Document:

ALLTEL LONG-TERM PERFORMANCE INCENTIVE COMPENSATION PLAN

                                                                                       Exhibit
    10.2

     

     

    ALLTEL
      CORPORATION

    LONG-TERM
      PERFORMANCE INCENTIVE COMPENSATION PLAN

    (As
      Amended and Restated as of January 1, 2006)

     

     

    I.
        PURPOSE

     

    The
      purpose of the Long-Term Performance Incentive Compensation Plan, as amended
      and
      restated, effective as of January 1, 2006 (the "Plan"), is to advance the
      interests of Alltel Corporation (the "Company") by strengthening, through the
      payment of incentive awards, the linkage between executives of the Company
      and
      stockholders of the Company, the decision-making focus of executives of the
      Company upon improving stockholder wealth, and the ability of the Company to
      attract and retain those key employees upon whose judgment, initiative and
      efforts the successful growth and profitability of the Company
      depends.

     

     

    II.
        DEFINITIONS

     

    a)  "Award"
      shall
      mean a cash award granted under the Plan to a Participant by the Committee
      pursuant to such terms, conditions, restrictions and/or limitations, if any,
      as
      the Committee may establish.

     

    b)  "Award
      Percentage"
      shall
      have the meaning given such term in Section VII of the Plan. 

     

    c)  "Average
      Base Compensation"
      of a
      Participant shall mean the Participant's average base annual salary or average
      wages payable by the Company or a Subsidiary for employment services during
      the
      Performance Measurement Period, including any amounts the payment of which
      is
      deferred under the Alltel Corporation 1998 Management Deferred Compensation
      Plan
      (or any successor thereto), but excluding any payments under the Performance
      Incentive Compensation Plan or other similar forms of additional compensation,
      or any fringe benefits reportable on Form W-2 for federal income tax
      purposes.

     

    d)  "Beneficiary"
      shall
      mean the beneficiary or beneficiaries designated in accordance with Section
      XVI
      to receive the amount, if any, payable under the Plan after the death of a
      Participant.

     

    e)  "Board"
      shall
      mean the Board of Directors of the Company.

     

    f)  "Code"
      shall
      mean the Internal Revenue Code of 1986, as amended. 

     

    g)  "CEO"
      shall
      mean the Chief Executive Officer of the Company.

     

    h)  "Committee"
      shall
      mean the Compensation Committee of the Board (or subcommittee thereof),
      consisting of not less than two Board members each of whom shall be (i) a
      "non-employee director" as defined in Rule 16b-3 of the Securities Exchange
      Act
      of 1934, as 

     

     

    
      
        1

      

      
        
        

        
          

        

      

      
        
        

      

       

      amended,
        and (ii) an "outside director" as defined in the regulations under Section
        162(m) of the Code.

    

     

    i)  "Company"
      shall
      mean Alltel Corporation, a Delaware corporation, its successors and survivors
      resulting from any merger or acquisition of Alltel Corporation with or by any
      other corporation or other entity or enterprise.

     

    j)  "Covered
      Employee"
      shall
      mean a Participant who the Committee deems likely to have compensation with
      respect to the Plan which would be non-deductible by the Company under Section
      162(m) of the Code if the Company did not comply with the provisions of Section
      162(m) of the Code and the regulations thereunder with respect to such
      compensation.

     

    k)  "Effective
      Date"
      shall
      mean January 1, 2006.

     

    l)  "Eligible
      Employee"
      shall
      mean any officer or key management employee of the Company or a Subsidiary
      who
      is a regular full time employee of the Company or a Subsidiary. A director
      of
      the Company or a Subsidiary is not an Eligible Employee unless he is also a
      regular full time salaried employee of the Company or a Subsidiary. A "full
      time" employee means any employee who is customarily employed for more than
      20
      hours per week and at least six months per year.

     

    m)  "Incentive
      Performance Objectives"
      shall
      mean the measurable performance objective or objectives established pursuant
      to
      the Plan for Participants. Incentive Performance Objectives may be described
      in
      terms of Company-wide objectives or objectives that are related to the
      performance of the individual Participant or of the Subsidiary, division,
      department, region or function within the Company or Subsidiary in which the
      Participant is employed. The Incentive Performance Objectives may be made
      relative to the performance of other corporations. The Incentive Performance
      Objectives applicable to any Award to a Covered Employee that is intended to
      qualify for the performance-based compensation exception to Section 162(m)
      of
      the Code shall be based on specified levels of growth in one or more of the
      following criteria: revenues, weighted average revenue per unit, earnings from
      operations, operating income, earnings before or after interest and taxes,
      operating income before or after interest and taxes, net income, cash flow,
      earnings per share, debt to capital ratio, economic value added, return on
      total
      capital, return on invested capital, return on equity, return on assets, total
      return to stockholders, earnings before or after interest, taxes, depreciation,
      amortization or extraordinary or special items, operating income before or
      after
      interest, taxes, depreciation, amortization or extraordinary or special items,
      return on investment, free cash flow, cash flow return on investment (discounted
      or otherwise), net cash provided by operations, cash flow in excess of cost
      of
      capital, operating margin, profit margin, contribution margin, stock price
      and/or strategic business criteria consisting of one or more objectives based
      on
      meeting specified product development, strategic partnering, research and
      development, market penetration, geographic business expansion goals, cost
      targets, customer satisfaction, gross or net additional customers, average
      customer life, employee satisfaction, management of employment practices and
      employee benefits, supervision of litigation and information technology, and
      goals relating to acquisitions or divestitures of subsidiaries, affiliates
      and
      joint ventures. Incentive Performance Objectives may be stated as a combination
      of the listed factors.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    n)  "Participant"
      shall
      mean any Eligible Employee who is approved by the Committee for participation
      in
      the Plan for the Performance Measurement Period with respect to which an Award
      may be made and which has not been paid, forfeited or otherwise terminated
      or
      satisfied under the Plan.

     

    o)  "Performance
      Measurement Period"
      shall
      mean a period of three consecutive calendar years, or such other period as
      determined by the Compensation Committee in its discretion, to be used to
      measure actual performance against Incentive Performance Objectives and to
      determine the amount of Awards for Participants.

     

    p)  "Plan"
      shall
      mean the Alltel Corporation Long-Term Performance Incentive Compensation Plan,
      as the same may be amended from time to time.

     

    q)  "Subsidiary"
      shall
      mean a corporation of which 50% or more of the issued and outstanding voting
      stock is owned by the Company.

     

    r)  "Target
      Award Opportunity"
      shall
      have the meaning given such term in Section VI of this Plan. 

     

     

    III.
        ADMINISTRATION

     

    a)  Administration
      of the Plan shall be by the Committee, which shall, in applying and interpreting
      the provisions of the Plan, have full power and authority to construe, interpret
      and carry out the provisions of the Plan. All decisions, interpretations and
      actions of the Committee under the Plan shall be at the Committee’s sole and
      absolute discretion and shall be final, conclusive and binding upon all parties.
      The generality of the provisions of the immediately preceding sentence shall
      not
      be deemed to be limited by any reference to the Committee’s discretion in any
      other provision of the Plan. The Committee may delegate to the CEO or other
      officers, subject to such terms as the Committee shall determine, authority
      to
      perform certain functions, including administrative functions, except that
      the
      Committee shall retain exclusive authority to determine matters relating to
      Awards to the CEO and other individuals who are Covered Employees. In the event
      of such delegation, all references to the Committee in the Plan shall be deemed
      references to such officers as it relates to those aspects of the Plan that
      have
      been delegated.

     

    b)  No
      member
      of the Committee shall be jointly or severally liable by reason of any contract
      or other instrument executed by him or on his behalf in his capacity as a member
      of the Committee, nor for any mistake of judgment made in good faith, and the
      Company shall indemnify and hold harmless each member of the Committee and
      each
      other officer, employee and director of the Company to whom any duty or act
      relating to the administration of the Plan may be allocated or delegated,
      against any cost or expense (including counsel fees) or liability (including
      any
      sum paid in settlement of the claim with the approval of the Board) arising
      out
      of any act or omission to act in connection with the Plan, unless arising out
      of
      such person’s or persons' own fraud or bad faith.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    c)  The
      existence of this Plan or any Award or other right granted hereunder will not
      affect the authority of the Company or the Committee to take any other action,
      including in respect of the grant or award of any annual or long-term bonus
      or
      other right or benefit, whether or not authorized by the Plan, subject only
      to
      limitations imposed by applicable law.

     

     

    IV.
        ELIGIBILITY
      FOR PARTICIPATION

     

    a)  As
      soon
      as practicable after the beginning of each Performance Measurement Period,
      the
      Committee shall designate those Eligible Employees who shall participate in
      the
      Plan for that Performance Measurement Period (or, if a person becomes an
      Eligible Employee after the beginning of a Performance Measurement Period,
      he
      shall be designated as a Participant at such other time as determined by the
      Committee). In determining which Eligible Employees shall participate for any
      given Performance Measurement Period, the Committee shall consider the
      recommendations of the CEO. Each Eligible Employee shall be notified of his
      participation in the Plan as soon as practicable after approval of his
      participation for any Performance Measurement Period (or portion thereof).
      An
      Eligible Employee who is a Participant for a given Performance Measurement
      Period is neither guaranteed nor assured of being selected for participation
      in
      any subsequent Performance Measurement Period.

     

    b)  Notwithstanding
      anything contained in Section IV(a) to the contrary, individuals who are Covered
      Employees shall be designated by the Committee to participate in the Plan no
      later than 90 days following the beginning of the Performance Measurement Period
      or before 25% of the Performance Measurement Period has elapsed, whichever
      is
      earlier.

     

     

    V.
        INCENTIVE
      PERFORMANCE OBJECTIVES

     

    a)  At
      the
      beginning of each Performance Measurement Period (or, if an Eligible Employee
      becomes a Participant during a Performance Measurement Period, on such other
      date as determined by the Committee), the Committee shall establish the
      Incentive Performance Objectives for each Participant. The Committee shall
      also
      establish a minimum threshold performance level, a maximum performance level,
      a
      target performance level and one or more intermediate performance levels or
      ranges. In determining the applicable Incentive Performance Objectives (and
      applicable performance levels or ranges) other than for the CEO, the Committee
      shall consider the recommendations of the CEO. The Incentive Performance
      Objectives established by the Committee need not be uniform with respect to
      any
      or all Participants. 

     

    b)  The
      Committee may establish multiple Incentive Performance Objectives with respect
      to a single Participant. If more than one Incentive Performance Objective is
      selected by the Committee for a Performance Measurement Period, the Incentive
      Performance Objectives will be weighted by the Committee (in the form of a
      percentage) to reflect their relative importance to the Company in the
      applicable Performance Measurement Period. 

     

    c)  The
      Committee may in its sole discretion modify such Incentive Performance
      Objectives or the related minimum acceptable level of achievement, in whole
      or
      in part, as the 

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

      Committee
        deems appropriate and equitable to reflect a change in the business, operations,
        corporate structure or capital structure of the Company, the manner in which
        it
        conducts its business, or other events or circumstances, except to the extent
        that such action would result in the loss of the otherwise available exemption
        of an Award under Section 162(m) of the Code. 

    

     

    d)  As
      soon
      as practicable after the beginning of each Performance Measurement Period,
      the
      Committee shall communicate in writing to each Participant the Incentive
      Performance Objectives applicable to him or her, the relative weighting of
      each
      Incentive Performance Objective and the minimum, maximum and target level of
      performance applicable to each Incentive Performance Objective. 

     

    e) Notwithstanding
      anything contained in this Section V to the contrary, the Committee shall
      establish the Incentive Performance Objectives (including the applicable
      performance levels or ranges and the relative weight of multiple Incentive
      Performance Objectives) for each Covered Employee not later than 90 days
      following the beginning of the Performance Measurement Period or before 25%
      of
      the Performance Measurement Period has elapsed, whichever is earlier.

     

     

    VI.
        TARGET
      AWARD OPPORTUNITY

     

    a)  At
      the
      beginning of each Performance Measurement Period (or, if an Eligible Employee
      becomes a Participant during a Performance Measurement Period, on such other
      date as determined by the Committee), the Committee shall assign each
      Participant a Target Award Opportunity. The Target Award Opportunity shall
      be
      expressed as a percentage of the Participant's Average Base Compensation and
      shall represent the amount payable to the Participant under the Plan for the
      Participant's achievement of the target performance level of the Incentive
      Performance Objective established for the Performance Measurement Period. In
      determining the applicable Target Award Opportunity, other than for the CEO,
      the
      Committee shall consider the recommendations of the CEO. 

     

    b)  As
      soon
      as practicable after the beginning of each Performance Measurement Period,
      the
      Committee shall communicate in writing to each Participant the Participant's
      Target Award Opportunity.

     

    c)  Notwithstanding
      anything contained in this Section VI to the contrary, the Committee shall
      establish the Target Award Opportunity for each Covered Employee not later
      than
      90 days following the beginning of the Performance Measurement Period or before
      25% of the Performance Measurement Period has elapsed, whichever is
      earlier.

     

     

    VII.
        DETERMINATION
      OF AWARDS

     

    a)  Promptly
      following the end of each Performance Measurement Period, the Committee shall
      meet to certify the extent to which the Incentive Performance Objectives for
      the
      applicable Performance Measurement Period have been achieved and assign the
      corresponding

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

      award
        percentage ("Award Percentage") with respect thereof. In the event that a
        Participant's Incentive Performance Objective for the Performance Measurement
        Period: 

    

     

    
      	i  	
              is
                below the minimum threshold performance level established therefor,
                the
                Award Percentage shall be zero; 

            

    

     

    
      	ii  	
              is
                equal to the minimum threshold performance level established therefor,
                the
                Award Percentage shall be 50%; 

            

    

     

    
      	iii  	
              is
                equal to the target performance level established therefor, the Award
                Percentage shall be 100%; 

            

    

     

    
      	iv  	
              is
                equal to or greater than the maximum performance threshold performance
                level established therefor, the Award Percentage shall be 150%;
                and

            

    

     

    
      	v  	
              is
                between any two of the performance levels described in the immediately
                preceding clauses (ii), (iii) and (iv), the Award Percentage shall
                be
                interpolated by the Committee to the nearest 1/100 of one percent
                between
                the corresponding levels of Award
                Percentages.

            

    

     

    The
      certification of the Incentive Performance Objectives of a Covered Employee
      shall be documented in writing (and otherwise conform to the requirements of
      applicable regulations under Section 162(m) of the Code) prior to the payout
      of
      his or her Award.

     

    b)  Where
      the
      Committee has established more than one Incentive Performance Objective for
      a
      Participant, then the Participant's Award Percentage shall be determined by:
      (i)
      multiplying the Award Percentage of each Incentive Performance Objective by
      the
      relative weight assigned (in the form of a percentage) to such Incentive
      Performance Objective by the Committee, and (ii) adding the resulting
      percentages. 

     

    c)  After
      determining the applicable Award Percentage for a Participant, the Committee
      shall calculate that Participant's Award by multiplying his or her Award
      Percentage by his or her Target Award Opportunity. 

     

    d)  Notwithstanding
      any other provision of this Plan to the contrary, in no event shall an Award
      paid to any Participant for a Performance Measurement Period exceed
      $7,000,000.

     

     

    VIII.
        LIMITATIONS
      ON PAYMENT

     

    Notwithstanding
      any contrary provision of this Plan, the Committee in its sole discretion may
      (i) eliminate or reduce the amount of any Award payable to any Participant
      below
      that which otherwise would be payable under the Plan, and (ii) except in the
      case of a Covered Employee, increase the amount of any Award payable to any
      Participant above that which otherwise would be payable under the Plan to
      recognize a Participant's individual performance or in other circumstances
      deemed appropriate by the Committee.

     

     

    
      
        
        

      

      
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    IX.
        PAYMENT
      OF AWARDS

     

                 
      Subject to Section VII hereof, Awards shall be paid as soon as practicable
      after
      the close of the Performance Measurement Period, but in no event later than
      75
      days after the end of the Performance Measurement Period to which the Awards
      relate. Notwithstanding the foregoing, the Committee may, in its sole discretion
      and upon such terms and conditions as it may establish, direct that payments
      to
      the Participants (other than Covered Employees) be made during December of
      the
      last year of the Performance Measurement Period in the amount of all or any
      portion specified by the Committee of the estimated Award for that Performance
      Measurement Period, subject to adjustment as soon as practicable after the
      end
      of the Performance Measurement Period and the determination of the exact amount
      of the Award therefore.

     

     

    X.
        TRANSFERS

     

    Except
      with respect to Covered Employees, if an Eligible Employee becomes a Participant
      or a Participant's duties change during a Performance Measurement Period, the
      Committee may, in its sole discretion, make such adjustments to the
      Participant's Target Award Opportunity that it deems appropriate or pro rate
      the
      Award payable to the Participant. 

     

     

    XI.
        SEPARATIONS

     

    In
      the
      case of a Participant's or an Eligible Employee's separation from service with
      the Company or a Subsidiary for any reason prior to the last day of a
      Performance Measurement Period then, unless otherwise determined by the
      Committee, such Participant or Eligible Employee shall become ineligible to
      participate in the Plan and shall not receive payment of any Award for any
      Performance Measurement Period that has not ended prior to the Participant’s
      separation from service. 

     

     

    XII.
        AMENDMENT
      AND TERMINATION OF PLAN

     

    a)  The
      Board
      reserves the right, at any time, to amend, suspend or terminate the Plan, in
      whole or in part, in any manner, and for any reason, and without the consent
      of
      any Participant, Eligible Employee or Beneficiary or other person; provided,
      that no such amendment, suspension or termination shall adversely affect the
      payment of any amount for a Performance Measurement Period ending prior to
      the
      action of the Board amending, suspending or terminating the Plan.

     

    b)  It
      is the
      intention of the Company that the Plan qualify for the performance-based
      compensation exception of Section 162(m) of the Code and the short-term deferral
      exception of Section 409A of the Code. The Plan and any Awards hereunder shall
      be administrated in a manner consistent with this intent, and any provision
      that
      would cause the Plan or any Awards 

     

    
      
        
        

      

      
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      hereunder
        to fail to satisfy either such exception shall have no force and effect until
        amended to so comply (which amendment may be retroactive and may be made
        by the
        Company without the consent of any Participant, Eligible Employee or Beneficiary
        or other person).

    

     

     

    XIII.
        GOVERNING
      LAW

     

    The
      provisions of the Plan shall be governed and construed in accordance with the
      laws of the State of Delaware.

     

     

    XIV.
        NO
      RIGHTS TO CONTINUED EMPLOYMENT OR AWARD

     

    Nothing
      contained in the Plan shall give any employee the right to be retained in the
      employment of the Company or a Subsidiary or affect the right of the Company
      or
      a Subsidiary to dismiss any employee. The Plan shall not constitute a contract
      between the Company or a Subsidiary and any employee. Except as provided in
      Section XII, no Participant shall receive any right to be granted an Award
      hereunder. No Award shall be considered as compensation under any employee
      benefit plan of the Company or a Subsidiary, except as may be otherwise provided
      in such employee benefit plan. No reference in this Plan to any other plan
      or
      program maintained by the Company shall be deemed to give any Participant or
      other person a right to benefits under such other plan or program. The Company
      and its Subsidiaries shall have the right to deduct from all payments made
      to
      any person under the Plan any federal, state, local, foreign or other taxes
      which, in the opinion of the Company and its Subsidiaries are required to be
      withheld with respect to such payments.

     

     

    XV.
        NO
      ALIENATION OF BENEFITS

     

    Except
      insofar as may otherwise be required by law, no amount payable at any time
      under
      the Plan shall be subject in any manner to alienation by anticipation, sale,
      transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance
      of
      any kind, nor in any manner be subject to the debts or liabilities of a
      Participant, and any attempt to so alienate or subject any such amount, whether
      presently or thereafter payable, shall be void.

     

     

    XVI.
        DESIGNATION
      OF BENEFICIARIES

     

    a)  Each
      Participant shall file with the Company a written designation of one or more
      persons as the Beneficiary who shall be entitled to receive any Award payable
      under the Plan after his death. A Participant may, from time to time, revoke
      or
      change his Beneficiary designation without the consent of any prior Beneficiary
      by filing a new designation with the Company.

     

     

    
      
        8

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    b)  The
      last
      such designation received by the Company shall be controlling; except that
      no
      designation, or change or revocation thereof, shall be effective unless received
      by the Company prior to the Participant’s death, and in no event shall it be
      effective as of the date prior to such receipt.

     

    c)  If
      no
      designation is in effect at the time of a Participant’s death, or if no
      designated Beneficiary survives the Participant, or if such designation, in
      the
      Company’s discretion, conflicts with applicable law, the Participant’s estate
      shall be deemed to have been designated his Beneficiary and shall receive any
      Award payable under the Plan after his death.

     

     

    XVII.
        PAYMENTS
      TO PERSON OTHER THAN PARTICIPANT

     

    If
      the
      Committee shall find that a Participant or his Beneficiary to whom an Award
      is
      payable under the Plan is unable to care for his affairs because of illness
      or
      accident, or is a minor, or has died, then any payment due him or his estate
      (unless a prior claim therefore has been made by a duly appointed
      representative) may, if the Committee so directs, be paid to his spouse, child,
      a relative, an institution maintaining custody of such person or any other
      person deemed by the Committee to be a proper recipient on behalf of such person
      otherwise entitled to payment. Any such payment shall be a complete discharge
      of
      the liability of the Plan, the Company and the Committee therefore.

     

     

    XVIII.
        NO
      RIGHT, TITLE OR INTEREST IN COMPANY’S ASSETS

     

    No
      Participant or Beneficiary shall have any right, title or interest whatsoever
      in
      or to any investments which the Company or a Subsidiary may make to aid it
      in
      meeting its obligations under the Plan. Nothing contained in the Plan, and
      no
      action taken pursuant to its provisions, shall create, or be construed to
      create, a trust of any kind, or fiduciary relationship between the Company
      or a
      Subsidiary and any Participant or Beneficiary or any other person. To the extent
      that any person acquires a right to receive payments from the Company under
      the
      Plan, such rights shall be no greater than the right of an unsecured general
      creditor of the Company. All payments to be made hereunder shall be paid from
      the general funds of the Company, and no special or separate funds shall be
      established, and no segregation of assets shall be made, to assure payment
      thereof.

     

     

    XIX.
        EFFECT
      OF AMENDMENT AND RESTATEMENT

     

    All
      matters regarding the Alltel Corporation Long-Term Performance Incentive
      Compensation Plan with respect to periods prior to the Effective Date shall
      be
      determined under the provisions of the Alltel Corporation Long-Term Performance
      Incentive Compensation Plan as it existed prior to the adoption of this amended
      and restated version of the Plan (the “Prior Plan”), as the Prior Plan was in
      effect from time to time with respect to relevant periods prior to the Effective
      Date and as the Prior Plan provisions may be amended from time to time. In
      no

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

      event
        shall any person acquire any rights to receive any payment pursuant to the
        provisions of the Prior Plan with respect to any period beginning after December
        31, 2005.

    

     

    
      
        
        

      

      
        10Unassociated Document

    
      	 

    

    

     

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

    Issuer

     

     

    and

     

     

    JPMORGAN
      CHASE BANK, N.A.

    Indenture
      Trustee

     

    _____________________________

     

    INDENTURE

     

    Dated
      as
      of April 6, 2006

     

    _____________________________

     

    ASSET-BACKED
      NOTES, SERIES 2006-1

     

    ________________

     

    

     

    
      	 

    

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    TABLE
      OF CONTENTS

     

    Section

    ARTICLE
      I

    DEFINITIONS

     

    
      	
              Section
                1.01.

            	
              Definitions

            
	
              Section
                1.02.

            	
              Incorporation
                by Reference of Trust Indenture Act

            
	
              Section
                1.03.

            	
              Rules
                of Construction

            

    

     

    ARTICLE
      II

    ORIGINAL
      ISSUANCE OF THE NOTES

     

    
      	
              Section
                2.01.

            	
              Form

            
	
              Section
                2.02.

            	
              Execution,
                Authentication and Delivery

            
	
              Section
                2.03.

            	
              Acceptance
                of Mortgage Loans by Indenture Trustee.

            
	
              Section
                2.04.

            	
              Acceptance
                of Cap Contracts by Indenture
                Trustee

            

    

     

    ARTICLE
      III

    COVENANTS

     

    
      	
              Section
                3.01.

            	
              Collection
                of Payments with respect to the Mortgage Loans

            
	
              Section
                3.02.

            	
              Maintenance
                of Office or Agency

            
	
              Section
                3.03.

            	
              Money
                for Payments To Be Held in Trust; Paying Agent

            
	
              Section
                3.04.

            	
              Existence

            
	
              Section
                3.05.

            	
              Payment
                of Principal and Interest.

            
	
              Section
                3.06.

            	
              Protection
                of Trust Estate.

            
	
              Section
                3.07.

            	
              Opinions
                as to Trust Estate.

            
	
              Section
                3.08.

            	
              Performance
                of Obligations.

            
	
              Section
                3.09.

            	
              Negative
                Covenants

            
	
              Section
                3.10.

            	
              [Reserved.]

            
	
              Section
                3.11.

            	
              [Reserved.]

            
	
              Section
                3.12.

            	
              Representations
                and Warranties Concerning the Mortgage Loans

            
	
              Section
                3.13.

            	
              Amendments
                to Servicing Agreement

            
	
              Section
                3.14.

            	
              Servicer
                as Agent and Bailee of the Indenture Trustee

            
	
              Section
                3.15.

            	
              Investment
                Company Act

            
	
              Section
                3.16.

            	
              Issuer
                May Consolidate, etc.

            
	
              Section
                3.17.

            	
              Successor
                or Transferee.

            
	
              Section
                3.18.

            	
              No
                Other Business

            
	
              Section
                3.19.

            	
              No
                Borrowing

            
	
              Section
                3.20.

            	
              Guarantees,
                Loans, Advances and Other Liabilities

            
	
              Section
                3.21.

            	
              Capital
                Expenditures

            
	
              Section
                3.22.

            	
              Determination
                of Note Rate

            
	
              Section
                3.23.

            	
              Restricted
                Payments

            
	
              Section
                3.24.

            	
              Notice
                of Events of Default

            
	
              Section
                3.25.

            	
              Further
                Instruments and Acts

            
	
              Section
                3.26.

            	
              Statements
                to Noteholders

            
	
              Section
                3.27.

            	
              [Reserved].

            
	
              Section
                3.28.

            	
              Certain
                Representations Regarding the Trust Estate.

            
	
              Section
                3.29.

            	
              Allocation
                of Realized Losses.

            

    

     

    ARTICLE
      IV

    THE
      NOTES; SATISFACTION AND DISCHARGE OF INDENTURE

     

    
      	
              Section
                4.01.

            	
              The
                Notes

            
	
              Section
                4.02.

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

            
	
              Section
                4.03.

            	
              Mutilated,
                Destroyed, Lost or Stolen Notes

            
	
              Section
                4.04.

            	
              Persons
                Deemed Owners

            
	
              Section
                4.05.

            	
              Cancellation

            
	
              Section
                4.06.

            	
              Book-Entry
                Notes

            
	
              Section
                4.07.

            	
              Notices
                to Depository

            
	
              Section
                4.08.

            	
              Definitive
                Notes

            
	
              Section
                4.09.

            	
              Tax
                Treatment

            
	
              Section
                4.10.

            	
              Satisfaction
                and Discharge of Indenture

            
	
              Section
                4.11.

            	
              Application
                of Trust Money

            
	
              Section
                4.12.

            	
              Derivative
                Contracts for Benefit of the Certificates

            
	
              Section
                4.13.

            	
              Repayment
                of Monies Held by Paying Agent

            
	
              Section
                4.14.

            	
              Temporary
                Notes

            
	
              Section
                4.15.

            	
              Representation
                Regarding ERISA

            

    

     

    ARTICLE
      V

    DEFAULT
      AND REMEDIES

     

    
      	
              Section
                5.01.

            	
              Events
                of Default

            
	
              Section
                5.02.

            	
              Acceleration
                of Maturity; Rescission and Annulment

            
	
              Section
                5.03.

            	
              Collection
                of Indebtedness and Suits for Enforcement by Indenture
                Trustee.

            
	
              Section
                5.04.

            	
              Remedies;
                Priorities.

            
	
              Section
                5.05.

            	
              Optional
                Preservation of the Trust Estate

            
	
              Section
                5.06.

            	
              Limitation
                of Suits

            
	
              Section
                5.07.

            	
              Unconditional
                Rights of Noteholders To Receive Principal and
                Interest.

            
	
              Section
                5.08.

            	
              Restoration
                of Rights and Remedies

            
	
              Section
                5.09.

            	
              Rights
                and Remedies Cumulative

            
	
              Section
                5.10.

            	
              Delay
                or Omission Not a Waiver

            
	
              Section
                5.11.

            	
              Control
                By Noteholders

            
	
              Section
                5.12.

            	
              Waiver
                of Past Defaults

            
	
              Section
                5.13.

            	
              Undertaking
                for Costs

            
	
              Section
                5.14.

            	
              Waiver
                of Stay or Extension Laws

            
	
              Section
                5.15.

            	
              Sale
                of Trust Estate.

            
	
              Section
                5.16.

            	
              Action
                on Notes

            
	
              Section
                5.17.

            	
              Performance
                and Enforcement of Certain
                Obligations.

            

    

    

     

    ARTICLE
      VI

    THE
      INDENTURE TRUSTEE

     

    
      	
              Section
                6.01.

            	
              Duties
                of Indenture Trustee.

            
	
              Section
                6.02.

            	
              Rights
                of Indenture Trustee.

            
	
              Section
                6.03.

            	
              Individual
                Rights of Indenture Trustee

            
	
              Section
                6.04.

            	
              Indenture
                Trustee’s Disclaimer

            
	
              Section
                6.05.

            	
              Notice
                of Event of Default

            
	
              Section
                6.06.

            	
              Reports
                by Indenture Trustee to Holders and Tax Administration.

            
	
              Section
                6.07.

            	
              Compensation
                and Indemnity

            
	
              Section
                6.08.

            	
              Replacement
                of Indenture Trustee

            
	
              Section
                6.09.

            	
              Successor
                Indenture Trustee by Merger

            
	
              Section
                6.10.

            	
              Appointment
                of Co-Indenture Trustee or Separate Indenture Trustee.

            
	
              Section
                6.11.

            	
              Eligibility;
                Disqualification

            
	
              Section
                6.12.

            	
              Preferential
                Collection of Claims Against Issuer

            
	
              Section
                6.13.

            	
              Representations
                and Warranties

            
	
              Section
                6.14.

            	
              Directions
                to Indenture Trustee

            
	
              Section
                6.15.

            	
              The
                Agents

            

    

    

     

    ARTICLE
      VII

    NOTEHOLDERS’
      LISTS AND REPORTS

     

    
      	
              Section
                7.01.

            	
              Issuer
                To Furnish Indenture Trustee Names and Addresses of
                Noteholders.

            
	
              Section
                7.02.

            	
              Preservation
                of Information; Communications to Noteholders.

            
	
              Section
                7.03.

            	
              Reports
                of Issuer.

            
	
              Section
                7.04.

            	
              Reports
                by Indenture Trustee

            
	
              Section
                7.05.

            	
              Statements
                to Noteholders.

            

    

    

     

    ARTICLE
      VIII

    ACCOUNTS,
      DISBURSEMENTS AND RELEASES

     

    
      	
              Section
                8.01.

            	
              Collection
                of Money

            
	
              Section
                8.02.

            	
              Trust
                Accounts.

            
	
              Section
                8.03.

            	
              Officer’s
                Certificate

            
	
              Section
                8.04.

            	
              Termination
                Upon Distribution to Noteholders

            
	
              Section
                8.05.

            	
              Release
                of Trust Estate.

            
	
              Section
                8.06.

            	
              Surrender
                of Notes Upon Final Payment

            
	
              Section
                8.07.

            	
              Optional
                Redemption of the Notes.

            

    

    

     

    ARTICLE
      IX

    SUPPLEMENTAL
      INDENTURES

     

    
      	
              Section
                9.01.

            	
              Supplemental
                Indentures Without Consent of Noteholders.

            
	
              Section
                9.02.

            	
              Supplemental
                Indentures With Consent of Noteholders

            
	
              Section
                9.03.

            	
              Execution
                of Supplemental Indentures

            
	
              Section
                9.04.

            	
              Effect
                of Supplemental Indenture

            
	
              Section
                9.05.

            	
              Conformity
                with Trust Indenture Act

            
	
              Section
                9.06.

            	
              Reference
                in Notes to Supplemental Indentures

            

    

    

     

    ARTICLE
      X

    MISCELLANEOUS

     

    
      	
              Section
                10.01.

            	
              Compliance
                Certificates and Opinions, etc.

            
	
              Section
                10.02.

            	
              Form
                of Documents Delivered to Indenture Trustee

            
	
              Section
                10.03.

            	
              Acts
                of Noteholders.

            
	
              Section
                10.04.

            	
              Notices
                etc., to Indenture Trustee Issuer and Rating Agencies.

            
	
              Section
                10.05.

            	
              Notices
                to Noteholders; Waiver

            
	
              Section
                10.06.

            	
              Conflict
                with Trust Indenture Act

            
	
              Section
                10.07.

            	
              Effect
                of Headings

            
	
              Section
                10.08.

            	
              Successors
                and Assigns

            
	
              Section
                10.09.

            	
              Separability

            
	
              Section
                10.10.

            	
              [Reserved.]

            
	
              Section
                10.11.

            	
              Legal
                Holidays

            
	
              Section
                10.12.

            	
              GOVERNING
                LAW

            
	
              Section
                10.13.

            	
              Counterparts

            
	
              Section
                10.14.

            	
              Recording
                of Indenture

            
	
              Section
                10.15.

            	
              Issuer
                Obligation

            
	
              Section
                10.16.

            	
              No
                Petition

            
	
              Section
                10.17.

            	
              Inspection

            
	
              Section
                10.18.

            	
              No
                Recourse to Owner Trustee

            
	
              Section
                10.19.

            	
              Proofs
                of Claim

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBITS

    

    
      	
              Exhibit
                A-1

            	
              Form
                of Class A-1 Note

            
	
              Exhibit
                A-2

            	
              Form
                of Class A-2 Note

            
	
              Exhibit
                A-3

            	
              Form
                of Class A-3 Note

            
	
              Exhibit
                A-4

            	
              Form
                of Class A-4 Note

            
	
              Exhibit
                A-5

            	
              Form
                of Class M-1 Note

            
	
              Exhibit
                A-6

            	
              Form
                of Class M-2 Note

            
	
              Exhibit
                A-7

            	
              Form
                of Class M-3 Note

            
	
              Exhibit
                A-8

            	
              Form
                of Class M-4 Note

            
	
              Exhibit
                A-9

            	
              Form
                of Class M-5 Note

            
	
              Exhibit
                A-10

            	
              Form
                of Class M-6 Note

            
	
              Exhibit
                A-11

            	
              Form
                of Class M-7 Note

            
	
              Exhibit
                A-12

            	
              Form
                of Class M-8 Note

            
	
              Exhibit
                A-13

            	
              Form
                of Class M-9 Note

            
	
              Exhibit
                A-14

            	
              Form
                of Class M-10 Note

            
	
              Exhibit
                A-15

            	
              Form
                of Class M-11 Note

            
	
              Exhibit
                B

            	
              Interest
                Rate Swap Agreement

            
	 	 
	
              Appendix
                A

            	
              Definitions

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    This
      Indenture, dated as of April 6, 2006, is entered into between Newcastle Mortgage
      Securities Trust 2006-1, a Delaware statutory trust, as Issuer (the “Issuer”),
      and JPMorgan Chase Bank, N.A., a national banking association, as Indenture
      Trustee (the “Indenture Trustee”).

     

    WITNESSETH
      THAT:

     

    Each
      party hereto agrees as follows for the benefit of the other party and for the
      equal and ratable benefit of the Holders of the Issuer’s Asset-Backed Notes,
      Series 2006-1 (the “Notes”).

     

    GRANTING
      CLAUSE

     

    The
      Issuer hereby Grants to the Indenture Trustee at the Closing Date, as trustee
      for the benefit of the Holders of the Notes, all of the Issuer’s right, title
      and interest in and to whether now existing or hereafter created by (a) the
      Mortgage Loans, Qualified Substitute Mortgage Loans and the proceeds thereof;
      (b) all funds on deposit from time to time in the Collection Account allocable
      to the Mortgage Loans excluding any investment income from such funds; (c)
      all
      funds on deposit from time to time in the Payment Account and in all proceeds
      thereof; (d) all rights under (i) the Assignment Agreement as assigned to the
      Issuer, (ii) the Sale and Servicing Agreement, (iii) any title, hazard and
      primary insurance policies with respect to the Mortgaged Properties and (iv)
      the
      rights with respect to the Interest Rate Swap Agreement; (e) all present and
      future claims, demands, causes and choses in action in respect of any or all
      of
      the foregoing and all payments on or under, and all proceeds of every kind
      and
      nature whatsoever in respect of, any or all of the foregoing and all payments
      on
      or under, and all proceeds of every kind and nature whatsoever in the conversion
      thereof, voluntary or involuntary, into cash or other liquid property, all
      cash
      proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks,
      deposit accounts, rights to payment of any and every kind, and other forms
      of
      obligations and receivables, instruments and other property which at any time
      constitute all or part of or are included in the proceeds of any of the
      foregoing and (f) all other property of the Issuer (collectively, the “Trust
      Estate” or 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 trustee on behalf of the Holders of the Notes,
      acknowledges such Grant, accepts the trust under this Indenture in accordance
      with the provisions hereof and agrees to perform its duties as Indenture Trustee
      as required herein.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      I 

    DEFINITIONS

     

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

     

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

     

    “Commission”
      means the Securities and Exchange Commission.

     

    “indenture
      securities” means the Notes.

     

    “indenture
      security holder” means a Noteholder.

     

    “indenture
      to be qualified” means this Indenture.

     

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

     

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

     

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

     

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

     

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

     

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

     

    (iii) “or”
is
      not exclusive;

     

    (iv) “including”
      means including without limitation;

     

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

     

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

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II

    ORIGINAL
      ISSUANCE OF THE NOTES

     

    Section
      2.01.  Form.
      The
      Floating Rate Notes, together with the Indenture Trustee’s certificate of
      authentication, shall be in substantially the form set forth in Exhibits A-1
      through A-15 to this Indenture, respectively, with such appropriate insertions,
      omissions, substitutions and other variations as are required or permitted
      by
      this Indenture.

     

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

     

    The
      terms
      of the Notes set forth in Exhibits A-1 through A-15 to this Indenture are part
      of the terms of this Indenture.

     

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

     

    Notes
      bearing the manual or facsimile signature of individuals who were at any time
      Authorized Officers of the Issuer 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 Issuer Request authenticate and deliver the
      Floating Rate Notes for original issue in an aggregate initial principal amount
      of $1,453,360,000. The
      Classes of Notes shall have the following Initial Note Balances:

     

    
      	
              Class

            	 	
              Initial
                Note Balance

            
	
              A-1

            	 	
              $

            	
              687,997,000

            
	
              A-2

            	 	
              $

            	
              113,911,000

            
	
              A-3

            	 	
              $

            	
              261,774,000

            
	
              A-4

            	 	
              $

            	
              116,279,000

            
	
              M-1

            	 	
              $

            	
              51,074,000

            
	
              M-2

            	 	
              $

            	
              47,319,000

            
	
              M-3

            	 	
              $

            	
              29,293,000

            
	
              M-4

            	 	
              $

            	
              24,035,000

            
	
              M-5

            	 	
              $

            	
              23,284,000

            
	
              M-6

            	 	
              $

            	
              21,782,000

            
	
              M-7

            	 	
              $

            	
              21,031,000

            
	
              M-8

            	 	
              $

            	
              18,026,000

            
	
              M-9

            	 	
              $

            	
              15,022,000

            
	
              M-10

            	 	
              $

            	
              15,022,000

            
	
              M-11

            	 	
              $

            	
              7,511,000

            

    

     

    Each
      of
      the Notes shall be dated the date of its authentication. The Notes shall be
      issuable as registered Notes and the Notes shall be issuable in the minimum
      initial Note Balances of $25,000 and in integral multiples of $1 in excess
      thereof; provided that the Floating Rate Notes must be purchased in a minimum
      total investments of $100,000 per class.

     

    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
      2.03.  Acceptance
      of Interest Rate Swap Agreement by Indenture Trustee.
      The
      Indenture Trustee acknowledges receipt of the Interest Rate Swap Agreement
      and
      declares that it holds and will continue to hold these documents and any
      amendments, replacements or supplements thereto and all other assets of the
      Trust Estate as Indenture Trustee in trust for the use and benefit of all
      present and future Holders of the Notes. 

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      III

    COVENANTS

     

    Section
      3.01.  Collection
      of Payments with respect to the Mortgage Loans.
      The
      Indenture Trustee shall establish and maintain an Eligible Account (the “Payment
      Account”) in which the Indenture Trustee shall deposit, on the same day as it is
      received from the Servicer, each remittance received by the Indenture Trustee
      with respect to the Mortgage Loans. The Indenture Trustee shall make all
      payments of principal of and interest on the Notes, subject to Section 3.03
      as
      provided in Section 3.05 herein from monies on deposit in the Payment
      Account.

     

    Section
      3.02.  Maintenance
      of Office or Agency.
      The
      Issuer will maintain an office or agency where, subject to satisfaction of
      conditions set forth herein, 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. 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 may be made at the office of the Indenture Trustee’s agent
      located at 2001 Bryan Street, 9th
      Floor,
      Dallas, Texas 75201, Attention: Transfer Dept., Newcastle Mortgage Securities
      Trust 2006-1, and notices and demands may be made or served at the Corporate
      Trust Office.

     

    Section
      3.03.  Money
      for Payments To Be Held in Trust; Paying Agent.
      As
      provided in Section 3.01, all payments of amounts due and payable with respect
      to any Notes that are to be made from amounts withdrawn from the Payment Account
      pursuant to Section 3.01 shall be made on behalf of the Issuer by the Indenture
      Trustee or by the Paying Agent, and no amounts so withdrawn from the Payment
      Account for payments of Notes shall be paid over to the Issuer except as
      provided in this Section 3.03. The Issuer hereby appoints the Indenture Trustee
      as its Paying Agent.

     

    The
      Issuer will cause each Paying Agent other than the Indenture Trustee 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
      3.03, 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 notice of any default by the Issuer 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, forthwith pay to the Indenture Trustee all sums so held
      in
      trust by such Paying Agent;

     

    (iv)  immediately
      resign as 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;

     

    (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; and

     

    (vi)  not
      commence a bankruptcy proceeding against the Issuer in connection with this
      Indenture.

     

    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 Request 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 trusts
      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.

     

    Subject
      to applicable laws with respect to escheat of funds, any money held by the
      Indenture Trustee or any Paying Agent in trust for the payment of any amount
      due
      with respect to any Note and remaining unclaimed for one year after such amount
      has become due and payable shall be discharged from such trust and be paid
      to
      the Issuer on Issuer Request; and the Holder of such Note shall thereafter,
      as
      an unsecured general creditor, look only to the Issuer for payment thereof
      (but
      only to the extent of the amounts so paid to the Issuer), and all liability
      of
      the Indenture Trustee or such Paying Agent with respect to such trust money
      shall thereupon cease; provided,
      however,
      that the
      Indenture Trustee or such Paying Agent, before being required to make any such
      repayment, shall at the expense and direction of the Issuer cause to be
      published once, in an Authorized Newspaper published in the English language,
      notice that such money remains unclaimed and that, after a date specified
      therein which shall not be less than 30 days from the date of such publication,
      any unclaimed balance of such money then remaining will be repaid to the Issuer.
      The Indenture Trustee may also adopt and employ, at the expense and direction
      of
      the Issuer, any other reasonable means of notification of such repayment
      (including, but not limited to, mailing notice of such repayment to Holders
      whose Notes have been called but have not been surrendered for redemption or
      whose right to or interest in monies due and payable but not claimed is
      determinable from the records of the Indenture Trustee or of any Paying Agent,
      at the last address of record for each such Holder).

     

    Section
      3.04.  Existence.
      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, the Mortgage Loans and each other instrument or agreement included in
      the
      Trust Estate.

     

    Section
      3.05.  Payment
      of Principal and Interest.

     

    (a)  On
      each
      Payment Date from amounts on deposit in the Payment Account in accordance with
      Section 8.02 hereof, the Indenture Trustee shall pay to the Persons specified
      below, to the extent provided therein, the Available Funds for such Payment
      Date.

     

    (b)  On
      each
      Payment Date, the Indenture Trustee shall withdraw from the Payment Account
      an
      amount equal to the Interest Remittance Amount and pay to the Noteholders the
      following amounts, in the following order of priority:

     

    (i)  concurrently,
      to the Holders of the Class A Notes, on a pro
      rata basis
      based on the entitlement of each such Class, the Monthly Interest Payable Amount
      and the Unpaid Interest Shortfall Amount, if any, for each such Class;
      and

     

    (ii)  sequentially,
      to the Holders of the Class M-1 Notes, the Class M-2 Notes, the Class M-3 Notes,
      the Class M-4 Notes, the Class M-5 Notes, the Class M-6 Notes, the Class M-7
      Notes, the Class M-8 Notes, the Class M-9 Notes, the Class M-10 Notes and the
      Class M-11 Notes, in that order, in an amount equal to the Monthly Interest
      Payable Amount for each such Class.

     

    (c)  (I)
      On
      each Payment Date (a) prior to the Stepdown Date or (b) on which a Trigger
      Event
      is in effect, the Principal Payment Amount shall be paid in the following order
      of priority:

     

    (i)  to
      the
      Holders of the Class A Notes (allocated among the Class A Notes in the priority
      described below), until the Note Balances thereof have been reduced to zero;
      and

     

    (ii)  sequentially,
      to the Holders of the Class M-1 Notes, the Class M-2 Notes, the Class M-3 Notes,
      the Class M-4 Notes, the Class M-5 Notes, the Class M-6 Notes, the Class M-7
      Notes, the Class M-8 Notes, the Class M-9 Notes, the Class M-10 Notes and the
      Class M-11 Notes, in that order, in each case, until the Note Balances thereof
      have been reduced to zero.

     

    (II) On
      each
      Payment Date (a) on or after the Stepdown Date and (b) on which a Trigger Event
      is not in effect, the Principal Payment Amount shall be paid in the following
      order of priority;

     

    (i)  to
      the
      Holders of the Class A Notes (allocated among the Class A Notes in the priority
      described below), the Senior Principal Payment Amount, until the Note Balances
      thereof have been reduced to zero; 

     

    (ii)  to
      the
      holders of the Class M-1 Notes, the Class M-1 Principal Payment Amount until
      the
      Note Balance thereof has been reduced to zero;

     

    (iii)  to
      the
      holders of the Class M-2 Notes, the Class M-2 Principal Payment Amount until
      the
      Note Balance thereof has been reduced to zero;

     

    (iv)  to
      the
      holders of the Class M-3 Notes, the Class M-3 Principal Payment Amount until
      the
      Note Balance thereof has been reduced to zero;

     

    (v)  to
      the
      holders of the Class M-4 Notes, the Class M-4 Principal Payment Amount until
      the
      Note Balance thereof has been reduced to zero;

     

    (vi)  to
      the
      holders of the Class M-5 Notes, the Class M-5 Principal Payment Amount until
      the
      Note Balance thereof has been reduced to zero;

     

    (vii)  to
      the
      holders of the Class M-6 Notes, the Class M-6 Principal Payment Amount until
      the
      Note Balance thereof has been reduced to zero;

     

    (viii)  to
      the
      holders of the Class M-7 Notes, the Class M-7 Principal Payment Amount until
      the
      Note Balance thereof has been reduced to zero; 

     

    (ix)  to
      the
      holders of the Class M-8 Notes, the Class M-8 Principal Payment Amount until
      the
      Note Balance thereof has been reduced to zero; 

     

    (x)  to
      the
      holders of the Class M-9 Notes, the Class M-9 Principal Payment Amount until
      the
      Note Balance thereof has been reduced to zero;

     

    (xi)  to
      the
      holders of the Class M-10 Notes, the Class M-10 Principal Payment Amount until
      the Note Balance thereof has been reduced to zero; and

     

    (xii)  to
      the
      holders of the Class M-11 Notes, the Class M-11 Principal Payment Amount until
      the Note Balance thereof has been reduced to zero.

     

    With
      respect to the Class A Notes, all principal payments will be paid sequentially,
      first, to the Holders of the Class A-1 Notes, until the Note Balance of the
      Class A-1 Notes has been reduced to zero, second, to the Holders of the Class
      A-2 Notes, until the Note Balance of the Class A-2 Notes has been reduced to
      zero, third, to the Holders of the Class A-3 Notes, until the Note Balance
      of
      the Class A-3 Notes has been reduced to zero and fourth, to the Holders of
      the
      Class A-4 Notes, until the Note Balance of the Class A-4 Notes has been reduced
      to zero; provided, however, on any Payment Date on which the aggregate Note
      Balance of the Mezzanine Notes has been reduced to zero, principal payments
      will
      be paid, concurrently, to the Holders of the Class A Notes, on a pro
      rata
      basis
      based on the Note Balance of each such Class, until their respective Note
      Balances have been reduced to zero.

     

    (d)  On
      each
      Payment Date, the Net Monthly Excess Cashflow shall be paid by the Indenture
      Trustee as follows: 

     

    (i)  to
      the
      Holders of the Class or Classes of Notes then entitled to receive payments
      in
      respect of principal, in an amount equal to any Extra Principal Payment Amount,
      without taking into account amounts, if any, received under the Interest Rate
      Swap Agreement, payable to such Holders as part of the Principal Payment
      Amount;

     

    (ii)  sequentially,
      to the Holders of the Class M-1 Notes, the Class M-2 Notes, the Class M-3 Notes,
      the Class M-4 Notes, the Class M-5 Notes, the Class M-6 Notes, the Class M-7
      Notes, the Class M-8 Notes, the Class M-9 Notes, the Class M-10 Notes and the
      Class M-11 Notes, in that order, in each case, first, up to the Unpaid Interest
      Shortfall Amount for each such Class and second, up to the Allocated Realized
      Loss Amount for each such Class;

     

    (iii)  to
      the
      Holders of the Floating Rate Notes (in the priority described below), any Basis
      Risk Shortfall Amounts for such Payment Date, without taking into account
      amounts, if any, received under the Interest Rate Swap Agreement;

     

    (iv)  sequentially,
      to the Holders of the Class M-1 Notes, the Class M-2 Notes, the Class M-3 Notes,
      the Class M-4 Notes, the Class M-5 Notes, the Class M-6 Notes, the Class M-7
      Notes, the Class M-8 Notes, the Class M-9 Notes, the Class M-10 Notes and the
      Class M-11 Notes, in that order, in an amount equal to the Deferred Interest
      allocated to each such Class of Notes; 

     

    (v)  to
      the
      Swap Provider, any Swap Termination Payments resulting from a Swap Provider
      Trigger Event; and

     

    (vi)  to
      the
      Owner Trustee, any fees, expenses and indemnities not otherwise paid and then,
      to the Holders of the Certificates, any remaining amounts.

     

    On
      each
      Payment Date, all amounts representing Prepayment Charges in respect of the
      Mortgage Loans received during the related Prepayment Period shall be withdrawn
      from the Payment Account and distributed by the Indenture Trustee to the Holders
      of the Certificates and shall not be available for payment to the Holders of
      any
      Class of Notes.

     

    Following
      the foregoing payments, an amount equal to the amount of Subsequent Recoveries
      deposited into the Collection Account pursuant to Section 3.10(a)(iii) of the
      Sale and Servicing Agreement shall be applied to increase the Note Balance
      of
      the Class of Notes with the Highest Priority up to the extent of such Realized
      Losses previously unreimbursed to that Class of Notes pursuant to Section 3.29.
      An amount equal to the amount of any remaining Subsequent Recoveries shall
      be
      applied to increase the Note Balance of the Class of Notes with the next Highest
      Priority, up to the amount of such Realized Losses previously allocated to
      that
      Class of Notes pursuant to Section 3.29. Holders of such Notes will not be
      entitled to any distribution in respect of interest on the amount of such
      increases for any Interest Accrual Period preceding the Payment Date on which
      such increase occurs. Any such increases shall be applied to the Note Balance
      of
      each Note of such Class in accordance with its respective Percentage
      Interest.

     

    (e)  On
      each
      Payment Date, the Indenture Trustee will pay any Basis Risk Shortfall Amount
      with respect to the Floating Rate Notes for such Payment Date in the following
      order of priority:

     

    (i)  concurrently
      to each Class of Class A Notes, the related Basis Risk Shortfall Amount
      remaining on a pro rata basis based on such respective remaining Basis Risk
      Shortfall Amounts; and

     

    (ii)  sequentially,
      to the Class M-1 Notes, the Class M-2 Notes, the Class M-3 Notes, the Class
      M-4
      Notes, the Class M-5 Notes, the Class M-6 Notes, the Class M-7 Notes, the Class
      M-8 Notes, the Class M-9 Notes, the Class M-10 Notes and the Class M-11 Notes,
      in that order, the related Basis Risk Shortfall Amount.

     

    (f)  On
      each
      Payment Date, after making the payments of the Available Funds, Net Monthly
      Excess Cashflow and Basis Risk Shortfall Amounts as set forth above, the
      Indenture Trustee shall pay the amount on deposit in the Swap Account as
      follows:

     

    (i)  to
      the
      Swap Provider, any Net Swap Payment owed to the Swap Provider pursuant to the
      Interest Rate Swap Agreement for such Payment Date;

     

    (ii)  to
      the
      Swap Provider, any Swap Termination Payment owed to the Swap Provider not
      resulting from a Swap Provider Trigger Event pursuant to the Interest Rate
      Swap
      Agreement;

     

    (iii)  concurrently,
      to the Class A Notes, the related Monthly Interest Payable Amount and Unpaid
      Interest Shortfall Amount remaining unpaid after the payments of the Interest
      Remittance Amount, on a pro
      rata
      basis
      based on such respective remaining Monthly Interest Payable Amount and Unpaid
      Interest Shortfall Amount;

     

    (iv)  sequentially,
      to the Class M-1 Notes,
      Class
      M-2 Notes, Class M-3 Notes, Class M-4 Notes, Class M-5 Notes, Class M-6 Notes,
      Class M-7 Notes, Class M-8 Notes, Class M-9 Notes, Class M-10 Notes and Class
      M-11 Notes, in that order, the related Monthly Interest Payable Amount and
      Unpaid Interest Shortfall Amount, to the extent remaining unpaid after the
      payments of the Interest Remittance Amount and the Net Monthly Excess
      Cashflow;

     

    (v)  to
      the
      Holders of the Class or Classes of Notes then entitled to receive payments
      in
      respect of principal, in an amount necessary to maintain the applicable
      Overcollateralization Target Amount after taking into account payments made
      pursuant to Section 4.01(d)(i);

     

    (vi)  sequentially
      to the Class M-1 Notes, Class M-2 Notes, Class M-3 Notes, Class M-4 Notes,
      Class
      M-5 Notes, Class M-6 Notes, Class M-7 Notes, Class M-8 Notes, Class M-9 Notes,
      Class M-10 Notes and Class M-11 Notes, in that order, in each case up to the
      related Allocated Realized Loss Amount related to such Notes for such Payment
      Date remaining unpaid after payment of the Net Monthly Excess
      Cashflow;

     

    (vii)  concurrently,
      to each Class of Class A Notes, the related Basis Risk Shortfall Amount, to
      the
      extent remaining unpaid after payments are made from the Basis Risk Shortfall
      Amount, on a pro
      rata
      basis
      based on such respective Basis Risk Shortfall Amounts remaining;

     

    (viii)  sequentially,
      to the Class M-1 Notes, Class M-2 Notes, Class M-3 Notes, Class M-4 Notes,
      Class
      M-5 Notes, Class M-6 Notes, Class M-7 Notes, Class M-8 Notes, Class M-9 Notes,
      Class M-10 Notes and Class M-11 Notes, in that order, the related Basis Risk
      Shortfall Amount, to the extent remaining unpaid after payments are made from
      the Basis Risk Shortfall Amount; and

     

    (ix)  any
      remaining amounts to the Holders of the Certificates.

     

    (g)  Each
      payment with respect to a Book-Entry Note shall be paid to the Depository,
      as
      Holder thereof, and the Depository shall be responsible for crediting the amount
      of such payment to the accounts of its Depository Participants in accordance
      with its normal procedures. Each Depository Participant shall be responsible
      for
      disbursing such payment to the Note Owners that it represents and to each
      indirect participating brokerage firm (a “brokerage firm” or “indirect
      participating firm”) for which it acts as agent. Each brokerage firm shall be
      responsible for disbursing funds to the Note Owners that it represents. None
      of
      the Indenture Trustee, the Note Registrar, the Paying Agent, the Depositor
      or
      the Servicer shall have any responsibility therefor except as otherwise provided
      by this Indenture or applicable law.

     

    (h)  On
      each
      Payment Date, the Certificate Paying Agent shall deposit in the Certificate
      Distribution Account all amounts it received pursuant to this Section 3.05
      for
      the purpose of distributing such funds pursuant to the Trust
      Agreement.

     

    (i)  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, if such Holder shall have so requested at least five Business Days
      prior to the related Record Date, be paid to each Holder of record on the
      preceding Record Date, by wire transfer to an account specified in writing
      by
      such Holder reasonably satisfactory to the Indenture Trustee as of the preceding
      Record Date or in all other cases or if no such instructions have been delivered
      to the Indenture Trustee, by check to such Noteholder mailed to such Holder’s
      address as it appears in the Note Register in the amount required to be paid
      to
      such Holder on such Payment Date pursuant to such Holder’s Notes; provided,
      however,
      that
      the Indenture Trustee shall not pay to such Holders any amount required to
      be
      withheld from a payment to such Holder by the Code.

     

    (j)  The
      principal of each Note shall be due and payable in full on the Final Stated
      Maturity Date for such Note as provided in the forms of Notes set forth in
      Exhibits A-1 through A-15 to this Indenture. All principal payments on the
      Notes
      shall be made to the Noteholders entitled thereto in accordance with the
      Percentage Interests represented by such Notes. 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 Final Stated Maturity Date or other final Payment
      Date (including any final Payment Date resulting from any redemption pursuant
      to
      Section 8.07 hereof). Such notice shall to the extent practicable be mailed
      no
      later than five Business Days prior to such Final Stated Maturity Date or other
      final Payment Date and shall specify that payment of the principal amount and
      any interest due with respect to such Note at the Final Stated Maturity Date
      or
      other final Payment Date will be payable only upon presentation and surrender
      of
      such Note and shall specify the place where such Note may be presented and
      surrendered for such final payment. No interest shall accrue on the Notes on
      or
      after the Final Stated Maturity Date or any such other final Payment
      Date.

     

    Section
      3.06.  Protection
      of Trust Estate.

     

    (a)  The
      Issuer will from time to time prepare, execute and deliver all such supplements
      and amendments hereto and all such financing statements, continuation
      statements, instruments of further assurance and other instruments, and will
      take such other action necessary or advisable to:

     

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

     

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

     

    (iii)  cause
      the
      Issuer or Servicer to enforce any of the rights to the Mortgage Loans;
      or

     

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

     

    (b)  Except
      as
      otherwise provided in this Indenture, the Indenture Trustee shall not remove
      any
      portion of the Trust Estate that consists of money or is evidenced by an
      instrument, certificate or other writing from the jurisdiction in which it
      was
      held at the date of the most recent Opinion of Counsel delivered pursuant to
      Section 3.07 hereof (or from the jurisdiction in which it was held as described
      in the Opinion of Counsel delivered on the Closing Date pursuant to Section
      3.07(a) hereof, or if no Opinion of Counsel has yet been delivered pursuant
      to
      Section 3.07(b) hereof, unless the Indenture Trustee shall have first received
      an Opinion of Counsel to the effect that the lien and security interest created
      by this Indenture with respect to such property will continue to be maintained
      after giving effect to such action or actions).

     

    The
      Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact
      to
      sign any financing statement, continuation statement or other instrument
      required to be signed pursuant to this Section 3.06 upon the Issuer’s
      preparation thereof and delivery to the Indenture Trustee.

     

    Section
      3.07.  Opinions
      as to Trust Estate.

     

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

     

    (b) On
      or
      before April 15th
      in each
      calendar year, beginning in 2007, the Issuer shall furnish to the Indenture
      Trustee an Opinion of Counsel at the expense of the Issuer either stating that,
      in the opinion of such counsel, such action has been taken with respect to
      the
      recording, filing, re-recording and refiling of this Indenture, any indentures
      supplemental hereto and any other requisite documents and with respect to the
      execution and filing of any financing statements and continuation statements
      as
      is necessary to maintain the lien and first priority security interest in the
      Collateral and reciting the details of such action or stating that in the
      opinion of such counsel no such action is necessary to maintain such lien and
      security interest. Such Opinion of Counsel shall also describe the recording,
      filing, re-recording and refiling of this Indenture, any indentures supplemental
      hereto and any other requisite documents and the execution and filing of any
      financing statements and continuation statements that will, in the opinion
      of
      such counsel, be required to maintain the lien and security interest in the
      Collateral until December 31st
      in the
      following calendar year.

     

    Section
      3.08.  Performance
      of Obligations.

     

    The
      Issuer will punctually perform and observe all of its obligations and agreements
      contained in this Indenture, the Basic Documents and in the instruments and
      agreements included in the Trust Estate.

     

    The
      Issuer may contract with other Persons to assist it in performing its duties
      under this Indenture, and any performance of such duties by a Person identified
      to the Indenture Trustee in an Officer’s Certificate of the Issuer shall be
      deemed to be action taken by the Issuer.

     

    The
      Issuer will not take any action or permit any action to be taken by others
      which
      would release any Person from any of such Person’s covenants or obligations
      under any of the documents relating to the Mortgage Loans or under any
      instrument included in the Trust Estate, or which would result in the amendment,
      hypothecation, subordination, termination or discharge of, or impair the
      validity or effectiveness of, any of the documents relating to the Mortgage
      Loans or any such instrument, except such actions as the Servicer is expressly
      permitted to take in the Sale and Servicing Agreement. The Indenture Trustee
      may
      exercise the rights of the Issuer to direct the actions of the Servicer pursuant
      to the Sale and Servicing Agreement.

     

    The
      Issuer may retain an administrator and may enter into contracts with other
      Persons for the performance of the Issuer’s obligations hereunder, and
      performance of such obligations by such Persons shall be deemed to be
      performance of such obligations by the Issuer.

     

    Section
      3.09.  Negative
      Covenants.  So
      long as any Notes are Outstanding, the Issuer shall not:

     

    (i)  except
      as
      expressly permitted by this Indenture, sell, transfer, exchange or otherwise
      dispose of the Trust Estate, unless directed to do so by the Indenture
      Trustee;

     

    (ii)  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;

     

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

     

    (iv)  waive
      or
      impair, or fail to assert rights under, the Mortgage Loans, or impair or cause
      to be impaired the Issuer’s interest in the Mortgage Loans, the Assignment and
      Recognition Agreement or in any Basic Document, if any such action would
      materially and adversely affect the interests of the Noteholders.

     

    Section
      3.10.  [Reserved.]

     

    Section
      3.11.  [Reserved.]

     

    Section
      3.12.  Representations
      and Warranties Concerning the Mortgage Loans.
      The
      Indenture Trustee, as pledgee of the Mortgage Loans, has the benefit of the
      representations and warranties made by the Originator in the Master Agreement
      concerning the Originator and the Mortgage Loans to the same extent as though
      such representations and warranties were made directly to the Indenture Trustee.
      If a Responsible Officer of the Indenture Trustee has actual knowledge of any
      breach of any representation or warranty made by the Originator in the Master
      Agreement, the Indenture Trustee shall promptly notify the Originator of such
      finding and the Originator’s obligation to cure such defect or repurchase or
      substitute for the related Mortgage Loan.

     

    Section
      3.13.  Amendments
      to Sale and Servicing Agreement.
      The
      Issuer covenants with the Indenture Trustee that it will not enter into any
      amendment or supplement to the Sale and Servicing Agreement without the prior
      written consent of the Indenture Trustee.

     

    Section
      3.14.  Servicer
      as Agent and Bailee of the Indenture Trustee.
      Solely
      for purposes of perfection under Section 9-305 of the UCC or other similar
      applicable law, rule or regulation of the state in which such property is held
      by the Servicer, the Issuer and the Indenture Trustee hereby acknowledge that
      the Servicer is acting as bailee of the Indenture Trustee in holding amounts
      on
      deposit in the Collection Account, as well as its bailee in holding any related
      documents released to the Servicer, and any other items constituting a part
      of
      the Trust Estate which from time to time come into the possession of the
      Servicer. It is intended that, by the Servicer’s acceptance of such bailee
      arrangement, the Indenture Trustee, as a secured party of the Mortgage Loans,
      will be deemed to have possession of such related documents, such monies and
      such other items for purposes of Section 9-305 of the UCC of the state in which
      such property is held by the Servicer. The Indenture Trustee shall not be liable
      with respect to such documents, monies or items while in possession of the
      Servicer.

     

    Section
      3.15.  Investment
      Company Act.
      The
      Issuer shall not become an “investment company” or be under the “control” of an
“investment company” as such terms are defined in the Investment Company Act of
      1940, as amended (or any successor or amendatory statute), and the rules and
      regulations thereunder (taking into account not only the general definition
      of
      the term “investment company” but also any available exceptions to such general
      definition); provided,
      however,
      that the
      Issuer shall be in compliance with this Section 3.15 if it shall have obtained
      an order exempting it from regulation as an “investment company” so long as it
      is in compliance with the conditions imposed in such order.

     

    Section
      3.16.  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 Indenture Trustee,
      the
      due and punctual payment of the principal of and interest on all Notes, and
      all
      other amounts payable to the Indenture Trustee, the payment to the Certificate
      Paying Agent of all amounts due to the Certificateholders, 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
      Rating Agencies shall have notified the Issuer that such transaction shall
      not
      cause the rating of the Notes to be reduced, suspended or withdrawn or to be
      considered by either Rating Agency to be below investment grade;

     

    (iv)  the
      Issuer shall have received an Opinion of Counsel (and shall have delivered
      a
      copy thereof to the Indenture Trustee) to the effect that such transaction
      will
      not (A) result in a “substantial modification” of the Notes under Treasury
      Regulation section 1.1001-3, or adversely affect the status of the Notes as
      indebtedness for federal income tax purposes, or (B) if 100% of the Certificates
      are not owned by a REIT, a “qualified REIT subsidiary” or by an entity that is
      wholly-owned by a REIT or a “qualified REIT subsidiary” and disregarded for
      federal income tax purposes, cause the Trust to be subject to an entity level
      tax for federal income tax purposes;

     

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

     

    (vi)  the
      Issuer shall have delivered to the Indenture Trustee 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 or relating to such transaction have been complied
      with (including any filing required by the Exchange Act), and that such
      supplemental indenture is enforceable; and

     

    (vii)  the
      consent of the Holders of not less than 50% of the aggregate Note Balance of
      the
      Notes has been obtained.

     

    (b)  The
      Issuer shall not convey or transfer any of its properties or assets pursuant
      to
      the terms of this Indenture, including those included in the Trust Estate,
      to
      any Person, unless:

     

    (i)  the
      Person that acquires by conveyance or transfer the properties and assets of
      the
      Issuer, the conveyance or transfer of which is hereby restricted, shall (A)
      be a
      United States citizen or a Person organized and existing under the laws of
      the
      United States of America or any state thereof, (B) expressly assume, by an
      indenture supplemental hereto, executed and delivered to the Indenture Trustee,
      in form satisfactory to the Indenture Trustee, 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, (C) expressly agree 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 the Holders of
      the
      Notes, (D) unless otherwise provided in such supplemental indenture, expressly
      agree to indemnify, defend and hold harmless the Issuer and the Indenture
      Trustee against and from any loss, liability or expense arising under or related
      to this Indenture and the Notes and (E) expressly agree 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;

     

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

     

    (iii)  the
      Rating Agencies shall have notified the Issuer that such transaction shall
      not
      cause the rating of the Notes to be reduced, suspended or
      withdrawn;

     

    (iv)  the
      Issuer shall have received an Opinion of Counsel (and shall have delivered
      a
      copy thereof to the Indenture Trustee) to the effect that such transaction
      will
      not (A) result in a “substantial modification” of the Notes under Treasury
      Regulation section 1.1001-3, or adversely affect the status of the Notes as
      indebtedness for federal income tax purposes, or (B) if 100% of the Certificates
      are not owned by a REIT, a “qualified REIT subsidiary” or by an entity that is
      wholly-owned by a REIT or a “qualified REIT subsidiary” and disregarded for
      federal income tax purposes, cause the Trust to be subject to an entity level
      tax for federal income tax purposes;

     

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

     

    (vi)  the
      Issuer shall have delivered to the Indenture Trustee 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).

     

    Section
      3.17.  Successor
      or Transferee.

     

    (a)  Upon
      any
      consolidation or merger of the Issuer in accordance with Section 3.16(a), 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 right
      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 all the assets and properties of the Issuer pursuant
      to Section 3.16(b), the Issuer will be released from every covenant and
      agreement 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
      and selling and managing the Mortgage Loans and the issuance of the Notes and
      Certificates in the manner contemplated by this Indenture and the Basic
      Documents and all activities incidental thereto.

     

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

     

    Section
      3.20.  Guarantees,
      Loans, Advances and Other Liabilities.  Except
      as contemplated by this Indenture or the Basic 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.  Determination
      of Note Rate.
      On each
      Interest Determination Date, the Indenture Trustee shall determine LIBOR and
      the
      related Note Rate for each Class of Notes for the following Accrual Period.
      The
      establishment of LIBOR on each Interest Determination Date by the Indenture
      Trustee and the Indenture Trustee’s calculation of the rate of interest
      applicable to each Class of Notes for the related Accrual Period shall (in
      the
      absence of manifest error) be final and binding.

     

    Section
      3.23.  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, (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 and payments to the
      Owner Trustee, the Indenture Trustee, Noteholders and the Certificateholders
      as
      contemplated by, and to the extent funds are available for such purpose under
      this Indenture and the Trust Agreement and (y) payments to the Servicer pursuant
      to the terms of the Sale and Servicing Agreement. The Issuer will not, directly
      or indirectly, make payments to or distributions from the Collection Account
      except in accordance with this Indenture and the Basic Documents.

     

    Section
      3.24.  Notice
      of Events of Default.
      The
      Issuer shall give the Indenture Trustee and the Rating Agencies prompt written
      notice of each Event of Default hereunder and under the Trust
      Agreement.

     

    Section
      3.25.  Further
      Instruments and Acts.
      Upon
      request of the Indenture Trustee, 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
      3.26.  Statements
      to Noteholders.
      On each
      Payment Date, the Indenture Trustee and the Certificate Registrar shall prepare
      and make available on the Indenture Trustee’s website,
      http://www.jpmorgan.com/sfr (or deliver in the event the recipient is unable
      to
      access such website), to each Noteholder and Certificateholder the most recent
      statement prepared by the Indenture Trustee pursuant to Section 7.05
      hereof.

     

    Section
      3.27.  [Reserved].

     

    Section
      3.28.  Certain
      Representations Regarding the Trust Estate.

     

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

     

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

     

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

     

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

     

    (iv)  The
      Issuer has taken all steps necessary to cause the Indenture Trustee to become
      the account holder of the Collateral.

     

    (v)  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.

     

    (vi)  The
      Collateral is not in the name of any Person other than the Issuer or the
      Indenture Trustee. The Issuer has not consented to the bank maintaining the
      Collateral to comply with instructions of any Person other than the Indenture
      Trustee.

     

    (b)  With
      respect to that portion of the Collateral described in clause (e), the Issuer
      represents to the Indenture Trustee that:

     

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

     

    (ii)  The
      Collateral constitutes “general intangibles” within the meaning of the
      applicable UCC.

     

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

     

    (iv)  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.

     

    (c)  With
      respect to any Collateral in which a security interest may be perfected by
      filing, the Issuer has not authorized the filing of, and is not aware of any
      financing statements against, the Issuer, that include a description of
      collateral covering such 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.

     

    (d)  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
      all Collateral granted to the Indenture Trustee hereunder in which a security
      interest may be perfected by filing and the Issuer will cause such security
      interest to be maintained. Any financing statement that is filed in connection
      with this Section 3.28 shall contain a statement that a purchase or security
      interest in any collateral described therein will violate the rights of the
      secured party named in such financing statement.

     

    (e)  The
      foregoing representations may not be waived and shall survive the issuance
      of
      the Notes.

     

    Section
      3.29.  Allocation
      of Realized Losses.

     

    (a)  All
      Realized Losses on the Mortgage Loans shall be allocated by the Indenture
      Trustee on each Payment Date as follows: first, to the Net Monthly Excess
      Cashflow for the related Interest Accrual Period; second, to Net Swap Payments
      received under the Interest Rate Swap Agreement; third, to the
      Overcollateralized Amount, until the Overcollateralized Amount has been reduced
      to zero; fourth, to the Class M-11 Notes until the Note Balance thereof has
      been
      reduced to zero; fifth, to the Class M-10 Notes until the Note Balance thereof
      has been reduced to zero; sixth, to the Class M-9 Notes until the Note Balance
      thereof has been reduced to zero; seventh, to the Class M-8 Notes until the
      Note
      Balance thereof has been reduced to zero; eighth, to the Class M-7 Notes until
      the Note Balance thereof has been reduced to zero; ninth, to the Class M-6
      Notes
      until the Note Balance thereof has been reduced to zero; tenth, to the Class
      M-5
      Notes until the Note Balance thereof has been reduced to zero; eleventh, to
      the
      Class M-4 Notes, until the Note Balance thereof has been reduced to zero;
      twelfth, to the Class M-3 Notes, until the Note Balance thereof has been reduced
      to zero; thirteenth, to the Class M-2 Notes, until the Note Balance thereof
      has
      been reduced to zero; and fourteenth, to the Class M-1 Notes, until the Note
      Balance thereof has been reduced to zero. 

     

    (b)  All
      Realized Losses to be allocated to the Note Balances of all Classes on any
      Payment Date shall be so allocated after the actual payments to be made on
      such
      date as provided above. All references above to the Note Balance of any Class
      of
      Notes shall be to the Note Balance of such Class immediately prior to the
      relevant Payment Date, before reduction thereof by any Realized Losses, in
      each
      case to be allocated to such Class of Notes, on such Payment Date.

     

    Any
      allocation of Realized Losses to a Mezzanine Note on any Payment Date shall
      be
      made by reducing the Note Balance thereof by the amount so allocated. No
      allocations of any Realized Losses shall be made to the Note Balances of the
      Class A Notes.

     

    As
      used
      herein, an allocation of a Realized Loss on a “pro
      rata
      basis”
among two or more specified Classes of Notes means an allocation on a pro rata
      basis, among the various Classes so specified, to each such Class of Notes
      on
      the basis of their then outstanding Note Balances prior to giving effect to
      payments to be made on such Payment Date. All Realized Losses and all other
      losses allocated to a Class of Notes hereunder will be allocated among the
      Notes
      of such Class in proportion to the Percentage Interests evidenced
      thereby.

     

      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IV

    THE
      NOTES; SATISFACTION AND DISCHARGE OF INDENTURE

     

    Section
      4.01.  The
      Notes.
      Each
      Class of Notes shall be registered in the name of a nominee designated by the
      Depository. Beneficial Owners will hold interests in the Notes through the
      book-entry facilities of the Depository in minimum initial Note Balances of
      $25,000 and integral multiples of $1 in excess thereof;
      provided that the Floating Rate Notes must be purchased in minimum total
      investments of $100,000 per Class.

     

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

     

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

     

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

     

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

     

    The
      Issuer shall cause to be kept at the Corporate Trust Office a Note Register
      in
      which, subject to such reasonable regulations as it may prescribe, the Note
      Registrar shall provide for the registration of Notes and of transfers and
      exchanges of Notes as herein provided.

     

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

     

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

     

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

     

    The
      Issuer hereby appoints the Indenture Trustee as (i) Certificate Registrar to
      keep at its Corporate Trust Office a Certificate Register pursuant to Section
      3.09 of the Trust Agreement in which, subject to such reasonable regulations
      as
      it may prescribe, the Certificate Registrar shall provide for the registration
      of Certificates and of transfers and exchanges thereof pursuant to Section
      3.05
      of the Trust Agreement and (ii) Note Registrar under this Indenture. The
      Indenture Trustee hereby accepts such appointments.

     

    Section
      4.03.  Mutilated,
      Destroyed, Lost or Stolen Notes.
      If (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 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 bona
      fide purchaser, and provided that the requirements of Section 8-405 of the
      UCC
      are met, the Issuer shall execute, and upon its 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, instead of issuing a
      replacement Note, the Issuer may pay such destroyed, lost or stolen Note when
      so
      due or payable without surrender thereof. If, after the delivery of such
      replacement Note or payment of a destroyed, lost or stolen Note pursuant to
      the
      proviso to the preceding sentence, a bona fide purchaser of the original Note
      in
      lieu of which such replacement Note was issued presents for payment such
      original Note, the 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 bona
      fide purchaser, and shall be entitled to recover upon the security or indemnity
      provided therefor to the extent of any loss, damage, cost or expense incurred
      by
      the Issuer or the Indenture Trustee in connection therewith.

     

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

     

    Section
      4.04.  Persons
      Deemed Owners.
      Prior
      to due presentment for registration of transfer of any Note, the Issuer, the
      Indenture Trustee, the Paying Agent 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, if any, on such Note and for all other
      purposes whatsoever, whether or not such Note be overdue, and neither the
      Issuer, the Indenture Trustee, the Paying Agent nor any agent of the Issuer
      or
      the Indenture Trustee shall be affected by notice to the contrary.

     

    Section
      4.05.  Cancellation.
      All
      Notes surrendered for payment, registration of transfer, exchange or redemption
      shall, if surrendered to any Person other than the Indenture Trustee, be
      delivered to the Indenture Trustee and shall be promptly cancelled 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 cancelled by the Indenture Trustee. No Notes shall
      be authenticated in lieu of or in exchange for any Notes cancelled as provided
      in this Section 4.05, except as expressly permitted by this Indenture. All
      cancelled Notes may be held or disposed of by the 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 Request that they be destroyed
      or returned to it; provided,
      however,
      that
      such Issuer Request is timely and the Notes have not been previously disposed
      of
      by the Indenture Trustee.

     

    Section
      4.06.  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 Depository, by, or on behalf of, the Issuer. The Notes
      shall initially be registered on the Note Register in the name of Cede &
Co., the nominee of the initial Depository, and no Beneficial Owner will receive
      a Definitive Note representing such Beneficial Owner’s interest in such Note,
      except as provided in Section 4.08. With respect to such Notes, unless and
      until
      definitive, fully registered Notes (the “Definitive Notes”) have been issued to
      Beneficial Owners pursuant to Section 4.08:

     

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

     

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

     

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

     

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

     

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

     

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

     

    Section
      4.08.  Definitive
      Notes.
      If (i)
      the Issuer determines that the Depository is no longer willing or able to
      properly discharge its responsibilities with respect to the Notes and the Issuer
      is unable to locate a qualified successor or (ii) after the occurrence of an
      Event of Default, Beneficial Owners of Notes representing beneficial interests
      aggregating at least a majority of the aggregate Note Balance of the Notes
      advise the Depository in writing that the continuation of a book-entry system
      through the Depository is no longer in the best interests of the Beneficial
      Owners, then the Depository shall notify all Beneficial Owners and the Indenture
      Trustee of the occurrence of any such event and of the availability of
      Definitive Notes to Beneficial Owners requesting the same. Upon surrender to
      the
      Indenture Trustee of the typewritten Notes representing the Book-Entry Notes
      by
      the Depository, accompanied by registration instructions, the Issuer shall
      execute and the Indenture Trustee shall authenticate the Definitive Notes in
      accordance with the instructions of the Depository. 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 shall recognize the Holders of the Definitive Notes as
      Noteholders.

     

    Section
      4.09.  Tax
      Treatment.
      The
      Issuer has entered into this Indenture, and the Notes will be issued with the
      intention that, for federal, state and local income, single business and
      franchise tax purposes, the Notes will qualify as indebtedness. The Issuer
      and
      the Indenture Trustee (in accordance with Section 6.06 hereof), by entering
      into
      this Indenture, and each Noteholder, by its acceptance of its Note (and each
      Beneficial Owner by its acceptance of an interest in the applicable Book-Entry
      Note), agree to treat the Notes for federal, state and local income, single
      business and franchise tax purposes as indebtedness.

     

    Section
      4.10.  Satisfaction
      and Discharge of Indenture.
      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 3.03,
      3.04, 3.06, 3.09, 3.17, 3.19 and 3.20, (v) the rights and immunities of the
      Indenture Trustee hereunder (including the rights of the Indenture Trustee
      under
      Section 6.07) and the obligations of the Indenture Trustee under Section 4.11
      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 and shall release and deliver the Collateral
      to or upon the order of the Issuer, when

     

    (A) either

     

    (1) 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 4.03 hereof 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
      3.03)
      have been delivered to the Indenture Trustee for cancellation; or

     

    (2) all
      Notes
      not theretofore delivered to the Indenture Trustee for cancellation (a) have
      become due and payable, (b) will become due and payable at the Final Stated
      Maturity Date within one year, or (c) have been called for early redemption
      pursuant to Section 8.07 hereof, and the Issuer, in the case of (a) or (b)
      above, has irrevocably deposited or caused to be irrevocably deposited with
      the
      Indenture Trustee cash (which cash shall come from payments received on the
      Mortgage Loans), in trust for such purpose, in an amount sufficient to pay
      and
      discharge the entire indebtedness on such Notes then outstanding not theretofore
      delivered to the Indenture Trustee for cancellation when due on the Final Stated
      Maturity Date or other final Payment Date, or, in the case of (c) above, the
      Issuer shall have complied with all requirements of Section 8.07
      hereof,

     

    (B) the
      Issuer has paid or caused to be paid all other sums payable hereunder, pursuant
      to the terms of this Indenture; and

     

    (C) the
      Issuer has delivered to the Indenture Trustee an Officer’s Certificate and an
      Opinion of Counsel, each meeting the applicable requirements of Section 10.01
      hereof, each stating that all conditions precedent herein provided for relating
      to the satisfaction and discharge of this Indenture have been complied with
      and,
      if the Opinion of Counsel relates to a deposit made in connection with Section
      4.10(A)(2)(b) above, such opinion shall further be to the effect that such
      deposit will constitute an “in-substance defeasance” within the meaning of
      Revenue Ruling 85-42, 1985-1 C.B. 36, and in accordance therewith, the Issuer
      will be the owner of the assets deposited in trust for federal income tax
      purposes.

     

    Section
      4.11.  Application
      of Trust Money.
      All
      monies deposited with the Indenture Trustee pursuant to Section 4.10 hereof
      shall be held in trust and applied by it, in accordance with the provisions
      of
      the Notes and this Indenture, to the payment, either directly or through any
      Paying Agent or the Issuer, Certificate Paying Agent as designee of the Issuer,
      as the Indenture Trustee may determine, to the Holders of Notes or Certificates,
      of all sums due and to become due thereon for principal and interest or
      otherwise; but such monies need not be segregated from other funds except to
      the
      extent required herein or required by law.

     

    Section
      4.12.  [Reserved].
      

     

    Section
      4.13.  Repayment
      of Monies Held by Paying Agent.
      In
      connection with the satisfaction and discharge of this Indenture with respect
      to
      the Notes, all monies then held by any Person other than the 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 3.05 and thereupon such Person shall be released from
      all
      further liability with respect to such monies.

     

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

     

    If
      temporary Notes are issued, the Issuer will cause Definitive Notes to be
      prepared without unreasonable delay. After the preparation of the Definitive
      Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
      surrender of the temporary Notes at the office of the Indenture Trustee located
      at 2001 Bryan Street, 9th
      Floor,
      Dallas, Texas 75201, Attention: Transfer Dept., Newcastle Mortgage Securities
      Trust 2006-1, without charge to the Holder. Upon surrender for cancellation
      of
      any one or more temporary Notes, the Issuer shall execute and the Indenture
      Trustee shall authenticate and make available for delivery, in exchange
      therefor, Definitive Notes of authorized denominations and of like tenor, class
      and aggregate principal amount. Until so exchanged, such temporary Notes shall
      in all respects be entitled to the same benefits under this Indenture as
      Definitive Notes.

     

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

     

      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      V

    DEFAULT
      AND REMEDIES

     

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

     

    Section
      5.02.  Acceleration
      of Maturity; Rescission and Annulment.
      If an
      Event of Default should occur and be continuing, then and in every such case
      the
      Indenture Trustee at the written direction of the Holders of Notes representing
      not less than a majority of the aggregate Note Balance of the 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 with respect to an
      Event
      of Default has been made and before a judgment or decree for payment of the
      money due has been obtained by the Indenture Trustee as hereinafter in this
      Article V provided, Holders of the Notes representing not less than a majority
      of the aggregate Note Balance of the Notes, by written notice to the Issuer
      and
      the Indenture Trustee, may waive the related Event of Default and rescind and
      annul such declaration and its consequences if:

     

    (i)  the
      Issuer has paid or deposited with the Indenture Trustee a sum (which sum shall
      come from payments received on the Mortgage Loans) sufficient to pay (a) all
      payments of principal of and interest on the Notes and all other amounts that
      would then be due hereunder or upon the Notes if the Event of Default giving
      rise to such acceleration had not occurred; and (b) 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

     

    (ii)  all
      Events of Default, other than the nonpayment of the principal of the Notes
      that
      has become due solely by such acceleration, have been cured or waived as
      provided in Section 5.12.

     

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

     

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

     

    (a)  The
      Issuer covenants that if (i) default is made in the payment of any interest
      on
      any Note when the same becomes due and payable, and such default continues
      for a
      period of five days, or (ii) default is made in the payment of the principal
      of
      or any installment of the principal of any Note when the same becomes due and
      payable, the Issuer shall, upon demand of the Indenture Trustee, at the
      direction of the Holders of a majority of the aggregate Note Balance of the
      Notes, pay to the Indenture Trustee, for the benefit of the Holders of Notes,
      the whole amount then due and payable on the Notes for principal and interest,
      with interest at the applicable Note Rate upon the overdue principal, and in
      addition thereto such further amount as shall be sufficient to cover the costs
      and expenses of collection, including the reasonable compensation, expenses,
      disbursements and advances of the Indenture Trustee and its agents and
      counsel.

     

    (b)  In
      case
      the Issuer shall fail forthwith to pay such amounts upon such demand, the
      Indenture Trustee, in its own name and as trustee of an express trust, subject
      to the provisions of Section 10.16 hereof may institute a Proceeding for the
      collection of the sums so due and unpaid, and may prosecute such Proceeding
      to
      judgment or final decree, and may enforce the same against the Issuer or other
      obligor upon the Notes and collect in the manner provided by law out of the
      property of the Issuer or other obligor the Notes, wherever situated, the monies
      adjudged or decreed to be payable.

     

    (c)  If
      an
      Event of Default occurs and is continuing, the Indenture Trustee, subject to
      the
      provisions of Section 10.16 hereof may, as more particularly provided in Section
      5.04 hereof, in its discretion, proceed to protect and enforce its rights and
      the rights of the Noteholders, by such appropriate Proceedings, as directed
      in
      writing by Holders of a majority of the aggregate Note Balance of the Notes,
      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, as directed in writing by Holders
      of a majority of the aggregate Note Balance of the Notes, irrespective of
      whether the principal of any Notes shall then be due and payable as therein
      expressed or by declaration or otherwise and irrespective of whether the
      Indenture Trustee shall have made any demand pursuant to the provisions of
      this
      Section, shall be entitled and empowered, by intervention in such Proceedings
      or
      otherwise:

     

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

     

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

     

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

     

    (iv)  to
      file
      such proofs of claim and other papers or documents as may be necessary or
      advisable in order to have the claims of the Indenture Trustee 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.

     

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

     

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

     

    (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 Holders of the Notes, and it shall not be necessary to make any Noteholder
      a
      party to any such Proceedings.

     

    Section
      5.04.  Remedies;
      Priorities.

     

    (a)  If
      an
      Event of Default shall have occurred and be continuing and if an acceleration
      has been declared and not rescinded pursuant to Section 5.02 hereof, the
      Indenture Trustee subject to the provisions of Section 10.16 hereof may, and
      shall, at the written direction of the Holders of a majority of the aggregate
      Note Balance of the Notes, do one or more of the following (subject to Section
      5.05 hereof):

     

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

     

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

     

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

     

    (iv)  sell
      the
      Trust Estate or any portion thereof or rights or interest therein, at one or
      more public or private sales called and conducted in any manner permitted by
      law; provided,
      however,
      that
      the Indenture Trustee may not sell or otherwise liquidate the Trust Estate
      following an Event of Default, unless (A) the Indenture Trustee obtains the
      consent of the Holders of 100% of the aggregate Note Balance of the Notes,
      (B)
      the proceeds of such sale or liquidation distributable to the Holders of the
      Notes are sufficient to discharge in full all amounts then due and unpaid upon
      such Notes for principal and interest or (C) the Indenture Trustee determines
      that the Mortgage Loans will not continue to provide sufficient funds for the
      payment of principal of and interest on the applicable Notes as they would
      have
      become due if the Notes had not been declared due and payable, and the Indenture
      Trustee obtains the consent of the Holders of a majority of the aggregate Note
      Balance of the Notes. In determining such sufficiency or insufficiency with
      respect to clause (B) and (C), the Indenture Trustee may, but need not, obtain
      and rely upon written advice or an opinion (obtained at the expense of the
      Trust) of an Independent investment banking or accounting firm of national
      reputation as to the feasibility of such proposed action and as to the
      sufficiency of the Trust Estate for such purpose. Notwithstanding the foregoing,
      so long as a Servicer Event of Termination has not occurred, any sale of the
      Trust Estate shall be made subject to the continued servicing of the Mortgage
      Loans by the Servicer as provided in the Sale and Servicing
      Agreement.

     

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

     

    (i)  to
      the
      Indenture Trustee and the Owner Trustee for amounts due under Section 6.07
      hereof and to the Owner Trustee for amounts due pursuant to Article VII of
      the
      Trust Agreement;

     

    (ii)  to
      the
      Swap Provider, any remaining Net Swap Payment or Swap Termination Payment (other
      than any Swap Termination Payment resulting from a Swap Provider Trigger Event)
      owed to the Swap Provider pursuant to the Interest Rate Swap
      Agreement;

     

    (iii)  to
      the
      Noteholders for amounts due and unpaid on the Notes (including Unpaid Interest
      Shortfall Amount but not including any Basis Risk Shortfall Amount) with respect
      to interest, first, concurrently, to the Holders of each Class of Class A Notes,
      on a pro
      rata
      basis
      based on the entitlement of each such Class, second, to the Holders of the
      Class
      M-1 Notes, third, to the Holders of the Class M-2 Notes, fourth, to the Holders
      of the Class M-3 Notes, fifth, to the Holders of the Class M-4 Notes, sixth,
      to
      the Holders of the Class M-5 Notes, seventh, to the Holders of the Class M-6
      Notes, eighth, to the Holders of the Class M-7 Notes, ninth, to the Holders
      of
      the Class M-8 Notes, tenth, to the Holders of the Class M-9 Notes, eleventh,
      to
      the Holders of the Class M-10 Notes and twelfth, to the Holders of the Class
      M-11 Notes according to the amounts due and payable on the Notes for
      interest;

     

    (iv)  to
      the
      Noteholders for amounts due and unpaid on the Notes with respect to principal,
      first, concurrently, to the Holders of each Class of Class A Notes, on a
pro
      rata
      basis
      based on the Note Balance of each such Class, second, to the Holders of the
      Class M-1 Notes, third, to the Holders of the Class M-2 Notes, fourth, to the
      Holders of the Class M-3 Notes, fifth, to the Holders of the Class M-4 Notes,
      sixth, to the Holders of the Class M-5 Notes, seventh, to the Holders of the
      Class M-6 Notes, eighth, to the Holders of the Class M-7 Notes, ninth, to the
      Holders of the Class M-8 Notes, tenth, to the Holders of the Class M-9 Notes,
      eleventh, to the Holders of the Class M-10 Notes and twelfth, to the Holders
      of
      the Class M-11 Notes according to the amounts due and payable on the Notes
      for
      interest according to the amounts due and payable on such Notes for principal,
      in each case, until the Note Balance of each such Class is reduced to
      zero;

     

    (v)  to
      the
      Noteholders for the amount of any related Allocated Realized Loss Amount and
      Deferred Interest not previously paid, first, to the Holders of the Class M-1
      Notes, second, to the Holders of the Class M-2 Notes, third, to the Holders
      of
      the Class M-3 Notes, fourth, to the Holders of the Class M-4 Notes, fifth,
      to
      the Holders of the Class M-5 Notes, sixth, to the Holders of the Class M-6
      Notes, seventh, to the Holders of the Class M-7 Notes, eighth, to the Holders
      of
      the Class M-8 Notes, ninth, to the Holders of the Class M-9 Notes, tenth, to
      the
      Holders of the Class M-10 Notes and eleventh, to the Holders of the Class M-11
      Notes;

     

    (vi)  to
      the
      Noteholders for amounts due and unpaid on the Notes with respect to any related
      Basis Risk Shortfall Amount, first, concurrently, to the Holders of each Class
      of Class A Notes, on a pro
      rata
      basis
      based on the Basis Risk Shortfall Amount for each such Class, second, to the
      Holders of the Class M-1 Notes, third, to the Holders of the Class M-2 Notes,
      fourth, to the Holders of the Class M-3 Notes, fifth, to the Holders of the
      Class M-4 Notes, sixth, to the Holders of the Class M-5 Notes, seventh, to
      the
      Holders of the Class M-6 Notes, eighth, to the Holders of the Class M-7 Notes,
      ninth, to the Holders of the Class M-8 Notes, tenth, to the Holders of the
      Class
      M-9 Notes, eleventh, to the Holders of the Class M-10 Notes and twelfth, to
      the
      Holders of the Class M-11 Notes according to the amounts due and payable on
      the
      Notes with respect thereto, from amounts available in the Trust Estate for
      the
      Noteholders; 

     

    (vii)  to
      the
      Swap Provider, any remaining Swap Termination Payment resulting from a Swap
      Provider Trigger Event; and

     

    (viii)  to
      the
      payment of the remainder, if any to the Certificate Paying Agent on behalf
      of
      the Issuer or to any other person legally entitled thereto.

     

    The
      Indenture Trustee may fix a record date and Payment Date for any payment to
      Noteholders pursuant to this Section 5.04. At least 15 days before such record
      date, the Indenture Trustee shall mail to each Noteholder a notice that states
      the record date, the Payment Date and the amount to be paid.

     

    Section
      5.05.  Optional
      Preservation of the Trust Estate.
      If the
      Notes have been declared to be due and payable under Section 5.02 following
      an
      Event of Default and such declaration and its consequences have not been
      rescinded and annulled, the Indenture Trustee may elect to take and maintain
      possession of the Trust Estate. It is the desire of the parties hereto and
      the
      Noteholders that there be at all times sufficient funds for the payment of
      principal of and interest on the Notes and other obligations of the Issuer
      and
      the Indenture Trustee shall take such desire into account when determining
      whether or not to take and maintain possession of the Trust Estate. In
      determining whether and how to take and maintain possession of the Trust Estate,
      the Indenture Trustee may, but need not, obtain and rely upon the written advice
      or an opinion of an Independent investment banking or accounting firm of
      national reputation as to the feasibility of such proposed action and as to
      the
      sufficiency of the Trust Estate for such purpose.

     

    Section
      5.06.  Limitation
      of Suits.
      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 and subject to the
      provisions of Section 10.16 hereof

     

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

     

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

     

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

     

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

     

    (v)  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 aggregate
      Note Balance of the Notes.

     

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

     

    Section
      5.07.  Unconditional
      Rights of Noteholders To Receive Principal and Interest.

     

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

     

    Section
      5.08.  Restoration
      of Rights and Remedies.
      If the
      Indenture Trustee or any Noteholder has instituted any Proceeding to enforce
      any
      right or remedy under this Indenture and such Proceeding has been discontinued
      or abandoned for any reason or has been determined adversely to the Indenture
      Trustee 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
      5.09.  Rights
      and Remedies Cumulative.
      No
      right or remedy herein conferred upon or reserved to the Indenture Trustee
      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 or any Holder of any Note to exercise
      any right or remedy accruing upon any Event of Default shall impair any such
      right or remedy or constitute a waiver of any such Event of Default or an
      acquiescence therein. Every right and remedy given by this Article V or by
      law
      to the Indenture Trustee or to the Noteholders may be exercised from time to
      time, and as often as may be deemed expedient, by the Indenture Trustee or
      by
      the Noteholders, as the case may be.

     

    Section
      5.11.  Control
      By Noteholders.  The
      Holders of a majority of the aggregate Note Balance of 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:

     

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

     

    (ii)  any
      direction to the Indenture Trustee to sell or liquidate the Trust Estate shall
      be by Holders of Notes representing not less than 100% of the aggregate Note
      Balance of the Notes;

     

    (iii)  the
      Indenture Trustee has been provided with indemnity satisfactory to it;
      and

     

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

     

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

     

    Section
      5.12.  Waiver
      of Past Defaults.  Prior
      to the declaration of the acceleration of the maturity of the Notes as provided
      in Section 5.02 hereof, the Holders of Notes representing not less than a
      majority of the aggregate Note Balance of the Notes may waive any past Event
      of
      Default and its consequences except an Event of Default (a) with respect to
      payment of principal of or interest on any of the Notes or (b) in respect of
      a
      covenant or provision hereof which cannot be modified or amended without the
      consent of the Holder of each Note. In the case of any such waiver, the Issuer,
      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 Event of Default or impair any right
      consequent thereto.

     

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

     

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

     

    Section
      5.14.  Waiver
      of Stay or Extension Laws.
      The
      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
      shall not hinder, delay or impede the execution of any power herein granted
      to
      the Indenture Trustee, but will suffer and permit the execution of every such
      power as though no such law had been enacted.

     

    Section
      5.15.  Sale
      of Trust Estate.

     

    (a)  The
      power
      to effect any sale or other disposition (a “Sale”) of any portion of the Trust
      Estate pursuant to Section 5.04 hereof is expressly subject to the provisions
      of
      Section 5.05 hereof and this Section 5.15. The power to effect any such Sale
      shall not be exhausted by any one or more Sales as to any portion of the Trust
      Estate remaining unsold, but shall continue unimpaired until the entire Trust
      Estate shall have been sold or all amounts payable on the Notes and under this
      Indenture shall have been paid. The Indenture Trustee may from time to time
      postpone any public Sale by public announcement made at the time and place
      of
      such Sale. The Indenture Trustee hereby expressly waives its right to any amount
      fixed by law as compensation for any Sale.

     

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

     

    (i)  the
      Holders of all Notes consent to or direct the Indenture Trustee to make, such
      Sale, or

     

    (ii)  the
      proceeds of such Sale would be not less than the entire amount which would
      be
      payable to the Noteholders under the Notes, in full payment thereof in
      accordance with Section 5.02 hereof, on the Payment Date next succeeding the
      date of such Sale, or

     

    (iii)  the
      Indenture Trustee determines that the conditions for retention of the Trust
      Estate set forth in Section 5.05 hereof cannot be satisfied (in making any
      determination under this Section 5.15, the Indenture Trustee may rely upon
      written advice or an opinion of an Independent investment banking firm obtained
      and delivered as provided in Section 5.05 hereof), the Holders of Notes
      representing at least 100% of the aggregate Note Balance of the Notes consent
      to
      such Sale.

     

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

     

    (c)  [Reserved].

     

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

     

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

     

    (ii)  the
      Indenture Trustee, may bid for and acquire the property offered for Sale in
      connection with any Sale thereof, and, subject to any requirements of, and
      to
      the extent permitted by, applicable law in connection therewith, may purchase
      all or any portion of the Trust Estate in a private sale, and, in lieu of paying
      cash therefor, may make settlement for the purchase price by crediting the
      gross
      Sale price against the sum of (A) the amount which would be payable to the
      Holders of the Notes and Holders of Certificates on the Payment Date next
      succeeding the date of such Sale and (B) the expenses of the Sale and of any
      Proceedings in connection therewith which are reimbursable to it, without being
      required to produce the Notes in order to complete any such Sale or in order
      for
      the net Sale price to be credited against such Notes, and any property so
      acquired by the Indenture Trustee shall be held and dealt with by it in
      accordance with the provisions of this Indenture;

     

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

     

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

     

    (v)  no
      purchaser or transferee at such a Sale shall be bound to ascertain the Indenture
      Trustee’s authority, inquire into the satisfaction of any conditions precedent
      or see to the application of any monies.

     

    Section
      5.16.  Action
      on Notes.
      The
      Indenture Trustee’s right to seek and recover judgment on the Notes or under
      this Indenture shall not be affected by the seeking, obtaining or application
      of
      any other relief under or with respect to this Indenture. Neither the lien
      of
      this Indenture nor any rights or remedies of the Indenture Trustee 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 5.04(b) hereof.

     

    Section
      5.17.  Performance
      and Enforcement of Certain Obligations.

     

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

     

    (b)  The
      Indenture Trustee, as pledgee of the Mortgage Loans, may, and at the direction
      (which direction shall be in writing or by telephone (confirmed in writing
      promptly thereafter)) of the Holders of 66-2/3% of the aggregate Note Balance
      of
      the Notes, shall exercise all rights, remedies, powers, privileges and claims
      of
      the Issuer against the Seller, the Originator or the Servicer under or in
      connection with the Assignment and Recognition Agreement, the Master Agreement
      and the Sale and Servicing Agreement, including the right or power to take
      any
      action to compel or secure performance or observance by the Seller, the
      Originator or the 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 Assignment and Recognition Agreement,
      the Master Agreement and the Sale and Servicing Agreement, as the case may
      be,
      and any right of the Issuer to take such action shall not be
      suspended.

     

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE
      VI 

    THE
      INDENTURE TRUSTEE

     

    Section
      6.01.  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 circumstances 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 on their face 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
      6.01;

     

    (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 from
      Noteholders or from the Issuer, which they are entitled to give under the Basic
      Documents.

     

    (d)  The
      Indenture Trustee shall not be liable for interest on any money received by
      it.

     

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

     

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

     

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

     

    (h)  The
      Indenture Trustee shall act in accordance with Section 6.02 of the Sale and
      Servicing Agreement and shall act as successor to the Servicer or appoint a
      successor Servicer in accordance with Section 6.02 of the Sale and Servicing
      Agreement.

     

    (i)  To
      help
      fight the funding of terrorism and money laundering activities, the Indenture
      Trustee may obtain, verify, and record information that identifies individuals
      or entities that establish a relationship or open an account with the Indenture
      Trustee. The Indenture Trustee may ask for the name, address, tax identification
      number and other information that will allow the Indenture Trustee to identify
      the individual or entity who is establishing the relationship or opening the
      account. The Indenture Trustee may also ask for formation documents such as
      articles of incorporation, an offering memorandum, or other identifying
      documents to be provided.

     

    Section
      6.02.  Rights
      of Indenture Trustee.

     

    (a)  The
      Indenture Trustee may conclusively rely on, and shall be fully protected from
      acting or refraining from acting upon, any 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 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 shall not be liable for any action it takes or omits to take
      in good faith which it believes to be authorized or within its rights or powers;
      provided,
      however,
      that
      the Indenture Trustee’s conduct does not constitute willful misconduct,
      negligence or bad faith.

     

    (d)  The
      Indenture Trustee may consult with counsel, and the advice or Opinion of Counsel
      with respect to legal matters relating to the Basic Documents and the Notes
      shall be full and complete authorization and protection from liability in
      respect to any action taken, omitted or suffered by it hereunder or in
      connection herewith in good faith and in accordance with the advice or opinion
      of such counsel.

     

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

     

    Section
      6.03.  Individual
      Rights of Indenture Trustee.
      The
      Indenture Trustee in its individual or any other capacity may become the owner
      or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
      with the same rights it would have if it were not Indenture Trustee, subject
      to
      the requirements of the Trust Indenture Act. Any Note Registrar, co-registrar
      or
      co-paying agent may do the same with like rights. However, the Indenture Trustee
      must comply with Sections 6.11 and 6.12 hereof.

     

    Section
      6.04.  Indenture
      Trustee’s Disclaimer.
      The
      Indenture Trustee shall not be responsible for and makes no representation
      as to
      the validity or adequacy of this Indenture or the Notes, it shall not be
      accountable for the Issuer’s use of the proceeds from the Notes, and it shall
      not be responsible for any statement of the Issuer in the 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
      6.05.  Notice
      of Event of Default.
      Subject
      to Section 5.01, the Indenture Trustee shall promptly mail to each Noteholder
      notice of the Event of Default after it is actually known to a Responsible
      Officer
      of
      the Indenture Trustee, unless such Event of Default shall have been waived
      or
      cured. Except in the case of an Event of Default in payment of principal of
      or
      interest on any Note, the Indenture Trustee may withhold the notice if and
      so
      long as it in good faith determines that withholding the notice is in the
      interests of Noteholders.

     

    Section
      6.06.  Reports
      by Indenture Trustee to Holders and Tax Administration.

     

    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. The Indenture Trustee shall prepare and file (or cause to be prepared
      and filed), on behalf of the Owner Trustee or the Issuer, all tax returns (if
      any) and information reports, tax elections and such annual or other reports
      of
      the Issuer as are necessary for preparation of tax returns and information
      reports as provided in Section 5.03 of the Trust Agreement, including without
      limitation Form 1099. All tax returns and information reports shall be signed
      by
      the Owner Trustee as provided in Section 5.03 of the Trust
      Agreement.

     

    Section
      6.07.  Compensation
      and Indemnity.  The
      Indenture Trustee shall withdraw from the Payment Account on each Payment Date
      and pay to itself the Indenture Trustee Fee. The Indenture Trustee’s
      compensation shall not be limited by any law on compensation of a trustee of
      an
      express trust. In addition, the Indenture Trustee shall withdraw from the
      Payment Account on each Payment Date and pay to the Owner Trustee the Owner
      Trustee Fee and its Expenses if notified in writing by the Owner Trustee to
      the
      Indenture Trustee no later than 10 Business Days prior to such Payment
      Date.

     

    The
      Issuer shall reimburse the Indenture Trustee and the Owner Trustee for all
      reasonable out-of-pocket expenses incurred or made by it, including costs of
      collection, in addition to compensation for its services. Such expenses shall
      include reasonable compensation and expenses, disbursements and advances of
      the
      Indenture Trustee’s or the Owner Trustee’s agents, counsel, accountants and
      experts. The Issuer shall indemnify the Indenture Trustee and hold it harmless
      against any and all claim, tax, penalty, loss, liability or expense (including
      attorneys’ fees and expenses) of any kind whatsoever, other than through the
      Indenture Trustee’s willful misconduct, negligence or bad faith, incurred by it
      in connection with the administration of this Trust and the performance of
      its
      duties under any of the Basic Documents. 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 reasonable fees
      and expenses of such counsel. 

     

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

     

    Section
      6.08.  Replacement
      of Indenture Trustee.
      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 pursuant to this Section 6.08.
      The Indenture Trustee may resign at any time by so notifying the Issuer. Holders
      of a majority of Note Balances of the Notes may remove the Indenture Trustee
      by
      so notifying the Indenture Trustee and may appoint a successor Indenture
      Trustee. The Issuer shall, remove the Indenture Trustee if:

     

    (i)  the
      Indenture Trustee fails to comply with Section 6.11 hereof;

     

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

     

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

     

    (iv)  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
      the 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.

     

    A
      successor Indenture Trustee shall deliver a written acceptance of its
      appointment to the retiring Indenture Trustee and to the Issuer. 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 30 days after the
      retiring Indenture Trustee resigns or is removed, the retiring Indenture
      Trustee, the Issuer or the Holders of a majority of Note Balances of the Notes
      may petition any court of competent jurisdiction for the appointment of a
      successor Indenture Trustee.

     

    Notwithstanding
      the replacement of the Indenture Trustee pursuant to this Section, the Issuer’s
      obligations under Section 6.07 shall continue for the benefit of the
      retiring Indenture Trustee.

     

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

     

    If
      at the
      time such successor or successors by merger, conversion or consolidation to
      the
      Indenture Trustee shall succeed to the trusts created by this Indenture and
      any
      of the Notes shall have been authenticated but not delivered, any such successor
      to the Indenture Trustee may adopt the certificate of authentication of any
      predecessor trustee and deliver such Notes so authenticated; and if at that
      time
      any of the Notes shall not have been authenticated, any successor to the
      Indenture Trustee may authenticate such Notes either in the name of any
      predecessor hereunder or in the name of the successor to the Indenture Trustee;
      and in all such cases such certificates shall have the full force which it
      is 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, such title to the Trust Estate,
      or any part hereof, and, subject to the other provisions of this Section, such
      powers, duties, obligations, rights and trusts as the Indenture Trustee may
      consider necessary or desirable. No co-trustee or separate trustee hereunder
      shall be required to meet the terms of eligibility as a successor trustee under
      Section 6.11 hereof.

     

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

     

    (i)  all
      rights, powers, duties and obligations conferred or imposed upon the Indenture
      Trustee shall be conferred or imposed upon and exercised or performed by the
      Indenture Trustee and such separate trustee or co-trustee jointly (it being
      understood that such separate trustee or co-trustee is not authorized to act
      separately without the Indenture Trustee joining in such act), except to the
      extent that under any law of any jurisdiction in which any particular act or
      acts are to be performed the Indenture Trustee shall be incompetent or
      unqualified to perform such act or acts, in which event such rights, powers,
      duties and obligations (including the holding of title to the Trust Estate
      or
      any portion thereof in any such jurisdiction) shall be exercised and performed
      singly by such separate trustee or co-trustee, but solely at the direction
      of
      the Indenture Trustee;

     

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

     

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

     

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

     

    (d)  Any
      separate trustee or co-trustee may at any time constitute the Indenture Trustee,
      its agent or attorney-in-fact with full power and authority, to the extent
      not
      prohibited by law, to do any lawful act under or in respect of this Indenture
      on
      its behalf and in its name. If any separate trustee or co-trustee shall die,
      become incapable of acting, resign or be removed, all of its estates,
      properties, rights, remedies and trusts shall vest in and be exercised by the
      Indenture Trustee, to the extent permitted by law, without the appointment
      of a
      new or successor trustee.

     

    Section
      6.11.  Eligibility;
      Disqualification.  The
      Indenture Trustee shall at all times satisfy the requirements of TIA § 310(a).
      The Indenture Trustee shall have a combined capital and surplus of at least
      $50,000,000 as set forth in its most recent published annual report of condition
      and it or its parent shall have a long-term debt rating of “Baa3” or better by
      Moody’s and “BBB” or better by S&P and Fitch. The Indenture Trustee shall
      comply with TIA § 310(b), including the optional provision permitted by the
      second sentence of TIA § 310(b)(9); provided,
      however,
      that
      there shall be excluded from the operation of TIA § 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 § 310(b)(1) are
      met.

     

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

     

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

     

    (i)  It
      is a
      national banking association duly organized, validly existing and in good
      standing under the laws of the United States.

     

    (ii)  The
      execution and delivery of this Indenture by it, and the performance and
      compliance with the terms of this Indenture by it, will not violate its charter
      or bylaws.

     

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

     

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

     

    (v)  The
      Indenture Trustee is a “securities intermediary,” as such term is defined in
      Section 8-102(a)(14)(B) of the New York UCC, that in the ordinary course of
      its
      business maintains “securities accounts” for others, as such term is used in
      Section 8-501 of the New York UCC.

     

    (vi)  The
      “securities intermediary’s jurisdiction” as defined in the New York UCC shall be
      the State of New York.

     

    (vii)  The
      Indenture Trustee is not a “clearing corporation”, as such term is defined in
      Section 8-102(a)(5) of the New York UCC.

     

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

     

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

     

    (ii)  to
      authenticate and deliver the Notes substantially in the form prescribed by
      Exhibits A-1 through A-15 to this Indenture in accordance with the terms of
      this
      Indenture; and

     

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

     

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

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VII 

    NOTEHOLDERS’
      LISTS AND REPORTS

     

    Section
      7.01.  Issuer
      To Furnish Indenture Trustee Names and Addresses of Noteholders.

     

    The
      Note
      Registrar will furnish or cause to be furnished to the Indenture Trustee (a)
      not
      more than five days after each Record Date, a list, in such form as the
      Indenture Trustee may reasonably require, of the names and addresses of the
      Holders of Notes as of such Record Date, (b) at such other times as the
      Indenture Trustee 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 to the Indenture Trustee.

     

    Section
      7.02.  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 Holders of Notes contained in the
      most recent list furnished to the Indenture Trustee as provided in Section
      7.01
      hereof and the names and addresses of Holders of Notes 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 7.01 upon receipt of a new
      list
      so furnished.

     

    (b)  Noteholders
      or Note Owners may communicate pursuant to TIA § 312(b) with other Noteholders
      or Note Owners 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 § 312(c).

     

    Section
      7.03.  Reports
      of Issuer.

     

    (a)  Solely
      in
      accordance with Section 4.02 of the Sale and Servicing Agreement,

     

    (i)  The
      Indenture Trustee shall file with the Commission on behalf of the Issuer, with
      a
      copy to the Issuer within 15 days before the Issuer is required to file the
      same
      with the Commission, the annual reports and the information, documents and
      other
      reports (or 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)  The
      Indenture Trustee shall file with the Commission, on behalf of the Issuer,
      in
      accordance with 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)  The
      Indenture Trustee shall supply (and the Indenture Trustee shall transmit by
      mail
      to all Noteholders described in TIA § 313(c)) such summaries of any information,
      documents and reports required to be filed by the Issuer pursuant to clauses
      (i)
      and (ii) of this Section 7.03(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 31st
      of each
      year.

     

    Section
      7.04.  Reports
      by Indenture Trustee.
      If
      required by TIA § 313(a), within 60 days after each January 30th
      beginning with March 31, 2007, the Indenture Trustee shall mail to each
      Noteholder as required by TIA § 313(c) a brief report dated as of such date that
      complies with TIA § 313(a). The Indenture Trustee also shall comply with TIA §
313(b).

     

    A
      copy of
      each report at the time of its mailing to Noteholders shall be filed by the
      Indenture Trustee with the Commission via EDGAR and each stock exchange, if
      any,
      on which the Notes are listed. The Issuer shall notify the Indenture Trustee
      in
      writing of the name of such stock exchange and the listing date if and when
      the
      Notes are listed on any stock exchange.

     

    Section
      7.05.  Statements
      to Noteholders.

     

    (a)  With
      respect to each Payment Date, the Indenture Trustee shall make available via
      the
      Indenture Trustee’s website www.jpmorgan.com/sfr or deliver (in the event a
      recipient is unable to access such website) to each Noteholder and each
      Certificateholder, the Depositor, the Owner Trustee, the Certificate Paying
      Agent and each Rating Agency, a statement setting forth the following
      information as to the Notes, to the extent applicable:

     

    (i)  the
      amount of the payment made on such Payment Date to the Holders of the Notes
      of
      each Class allocable to principal;

     

    (ii)  the
      amount of the payment made on such Payment Date to the Holders of the Notes
      of
      each Class allocable to interest;

     

    (iii)  the
      fees
      and expenses of the Trust accrued and paid on such Payment Date and to whom
      such
      fees and expenses were paid;

     

    (iv)  the
      aggregate amount of Advances for such Payment Date (including the general
      purpose of such Advances as, and to the extent, reported by the
      Servicer);

     

    (v)  the
      aggregate Stated Principal Balance of the Mortgage Loans and any REO Properties
      as of the close of business on such Payment Date;

     

    (vi)  the
      number, aggregate principal balance, weighted average remaining term to maturity
      and weighted average Mortgage Rate of the Mortgage Loans as of the related
      Due
      Date;

     

    (vii)  the
      number and aggregate unpaid principal balance of Mortgage Loans (a) delinquent
      30 to 59 days, (b) delinquent 60 to 89 days, (c) delinquent 90 or more days,
      in
      each case, as of the last day of the preceding calendar month, (d) as to which
      foreclosure proceedings have been commenced and (e) with respect to which the
      related Mortgagor has filed for protection under applicable bankruptcy laws,
      with respect to whom bankruptcy proceedings are pending or with respect to
      whom
      bankruptcy protection is in force;

     

    (viii)  with
      respect to any Mortgage Loan that became an REO Property during the preceding
      calendar month, the loan number of such Mortgage Loan and the Stated Principal
      Balance of such Mortgage Loan as of the date it became an REO
      Property;

     

    (ix)  the
      aggregate amount of Principal Prepayments made during the related Prepayment
      Period;

     

    (x)  the
      aggregate amount of Realized Losses incurred during the related Prepayment
      Period and the aggregate amount of Realized Losses incurred since the Closing
      Date and the aggregate amount of Subsequent Recoveries received during the
      Prepayment Period and the cumulative amount of Subsequent Recoveries received
      since the Closing Date;

     

    (xi)  the
      aggregate Note Balance of each Class of Notes, before and after giving effect
      to
      the payments, and allocations of Realized Losses, made on such Payment
      Date;

     

    (xii)  the
      Monthly Interest Payable Amount in respect of the Floating Rate Notes for such
      Payment Date and the Unpaid Interest Shortfall Amount, if any, with respect
      to
      the Floating Rate Notes on such Payment Date;

     

    (xiii)  the
      aggregate amount of any Prepayment Interest Shortfall for such Payment Date,
      to
      the extent not covered by payments by the Servicer pursuant to Section 3.24
      of
      the Sale and Servicing Agreement;

     

    (xiv)  the
      aggregate amount of Relief Act Interest Shortfalls for such Payment
      Date;

     

    (xv)  the
      Net
      Monthly Excess Cashflow, the Overcollateralized Amount, the
      Overcollateralization Release Amount, Overcollateralization Deficiency Amount,
      the Overcollateralization Target Amount and the Senior Credit Enhancement
      Percentage for such Payment Date;

     

    (xvi)  the
      respective Note Rates applicable to the Floating Rate Notes for such Payment
      Date and the Note Rate applicable to the Floating Rate Notes for the immediately
      succeeding Payment Date;

     

    (xvii)  the
      Basis
      Risk Shortfall Amount for the Floating Rate Notes, if any, for such Payment
      Date
      and the amount remaining unpaid after reimbursements therefor on such Payment
      Date;

     

    (xviii)  whether
      the Stepdown Date or a Trigger Event is in effect on such Payment Date;

     

    (xix)  the
      Delinquency Percentage and Realized Loss Percentage for such Payment
      Date;

     

    (xx)  the
      amount of Prepayment Charges collected or paid by the Servicer for such Payment
      Date;

     

    (xxi)  the
      total
      cashflows received and the general sources thereof;

     

    (xxii)  the
      amount of any Net Swap Payments or Swap Termination Payments;

     

    (xxiii)  the
      applicable Record Dates, Interest Accrual Periods and Interest Determination
      Dates for calculating payments for such Payment Date; and

     

    (xxiv)  amounts
      paid to the Certificate Paying Agent for distribution to the
      Certificates.

     

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

     

    (b)  The
      Indenture Trustee may conclusively rely upon the Remittance Report provided
      by
      the Servicer pursuant to Section 4.01 of the Sale and Servicing Agreement and
      on
      the amounts furnished to the Indenture Trustee pursuant to the Interest Rate
      Swap Agreement in its preparation of its statement to Noteholders pursuant
      to
      clause (a) above.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VIII  

    ACCOUNTS,
      DISBURSEMENTS AND RELEASES

     

    Section
      8.01.  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.

     

    Section
      8.02.  Trust
      Accounts.

     

    (a)  On
      or
      prior to the Closing Date, the Issuer shall cause the Indenture Trustee to
      establish and maintain, in the name of the Indenture Trustee, for the benefit
      of
      the Noteholders, the Payment Account as provided in Section 3.01
      hereof.

     

    (b)  On
      each
      Payment Date, the Indenture Trustee shall pay itself the Indenture Trustee
      Fee
      and any expenses and indemnity payments owing to it for such Payment Date and
      shall pay the Owner Trustee the Owner Trustee Fee and its Expenses, and then
      the
      Indenture Trustee shall pay all remaining amounts on deposit in the Payment
      Account to the Noteholders in respect of the Notes and to such other persons
      in
      the order of priority set forth in Section 3.05 hereof (except as otherwise
      provided in Section 5.04(b) hereof).

     

    (c)  Pursuant
      to Section 3.12 of the Sale and Servicing Agreement, funds in the Payment
      Account shall remain uninvested.

     

    Section
      8.03.  Officer’s
      Certificate.
      The
      Indenture Trustee shall receive at least seven Business Days’ written notice
      when requested by the Issuer to take any action pursuant to Section 8.05(a)
      hereof, accompanied by copies of any instruments to be executed, and the
      Indenture Trustee shall also require, as a condition to such action, an
      Officer’s Certificate, in form and substance satisfactory to the Indenture
      Trustee, stating the legal effect of any such action, outlining the steps
      required to complete the same, and concluding that all conditions precedent
      to
      the taking of such action have been complied with.

     

    Section
      8.04.  Termination
      Upon Distribution to Noteholders.
      This
      Indenture and the respective obligations and responsibilities of the Issuer
      and
      the Indenture Trustee created hereby shall terminate upon the payment to
      Noteholders, the Certificate Paying Agent on behalf of the Owner Trustee, the
      Certificateholders and the Indenture Trustee of all amounts required to be
      paid
      pursuant to Article III and Section 6.07 hereof; provided,
      however,
      that in
      no event shall the trust created hereby continue beyond the expiration of 21
      years from the death of the survivor of the descendants of Joseph P. Kennedy,
      the late ambassador of the United States to the Court of St. James, living
      on
      the date hereof.

     

    Section
      8.05.  Release
      of Trust Estate.

     

    (a)  Subject
      to the payment of its fees, expenses and indemnity payments, the Indenture
      Trustee may, and when required by the provisions of this Indenture shall,
      execute instruments to release property from the lien of this Indenture, or
      convey the Indenture Trustee’s interest in the same, in a manner and under
      circumstances that are not inconsistent with the provisions of this Indenture,
      including for the purposes of any repurchase by the Servicer of a Mortgage
      Loan
      pursuant to Section 3.16 of the Sale and Servicing Agreement. No party relying
      upon an instrument executed by the Indenture Trustee as provided in Article
      VIII
      hereunder shall be bound to ascertain the Indenture Trustee’s authority, inquire
      into the satisfaction of any conditions precedent, or see to the application
      of
      any monies.

     

    (b)  The
      Indenture Trustee shall, at such time as (i) there are no Notes Outstanding
      and
      (ii) all sums due to the Indenture Trustee pursuant to this Indenture have
      been
      paid, release any remaining portion of the Trust Estate that secured the Notes
      from the lien of this Indenture.

     

    (c)  The
      Indenture Trustee shall release property from the lien of this Indenture
      pursuant to this Section 8.05 only upon receipt of a request from the Issuer
      accompanied by an Officers’ Certificate and an Opinion of Counsel stating that
      all applicable requirements have been satisfied.

     

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

     

    Section
      8.07.  Optional
      Redemption of the Notes.

     

    (a)  The
      Majority Certificateholder shall have the option to purchase the Mortgage Loans
      and REO Property on the later of (i) one year following the Closing Date and
      (ii) any Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 20% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date (the “Optional Redemption Date”). The
      aggregate purchase price will be equal to the greater of (i) the Stated
      Principal Balance of the Mortgage Loans and the appraised value of any REO
      Properties, such appraisal to be conducted by an Independent appraiser mutually
      agreed upon by the Servicer and the Majority Certificateholder in their
      reasonable discretion and (ii) the fair market value of the Mortgage Loans
      and
      the REO Properties (as determined by the Servicer and the Majority
      Certificateholder, in each case plus accrued and unpaid interest thereon at
      the
      weighted average of the Mortgage Rates through the end of the Due Period
      preceding the final Payment Date plus unreimbursed Servicing Advances, Advances,
      any unpaid Servicing Fees allocable to such Mortgage Loans and REO Properties
      and any accrued and unpaid Basis Risk Shortfall Amounts and
      any
      remaining amounts owed to the Swap Provider
      (the
“Redemption Price”); provided, however, that the Majority Certificateholder will
      not be permitted to purchase the Mortgage Loans unless the Redemption Price
      is
      sufficient to pay the Indenture Trustee all amounts owing to it hereunder and
      to
      retire the Note Balance of the remaining Notes to zero.

     

    (b)  In
      order
      to exercise the foregoing option, the Majority Certificateholder shall provide
      written notice of its exercise of such option to the Indenture Trustee, the
      Swap
      Provider and the Owner Trustee at least 15 days prior to its exercise. Following
      receipt of the notice, the Indenture Trustee shall provide notice to the
      Noteholders of the final payment on the Notes. In addition, the Majority
      Certificateholder shall, not less than one Business Day prior to the proposed
      Payment Date on which such redemption is to be made, deposit the aggregate
      redemption price specified in (a) above with the Indenture Trustee, who shall
      deposit the aggregate redemption price into the Payment Account and shall,
      on
      the Payment Date after receipt of the funds, apply such funds to make final
      payments of principal and interest on the Notes in accordance with Section
      3.05(b) and (c) hereof and payment in full to the Indenture Trustee of all
      amounts owing to it hereunder, and this Indenture shall be discharged subject
      to
      the provisions of Section 4.10 hereof. If for any reason the amount deposited
      by
      the Majority Certificateholder is not sufficient to make such redemption or
      such
      redemption cannot be completed for any reason, the amount so deposited by the
      Majority Certificateholder with the Indenture Trustee shall be immediately
      returned to the Majority Certificateholder in full and shall not be used for
      any
      other purpose or be deemed to be part of the Trust Estate.

     

      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IX

    SUPPLEMENTAL
      INDENTURES

     

    Section
      9.01.  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
      Request, at any time and from time to time, may enter into one or more
      indentures supplemental hereto (which shall conform to the provisions of the
      TIA
      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 Holders of the Notes, 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;

     

    (vi)  to
      make
      any other provisions with respect to matters or questions arising under this
      Indenture or in any supplemental indenture; provided, that such action (as
      evidenced by either (i) an Opinion of Counsel delivered to the Indenture Trustee
      or (ii) confirmation from the Rating Agencies that such amendment will not
      result in the reduction or withdrawal of the rating of any Class of Notes)
      shall
      not materially and adversely affect the interests of the Holders of the
      Notes;

     

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

     

    (viii)  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;

     

    provided,
      however,
      that no
      such indenture supplements shall be entered into unless the Indenture Trustee
      shall have received (x) an Opinion of Counsel as to the enforceability of any
      such indenture supplement and to the effect that (i) such indenture supplement
      is permitted hereunder and (ii) entering into such indenture supplement will
      not
      result in a “substantial modification” of the Notes under Treasury Regulation
      Section 1.1001-3 or adversely affect the status of the Notes as indebtedness
      for
      federal income tax purposes and (y) in the case of (vi) and (viii) above, an
      Officer’s Certificate of the Sponsor certifying that such supplemental indenture
      will not cause the Trust to fail to qualify as a “qualified special purpose
      entity” under Financial Accounting Standard 140.

     

    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 Request, may,
      also without the consent of any of the Holders of the Notes and prior notice
      to
      the Rating Agencies, enter into an indenture or indentures supplemental hereto
      for the purpose of adding any provisions to, or changing in any manner or
      eliminating any of the provisions of, this Indenture or of modifying in any
      manner the rights of the Holders of the Notes under this Indenture; provided,
      however,
      that
      such action as evidenced by an Opinion of Counsel, (i) is permitted by this
      Indenture, and shall not (ii) adversely affect in any material respect the
      interests of any Noteholder (which may be evidenced by confirmation from the
      Rating Agencies that such amendment will not result in the reduction or
      withdrawal of the rating of any Class of Notes) or (iii) if 100% of the
      Certificates are not owned by a REIT, a “qualified REIT subsidiary” or by an
      entity that is wholly-owned by a REIT or a “qualified REIT subsidiary” and
      disregarded for federal income tax purposes, cause the Issuer to be subject
      to
      an entity level tax for federal income tax purposes.

     

    Section
      9.02.  Supplemental
      Indentures With Consent of Noteholders.
      The
      Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
      may, with prior notice to the Rating Agencies and, with the consent of the
      Swap
      Provider (if materially and adversely affected thereby) and the Holders of
      not
      less than a majority of the Note Balance of each Class of Notes affected
      thereby, by Act (as defined in Section 10.03 hereof) 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
      Note affected thereby:

     

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

     

    (ii)  reduce
      the percentage of the aggregate Note Balance 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;

     

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

     

    (iv)  reduce
      the percentage of the aggregate Note Balance of the Notes required to direct
      the
      Indenture Trustee to direct the Issuer to sell or liquidate the Trust Estate
      pursuant to Section 5.04 hereof;

     

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

     

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

     

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

     

    and
      provided,
      further,
      that
      such action shall not, as evidenced by an Opinion of Counsel, cause the Issuer
      (if 100% of the Certificates are not owned by a REIT, a “qualified REIT
      subsidiary” or by an entity that is wholly-owned by a REIT or a “qualified REIT
      subsidiary” and disregarded for federal income tax purposes) to be subject to an
      entity level tax.

     

    Any
      such
      action shall not (as evidenced by either (i) an Opinion of Counsel delivered
      to
      the Indenture Trustee or (ii) confirmation from the Rating Agencies that such
      amendment will not result in the reduction or withdrawal of the rating of any
      Class of Notes) adversely affect in any material respect the interest of any
      Holder (other than a Holder who shall consent to such supplemental
      indenture).

     

    Notwithstanding
      any other provision of this Article IX, the prior written consent of the Swap
      Provider shall be required for any supplemental indenture that materially and
      adversely affects in any respect the rights and interest hereunder of the Swap
      Provider.

     

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

     

    Promptly
      after the execution by the Issuer and the Indenture Trustee of any supplemental
      indenture pursuant to this Section 9.02, 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 terms the substance of such supplemental
      indenture. Any failure of the Indenture Trustee to mail such notice, or any
      defect therein, shall not, however, in any way impair or affect the validity
      of
      any such supplemental indenture.

     

    Section
      9.03.  Execution
      of Supplemental Indentures.
      In
      executing, or permitting the additional trusts created by, any supplemental
      indenture permitted by this Article IX or the modification thereby of the trusts
      created by this Indenture, the Indenture Trustee shall be entitled to receive,
      and subject to Sections 6.01 and 6.02 hereof, shall be fully protected in
      relying upon, an Opinion of Counsel stating that the execution of such
      supplemental indenture is authorized or permitted by this Indenture. 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
      9.04.  Effect
      of Supplemental Indenture.
      Upon
      the execution of any supplemental indenture pursuant to the provisions hereof,
      this Indenture shall be and shall be deemed to be modified and amended in
      accordance therewith with respect to the Notes affected thereby, and the
      respective rights, limitations of rights, obligations, duties, liabilities
      and
      immunities under this Indenture of the Indenture Trustee, the 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
      9.05.  Conformity
      with Trust Indenture Act.
      Every
      amendment of this Indenture and every supplemental indenture executed pursuant
      to this Article IX shall conform to the requirements of the Trust Indenture
      Act
      as then in effect so long as this Indenture shall then be qualified under the
      Trust Indenture Act.

     

    Section
      9.06.  Reference
      in Notes to Supplemental Indentures.  Notes
      authenticated and delivered after the execution of any supplemental indenture
      pursuant to this Article IX may, and if required by the 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

    MISCELLANEOUS

     

    Section
      10.01.  Compliance
      Certificates and Opinions, etc.

     

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

     

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

     

    (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;

     

    (iii)  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;

     

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

     

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

     

    (b)  (i)
      Prior
      to the deposit of any Collateral or other property or securities with the
      Indenture Trustee that is to be made the basis for the release of any property
      or securities subject to the lien of this Indenture, the Issuer shall, in
      addition to any obligation imposed in Section 10.01(a) 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 prior to such deposit) to the Issuer of the Collateral
      or
      other property or securities to be so deposited and a report from a nationally
      recognized accounting firm verifying such value.

     

    (ii)  Whenever
      the 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 from a nationally recognized
      accounting firm as to the same matters, if the fair value of the securities
      to
      be so deposited and of all other such securities made the basis of any such
      withdrawal or release since the commencement of the then current fiscal year
      of
      the 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 Balance of
      the
      Notes, but such a certificate need not be furnished with respect to any
      securities so deposited, if the fair value thereof as set forth in the related
      Officer’s Certificate is less than $25,000 or less than one percent of the
      aggregate Note 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 prior to such release) of the property or
      securities proposed to be released and stating that in the opinion of such
      person the proposed release will not impair the security under this Indenture
      in
      contravention of the provisions hereof.

     

    (iv)  Whenever
      the 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
      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 Balance of the Notes.

     

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

     

    Any
      certificate or opinion of an Authorized Officer of the 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 his certificate or opinion is based
      are
      erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
      may be based, insofar as it relates to factual matters, upon a certificate
      or
      opinion of, or representations by, an officer or officers of the Sponsor or
      the
      Issuer, stating that the information with respect to such factual matters is
      in
      the possession of the Sponsor 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.

     

    Section
      10.03.  Acts
      of Noteholders.

     

    (a)  Any
      request, demand, authorization, direction, notice, consent, waiver or other
      action provided by this Indenture to be given or taken by Noteholders may be
      embodied in and evidenced by one or more instruments of substantially similar
      tenor signed by such Noteholders in person or by agents duly appointed in
      writing; and except as herein otherwise expressly provided, such action shall
      become effective when such instrument or instruments are delivered to the
      Indenture Trustee, and, where it is hereby expressly required, to the 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 6.01 hereof) conclusive in
      favor of the Indenture Trustee and the Issuer, if made in the manner provided
      in
      this Section 10.03 hereof.

     

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

     

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

     

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

     

    Section
      10.04.  Notices
      etc., to Indenture Trustee, Issuer and Rating Agencies.

     

    Any
      request, demand, authorization, direction, notice, consent, waiver or Act of
      Noteholders or other documents provided or permitted by this Indenture shall
      be
      in writing and if such request, demand, authorization, direction, notice,
      consent, waiver or act of Noteholders is to be made upon, given or furnished
      to
      or filed with:

     

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

     

    (ii)  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: Newcastle Mortgage Securities Trust 2006-1, in care
      of
      Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
      Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration,
      with
      a copy to Newcastle Investment Corp., 1345 Avenue of the Americas, New York,
      New
      York 10105, Attention: Debra Hess, or at any other address previously furnished
      in writing to the Indenture Trustee by the Issuer. The Issuer shall promptly
      transmit any notice received by it from the Noteholders to the Indenture
      Trustee.

     

    Notices
      required to be given to the Rating Agencies by the Issuer, the Indenture Trustee
      or the Owner Trustee shall be in writing, mailed first-class postage pre-paid,
      to (i) in the case of Moody’s, at the following address: Moody’s Investors
      Service, Inc., Residential Mortgage Monitoring Department, 99 Church Street,
      New
      York, New York 10007 and (ii) in the case of S&P, at the following address:
      Standard & Poor’s, 55 Water Street, 41st
      Floor,
      New York, New York 10041, Attention of Asset Backed Surveillance Department;
      or
      as to each of the foregoing, at such other address as shall be designated by
      written notice to the other parties.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Section
      10.08.  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
      10.09.  Separability.
      In case
      any provision in this Indenture or in the Notes shall be invalid, illegal or
      unenforceable, the validity, legality, and enforceability of the remaining
      provisions shall not in any way be affected or impaired thereby.

     

    Section
      10.10.  Third
      Party Rights.
      The
      Swap Provider shall be deemed a third-party beneficiary of this Indenture to
      the
      same extent as if it was a party hereto, and shall have the right to enforce
      the
      provisions of this Indenture.

     

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

     

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

     

    Section
      10.13.  Counterparts.
      This
      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
      10.14.  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 at its expense (which may be counsel to the Indenture
      Trustee or any other counsel reasonably acceptable to the Indenture Trustee)
      to
      the effect that such recording is necessary either for the protection of the
      Noteholders or any other Person secured hereunder or for the enforcement of
      any
      right or remedy granted to the Indenture Trustee under this
      Indenture.

     

    Section
      10.15.  Issuer
      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 Article VI, VII and
      VIII of the Trust Agreement.

     

    Section
      10.16.  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
      prior
      to one year from the date of termination hereof, institute against the Depositor
      or the Issuer, or join in any institution against the Depositor 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 Basic Documents, except for filing proofs
      of
      claim.

     

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

     

    Section
      10.18.  No
      Recourse to Owner Trustee.
      It is
      expressly understood and agreed by the parties hereto that (a) this Indenture
      is
      executed and delivered by Wilmington Trust Company, not individually or
      personally, but solely as Owner Trustee of Newcastle Mortgage Securities Trust
      2006-1, in the exercise of the powers and authority conferred and vested in
      it,
      (b) each of the representations, undertakings and agreements herein made on
      the
      part of the Issuer 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 Issuer, (c) nothing herein contained shall
      be construed as creating any liability of 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 Issuer or be liable for the
      breach or failure of any obligation, representation, warranty or covenant made
      or undertaken by the Issuer under this Indenture or any other related
      documents.

     

    Section
      10.19.  Proofs
      of Claim.
      The
      Indenture Trustee is authorized 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 (including any claim for the reasonable compensation,
      expenses, disbursements and advances of the Indenture Trustee, its agents and
      counsel) and the Noteholders allowed in any judicial proceedings relative to
      the
      Issuer (or any other obligor upon the Notes), its creditors or its property
      and
      shall be entitled and empowered to collect, receive and distribute any money
      or
      other property payable or deliverable on any such claims and any custodian
      in
      any such judicial proceeding is hereby authorized by each Noteholder to make
      such payments to the Indenture Trustee, as administrative expenses associated
      with any such proceeding, and, in the event that the Indenture Trustee shall
      consent to the making of such payments directly to the Noteholder to pay to
      the
      Indenture Trustee any amount due to it for the reasonable compensation,
      expenses, disbursements and advances of the Indenture Trustee, its agents and
      counsel, and any other amounts due to the Indenture Trustee under Section 6.07
      hereof. To the extent that the payment of any such compensation, expenses,
      disbursements and advances of the Indenture Trustee, its agents and counsel,
      and
      any other amounts due the Indenture Trustee under Section 6.07 hereof out of
      the
      estate in any such proceeding, shall be denied for any reason, payment of the
      same shall be secured by a Lien on, and shall be paid out of, any and all
      distributions, dividends, money, securities and other properties that the
      Noteholders may be entitled to receive in such proceeding whether in liquidation
      or under any plan of reorganization or arrangement or otherwise. Nothing herein
      contained shall be deemed to authorize the Indenture Trustee to authorize or
      consent to or accept or adopt on behalf of any Noteholder any plan of
      reorganization, arrangement, adjustment or composition affecting the Noteholder
      of the rights of any Noteholder thereof, or to authorize the Indenture Trustee
      to vote in respect of the claim of any Noteholder in any such
      proceeding.

     

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

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

     

    
      	 	 	 	 	 	 	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST, 2006-1, as Issuer

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

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	
               /s/
                Joann A. Rozell

            
	 	 	 	 	 	 	 	
              Name: Joann
                A. Rozell

            
	 	 	 	 	 	 	 	
              Title: Assistant
                Vice President

            
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              JPMORGAN
                CHASE BANK, N.A., as Indenture Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	
               /s/
                Steve M. Husbands

            
	 	 	 	 	 	 	 	
              Name: Steve
                M. Husbands

            
	 	 	 	 	 	 	 	
              Title:
                 Assistant
                Vice President

            

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              STATE
                OF NEW YORK

            	
              )

            	 
	 	
              )

            	
              ss.:

            
	
              COUNTY
                OF NEW YORK

            	
              )

            	 

    

    

    On
      this
      ___ day of April, 2006, before me personally appeared _________ to me known,
      who
      being by me duly sworn, did depose and say, that (s)he is _____________ and
      _______________ to me known, who being by me duly sworn, did depose and say,
      that (s)he is a _________________ of the Indenture Trustee, one of the
      corporations described in and which executed the above instrument; and that
      he
      signed his name thereto by like order.

     

    
      	 	 
	 	
              Notary
                Public

            
	 	 
	 	
              NOTARY
                PUBLIC

            

    

    

    

    [NOTARIAL
      SEAL]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              STATE
                OF DELAWARE

            	
              )

            	 
	 	
              )

            	
              ss.:

            
	
              COUNTY
                OF NEW CASTLE

            	
              )

            	 

    

    

    On
      this
      ___ day of April, 2006, before me personally appeared _______________ to me
      known, who being by me duly sworn, did depose and say, that (s)he is a Financial
      Services Officer of the Owner Trustee, one of the entities described in and
      which executed the above instrument; and that she signed her name thereto by
      like order.

     

    
      	 	 
	 	
              Notary
                Public

            
	 	 
	 	
              NOTARY
                PUBLIC

            

    

    

    

    [NOTARIAL
      SEAL]

     

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A-1

     

    FORM
      OF
      CLASS A-1 NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

     

    ASSET-BACKED
      NOTES, SERIES 2006-1

     

    CLASS
      A-1

     

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $687,997,000.00

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $687,997,000.00

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. 65106A AJ 2

            

    

    

    Newcastle
      Mortgage Securities Trust 2006-1 (the “Issuer”), a Delaware statutory trust, for
      value received, hereby promises to pay to Cede & Co. or registered assigns,
      the Aggregate Note Balance in monthly installments on the twenty-fifth day
      of
      each month or, if such day is not a Business Day, the next succeeding Business
      Day (each a “Payment Date”), commencing in April 2006 and ending on or before
      the Payment Date occurring on the Final Stated Maturity Date and to pay interest
      on the Note Balance of this Note (this “Note”) outstanding from time to time as
      provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
      2006-1 (the “Notes”), issued under an Indenture dated as of April 6, 2006 (the
“Indenture”), between the Issuer and JPMorgan Chase Bank, N.A., as indenture
      trustee (the “Indenture Trustee”, which term includes any successor Indenture
      Trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the respective rights
      thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
      and the terms upon which the Notes are to be authenticated and delivered. All
      terms used in this Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    Payments
      of principal and interest on this Note will be made on each Payment Date to
      the
      Noteholder of record as of the related Record Date. The “Note Balance” of a Note
      as of any date of determination is equal to the initial Note Balance thereof,
      reduced by the aggregate of all amounts previously paid with respect to such
      Note on account of principal and the aggregate amount of cumulative Realized
      Losses allocated to such Note on all prior Payment Dates.

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, 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 Issuer with respect to this Note shall be equal to this
      Note’s pro
      rata
      share of
      the aggregate payments on all Class A-1 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

    All
      principal and interest accrued on the Notes, if not previously paid, will become
      finally due and payable at the Final Stated Maturity Date.

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Majority
      Certificateholder on any Payment Date on or after the Payment Date on which
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
      prior Due Period is less than or equal to 20% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of Cut-off Date.

     

    The
      Issuer shall not be liable upon the indebtedness evidenced by the Notes except
      to the extent of amounts available from the Trust Estate which constitutes
      security for the payment of the Notes. The assets included in the Trust Estate
      will be the sole source of payments on the Class A-1 Notes, and each Holder
      hereof, by its acceptance of this Note, agrees that (i) such Note will be
      limited in right of payment to amounts available from the Trust Estate as
      provided in the Indenture and (ii) such Holder shall have no recourse to the
      Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Originator,
      the Servicer or any of their respective affiliates, or to the assets of any
      of
      the foregoing entities, except the assets of the Issuer pledged to secure the
      Class A-1 Notes pursuant to the Indenture and the rights conveyed to the Issuer
      under the Indenture.

     

    Any
      payment of principal or interest payable on this Note which is punctually paid
      on the applicable Payment Date shall be paid to the Person in whose name such
      Note is registered at the close of business on the Record Date for such Payment
      Date by check mailed to such person’s address as it appears in the Note Register
      on such Record Date, except for the final installment of principal and interest
      payable with respect to such Note, which shall be payable as provided below.
      Notwithstanding the foregoing, upon written request with appropriate
      instructions by the Holder of this Note delivered to the Indenture Trustee
      at
      least five Business Days prior to the Record Date, any payment of principal
      or
      interest, other than the final installment of principal or interest, shall
      be
      made by wire transfer to an account in the United States designated by such
      Holder. All scheduled reductions in the Note Balance of a Note (or one or more
      predecessor Notes) effected by payments of principal made on any Payment Date
      shall be binding upon all Holders of this Note and of any note issued upon
      the
      registration of transfer thereof or in exchange therefor or in lieu thereof,
      whether or not such payment is noted on such Note. The final payment of this
      Note shall be payable upon presentation and surrender thereof on or after the
      Payment Date thereof at the office or agency of the Issuer maintained by it
      for
      such purpose pursuant to Section 3.02 of the Indenture.

     

    Subject
      to the foregoing provisions, each Note delivered under the Indenture, upon
      registration of transfer of or in exchange for or in lieu of any other Note
      shall carry the right to unpaid principal and interest that were carried by
      such
      other Note.

     

    If
      an
      Event of Default as defined in the Indenture shall occur and be continuing
      with
      respect to the Notes, the Notes may become or be declared due and payable in
      the
      manner and with the effect provided in the Indenture. If any such acceleration
      of maturity occurs prior to the payment of the entire unpaid Note Balance of
      the
      Notes, the amount payable to the Holder of this Note will be equal to the sum
      of
      the unpaid Note Balance of the Notes, together with accrued and unpaid interest
      thereon as described in the Indenture. The Indenture provides that,
      notwithstanding the acceleration of the maturity of the Notes, under certain
      circumstances specified therein, all amounts collected as proceeds of the Trust
      Estate securing the Notes or otherwise shall continue to be applied to payments
      of principal of and interest on the Notes as if they had not been declared
      due
      and payable.

     

    The
      failure to pay any Unpaid Interest Shortfall Amount at any time when funds
      are
      not available to make such payment as provided in the Indenture shall not
      constitute an Event of Default under the Indenture.

     

    The
      Holder of this Note or Beneficial Owner of any interest herein is deemed to
      represent that either (1) it is not acquiring this Note with Plan Assets or
      (2)
      (A) the acquisition, holding and transfer of this Note will not give rise to
      a
      nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
      of
      the Code and (B) this Note is rated investment grade or better and such person
      believes that this Note is properly treated as indebtedness without substantial
      equity features for purposes of the DOL Regulations, and agrees to so treat
      this
      Note. Alternatively, regardless of the rating of this Note, such person may
      provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
      which opinion of counsel will not be at the expense of the Issuer, the Seller,
      the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee,
      the
      Servicer or any successor servicer which opines that the acquisition, holding
      and transfer of this Note or interest herein is permissible under applicable
      law, will not constitute or result in a non-exempt prohibited transaction under
      ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
      the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
      Trustee, the Servicer or any successor servicer to any obligation in addition
      to
      those undertaken in the Indenture or other Operative Agreements.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Note Register of the Issuer.
      Upon surrender for registration of transfer of, or presentation of a written
      instrument of transfer for, this Note at the office or agency designated by
      the
      Issuer pursuant to the Indenture, accompanied by proper instruments of
      assignment in form satisfactory to the Indenture Trustee, one or more new Notes
      of any authorized denominations and of a like aggregate initial Note Balance,
      will be issued to the designated transferee or transferees.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuer,
      the
      Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
      treat
      the Person in whose name this Note is registered as the owner of such Note
      (i)
      on the applicable Record Date for the purpose of making payments and interest
      of
      such Note and (ii) on any other date for all other purposes whatsoever, as
      the
      owner hereof, whether or not this Note be overdue, and neither the Issuer,
      the
      Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
      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 Issuer and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Issuer
      and the Holders of a majority of all Notes at the time outstanding. The
      Indenture also contains provisions permitting the Holders of Notes representing
      specified percentages of the aggregate Note Balance of the Notes on behalf
      of
      the Holders of all the Notes, to waive any past Default under the Indenture
      and
      its consequences. Any such waiver by the Holder, at the time of the giving
      thereof, of this Note (or any one or more predecessor Notes) shall bind the
      Holder of every 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 such Note. The Indenture also permits the Issuer and the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

    Initially,
      this Note will be registered in the name of Cede & Co. as nominee of DTC,
      acting in its capacity as the Depository for this Note. This Note will be
      delivered by the clearing agency in denominations as provided in the Indenture
      and subject to certain limitations therein set forth. This Note is exchangeable
      for a like aggregate initial Note Balance of Notes of different authorized
      denominations, as requested by the Holder surrendering same.

     

    Unless
      the Certificate of Authentication hereon has been executed by the Indenture
      Trustee by manual signature, this Note shall not be entitled to any benefit
      under the Indenture, or be valid or obligatory for any purpose.

     

    AS
      PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
      BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
      NEW
      YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
      by
      Wilmington Trust Company, not in its individual capacity but solely as Owner
      Trustee.

     

    Dated:
      April ____, 2006

     

    
      	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST 2006-1

            
	 
	
              BY:
                WILMINGTON TRUST COMPANY, not in its individual capacity but solely
                in its
                capacity as Owner Trustee

            
	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            
	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes referred to in the within-mentioned Indenture.

     

    
      	
              JPMORGAN
                CHASE BANK, N.A., as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of the Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations:

     

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ______________________________________________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              
                ______________________________________________________________________________

              

            
	 	 	 	
              (State)

            
	 	 	 

    

    

    Additional
      abbreviations may also be used though not in the above LIST.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING 

    NUMBER
      OF
      ASSIGNEE:

    

    
      	 
	 
	 

    

    (Please
      print or typewrite name and address, including zip code, of
      assignee)

     

    

    
      	 

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes 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 by __________________________________

     

    NOTICE:
      The signature(s) to this assignment must correspond with the name as it appears
      upon the face of the within Note in every particular, without alteration or
      enlargement or any change whatsoever. Signature(s) must be guaranteed by a
      commercial bank or by a member firm of the New York Stock Exchange or another
      national securities exchange. Notarized or witnessed signatures are not
      acceptable.

     

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A-2

     

    FORM
      OF
      CLASS A-2 NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

     

    ASSET-BACKED
      NOTES, SERIES 2006-1

     

    CLASS
      A-2

     

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $113,911,000.00

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $113,911,000.00

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. 65106A AK 9

            

    

    

    Newcastle
      Mortgage Securities Trust 2006-1 (the “Issuer”), a Delaware statutory trust, for
      value received, hereby promises to pay to Cede & Co. or registered assigns,
      the Aggregate Note Balance in monthly installments on the twenty-fifth day
      of
      each month or, if such day is not a Business Day, the next succeeding Business
      Day (each a “Payment Date”), commencing in April 2006 and ending on or before
      the Payment Date occurring on the Final Stated Maturity Date and to pay interest
      on the Note Balance of this Note (this “Note”) outstanding from time to time as
      provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
      2006-1 (the “Notes”), issued under an Indenture dated as of April 6, 2006 (the
“Indenture”), between the Issuer and JPMorgan Chase Bank, N.A., as indenture
      trustee (the “Indenture Trustee”, which term includes any successor Indenture
      Trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the respective rights
      thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
      and the terms upon which the Notes are to be authenticated and delivered. All
      terms used in this Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    Payments
      of principal and interest on this Note will be made on each Payment Date to
      the
      Noteholder of record as of the related Record Date. The “Note Balance” of a Note
      as of any date of determination is equal to the initial Note Balance thereof,
      reduced by the aggregate of all amounts previously paid with respect to such
      Note on account of principal and the aggregate amount of cumulative Realized
      Losses allocated to such Note on all prior Payment Dates.

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, 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 Issuer with respect to this Note shall be equal to this
      Note’s pro
      rata
      share of
      the aggregate payments on all Class A-2 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

    All
      principal and interest accrued on the Notes, if not previously paid, will become
      finally due and payable at the Final Stated Maturity Date.

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Majority
      Certificateholder on any Payment Date on or after the Payment Date on which
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
      prior Due Period is less than or equal to 20% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of Cut-off Date.

     

    The
      Issuer shall not be liable upon the indebtedness evidenced by the Notes except
      to the extent of amounts available from the Trust Estate which constitutes
      security for the payment of the Notes. The assets included in the Trust Estate
      will be the sole source of payments on the Class A-2 Notes, and each Holder
      hereof, by its acceptance of this Note, agrees that (i) such Note will be
      limited in right of payment to amounts available from the Trust Estate as
      provided in the Indenture and (ii) such Holder shall have no recourse to the
      Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Originator,
      the Servicer or any of their respective affiliates, or to the assets of any
      of
      the foregoing entities, except the assets of the Issuer pledged to secure the
      Class A-2 Notes pursuant to the Indenture and the rights conveyed to the Issuer
      under the Indenture.

     

    Any
      payment of principal or interest payable on this Note which is punctually paid
      on the applicable Payment Date shall be paid to the Person in whose name such
      Note is registered at the close of business on the Record Date for such Payment
      Date by check mailed to such person’s address as it appears in the Note Register
      on such Record Date, except for the final installment of principal and interest
      payable with respect to such Note, which shall be payable as provided below.
      Notwithstanding the foregoing, upon written request with appropriate
      instructions by the Holder of this Note delivered to the Indenture Trustee
      at
      least five Business Days prior to the Record Date, any payment of principal
      or
      interest, other than the final installment of principal or interest, shall
      be
      made by wire transfer to an account in the United States designated by such
      Holder. All scheduled reductions in the Note Balance of a Note (or one or more
      predecessor Notes) effected by payments of principal made on any Payment Date
      shall be binding upon all Holders of this Note and of any note issued upon
      the
      registration of transfer thereof or in exchange therefor or in lieu thereof,
      whether or not such payment is noted on such Note. The final payment of this
      Note shall be payable upon presentation and surrender thereof on or after the
      Payment Date thereof at the office or agency of the Issuer maintained by it
      for
      such purpose pursuant to Section 3.02 of the Indenture.

     

    Subject
      to the foregoing provisions, each Note delivered under the Indenture, upon
      registration of transfer of or in exchange for or in lieu of any other Note
      shall carry the right to unpaid principal and interest that were carried by
      such
      other Note.

     

    If
      an
      Event of Default as defined in the Indenture shall occur and be continuing
      with
      respect to the Notes, the Notes may become or be declared due and payable in
      the
      manner and with the effect provided in the Indenture. If any such acceleration
      of maturity occurs prior to the payment of the entire unpaid Note Balance of
      the
      Notes, the amount payable to the Holder of this Note will be equal to the sum
      of
      the unpaid Note Balance of the Notes, together with accrued and unpaid interest
      thereon as described in the Indenture. The Indenture provides that,
      notwithstanding the acceleration of the maturity of the Notes, under certain
      circumstances specified therein, all amounts collected as proceeds of the Trust
      Estate securing the Notes or otherwise shall continue to be applied to payments
      of principal of and interest on the Notes as if they had not been declared
      due
      and payable.

     

    The
      failure to pay any Unpaid Interest Shortfall Amount at any time when funds
      are
      not available to make such payment as provided in the Indenture shall not
      constitute an Event of Default under the Indenture.

     

    The
      Holder of this Note or Beneficial Owner of any interest herein is deemed to
      represent that either (1) it is not acquiring this Note with Plan Assets or
      (2)
      (A) the acquisition, holding and transfer of this Note will not give rise to
      a
      nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
      of
      the Code and (B) this Note is rated investment grade or better and such person
      believes that this Note is properly treated as indebtedness without substantial
      equity features for purposes of the DOL Regulations, and agrees to so treat
      this
      Note. Alternatively, regardless of the rating of this Note, such person may
      provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
      which opinion of counsel will not be at the expense of the Issuer, the Seller,
      the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee,
      the
      Servicer or any successor servicer which opines that the acquisition, holding
      and transfer of this Note or interest herein is permissible under applicable
      law, will not constitute or result in a non-exempt prohibited transaction under
      ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
      the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
      Trustee, the Servicer or any successor servicer to any obligation in addition
      to
      those undertaken in the Indenture or other Operative Agreements.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Note Register of the Issuer.
      Upon surrender for registration of transfer of, or presentation of a written
      instrument of transfer for, this Note at the office or agency designated by
      the
      Issuer pursuant to the Indenture, accompanied by proper instruments of
      assignment in form satisfactory to the Indenture Trustee, one or more new Notes
      of any authorized denominations and of a like aggregate initial Note Balance,
      will be issued to the designated transferee or transferees.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuer,
      the
      Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
      treat
      the Person in whose name this Note is registered as the owner of such Note
      (i)
      on the applicable Record Date for the purpose of making payments and interest
      of
      such Note and (ii) on any other date for all other purposes whatsoever, as
      the
      owner hereof, whether or not this Note be overdue, and neither the Issuer,
      the
      Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
      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 Issuer and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Issuer
      and the Holders of a majority of all Notes at the time outstanding. The
      Indenture also contains provisions permitting the Holders of Notes representing
      specified percentages of the aggregate Note Balance of the Notes on behalf
      of
      the Holders of all the Notes, to waive any past Default under the Indenture
      and
      its consequences. Any such waiver by the Holder, at the time of the giving
      thereof, of this Note (or any one or more predecessor Notes) shall bind the
      Holder of every 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 such Note. The Indenture also permits the Issuer and the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

    Initially,
      this Note will be registered in the name of Cede & Co. as nominee of DTC,
      acting in its capacity as the Depository for this Note. This Note will be
      delivered by the clearing agency in denominations as provided in the Indenture
      and subject to certain limitations therein set forth. This Note is exchangeable
      for a like aggregate initial Note Balance of Notes of different authorized
      denominations, as requested by the Holder surrendering same.

     

    Unless
      the Certificate of Authentication hereon has been executed by the Indenture
      Trustee by manual signature, this Note shall not be entitled to any benefit
      under the Indenture, or be valid or obligatory for any purpose.

     

    AS
      PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
      BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
      NEW
      YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
      by
      Wilmington Trust Company, not in its individual capacity but solely as Owner
      Trustee.

     

    Dated:
      April ____, 2006

     

    
      	 	 	 	 	 	 	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST 2006-1

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              BY:
                WILMINGTON TRUST COMPANY, not in its individual capacity but solely
                in its
                capacity as Owner Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes referred to in the within-mentioned Indenture.

     

    
      	
              JPMORGAN
                CHASE BANK, N.A.,

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of the Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations:

     

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ______________________________________________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              
                ______________________________________________________________________________

              

            
	 	 	 	
              (State)

            
	 	 	 

    

    

    Additional
      abbreviations may also be used though not in the above LIST.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING 

    NUMBER
      OF
      ASSIGNEE:

    

    
      	 
	 
	 

    

    (Please
      print or typewrite name and address, including zip code, of
      assignee)

     

    

    
      	 

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes 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 by __________________________________

     

    NOTICE:
      The signature(s) to this assignment must correspond with the name as it appears
      upon the face of the within Note in every particular, without alteration or
      enlargement or any change whatsoever. Signature(s) must be guaranteed by a
      commercial bank or by a member firm of the New York Stock Exchange or another
      national securities exchange. Notarized or witnessed signatures are not
      acceptable.

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A-3

     

    FORM
      OF
      CLASS A-3 NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

     

    ASSET-BACKED
      NOTES, SERIES 2006-1

     

    CLASS
      A-3

     

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $261,774,000.00

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $261,774,000.00

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. 65106A AL 7

            

    

    

    Newcastle
      Mortgage Securities Trust 2006-1 (the “Issuer”), a Delaware statutory trust, for
      value received, hereby promises to pay to Cede & Co. or registered assigns,
      the Aggregate Note Balance in monthly installments on the twenty-fifth day
      of
      each month or, if such day is not a Business Day, the next succeeding Business
      Day (each a “Payment Date”), commencing in April 2006 and ending on or before
      the Payment Date occurring on the Final Stated Maturity Date and to pay interest
      on the Note Balance of this Note (this “Note”) outstanding from time to time as
      provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
      2006-1 (the “Notes”), issued under an Indenture dated as of April 6, 2006 (the
“Indenture”), between the Issuer and JPMorgan Chase Bank, N.A., as indenture
      trustee (the “Indenture Trustee”, which term includes any successor Indenture
      Trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the respective rights
      thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
      and the terms upon which the Notes are to be authenticated and delivered. All
      terms used in this Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    Payments
      of principal and interest on this Note will be made on each Payment Date to
      the
      Noteholder of record as of the related Record Date. The “Note Balance” of a Note
      as of any date of determination is equal to the initial Note Balance thereof,
      reduced by the aggregate of all amounts previously paid with respect to such
      Note on account of principal and the aggregate amount of cumulative Realized
      Losses allocated to such Note on all prior Payment Dates.

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, 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 Issuer with respect to this Note shall be equal to this
      Note’s pro
      rata
      share of
      the aggregate payments on all Class A-3 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

    All
      principal and interest accrued on the Notes, if not previously paid, will become
      finally due and payable at the Final Stated Maturity Date.

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Majority
      Certificateholder on any Payment Date on or after the Payment Date on which
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
      prior Due Period is less than or equal to 20% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of Cut-off Date.

     

    The
      Issuer shall not be liable upon the indebtedness evidenced by the Notes except
      to the extent of amounts available from the Trust Estate which constitutes
      security for the payment of the Notes. The assets included in the Trust Estate
      will be the sole source of payments on the Class A-3 Notes, and each Holder
      hereof, by its acceptance of this Note, agrees that (i) such Note will be
      limited in right of payment to amounts available from the Trust Estate as
      provided in the Indenture and (ii) such Holder shall have no recourse to the
      Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Originator,
      the Servicer or any of their respective affiliates, or to the assets of any
      of
      the foregoing entities, except the assets of the Issuer pledged to secure the
      Class A-3 Notes pursuant to the Indenture and the rights conveyed to the Issuer
      under the Indenture.

     

    Any
      payment of principal or interest payable on this Note which is punctually paid
      on the applicable Payment Date shall be paid to the Person in whose name such
      Note is registered at the close of business on the Record Date for such Payment
      Date by check mailed to such person’s address as it appears in the Note Register
      on such Record Date, except for the final installment of principal and interest
      payable with respect to such Note, which shall be payable as provided below.
      Notwithstanding the foregoing, upon written request with appropriate
      instructions by the Holder of this Note delivered to the Indenture Trustee
      at
      least five Business Days prior to the Record Date, any payment of principal
      or
      interest, other than the final installment of principal or interest, shall
      be
      made by wire transfer to an account in the United States designated by such
      Holder. All scheduled reductions in the Note Balance of a Note (or one or more
      predecessor Notes) effected by payments of principal made on any Payment Date
      shall be binding upon all Holders of this Note and of any note issued upon
      the
      registration of transfer thereof or in exchange therefor or in lieu thereof,
      whether or not such payment is noted on such Note. The final payment of this
      Note shall be payable upon presentation and surrender thereof on or after the
      Payment Date thereof at the office or agency of the Issuer maintained by it
      for
      such purpose pursuant to Section 3.02 of the Indenture.

     

    Subject
      to the foregoing provisions, each Note delivered under the Indenture, upon
      registration of transfer of or in exchange for or in lieu of any other Note
      shall carry the right to unpaid principal and interest that were carried by
      such
      other Note.

     

    If
      an
      Event of Default as defined in the Indenture shall occur and be continuing
      with
      respect to the Notes, the Notes may become or be declared due and payable in
      the
      manner and with the effect provided in the Indenture. If any such acceleration
      of maturity occurs prior to the payment of the entire unpaid Note Balance of
      the
      Notes, the amount payable to the Holder of this Note will be equal to the sum
      of
      the unpaid Note Balance of the Notes, together with accrued and unpaid interest
      thereon as described in the Indenture. The Indenture provides that,
      notwithstanding the acceleration of the maturity of the Notes, under certain
      circumstances specified therein, all amounts collected as proceeds of the Trust
      Estate securing the Notes or otherwise shall continue to be applied to payments
      of principal of and interest on the Notes as if they had not been declared
      due
      and payable.

     

    The
      failure to pay any Unpaid Interest Shortfall Amount at any time when funds
      are
      not available to make such payment as provided in the Indenture shall not
      constitute an Event of Default under the Indenture.

     

    The
      Holder of this Note or Beneficial Owner of any interest herein is deemed to
      represent that either (1) it is not acquiring this Note with Plan Assets or
      (2)
      (A) the acquisition, holding and transfer of this Note will not give rise to
      a
      nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
      of
      the Code and (B) this Note is rated investment grade or better and such person
      believes that this Note is properly treated as indebtedness without substantial
      equity features for purposes of the DOL Regulations, and agrees to so treat
      this
      Note. Alternatively, regardless of the rating of this Note, such person may
      provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
      which opinion of counsel will not be at the expense of the Issuer, the Seller,
      the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee,
      the
      Servicer or any successor servicer which opines that the acquisition, holding
      and transfer of this Note or interest herein is permissible under applicable
      law, will not constitute or result in a non-exempt prohibited transaction under
      ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
      the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
      Trustee, the Servicer or any successor servicer to any obligation in addition
      to
      those undertaken in the Indenture or other Operative Agreements.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Note Register of the Issuer.
      Upon surrender for registration of transfer of, or presentation of a written
      instrument of transfer for, this Note at the office or agency designated by
      the
      Issuer pursuant to the Indenture, accompanied by proper instruments of
      assignment in form satisfactory to the Indenture Trustee, one or more new Notes
      of any authorized denominations and of a like aggregate initial Note Balance,
      will be issued to the designated transferee or transferees.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuer,
      the
      Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
      treat
      the Person in whose name this Note is registered as the owner of such Note
      (i)
      on the applicable Record Date for the purpose of making payments and interest
      of
      such Note and (ii) on any other date for all other purposes whatsoever, as
      the
      owner hereof, whether or not this Note be overdue, and neither the Issuer,
      the
      Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
      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 Issuer and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Issuer
      and the Holders of a majority of all Notes at the time outstanding. The
      Indenture also contains provisions permitting the Holders of Notes representing
      specified percentages of the aggregate Note Balance of the Notes on behalf
      of
      the Holders of all the Notes, to waive any past Default under the Indenture
      and
      its consequences. Any such waiver by the Holder, at the time of the giving
      thereof, of this Note (or any one or more predecessor Notes) shall bind the
      Holder of every 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 such Note. The Indenture also permits the Issuer and the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

    Initially,
      this Note will be registered in the name of Cede & Co. as nominee of DTC,
      acting in its capacity as the Depository for this Note. This Note will be
      delivered by the clearing agency in denominations as provided in the Indenture
      and subject to certain limitations therein set forth. This Note is exchangeable
      for a like aggregate initial Note Balance of Notes of different authorized
      denominations, as requested by the Holder surrendering same.

     

    Unless
      the Certificate of Authentication hereon has been executed by the Indenture
      Trustee by manual signature, this Note shall not be entitled to any benefit
      under the Indenture, or be valid or obligatory for any purpose.

     

    AS
      PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
      BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
      NEW
      YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
      by
      Wilmington Trust Company, not in its individual capacity but solely as Owner
      Trustee.

     

    Dated:
      April ____, 2006

     

    
      	 	 	 	 	 	 	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST 2006-1

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              BY:
                WILMINGTON TRUST COMPANY, not in its individual capacity but solely
                in its
                capacity as Owner Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes referred to in the within-mentioned Indenture.

     

    
      	
              JPMORGAN
                CHASE BANK, N.A.,

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of the Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations:

     

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

    Additional
      abbreviations may also be used though not in the above LIST.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING 

    NUMBER
      OF
      ASSIGNEE:

    

    
      	 
	 
	 

    

    (Please
      print or typewrite name and address, including zip code, of
      assignee)

     

    

    
      	 

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes 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 by __________________________________

     

    NOTICE:
      The signature(s) to this assignment must correspond with the name as it appears
      upon the face of the within Note in every particular, without alteration or
      enlargement or any change whatsoever. Signature(s) must be guaranteed by a
      commercial bank or by a member firm of the New York Stock Exchange or another
      national securities exchange. Notarized or witnessed signatures are not
      acceptable.

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A-4

     

    FORM
      OF
      CLASS A-4 NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

     

    ASSET-BACKED
      NOTES, SERIES 2006-1

     

    CLASS
      A-4

     

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $116,279,000.00

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $116,279,000.00

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. 65106A AM 5

            

    

    

    Newcastle
      Mortgage Securities Trust 2006-1 (the “Issuer”), a Delaware statutory trust, for
      value received, hereby promises to pay to Cede & Co. or registered assigns,
      the Aggregate Note Balance in monthly installments on the twenty-fifth day
      of
      each month or, if such day is not a Business Day, the next succeeding Business
      Day (each a “Payment Date”), commencing in April 2006 and ending on or before
      the Payment Date occurring on the Final Stated Maturity Date and to pay interest
      on the Note Balance of this Note (this “Note”) outstanding from time to time as
      provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
      2006-1 (the “Notes”), issued under an Indenture dated as of April 6, 2006 (the
“Indenture”), between the Issuer and JPMorgan Chase Bank, N.A., as indenture
      trustee (the “Indenture Trustee”, which term includes any successor Indenture
      Trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the respective rights
      thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
      and the terms upon which the Notes are to be authenticated and delivered. All
      terms used in this Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    Payments
      of principal and interest on this Note will be made on each Payment Date to
      the
      Noteholder of record as of the related Record Date. The “Note Balance” of a Note
      as of any date of determination is equal to the initial Note Balance thereof,
      reduced by the aggregate of all amounts previously paid with respect to such
      Note on account of principal and the aggregate amount of cumulative Realized
      Losses allocated to such Note on all prior Payment Dates.

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, 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 Issuer with respect to this Note shall be equal to this
      Note’s pro
      rata
      share of
      the aggregate payments on all Class A-4 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

    All
      principal and interest accrued on the Notes, if not previously paid, will become
      finally due and payable at the Final Stated Maturity Date.

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Majority
      Certificateholder on any Payment Date on or after the Payment Date on which
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
      prior Due Period is less than or equal to 20% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of Cut-off Date.

     

    The
      Issuer shall not be liable upon the indebtedness evidenced by the Notes except
      to the extent of amounts available from the Trust Estate which constitutes
      security for the payment of the Notes. The assets included in the Trust Estate
      will be the sole source of payments on the Class A-4 Notes, and each Holder
      hereof, by its acceptance of this Note, agrees that (i) such Note will be
      limited in right of payment to amounts available from the Trust Estate as
      provided in the Indenture and (ii) such Holder shall have no recourse to the
      Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Originator,
      the Servicer or any of their respective affiliates, or to the assets of any
      of
      the foregoing entities, except the assets of the Issuer pledged to secure the
      Class A-4 Notes pursuant to the Indenture and the rights conveyed to the Issuer
      under the Indenture.

     

    Any
      payment of principal or interest payable on this Note which is punctually paid
      on the applicable Payment Date shall be paid to the Person in whose name such
      Note is registered at the close of business on the Record Date for such Payment
      Date by check mailed to such person’s address as it appears in the Note Register
      on such Record Date, except for the final installment of principal and interest
      payable with respect to such Note, which shall be payable as provided below.
      Notwithstanding the foregoing, upon written request with appropriate
      instructions by the Holder of this Note delivered to the Indenture Trustee
      at
      least five Business Days prior to the Record Date, any payment of principal
      or
      interest, other than the final installment of principal or interest, shall
      be
      made by wire transfer to an account in the United States designated by such
      Holder. All scheduled reductions in the Note Balance of a Note (or one or more
      predecessor Notes) effected by payments of principal made on any Payment Date
      shall be binding upon all Holders of this Note and of any note issued upon
      the
      registration of transfer thereof or in exchange therefor or in lieu thereof,
      whether or not such payment is noted on such Note. The final payment of this
      Note shall be payable upon presentation and surrender thereof on or after the
      Payment Date thereof at the office or agency of the Issuer maintained by it
      for
      such purpose pursuant to Section 3.02 of the Indenture.

     

    Subject
      to the foregoing provisions, each Note delivered under the Indenture, upon
      registration of transfer of or in exchange for or in lieu of any other Note
      shall carry the right to unpaid principal and interest that were carried by
      such
      other Note.

     

    If
      an
      Event of Default as defined in the Indenture shall occur and be continuing
      with
      respect to the Notes, the Notes may become or be declared due and payable in
      the
      manner and with the effect provided in the Indenture. If any such acceleration
      of maturity occurs prior to the payment of the entire unpaid Note Balance of
      the
      Notes, the amount payable to the Holder of this Note will be equal to the sum
      of
      the unpaid Note Balance of the Notes, together with accrued and unpaid interest
      thereon as described in the Indenture. The Indenture provides that,
      notwithstanding the acceleration of the maturity of the Notes, under certain
      circumstances specified therein, all amounts collected as proceeds of the Trust
      Estate securing the Notes or otherwise shall continue to be applied to payments
      of principal of and interest on the Notes as if they had not been declared
      due
      and payable.

     

    The
      failure to pay any Unpaid Interest Shortfall Amount at any time when funds
      are
      not available to make such payment as provided in the Indenture shall not
      constitute an Event of Default under the Indenture.

     

    The
      Holder of this Note or Beneficial Owner of any interest herein is deemed to
      represent that either (1) it is not acquiring this Note with Plan Assets or
      (2)
      (A) the acquisition, holding and transfer of this Note will not give rise to
      a
      nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
      of
      the Code and (B) this Note is rated investment grade or better and such person
      believes that this Note is properly treated as indebtedness without substantial
      equity features for purposes of the DOL Regulations, and agrees to so treat
      this
      Note. Alternatively, regardless of the rating of this Note, such person may
      provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
      which opinion of counsel will not be at the expense of the Issuer, the Seller,
      the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee,
      the
      Servicer or any successor servicer which opines that the acquisition, holding
      and transfer of this Note or interest herein is permissible under applicable
      law, will not constitute or result in a non-exempt prohibited transaction under
      ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
      the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
      Trustee, the Servicer or any successor servicer to any obligation in addition
      to
      those undertaken in the Indenture or other Operative Agreements.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Note Register of the Issuer.
      Upon surrender for registration of transfer of, or presentation of a written
      instrument of transfer for, this Note at the office or agency designated by
      the
      Issuer pursuant to the Indenture, accompanied by proper instruments of
      assignment in form satisfactory to the Indenture Trustee, one or more new Notes
      of any authorized denominations and of a like aggregate initial Note Balance,
      will be issued to the designated transferee or transferees.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuer,
      the
      Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
      treat
      the Person in whose name this Note is registered as the owner of such Note
      (i)
      on the applicable Record Date for the purpose of making payments and interest
      of
      such Note and (ii) on any other date for all other purposes whatsoever, as
      the
      owner hereof, whether or not this Note be overdue, and neither the Issuer,
      the
      Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
      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 Issuer and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Issuer
      and the Holders of a majority of all Notes at the time outstanding. The
      Indenture also contains provisions permitting the Holders of Notes representing
      specified percentages of the aggregate Note Balance of the Notes on behalf
      of
      the Holders of all the Notes, to waive any past Default under the Indenture
      and
      its consequences. Any such waiver by the Holder, at the time of the giving
      thereof, of this Note (or any one or more predecessor Notes) shall bind the
      Holder of every 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 such Note. The Indenture also permits the Issuer and the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

    Initially,
      this Note will be registered in the name of Cede & Co. as nominee of DTC,
      acting in its capacity as the Depository for this Note. This Note will be
      delivered by the clearing agency in denominations as provided in the Indenture
      and subject to certain limitations therein set forth. This Note is exchangeable
      for a like aggregate initial Note Balance of Notes of different authorized
      denominations, as requested by the Holder surrendering same.

     

    Unless
      the Certificate of Authentication hereon has been executed by the Indenture
      Trustee by manual signature, this Note shall not be entitled to any benefit
      under the Indenture, or be valid or obligatory for any purpose.

     

    AS
      PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
      BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
      NEW
      YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
      by
      Wilmington Trust Company, not in its individual capacity but solely as Owner
      Trustee.

     

    Dated:
      April ____, 2006

     

    
      	 	 	 	 	 	 	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST 2006-1

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              BY:
                WILMINGTON TRUST COMPANY, not in its individual capacity but solely
                in its
                capacity as Owner Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes referred to in the within-mentioned Indenture.

     

    
      	
              JPMORGAN
                CHASE BANK, N.A.,

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of the Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations:

     

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

    Additional
      abbreviations may also be used though not in the above LIST.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING 

    NUMBER
      OF
      ASSIGNEE:

    

    
      	 
	 
	 

    

    (Please
      print or typewrite name and address, including zip code, of
      assignee)

     

    

    
      	 

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes 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 by __________________________________

     

    NOTICE:
      The signature(s) to this assignment must correspond with the name as it appears
      upon the face of the within Note in every particular, without alteration or
      enlargement or any change whatsoever. Signature(s) must be guaranteed by a
      commercial bank or by a member firm of the New York Stock Exchange or another
      national securities exchange. Notarized or witnessed signatures are not
      acceptable.

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A-5

     

    FORM
      OF
      CLASS M-1 NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

    THIS
      NOTE
      IS SUBORDINATE TO THE CLASS A NOTES TO THE EXTENT DESCRIBED IN THE INDENTURE
      REFERRED TO HEREIN.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

    ASSET-BACKED
      NOTES, SERIES 2006-1

    CLASS
      M-1

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $51,074,000.00

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $51,074,000.00

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. 65106A AN 3

            

    

    

    Newcastle
      Mortgage Securities Trust 2006-1 (the “Issuer”), a Delaware statutory trust, for
      value received, hereby promises to pay to Cede & Co. or registered assigns,
      the Aggregate Note Balance in monthly installments on the twenty-fifth day
      of
      each month or, if such day is not a Business Day, the next succeeding Business
      Day (each a “Payment Date”), commencing in April 2006 and ending on or before
      the Payment Date occurring on the Final Stated Maturity Date and to pay interest
      on the Note Balance of this Note (this “Note”) outstanding from time to time as
      provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
      2006-1 (the “Notes”), issued under an Indenture dated as of April 6, 2006 (the
“Indenture”), between the Issuer and JPMorgan Chase Bank, N.A., as indenture
      trustee (the “Indenture Trustee”, which term includes any successor Indenture
      Trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the respective rights
      thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
      and the terms upon which the Notes are to be authenticated and delivered. All
      terms used in this Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    Payments
      of principal and interest on this Note will be made on each Payment Date to
      the
      Noteholder of record as of the related Record Date. The “Note Balance” of a Note
      as of any date of determination is equal to the initial Note Balance thereof,
      reduced by the aggregate of all amounts previously paid with respect to such
      Note on account of principal and the aggregate amount of cumulative Realized
      Losses allocated to such Note on all prior Payment Dates.

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, 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 Issuer with respect to this Note shall be equal to this
      Note’s pro
      rata
      share of
      the aggregate payments on all Class M-1 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

    All
      principal and interest accrued on the Notes, if not previously paid, will become
      finally due and payable at the Final Stated Maturity Date.

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Majority
      Certificateholder on any Payment Date on or after the Payment Date on which
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
      prior Due Period is less than or equal to 20% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of Cut-off Date.

     

    The
      Issuer shall not be liable upon the indebtedness evidenced by the Notes except
      to the extent of amounts available from the Trust Estate which constitutes
      security for the payment of the Notes. The assets included in the Trust Estate
      will be the sole source of payments on the Class M-1 Notes, and each Holder
      hereof, by its acceptance of this Note, agrees that (i) such Note will be
      limited in right of payment to amounts available from the Trust Estate as
      provided in the Indenture and (ii) such Holder shall have no recourse to the
      Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Originator,
      the Servicer or any of their respective affiliates, or to the assets of any
      of
      the foregoing entities, except the assets of the Issuer pledged to secure the
      Class M-1 Notes pursuant to the Indenture and the rights conveyed to the Issuer
      under the Indenture.

     

    Any
      payment of principal or interest payable on this Note which is punctually paid
      on the applicable Payment Date shall be paid to the Person in whose name such
      Note is registered at the close of business on the Record Date for such Payment
      Date by check mailed to such person’s address as it appears in the Note Register
      on such Record Date, except for the final installment of principal and interest
      payable with respect to such Note, which shall be payable as provided below.
      Notwithstanding the foregoing, upon written request with appropriate
      instructions by the Holder of this Note delivered to the Indenture Trustee
      at
      least five Business Days prior to the Record Date, any payment of principal
      or
      interest, other than the final installment of principal or interest, shall
      be
      made by wire transfer to an account in the United States designated by such
      Holder. All scheduled reductions in the Note Balance of a Note (or one or more
      predecessor Notes) effected by payments of principal made on any Payment Date
      shall be binding upon all Holders of this Note and of any note issued upon
      the
      registration of transfer thereof or in exchange therefor or in lieu thereof,
      whether or not such payment is noted on such Note. The final payment of this
      Note shall be payable upon presentation and surrender thereof on or after the
      Payment Date thereof at the office or agency of the Issuer maintained by it
      for
      such purpose pursuant to Section 3.02 of the Indenture.

     

    Subject
      to the foregoing provisions, each Note delivered under the Indenture, upon
      registration of transfer of or in exchange for or in lieu of any other Note
      shall carry the right to unpaid principal and interest that were carried by
      such
      other Note.

     

    If
      an
      Event of Default as defined in the Indenture shall occur and be continuing
      with
      respect to the Notes, the Notes may become or be declared due and payable in
      the
      manner and with the effect provided in the Indenture. If any such acceleration
      of maturity occurs prior to the payment of the entire unpaid Note Balance of
      the
      Notes, the amount payable to the Holder of this Note will be equal to the sum
      of
      the unpaid Note Balance of the Notes, together with accrued and unpaid interest
      thereon as described in the Indenture. The Indenture provides that,
      notwithstanding the acceleration of the maturity of the Notes, under certain
      circumstances specified therein, all amounts collected as proceeds of the Trust
      Estate securing the Notes or otherwise shall continue to be applied to payments
      of principal of and interest on the Notes as if they had not been declared
      due
      and payable.

     

    The
      failure to pay any Unpaid Interest Shortfall Amount at any time when funds
      are
      not available to make such payment as provided in the Indenture shall not
      constitute an Event of Default under the Indenture.

     

    The
      Holder of this Note or Beneficial Owner of any interest herein is deemed to
      represent that either (1) it is not acquiring this Note with Plan Assets or
      (2)
      (A) the acquisition, holding and transfer of this Note will not give rise to
      a
      nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
      of
      the Code and (B) this Note is rated investment grade or better and such person
      believes that this Note is properly treated as indebtedness without substantial
      equity features for purposes of the DOL Regulations, and agrees to so treat
      this
      Note. Alternatively, regardless of the rating of this Note, such person may
      provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
      which opinion of counsel will not be at the expense of the Issuer, the Seller,
      the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee,
      the
      Servicer or any successor servicer which opines that the acquisition, holding
      and transfer of this Note or interest herein is permissible under applicable
      law, will not constitute or result in a non-exempt prohibited transaction under
      ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
      the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
      Trustee, the Servicer or any successor servicer to any obligation in addition
      to
      those undertaken in the Indenture or other Operative Agreements.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Note Register of the Issuer.
      Upon surrender for registration of transfer of, or presentation of a written
      instrument of transfer for, this Note at the office or agency designated by
      the
      Issuer pursuant to the Indenture, accompanied by proper instruments of
      assignment in form satisfactory to the Indenture Trustee, one or more new Notes
      of any authorized denominations and of a like aggregate initial Note Balance,
      will be issued to the designated transferee or transferees.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuer,
      the
      Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
      treat
      the Person in whose name this Note is registered as the owner of such Note
      (i)
      on the applicable Record Date for the purpose of making payments and interest
      of
      such Note and (ii) on any other date for all other purposes whatsoever, as
      the
      owner hereof, whether or not this Note be overdue, and neither the Issuer,
      the
      Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
      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 Issuer and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Issuer
      and the Holders of a majority of all Notes at the time outstanding. The
      Indenture also contains provisions permitting the Holders of Notes representing
      specified percentages of the aggregate Note Balance of the Notes on behalf
      of
      the Holders of all the Notes, to waive any past Default under the Indenture
      and
      its consequences. Any such waiver by the Holder, at the time of the giving
      thereof, of this Note (or any one or more predecessor Notes) shall bind the
      Holder of every 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 such Note. The Indenture also permits the Issuer and the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

    Initially,
      this Note will be registered in the name of Cede & Co. as nominee of DTC,
      acting in its capacity as the Depository for this Note. This Note will be
      delivered by the clearing agency in denominations as provided in the Indenture
      and subject to certain limitations therein set forth. This Note is exchangeable
      for a like aggregate initial Note Balance of Notes of different authorized
      denominations, as requested by the Holder surrendering same.

     

    Unless
      the Certificate of Authentication hereon has been executed by the Indenture
      Trustee by manual signature, this Note shall not be entitled to any benefit
      under the Indenture, or be valid or obligatory for any purpose.

     

    AS
      PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
      BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
      NEW
      YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
      by
      Wilmington Trust Company, not in its individual capacity but solely as Owner
      Trustee.

     

    Dated:
      April ____, 2006

     

    
      	 	 	 	 	 	 	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST 2006-1

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              BY:
                WILMINGTON TRUST COMPANY, not in its individual capacity but solely
                in its
                capacity as Owner Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes referred to in the within-mentioned Indenture.

     

    
      	
              JPMORGAN
                CHASE BANK, N.A.,

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of the Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations:

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

    Additional
      abbreviations may also be used though not in the above list.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

    (Please
      print or typewrite name and address, including zip code, of
      assignee)

     

    

    
      	 

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes 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 by __________________________________

     

    NOTICE:
      The signature(s) to this assignment must correspond with the name as it appears
      upon the face of the within Note in every particular, without alteration or
      enlargement or any change whatsoever. Signature(s) must be guaranteed by a
      commercial bank or by a member firm of the New York Stock Exchange or another
      national securities exchange. Notarized or witnessed signatures are not
      acceptable.

     

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A-6

     

    FORM
      OF
      CLASS M-2 NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

    THIS
      NOTE
      IS SUBORDINATE TO THE CLASS A NOTES AND THE CLASS M-1 NOTES TO THE EXTENT
      DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

    ASSET-BACKED
      NOTES, SERIES 2006-1

    CLASS
      M-2

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $47,319,000.00

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $47,319,000.00

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. 65106A AP 8

            

    

    

    Newcastle
      Mortgage Securities Trust 2006-1 (the “Issuer”), a Delaware statutory trust, for
      value received, hereby promises to pay to Cede & Co. or registered assigns,
      the Aggregate
      Note Balance in
      monthly installments on the twenty-fifth day of each month or, if such day
      is
      not a Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in April 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
      2006-1 (the “Notes”), issued under an Indenture dated as of April 6, 2006 (the
“Indenture”), between the Issuer and JPMorgan Chase Bank, N.A., as indenture
      trustee (the “Indenture Trustee”, which term includes any successor Indenture
      Trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the respective rights
      thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
      and the terms upon which the Notes are to be authenticated and delivered. All
      terms used in this Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    Payments
      of principal and interest on this Note will be made on each Payment Date to
      the
      Noteholder of record as of the related Record Date. The “Note Balance” of a Note
      as of any date of determination is equal to the initial Note Balance thereof,
      reduced by the aggregate of all amounts previously paid with respect to such
      Note on account of principal and the aggregate amount of cumulative Realized
      Losses allocated to such Note on all prior Payment Dates.

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, 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 Issuer with respect to this Note shall be equal to this
      Note’s pro
      rata
      share of
      the aggregate payments on all Class M-2 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

    All
      principal and interest accrued on the Notes, if not previously paid, will become
      finally due and payable at the Final Stated Maturity Date.

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Majority
      Certificateholder on any Payment Date on or after the Payment Date on which
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
      prior Due Period is less than or equal to 20% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of Cut-off Date.

     

    The
      Issuer shall not be liable upon the indebtedness evidenced by the Notes except
      to the extent of amounts available from the Trust Estate which constitutes
      security for the payment of the Notes. The assets included in the Trust Estate
      will be the sole source of payments on the Class M-2 Notes, and each Holder
      hereof, by its acceptance of this Note, agrees that (i) such Note will be
      limited in right of payment to amounts available from the Trust Estate as
      provided in the Indenture and (ii) such Holder shall have no recourse to the
      Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Originator,
      the Servicer or any of their respective affiliates, or to the assets of any
      of
      the foregoing entities, except the assets of the Issuer pledged to secure the
      Class M-2 Notes pursuant to the Indenture and the rights conveyed to the Issuer
      under the Indenture.

     

    Any
      payment of principal or interest payable on this Note which is punctually paid
      on the applicable Payment Date shall be paid to the Person in whose name such
      Note is registered at the close of business on the Record Date for such Payment
      Date by check mailed to such person’s address as it appears in the Note Register
      on such Record Date, except for the final installment of principal and interest
      payable with respect to such Note, which shall be payable as provided below.
      Notwithstanding the foregoing, upon written request with appropriate
      instructions by the Holder of this Note delivered to the Indenture Trustee
      at
      least five Business Days prior to the Record Date, any payment of principal
      or
      interest, other than the final installment of principal or interest, shall
      be
      made by wire transfer to an account in the United States designated by such
      Holder. All scheduled reductions in the Note Balance of a Note (or one or more
      predecessor Notes) effected by payments of principal made on any Payment Date
      shall be binding upon all Holders of this Note and of any note issued upon
      the
      registration of transfer thereof or in exchange therefor or in lieu thereof,
      whether or not such payment is noted on such Note. The final payment of this
      Note shall be payable upon presentation and surrender thereof on or after the
      Payment Date thereof at the office or agency of the Issuer maintained by it
      for
      such purpose pursuant to Section 3.02 of the Indenture.

     

    Subject
      to the foregoing provisions, each Note delivered under the Indenture, upon
      registration of transfer of or in exchange for or in lieu of any other Note
      shall carry the right to unpaid principal and interest that were carried by
      such
      other Note.

     

    If
      an
      Event of Default as defined in the Indenture shall occur and be continuing
      with
      respect to the Notes, the Notes may become or be declared due and payable in
      the
      manner and with the effect provided in the Indenture. If any such acceleration
      of maturity occurs prior to the payment of the entire unpaid Note Balance of
      the
      Notes, the amount payable to the Holder of this Note will be equal to the sum
      of
      the unpaid Note Balance of the Notes, together with accrued and unpaid interest
      thereon as described in the Indenture. The Indenture provides that,
      notwithstanding the acceleration of the maturity of the Notes, under certain
      circumstances specified therein, all amounts collected as proceeds of the Trust
      Estate securing the Notes or otherwise shall continue to be applied to payments
      of principal of and interest on the Notes as if they had not been declared
      due
      and payable.

     

    The
      failure to pay any Unpaid Interest Shortfall Amount at any time when funds
      are
      not available to make such payment as provided in the Indenture shall not
      constitute an Event of Default under the Indenture.

     

    The
      Holder of this Note or Beneficial Owner of any interest herein is deemed to
      represent that either (1) it is not acquiring this Note with Plan Assets or
      (2)
      (A) the acquisition, holding and transfer of this Note will not give rise to
      a
      nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of
      the Code and (B) this Note is rated investment grade or better and such person
      believes that this Note is properly treated as indebtedness without substantial
      equity features for purposes of the DOL Regulations, and agrees to so treat
      this
      Note. Alternatively, regardless of the rating of this Note, such person may
      provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
      which opinion of counsel will not be at the expense of the Issuer, the Seller,
      the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee,
      the
      Servicer or any successor servicer which opines that the acquisition, holding
      and transfer of this Note or interest herein is permissible under applicable
      law, will not constitute or result in a non-exempt prohibited transaction under
      ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
      the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
      Trustee, the Servicer or any successor servicer to any obligation in addition
      to
      those undertaken in the Indenture or other Operative Agreements.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Note Register of the Issuer.
      Upon surrender for registration of transfer of, or presentation of a written
      instrument of transfer for, this Note at the office or agency designated by
      the
      Issuer pursuant to the Indenture, accompanied by proper instruments of
      assignment in form satisfactory to the Indenture Trustee, one or more new Notes
      of any authorized denominations and of a like aggregate initial Note Balance,
      will be issued to the designated transferee or transferees.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuer,
      the
      Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
      treat
      the Person in whose name this Note is registered as the owner of such Note
      (i)
      on the applicable Record Date for the purpose of making payments and interest
      of
      such Note and (ii) on any other date for all other purposes whatsoever, as
      the
      owner hereof, whether or not this Note be overdue, and neither the Issuer,
      the
      Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
      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 Issuer and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Issuer
      and the Holders of a majority of all Notes at the time outstanding. The
      Indenture also contains provisions permitting the Holders of Notes representing
      specified percentages of the aggregate Note Balance of the Notes on behalf
      of
      the Holders of all the Notes, to waive any past Default under the Indenture
      and
      its consequences. Any such waiver by the Holder, at the time of the giving
      thereof, of this Note (or any one or more predecessor Notes) shall bind the
      Holder of every 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 such Note. The Indenture also permits the Issuer and the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

    Initially,
      this Note will be registered in the name of Cede & Co. as nominee of DTC,
      acting in its capacity as the Depository for this Note. This Note will be
      delivered by the clearing agency in denominations as provided in the Indenture
      and subject to certain limitations therein set forth. This Note is exchangeable
      for a like aggregate initial Note Balance of Notes of different authorized
      denominations, as requested by the Holder surrendering same.

     

    Unless
      the Certificate of Authentication hereon has been executed by the Indenture
      Trustee by manual signature, this Note shall not be entitled to any benefit
      under the Indenture, or be valid or obligatory for any purpose.

     

    AS
      PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
      BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
      NEW
      YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
      by
      Wilmington Trust Company, not in its individual capacity but solely as Owner
      Trustee.

     

    Dated:
      April ____, 2006

     

    
      	 	 	 	 	 	 	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST 2006-1

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              BY:
                WILMINGTON TRUST COMPANY, not in its individual capacity but solely
                in its
                capacity as Owner Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes referred to in the within-mentioned Indenture.

     

    
      	
              JPMORGAN
                CHASE BANK, N.A.,

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of the Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations:

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

    Additional
      abbreviations may also be used though not in the above list.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

    (Please
      print or typewrite name and address, including zip code, of
      assignee)

     

    

    
      	 

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes 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 by __________________________________

     

    NOTICE:
      The signature(s) to this assignment must correspond with the name as it appears
      upon the face of the within Note in every particular, without alteration or
      enlargement or any change whatsoever. Signature(s) must be guaranteed by a
      commercial bank or by a member firm of the New York Stock Exchange or another
      national securities exchange. Notarized or witnessed signatures are not
      acceptable.

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A-7

     

    FORM
      OF
      CLASS M-3 NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

    THIS
      NOTE
      IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES AND THE CLASS M-2
      NOTES
      TO THE EXTENT DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

    ASSET-BACKED
      NOTES, SERIES 2006-1

    CLASS
      M-3

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $29,293,000.00

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $29,293,000.00

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. 65106A AQ 6

            

    

    

    Newcastle
      Mortgage Securities Trust 2006-1 (the “Issuer”), a Delaware statutory trust, for
      value received, hereby promises to pay to Cede & Co. or registered assigns,
      the Aggregate Note Balance in monthly installments on the twenty-fifth day
      of
      each month or, if such day is not a Business Day, the next succeeding Business
      Day (each a “Payment Date”), commencing in April 2006 and ending on or before
      the Payment Date occurring on the Final Stated Maturity Date and to pay interest
      on the Note Balance of this Note (this “Note”) outstanding from time to time as
      provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
      2006-1 (the “Notes”), issued under an Indenture dated as of April 6, 2006 (the
“Indenture”), between the Issuer and JPMorgan Chase Bank, N.A., as indenture
      trustee (the “Indenture Trustee”, which term includes any successor Indenture
      Trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the respective rights
      thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
      and the terms upon which the Notes are to be authenticated and delivered. All
      terms used in this Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    Payments
      of principal and interest on this Note will be made on each Payment Date to
      the
      Noteholder of record as of the related Record Date. The “Note Balance” of a Note
      as of any date of determination is equal to the initial Note Balance thereof,
      reduced by the aggregate of all amounts previously paid with respect to such
      Note on account of principal and the aggregate amount of cumulative Realized
      Losses allocated to such Note on all prior Payment Dates.

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, 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 Issuer with respect to this Note shall be equal to this
      Note’s pro
      rata
      share of
      the aggregate payments on all Class M-3 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

    All
      principal and interest accrued on the Notes, if not previously paid, will become
      finally due and payable at the Final Stated Maturity Date.

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Majority
      Certificateholder on any Payment Date on or after the Payment Date on which
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
      prior Due Period is less than or equal to 20% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of Cut-off Date.

     

    The
      Issuer shall not be liable upon the indebtedness evidenced by the Notes except
      to the extent of amounts available from the Trust Estate which constitutes
      security for the payment of the Notes. The assets included in the Trust Estate
      will be the sole source of payments on the Class M-3 Notes, and each Holder
      hereof, by its acceptance of this Note, agrees that (i) such Note will be
      limited in right of payment to amounts available from the Trust Estate as
      provided in the Indenture and (ii) such Holder shall have no recourse to the
      Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Originator,
      the Servicer or any of their respective affiliates, or to the assets of any
      of
      the foregoing entities, except the assets of the Issuer pledged to secure the
      Class M-3 Notes pursuant to the Indenture and the rights conveyed to the Issuer
      under the Indenture.

     

    Any
      payment of principal or interest payable on this Note which is punctually paid
      on the applicable Payment Date shall be paid to the Person in whose name such
      Note is registered at the close of business on the Record Date for such Payment
      Date by check mailed to such person’s address as it appears in the Note Register
      on such Record Date, except for the final installment of principal and interest
      payable with respect to such Note, which shall be payable as provided below.
      Notwithstanding the foregoing, upon written request with appropriate
      instructions by the Holder of this Note delivered to the Indenture Trustee
      at
      least five Business Days prior to the Record Date, any payment of principal
      or
      interest, other than the final installment of principal or interest, shall
      be
      made by wire transfer to an account in the United States designated by such
      Holder. All scheduled reductions in the Note Balance of a Note (or one or more
      predecessor Notes) effected by payments of principal made on any Payment Date
      shall be binding upon all Holders of this Note and of any note issued upon
      the
      registration of transfer thereof or in exchange therefor or in lieu thereof,
      whether or not such payment is noted on such Note. The final payment of this
      Note shall be payable upon presentation and surrender thereof on or after the
      Payment Date thereof at the office or agency of the Issuer maintained by it
      for
      such purpose pursuant to Section 3.02 of the Indenture.

     

    Subject
      to the foregoing provisions, each Note delivered under the Indenture, upon
      registration of transfer of or in exchange for or in lieu of any other Note
      shall carry the right to unpaid principal and interest that were carried by
      such
      other Note.

     

    If
      an
      Event of Default as defined in the Indenture shall occur and be continuing
      with
      respect to the Notes, the Notes may become or be declared due and payable in
      the
      manner and with the effect provided in the Indenture. If any such acceleration
      of maturity occurs prior to the payment of the entire unpaid Note Balance of
      the
      Notes, the amount payable to the Holder of this Note will be equal to the sum
      of
      the unpaid Note Balance of the Notes, together with accrued and unpaid interest
      thereon as described in the Indenture. The Indenture provides that,
      notwithstanding the acceleration of the maturity of the Notes, under certain
      circumstances specified therein, all amounts collected as proceeds of the Trust
      Estate securing the Notes or otherwise shall continue to be applied to payments
      of principal of and interest on the Notes as if they had not been declared
      due
      and payable.

     

    The
      failure to pay any Unpaid Interest Shortfall Amount at any time when funds
      are
      not available to make such payment as provided in the Indenture shall not
      constitute an Event of Default under the Indenture.

     

    The
      Holder of this Note or Beneficial Owner of any interest herein is deemed to
      represent that either (1) it is not acquiring this Note with Plan Assets or
      (2)
      (A) the acquisition, holding and transfer of this Note will not give rise to
      a
      nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
      of
      the Code and (B) this Note is rated investment grade or better and such person
      believes that this Note is properly treated as indebtedness without substantial
      equity features for purposes of the DOL Regulations, and agrees to so treat
      this
      Note. Alternatively, regardless of the rating of this Note, such person may
      provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
      which opinion of counsel will not be at the expense of the Issuer, the Seller,
      the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee,
      the
      Servicer or any successor servicer which opines that the acquisition, holding
      and transfer of this Note or interest herein is permissible under applicable
      law, will not constitute or result in a non-exempt prohibited transaction under
      ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
      the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
      Trustee, the Servicer or any successor servicer to any obligation in addition
      to
      those undertaken in the Indenture or other Operative Agreements.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Note Register of the Issuer.
      Upon surrender for registration of transfer of, or presentation of a written
      instrument of transfer for, this Note at the office or agency designated by
      the
      Issuer pursuant to the Indenture, accompanied by proper instruments of
      assignment in form satisfactory to the Indenture Trustee, one or more new Notes
      of any authorized denominations and of a like aggregate initial Note Balance,
      will be issued to the designated transferee or transferees.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuer,
      the
      Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
      treat
      the Person in whose name this Note is registered as the owner of such Note
      (i)
      on the applicable Record Date for the purpose of making payments and interest
      of
      such Note and (ii) on any other date for all other purposes whatsoever, as
      the
      owner hereof, whether or not this Note be overdue, and neither the Issuer,
      the
      Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
      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 Issuer and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Issuer
      and the Holders of a majority of all Notes at the time outstanding. The
      Indenture also contains provisions permitting the Holders of Notes representing
      specified percentages of the aggregate Note Balance of the Notes on behalf
      of
      the Holders of all the Notes, to waive any past Default under the Indenture
      and
      its consequences. Any such waiver by the Holder, at the time of the giving
      thereof, of this Note (or any one or more predecessor Notes) shall bind the
      Holder of every 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 such Note. The Indenture also permits the Issuer and the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

    Initially,
      this Note will be registered in the name of Cede & Co. as nominee of DTC,
      acting in its capacity as the Depository for this Note. This Note will be
      delivered by the clearing agency in denominations as provided in the Indenture
      and subject to certain limitations therein set forth. This Note is exchangeable
      for a like aggregate initial Note Balance of Notes of different authorized
      denominations, as requested by the Holder surrendering same.

     

    Unless
      the Certificate of Authentication hereon has been executed by the Indenture
      Trustee by manual signature, this Note shall not be entitled to any benefit
      under the Indenture, or be valid or obligatory for any purpose.

     

    AS
      PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
      BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
      NEW
      YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
      by
      Wilmington Trust Company, not in its individual capacity but solely as Owner
      Trustee.

     

    Dated:
      April ____, 2006

     

    
      	 	 	 	 	 	 	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST 2006-1

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              BY:
                WILMINGTON TRUST COMPANY, not in its individual capacity but solely
                in its
                capacity as Owner Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes referred to in the within-mentioned Indenture.

     

    
      	
              JPMORGAN
                CHASE BANK, N.A.,

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of the Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations:

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

    Additional
      abbreviations may also be used though not in the above list.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

    (Please
      print or typewrite name and address, including zip code, of
      assignee)

     

    

    
      	 

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes 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 by __________________________________

     

    NOTICE:
      The signature(s) to this assignment must correspond with the name as it appears
      upon the face of the within Note in every particular, without alteration or
      enlargement or any change whatsoever. Signature(s) must be guaranteed by a
      commercial bank or by a member firm of the New York Stock Exchange or another
      national securities exchange. Notarized or witnessed signatures are not
      acceptable.

     

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A-8

     

    FORM
      OF
      CLASS M-4 NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

    THIS
      NOTE
      IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES
      AND THE CLASS M-3 NOTES TO THE EXTENT DESCRIBED IN THE INDENTURE REFERRED TO
      HEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

    ASSET-BACKED
      NOTES, SERIES 2006-1

    CLASS
      M-4

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $24,035,000.00

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $24,035,000.00

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. 65106A AR 4

            

    

    

    Newcastle
      Mortgage Securities Trust 2006-1 (the “Issuer”), a Delaware statutory trust, for
      value received, hereby promises to pay to Cede & Co. or registered assigns,
      the Aggregate
      Note Balance
      in
      monthly installments on the twenty-fifth day of each month or, if such day
      is
      not a Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in April 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
      2006-1 (the “Notes”), issued under an Indenture dated as of April 6, 2006 (the
“Indenture”), between the Issuer and JPMorgan Chase Bank, N.A., as indenture
      trustee (the “Indenture Trustee”, which term includes any successor Indenture
      Trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the respective rights
      thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
      and the terms upon which the Notes are to be authenticated and delivered. All
      terms used in this Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    Payments
      of principal and interest on this Note will be made on each Payment Date to
      the
      Noteholder of record as of the related Record Date. The “Note Balance” of a Note
      as of any date of determination is equal to the initial Note Balance thereof,
      reduced by the aggregate of all amounts previously paid with respect to such
      Note on account of principal and the aggregate amount of cumulative Realized
      Losses allocated to such Note on all prior Payment Dates.

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, 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 Issuer with respect to this Note shall be equal to this
      Note’s pro
      rata
      share of
      the aggregate payments on all Class M-4 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

    All
      principal and interest accrued on the Notes, if not previously paid, will become
      finally due and payable at the Final Stated Maturity Date.

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Majority
      Certificateholder on any Payment Date on or after the Payment Date on which
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
      prior Due Period is less than or equal to 20% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of Cut-off Date.

     

    The
      Issuer shall not be liable upon the indebtedness evidenced by the Notes except
      to the extent of amounts available from the Trust Estate which constitutes
      security for the payment of the Notes. The assets included in the Trust Estate
      will be the sole source of payments on the Class M-4 Notes, and each Holder
      hereof, by its acceptance of this Note, agrees that (i) such Note will be
      limited in right of payment to amounts available from the Trust Estate as
      provided in the Indenture and (ii) such Holder shall have no recourse to the
      Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Originator,
      the Servicer or any of their respective affiliates, or to the assets of any
      of
      the foregoing entities, except the assets of the Issuer pledged to secure the
      Class M-4 Notes pursuant to the Indenture and the rights conveyed to the Issuer
      under the Indenture.

     

    Any
      payment of principal or interest payable on this Note which is punctually paid
      on the applicable Payment Date shall be paid to the Person in whose name such
      Note is registered at the close of business on the Record Date for such Payment
      Date by check mailed to such person’s address as it appears in the Note Register
      on such Record Date, except for the final installment of principal and interest
      payable with respect to such Note, which shall be payable as provided below.
      Notwithstanding the foregoing, upon written request with appropriate
      instructions by the Holder of this Note delivered to the Indenture Trustee
      at
      least five Business Days prior to the Record Date, any payment of principal
      or
      interest, other than the final installment of principal or interest, shall
      be
      made by wire transfer to an account in the United States designated by such
      Holder. All scheduled reductions in the Note Balance of a Note (or one or more
      predecessor Notes) effected by payments of principal made on any Payment Date
      shall be binding upon all Holders of this Note and of any note issued upon
      the
      registration of transfer thereof or in exchange therefor or in lieu thereof,
      whether or not such payment is noted on such Note. The final payment of this
      Note shall be payable upon presentation and surrender thereof on or after the
      Payment Date thereof at the office or agency of the Issuer maintained by it
      for
      such purpose pursuant to Section 3.02 of the Indenture.

     

    Subject
      to the foregoing provisions, each Note delivered under the Indenture, upon
      registration of transfer of or in exchange for or in lieu of any other Note
      shall carry the right to unpaid principal and interest that were carried by
      such
      other Note.

     

    If
      an
      Event of Default as defined in the Indenture shall occur and be continuing
      with
      respect to the Notes, the Notes may become or be declared due and payable in
      the
      manner and with the effect provided in the Indenture. If any such acceleration
      of maturity occurs prior to the payment of the entire unpaid Note Balance of
      the
      Notes, the amount payable to the Holder of this Note will be equal to the sum
      of
      the unpaid Note Balance of the Notes, together with accrued and unpaid interest
      thereon as described in the Indenture. The Indenture provides that,
      notwithstanding the acceleration of the maturity of the Notes, under certain
      circumstances specified therein, all amounts collected as proceeds of the Trust
      Estate securing the Notes or otherwise shall continue to be applied to payments
      of principal of and interest on the Notes as if they had not been declared
      due
      and payable.

     

    The
      failure to pay any Unpaid Interest Shortfall Amount at any time when funds
      are
      not available to make such payment as provided in the Indenture shall not
      constitute an Event of Default under the Indenture.

     

    The
      Holder of this Note or Beneficial Owner of any interest herein is deemed to
      represent that either (1) it is not acquiring this Note with Plan Assets or
      (2)
      (A) the acquisition, holding and transfer of this Note will not give rise to
      a
      nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
      of
      the Code and (B) this Note is rated investment grade or better and such person
      believes that this Note is properly treated as indebtedness without substantial
      equity features for purposes of the DOL Regulations, and agrees to so treat
      this
      Note. Alternatively, regardless of the rating of this Note, such person may
      provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
      which opinion of counsel will not be at the expense of the Issuer, the Seller,
      the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee,
      the
      Servicer or any successor servicer which opines that the acquisition, holding
      and transfer of this Note or interest herein is permissible under applicable
      law, will not constitute or result in a non-exempt prohibited transaction under
      ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
      the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
      Trustee, the Servicer or any successor servicer to any obligation in addition
      to
      those undertaken in the Indenture or other Operative Agreements.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Note Register of the Issuer.
      Upon surrender for registration of transfer of, or presentation of a written
      instrument of transfer for, this Note at the office or agency designated by
      the
      Issuer pursuant to the Indenture, accompanied by proper instruments of
      assignment in form satisfactory to the Indenture Trustee, one or more new Notes
      of any authorized denominations and of a like aggregate initial Note Balance,
      will be issued to the designated transferee or transferees.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuer,
      the
      Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
      treat
      the Person in whose name this Note is registered as the owner of such Note
      (i)
      on the applicable Record Date for the purpose of making payments and interest
      of
      such Note and (ii) on any other date for all other purposes whatsoever, as
      the
      owner hereof, whether or not this Note be overdue, and neither the Issuer,
      the
      Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
      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 Issuer and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Issuer
      and the Holders of a majority of all Notes at the time outstanding. The
      Indenture also contains provisions permitting the Holders of Notes representing
      specified percentages of the aggregate Note Balance of the Notes on behalf
      of
      the Holders of all the Notes, to waive any past Default under the Indenture
      and
      its consequences. Any such waiver by the Holder, at the time of the giving
      thereof, of this Note (or any one or more predecessor Notes) shall bind the
      Holder of every 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 such Note. The Indenture also permits the Issuer and the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

    Initially,
      this Note will be registered in the name of Cede & Co. as nominee of DTC,
      acting in its capacity as the Depository for this Note. This Note will be
      delivered by the clearing agency in denominations as provided in the Indenture
      and subject to certain limitations therein set forth. This Note is exchangeable
      for a like aggregate initial Note Balance of Notes of different authorized
      denominations, as requested by the Holder surrendering same.

     

    Unless
      the Certificate of Authentication hereon has been executed by the Indenture
      Trustee by manual signature, this Note shall not be entitled to any benefit
      under the Indenture, or be valid or obligatory for any purpose.

     

    AS
      PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
      BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
      NEW
      YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
      by
      Wilmington Trust Company, not in its individual capacity but solely as Owner
      Trustee.

     

    Dated:
      April ____, 2006

     

    
      	 	 	 	 	 	 	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST 2006-1

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              BY:
                WILMINGTON TRUST COMPANY, not in its individual capacity but solely
                in its
                capacity as Owner Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes referred to in the within-mentioned Indenture.

     

    
      	
              JPMORGAN
                CHASE BANK, N.A.,

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of the Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations:

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

    Additional
      abbreviations may also be used though not in the above list.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

    (Please
      print or typewrite name and address, including zip code, of
      assignee)

     

    

    
      	 

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes 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 by __________________________________

     

    NOTICE:
      The signature(s) to this assignment must correspond with the name as it appears
      upon the face of the within Note in every particular, without alteration or
      enlargement or any change whatsoever. Signature(s) must be guaranteed by a
      commercial bank or by a member firm of the New York Stock Exchange or another
      national securities exchange. Notarized or witnessed signatures are not
      acceptable.

     

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A-9

     

    FORM
      OF
      CLASS M-5 NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

    THIS
      NOTE
      IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES,
      THE CLASS M-3 NOTES AND THE CLASS M-4 NOTES TO THE EXTENT DESCRIBED IN THE
      INDENTURE REFERRED TO HEREIN.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

    ASSET-BACKED
      NOTES, SERIES 2006-1

    CLASS
      M-5

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $23,284,000.00

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $23,284,000.00

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. 65106A AS 2

            

    

    

    Newcastle
      Mortgage Securities Trust 2006-1 (the “Issuer”), a Delaware statutory trust, for
      value received, hereby promises to pay to Cede & Co. or registered assigns,
      the Aggregate Note Balance in monthly installments on the twenty-fifth day
      of
      each month or, if such day is not a Business Day, the next succeeding Business
      Day (each a “Payment Date”), commencing in April 2006 and ending on or before
      the Payment Date occurring on the Final Stated Maturity Date and to pay interest
      on the Note Balance of this Note (this “Note”) outstanding from time to time as
      provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
      2006-1 (the “Notes”), issued under an Indenture dated as of April 6, 2006 (the
“Indenture”), between the Issuer and JPMorgan Chase Bank, N.A., as indenture
      trustee (the “Indenture Trustee”, which term includes any successor Indenture
      Trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the respective rights
      thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
      and the terms upon which the Notes are to be authenticated and delivered. All
      terms used in this Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    Payments
      of principal and interest on this Note will be made on each Payment Date to
      the
      Noteholder of record as of the related Record Date. The “Note Balance” of a Note
      as of any date of determination is equal to the initial Note Balance thereof,
      reduced by the aggregate of all amounts previously paid with respect to such
      Note on account of principal and the aggregate amount of cumulative Realized
      Losses allocated to such Note on all prior Payment Dates.

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, 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 Issuer with respect to this Note shall be equal to this
      Note’s pro
      rata
      share of
      the aggregate payments on all Class M-5 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

    All
      principal and interest accrued on the Notes, if not previously paid, will become
      finally due and payable at the Final Stated Maturity Date.

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Majority
      Certificateholder on any Payment Date on or after the Payment Date on which
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
      prior Due Period is less than or equal to 20% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of Cut-off Date.

     

    The
      Issuer shall not be liable upon the indebtedness evidenced by the Notes except
      to the extent of amounts available from the Trust Estate which constitutes
      security for the payment of the Notes. The assets included in the Trust Estate
      will be the sole source of payments on the Class M-5 Notes, and each Holder
      hereof, by its acceptance of this Note, agrees that (i) such Note will be
      limited in right of payment to amounts available from the Trust Estate as
      provided in the Indenture and (ii) such Holder shall have no recourse to the
      Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Originator,
      the Servicer or any of their respective affiliates, or to the assets of any
      of
      the foregoing entities, except the assets of the Issuer pledged to secure the
      Class M-5 Notes pursuant to the Indenture and the rights conveyed to the Issuer
      under the Indenture.

     

    Any
      payment of principal or interest payable on this Note which is punctually paid
      on the applicable Payment Date shall be paid to the Person in whose name such
      Note is registered at the close of business on the Record Date for such Payment
      Date by check mailed to such person’s address as it appears in the Note Register
      on such Record Date, except for the final installment of principal and interest
      payable with respect to such Note, which shall be payable as provided below.
      Notwithstanding the foregoing, upon written request with appropriate
      instructions by the Holder of this Note delivered to the Indenture Trustee
      at
      least five Business Days prior to the Record Date, any payment of principal
      or
      interest, other than the final installment of principal or interest, shall
      be
      made by wire transfer to an account in the United States designated by such
      Holder. All scheduled reductions in the Note Balance of a Note (or one or more
      predecessor Notes) effected by payments of principal made on any Payment Date
      shall be binding upon all Holders of this Note and of any note issued upon
      the
      registration of transfer thereof or in exchange therefor or in lieu thereof,
      whether or not such payment is noted on such Note. The final payment of this
      Note shall be payable upon presentation and surrender thereof on or after the
      Payment Date thereof at the office or agency of the Issuer maintained by it
      for
      such purpose pursuant to Section 3.02 of the Indenture.

     

    Subject
      to the foregoing provisions, each Note delivered under the Indenture, upon
      registration of transfer of or in exchange for or in lieu of any other Note
      shall carry the right to unpaid principal and interest that were carried by
      such
      other Note.

     

    If
      an
      Event of Default as defined in the Indenture shall occur and be continuing
      with
      respect to the Notes, the Notes may become or be declared due and payable in
      the
      manner and with the effect provided in the Indenture. If any such acceleration
      of maturity occurs prior to the payment of the entire unpaid Note Balance of
      the
      Notes, the amount payable to the Holder of this Note will be equal to the sum
      of
      the unpaid Note Balance of the Notes, together with accrued and unpaid interest
      thereon as described in the Indenture. The Indenture provides that,
      notwithstanding the acceleration of the maturity of the Notes, under certain
      circumstances specified therein, all amounts collected as proceeds of the Trust
      Estate securing the Notes or otherwise shall continue to be applied to payments
      of principal of and interest on the Notes as if they had not been declared
      due
      and payable.

     

    The
      failure to pay any Unpaid Interest Shortfall Amount at any time when funds
      are
      not available to make such payment as provided in the Indenture shall not
      constitute an Event of Default under the Indenture.

     

    The
      Holder of this Note or Beneficial Owner of any interest herein is deemed to
      represent that either (1) it is not acquiring this Note with Plan Assets or
      (2)
      (A) the acquisition, holding and transfer of this Note will not give rise to
      a
      nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
      of
      the Code and (B) this Note is rated investment grade or better and such person
      believes that this Note is properly treated as indebtedness without substantial
      equity features for purposes of the DOL Regulations, and agrees to so treat
      this
      Note. Alternatively, regardless of the rating of this Note, such person may
      provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
      which opinion of counsel will not be at the expense of the Issuer, the Seller,
      the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee,
      the
      Servicer or any successor servicer which opines that the acquisition, holding
      and transfer of this Note or interest herein is permissible under applicable
      law, will not constitute or result in a non-exempt prohibited transaction under
      ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
      the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
      Trustee, the Servicer or any successor servicer to any obligation in addition
      to
      those undertaken in the Indenture or other Operative Agreements.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Note Register of the Issuer.
      Upon surrender for registration of transfer of, or presentation of a written
      instrument of transfer for, this Note at the office or agency designated by
      the
      Issuer pursuant to the Indenture, accompanied by proper instruments of
      assignment in form satisfactory to the Indenture Trustee, one or more new Notes
      of any authorized denominations and of a like aggregate initial Note Balance,
      will be issued to the designated transferee or transferees.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuer,
      the
      Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
      treat
      the Person in whose name this Note is registered as the owner of such Note
      (i)
      on the applicable Record Date for the purpose of making payments and interest
      of
      such Note and (ii) on any other date for all other purposes whatsoever, as
      the
      owner hereof, whether or not this Note be overdue, and neither the Issuer,
      the
      Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
      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 Issuer and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Issuer
      and the Holders of a majority of all Notes at the time outstanding. The
      Indenture also contains provisions permitting the Holders of Notes representing
      specified percentages of the aggregate Note Balance of the Notes on behalf
      of
      the Holders of all the Notes, to waive any past Default under the Indenture
      and
      its consequences. Any such waiver by the Holder, at the time of the giving
      thereof, of this Note (or any one or more predecessor Notes) shall bind the
      Holder of every 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 such Note. The Indenture also permits the Issuer and the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

    Initially,
      this Note will be registered in the name of Cede & Co. as nominee of DTC,
      acting in its capacity as the Depository for this Note. This Note will be
      delivered by the clearing agency in denominations as provided in the Indenture
      and subject to certain limitations therein set forth. This Note is exchangeable
      for a like aggregate initial Note Balance of Notes of different authorized
      denominations, as requested by the Holder surrendering same.

     

    Unless
      the Certificate of Authentication hereon has been executed by the Indenture
      Trustee by manual signature, this Note shall not be entitled to any benefit
      under the Indenture, or be valid or obligatory for any purpose.

     

    AS
      PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
      BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
      NEW
      YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
      by
      Wilmington Trust Company, not in its individual capacity but solely as Owner
      Trustee.

     

    Dated:
      April ____, 2006

     

    
      	 	 	 	 	 	 	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST 2006-1

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              BY:
                WILMINGTON TRUST COMPANY, not in its individual capacity but solely
                in its
                capacity as Owner Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes referred to in the within-mentioned Indenture.

     

    
      	
              JPMORGAN
                CHASE BANK, N.A.,

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of the Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations:

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

    Additional
      abbreviations may also be used though not in the above list.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

    (Please
      print or typewrite name and address, including zip code, of
      assignee)

     

    

    
      	 

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes 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 by __________________________________

     

    NOTICE:
      The signature(s) to this assignment must correspond with the name as it appears
      upon the face of the within Note in every particular, without alteration or
      enlargement or any change whatsoever. Signature(s) must be guaranteed by a
      commercial bank or by a member firm of the New York Stock Exchange or another
      national securities exchange. Notarized or witnessed signatures are not
      acceptable.

     

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A-10

     

    FORM
      OF
      CLASS M-6 NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

    THIS
      NOTE
      IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES,
      THE CLASS M-3 NOTES, THE CLASS M-4 NOTES AND THE CLASS M-5 NOTES TO THE EXTENT
      DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

    ASSET-BACKED
      NOTES, SERIES 2006-1

    CLASS
      M-6

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $21,782,000.00

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $21,782,000.00

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. 65106A AT 0

            

    

    

    Newcastle
      Mortgage Securities Trust 2006-1 (the “Issuer”), a Delaware statutory trust, for
      value received, hereby promises to pay to Cede & Co. or registered assigns,
      the Aggregate Note Balance in monthly installments on the twenty-fifth day
      of
      each month or, if such day is not a Business Day, the next succeeding Business
      Day (each a “Payment Date”), commencing in April 2006 and ending on or before
      the Payment Date occurring on the Final Stated Maturity Date and to pay interest
      on the Note Balance of this Note (this “Note”) outstanding from time to time as
      provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
      2006-1 (the “Notes”), issued under an Indenture dated as of April 6, 2006 (the
“Indenture”), between the Issuer and JPMorgan Chase Bank, N.A., as indenture
      trustee (the “Indenture Trustee”, which term includes any successor Indenture
      Trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the respective rights
      thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
      and the terms upon which the Notes are to be authenticated and delivered. All
      terms used in this Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    Payments
      of principal and interest on this Note will be made on each Payment Date to
      the
      Noteholder of record as of the related Record Date. The “Note Balance” of a Note
      as of any date of determination is equal to the initial Note Balance thereof,
      reduced by the aggregate of all amounts previously paid with respect to such
      Note on account of principal and the aggregate amount of cumulative Realized
      Losses allocated to such Note on all prior Payment Dates.

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, 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 Issuer with respect to this Note shall be equal to this
      Note’s pro
      rata
      share of
      the aggregate payments on all Class M-6 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

    All
      principal and interest accrued on the Notes, if not previously paid, will become
      finally due and payable at the Final Stated Maturity Date.

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Majority
      Certificateholder on any Payment Date on or after the Payment Date on which
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
      prior Due Period is less than or equal to 20% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of Cut-off Date.

     

    The
      Issuer shall not be liable upon the indebtedness evidenced by the Notes except
      to the extent of amounts available from the Trust Estate which constitutes
      security for the payment of the Notes. The assets included in the Trust Estate
      will be the sole source of payments on the Class M-6 Notes, and each Holder
      hereof, by its acceptance of this Note, agrees that (i) such Note will be
      limited in right of payment to amounts available from the Trust Estate as
      provided in the Indenture and (ii) such Holder shall have no recourse to the
      Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Originator,
      the Servicer or any of their respective affiliates, or to the assets of any
      of
      the foregoing entities, except the assets of the Issuer pledged to secure the
      Class M-6 Notes pursuant to the Indenture and the rights conveyed to the Issuer
      under the Indenture.

     

    Any
      payment of principal or interest payable on this Note which is punctually paid
      on the applicable Payment Date shall be paid to the Person in whose name such
      Note is registered at the close of business on the Record Date for such Payment
      Date by check mailed to such person’s address as it appears in the Note Register
      on such Record Date, except for the final installment of principal and interest
      payable with respect to such Note, which shall be payable as provided below.
      Notwithstanding the foregoing, upon written request with appropriate
      instructions by the Holder of this Note delivered to the Indenture Trustee
      at
      least five Business Days prior to the Record Date, any payment of principal
      or
      interest, other than the final installment of principal or interest, shall
      be
      made by wire transfer to an account in the United States designated by such
      Holder. All scheduled reductions in the Note Balance of a Note (or one or more
      predecessor Notes) effected by payments of principal made on any Payment Date
      shall be binding upon all Holders of this Note and of any note issued upon
      the
      registration of transfer thereof or in exchange therefor or in lieu thereof,
      whether or not such payment is noted on such Note. The final payment of this
      Note shall be payable upon presentation and surrender thereof on or after the
      Payment Date thereof at the office or agency of the Issuer maintained by it
      for
      such purpose pursuant to Section 3.02 of the Indenture.

     

    Subject
      to the foregoing provisions, each Note delivered under the Indenture, upon
      registration of transfer of or in exchange for or in lieu of any other Note
      shall carry the right to unpaid principal and interest that were carried by
      such
      other Note.

     

    If
      an
      Event of Default as defined in the Indenture shall occur and be continuing
      with
      respect to the Notes, the Notes may become or be declared due and payable in
      the
      manner and with the effect provided in the Indenture. If any such acceleration
      of maturity occurs prior to the payment of the entire unpaid Note Balance of
      the
      Notes, the amount payable to the Holder of this Note will be equal to the sum
      of
      the unpaid Note Balance of the Notes, together with accrued and unpaid interest
      thereon as described in the Indenture. The Indenture provides that,
      notwithstanding the acceleration of the maturity of the Notes, under certain
      circumstances specified therein, all amounts collected as proceeds of the Trust
      Estate securing the Notes or otherwise shall continue to be applied to payments
      of principal of and interest on the Notes as if they had not been declared
      due
      and payable.

     

    The
      failure to pay any Unpaid Interest Shortfall Amount at any time when funds
      are
      not available to make such payment as provided in the Indenture shall not
      constitute an Event of Default under the Indenture.

     

    The
      Holder of this Note or Beneficial Owner of any interest herein is deemed to
      represent that either (1) it is not acquiring this Note with Plan Assets or
      (2)
      (A) the acquisition, holding and transfer of this Note will not give rise to
      a
      nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
      of
      the Code and (B) this Note is rated investment grade or better and such person
      believes that this Note is properly treated as indebtedness without substantial
      equity features for purposes of the DOL Regulations, and agrees to so treat
      this
      Note. Alternatively, regardless of the rating of this Note, such person may
      provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
      which opinion of counsel will not be at the expense of the Issuer, the Seller,
      the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee,
      the
      Servicer or any successor servicer which opines that the acquisition, holding
      and transfer of this Note or interest herein is permissible under applicable
      law, will not constitute or result in a non-exempt prohibited transaction under
      ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
      the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
      Trustee, the Servicer or any successor servicer to any obligation in addition
      to
      those undertaken in the Indenture or other Operative Agreements.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Note Register of the Issuer.
      Upon surrender for registration of transfer of, or presentation of a written
      instrument of transfer for, this Note at the office or agency designated by
      the
      Issuer pursuant to the Indenture, accompanied by proper instruments of
      assignment in form satisfactory to the Indenture Trustee, one or more new Notes
      of any authorized denominations and of a like aggregate initial Note Balance,
      will be issued to the designated transferee or transferees.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuer,
      the
      Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
      treat
      the Person in whose name this Note is registered as the owner of such Note
      (i)
      on the applicable Record Date for the purpose of making payments and interest
      of
      such Note and (ii) on any other date for all other purposes whatsoever, as
      the
      owner hereof, whether or not this Note be overdue, and neither the Issuer,
      the
      Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
      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 Issuer and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Issuer
      and the Holders of a majority of all Notes at the time outstanding. The
      Indenture also contains provisions permitting the Holders of Notes representing
      specified percentages of the aggregate Note Balance of the Notes on behalf
      of
      the Holders of all the Notes, to waive any past Default under the Indenture
      and
      its consequences. Any such waiver by the Holder, at the time of the giving
      thereof, of this Note (or any one or more predecessor Notes) shall bind the
      Holder of every 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 such Note. The Indenture also permits the Issuer and the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

    Initially,
      this Note will be registered in the name of Cede & Co. as nominee of DTC,
      acting in its capacity as the Depository for this Note. This Note will be
      delivered by the clearing agency in denominations as provided in the Indenture
      and subject to certain limitations therein set forth. This Note is exchangeable
      for a like aggregate initial Note Balance of Notes of different authorized
      denominations, as requested by the Holder surrendering same.

     

    Unless
      the Certificate of Authentication hereon has been executed by the Indenture
      Trustee by manual signature, this Note shall not be entitled to any benefit
      under the Indenture, or be valid or obligatory for any purpose.

     

    AS
      PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
      BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
      NEW
      YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
      by
      Wilmington Trust Company, not in its individual capacity but solely as Owner
      Trustee.

     

    Dated:
      April ____, 2006

     

    
      	 	 	 	 	 	 	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST 2006-1

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              BY:
                WILMINGTON TRUST COMPANY, not in its individual capacity but solely
                in its
                capacity as Owner Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes referred to in the within-mentioned Indenture.

     

    
      	
              JPMORGAN
                CHASE BANK, N.A.,

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of the Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations:

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

    Additional
      abbreviations may also be used though not in the above list.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

    (Please
      print or typewrite name and address, including zip code, of
      assignee)

     

    

    
      	 

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes 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 by __________________________________

     

    NOTICE:
      The signature(s) to this assignment must correspond with the name as it appears
      upon the face of the within Note in every particular, without alteration or
      enlargement or any change whatsoever. Signature(s) must be guaranteed by a
      commercial bank or by a member firm of the New York Stock Exchange or another
      national securities exchange. Notarized or witnessed signatures are not
      acceptable.

     

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A-11

     

    FORM
      OF
      CLASS M-7 NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

    THIS
      NOTE
      IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES,
      THE CLASS M-3 NOTES, THE CLASS M-4 NOTES, THE CLASS M-5 NOTES AND THE CLASS
      M-6
      NOTES TO THE EXTENT DESCRIBED IN THE INDENTURE REFERRED TO
      HEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

    ASSET-BACKED
      NOTES, SERIES 2006-1

    CLASS
      M-7

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $21,031,000.00

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $21,031,000.00

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. 65106A AU 7

            

    

    

    Newcastle
      Mortgage Securities Trust 2006-1 (the “Issuer”), a Delaware statutory trust, for
      value received, hereby promises to pay to Cede & Co. or registered assigns,
      the Aggregate Note Balance in monthly installments on the twenty-fifth day
      of
      each month or, if such day is not a Business Day, the next succeeding Business
      Day (each a “Payment Date”), commencing in April 2006 and ending on or before
      the Payment Date occurring on the Final Stated Maturity Date and to pay interest
      on the Note Balance of this Note (this “Note”) outstanding from time to time as
      provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
      2006-1 (the “Notes”), issued under an Indenture dated as of April 6, 2006 (the
“Indenture”), between the Issuer and JPMorgan Chase Bank, N.A., as indenture
      trustee (the “Indenture Trustee”, which term includes any successor Indenture
      Trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the respective rights
      thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
      and the terms upon which the Notes are to be authenticated and delivered. All
      terms used in this Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    Payments
      of principal and interest on this Note will be made on each Payment Date to
      the
      Noteholder of record as of the related Record Date. The “Note Balance” of a Note
      as of any date of determination is equal to the initial Note Balance thereof,
      reduced by the aggregate of all amounts previously paid with respect to such
      Note on account of principal and the aggregate amount of cumulative Realized
      Losses allocated to such Note on all prior Payment Dates.

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, 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 Issuer with respect to this Note shall be equal to this
      Note’s pro
      rata
      share of
      the aggregate payments on all Class M-7 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

    All
      principal and interest accrued on the Notes, if not previously paid, will become
      finally due and payable at the Final Stated Maturity Date.

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Majority
      Certificateholder on any Payment Date on or after the Payment Date on which
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
      prior Due Period is less than or equal to 20% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of Cut-off Date.

     

    The
      Issuer shall not be liable upon the indebtedness evidenced by the Notes except
      to the extent of amounts available from the Trust Estate which constitutes
      security for the payment of the Notes. The assets included in the Trust Estate
      will be the sole source of payments on the Class M-7 Notes, and each Holder
      hereof, by its acceptance of this Note, agrees that (i) such Note will be
      limited in right of payment to amounts available from the Trust Estate as
      provided in the Indenture and (ii) such Holder shall have no recourse to the
      Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Originator,
      the Servicer or any of their respective affiliates, or to the assets of any
      of
      the foregoing entities, except the assets of the Issuer pledged to secure the
      Class M-7 Notes pursuant to the Indenture and the rights conveyed to the Issuer
      under the Indenture.

     

    Any
      payment of principal or interest payable on this Note which is punctually paid
      on the applicable Payment Date shall be paid to the Person in whose name such
      Note is registered at the close of business on the Record Date for such Payment
      Date by check mailed to such person’s address as it appears in the Note Register
      on such Record Date, except for the final installment of principal and interest
      payable with respect to such Note, which shall be payable as provided below.
      Notwithstanding the foregoing, upon written request with appropriate
      instructions by the Holder of this Note delivered to the Indenture Trustee
      at
      least five Business Days prior to the Record Date, any payment of principal
      or
      interest, other than the final installment of principal or interest, shall
      be
      made by wire transfer to an account in the United States designated by such
      Holder. All scheduled reductions in the Note Balance of a Note (or one or more
      predecessor Notes) effected by payments of principal made on any Payment Date
      shall be binding upon all Holders of this Note and of any note issued upon
      the
      registration of transfer thereof or in exchange therefor or in lieu thereof,
      whether or not such payment is noted on such Note. The final payment of this
      Note shall be payable upon presentation and surrender thereof on or after the
      Payment Date thereof at the office or agency of the Issuer maintained by it
      for
      such purpose pursuant to Section 3.02 of the Indenture.

     

    Subject
      to the foregoing provisions, each Note delivered under the Indenture, upon
      registration of transfer of or in exchange for or in lieu of any other Note
      shall carry the right to unpaid principal and interest that were carried by
      such
      other Note.

     

    If
      an
      Event of Default as defined in the Indenture shall occur and be continuing
      with
      respect to the Notes, the Notes may become or be declared due and payable in
      the
      manner and with the effect provided in the Indenture. If any such acceleration
      of maturity occurs prior to the payment of the entire unpaid Note Balance of
      the
      Notes, the amount payable to the Holder of this Note will be equal to the sum
      of
      the unpaid Note Balance of the Notes, together with accrued and unpaid interest
      thereon as described in the Indenture. The Indenture provides that,
      notwithstanding the acceleration of the maturity of the Notes, under certain
      circumstances specified therein, all amounts collected as proceeds of the Trust
      Estate securing the Notes or otherwise shall continue to be applied to payments
      of principal of and interest on the Notes as if they had not been declared
      due
      and payable.

     

    The
      failure to pay any Unpaid Interest Shortfall Amount at any time when funds
      are
      not available to make such payment as provided in the Indenture shall not
      constitute an Event of Default under the Indenture.

     

    The
      Holder of this Note or Beneficial Owner of any interest herein is deemed to
      represent that either (1) it is not acquiring this Note with Plan Assets or
      (2)
      (A) the acquisition, holding and transfer of this Note will not give rise to
      a
      nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
      of
      the Code and (B) this Note is rated investment grade or better and such person
      believes that this Note is properly treated as indebtedness without substantial
      equity features for purposes of the DOL Regulations, and agrees to so treat
      this
      Note. Alternatively, regardless of the rating of this Note, such person may
      provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
      which opinion of counsel will not be at the expense of the Issuer, the Seller,
      the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee,
      the
      Servicer or any successor servicer which opines that the acquisition, holding
      and transfer of this Note or interest herein is permissible under applicable
      law, will not constitute or result in a non-exempt prohibited transaction under
      ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
      the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
      Trustee, the Servicer or any successor servicer to any obligation in addition
      to
      those undertaken in the Indenture or other Operative Agreements.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Note Register of the Issuer.
      Upon surrender for registration of transfer of, or presentation of a written
      instrument of transfer for, this Note at the office or agency designated by
      the
      Issuer pursuant to the Indenture, accompanied by proper instruments of
      assignment in form satisfactory to the Indenture Trustee, one or more new Notes
      of any authorized denominations and of a like aggregate initial Note Balance,
      will be issued to the designated transferee or transferees.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuer,
      the
      Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
      treat
      the Person in whose name this Note is registered as the owner of such Note
      (i)
      on the applicable Record Date for the purpose of making payments and interest
      of
      such Note and (ii) on any other date for all other purposes whatsoever, as
      the
      owner hereof, whether or not this Note be overdue, and neither the Issuer,
      the
      Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
      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 Issuer and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Issuer
      and the Holders of a majority of all Notes at the time outstanding. The
      Indenture also contains provisions permitting the Holders of Notes representing
      specified percentages of the aggregate Note Balance of the Notes on behalf
      of
      the Holders of all the Notes, to waive any past Default under the Indenture
      and
      its consequences. Any such waiver by the Holder, at the time of the giving
      thereof, of this Note (or any one or more predecessor Notes) shall bind the
      Holder of every 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 such Note. The Indenture also permits the Issuer and the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

    Initially,
      this Note will be registered in the name of Cede & Co. as nominee of DTC,
      acting in its capacity as the Depository for this Note. This Note will be
      delivered by the clearing agency in denominations as provided in the Indenture
      and subject to certain limitations therein set forth. This Note is exchangeable
      for a like aggregate initial Note Balance of Notes of different authorized
      denominations, as requested by the Holder surrendering same.

     

    Unless
      the Certificate of Authentication hereon has been executed by the Indenture
      Trustee by manual signature, this Note shall not be entitled to any benefit
      under the Indenture, or be valid or obligatory for any purpose.

     

    AS
      PROVIDED IN
      THE
      INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE
      SHALL BE
      CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW
      YORK
      APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
      by
      Wilmington Trust Company, not in its individual capacity but solely as Owner
      Trustee.

     

    Dated:
      April ____, 2006

     

    
      	 	 	 	 	 	 	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST 2006-1

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              BY:
                WILMINGTON TRUST COMPANY, not in its individual capacity but solely
                in its
                capacity as Owner Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes referred to in the within-mentioned Indenture.

     

    
      	
              JPMORGAN
                CHASE BANK, N.A.,

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of the Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations:

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

    Additional
      abbreviations may also be used though not in the above list.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

    (Please
      print or typewrite name and address, including zip code, of
      assignee)

     

    

    
      	 

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes 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 by __________________________________

     

    NOTICE:
      The signature(s) to this assignment must correspond with the name as it appears
      upon the face of the within Note in every particular, without alteration or
      enlargement or any change whatsoever. Signature(s) must be guaranteed by a
      commercial bank or by a member firm of the New York Stock Exchange or another
      national securities exchange. Notarized or witnessed signatures are not
      acceptable.

     

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A-12

     

    FORM
      OF
      CLASS M-8 NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

    THIS
      NOTE
      IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES,
      THE CLASS M-3 NOTES, THE CLASS M-4 NOTES, THE CLASS M-5 NOTES, THE CLASS M-6
      NOTES AND THE CLASS M-7 NOTES TO THE EXTENT DESCRIBED IN THE INDENTURE REFERRED
      TO HEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

    ASSET-BACKED
      NOTES, SERIES 2006-1

    CLASS
      M-8

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $18,026,000.00

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $18,026,000.00

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. 65106A AV 5

            

    

    

    Newcastle
      Mortgage Securities Trust 2006-1 (the “Issuer”), a Delaware statutory trust, for
      value received, hereby promises to pay to Cede & Co. or registered assigns,
      the Aggregate Note Balance in monthly installments on the twenty-fifth day
      of
      each month or, if such day is not a Business Day, the next succeeding Business
      Day (each a “Payment Date”), commencing in April 2006 and ending on or before
      the Payment Date occurring on the Final Stated Maturity Date and to pay interest
      on the Note Balance of this Note (this “Note”) outstanding from time to time as
      provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
      2006-1 (the “Notes”), issued under an Indenture dated as of April 6, 2006 (the
“Indenture”), between the Issuer and JPMorgan Chase Bank, N.A., as indenture
      trustee (the “Indenture Trustee”, which term includes any successor Indenture
      Trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the respective rights
      thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
      and the terms upon which the Notes are to be authenticated and delivered. All
      terms used in this Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    Payments
      of principal and interest on this Note will be made on each Payment Date to
      the
      Noteholder of record as of the related Record Date. The “Note Balance” of a Note
      as of any date of determination is equal to the initial Note Balance thereof,
      reduced by the aggregate of all amounts previously paid with respect to such
      Note on account of principal and the aggregate amount of cumulative Realized
      Losses allocated to such Note on all prior Payment Dates.

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, 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 Issuer with respect to this Note shall be equal to this
      Note’s pro
      rata
      share of
      the aggregate payments on all Class M-8 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

    All
      principal and interest accrued on the Notes, if not previously paid, will become
      finally due and payable at the Final Stated Maturity Date.

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Majority
      Certificateholder on any Payment Date on or after the Payment Date on which
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
      prior Due Period is less than or equal to 20% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of Cut-off Date.

     

    The
      Issuer shall not be liable upon the indebtedness evidenced by the Notes except
      to the extent of amounts available from the Trust Estate which constitutes
      security for the payment of the Notes. The assets included in the Trust Estate
      will be the sole source of payments on the Class M-8 Notes, and each Holder
      hereof, by its acceptance of this Note, agrees that (i) such Note will be
      limited in right of payment to amounts available from the Trust Estate as
      provided in the Indenture and (ii) such Holder shall have no recourse to the
      Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Originator,
      the Servicer or any of their respective affiliates, or to the assets of any
      of
      the foregoing entities, except the assets of the Issuer pledged to secure the
      Class M-8 Notes pursuant to the Indenture and the rights conveyed to the Issuer
      under the Indenture.

     

    Any
      payment of principal or interest payable on this Note which is punctually paid
      on the applicable Payment Date shall be paid to the Person in whose name such
      Note is registered at the close of business on the Record Date for such Payment
      Date by check mailed to such person’s address as it appears in the Note Register
      on such Record Date, except for the final installment of principal and interest
      payable with respect to such Note, which shall be payable as provided below.
      Notwithstanding the foregoing, upon written request with appropriate
      instructions by the Holder of this Note delivered to the Indenture Trustee
      at
      least five Business Days prior to the Record Date, any payment of principal
      or
      interest, other than the final installment of principal or interest, shall
      be
      made by wire transfer to an account in the United States designated by such
      Holder. All scheduled reductions in the Note Balance of a Note (or one or more
      predecessor Notes) effected by payments of principal made on any Payment Date
      shall be binding upon all Holders of this Note and of any note issued upon
      the
      registration of transfer thereof or in exchange therefor or in lieu thereof,
      whether or not such payment is noted on such Note. The final payment of this
      Note shall be payable upon presentation and surrender thereof on or after the
      Payment Date thereof at the office or agency of the Issuer maintained by it
      for
      such purpose pursuant to Section 3.02 of the Indenture.

     

    Subject
      to the foregoing provisions, each Note delivered under the Indenture, upon
      registration of transfer of or in exchange for or in lieu of any other Note
      shall carry the right to unpaid principal and interest that were carried by
      such
      other Note.

     

    If
      an
      Event of Default as defined in the Indenture shall occur and be continuing
      with
      respect to the Notes, the Notes may become or be declared due and payable in
      the
      manner and with the effect provided in the Indenture. If any such acceleration
      of maturity occurs prior to the payment of the entire unpaid Note Balance of
      the
      Notes, the amount payable to the Holder of this Note will be equal to the sum
      of
      the unpaid Note Balance of the Notes, together with accrued and unpaid interest
      thereon as described in the Indenture. The Indenture provides that,
      notwithstanding the acceleration of the maturity of the Notes, under certain
      circumstances specified therein, all amounts collected as proceeds of the Trust
      Estate securing the Notes or otherwise shall continue to be applied to payments
      of principal of and interest on the Notes as if they had not been declared
      due
      and payable.

     

    The
      failure to pay any Unpaid Interest Shortfall Amount at any time when funds
      are
      not available to make such payment as provided in the Indenture shall not
      constitute an Event of Default under the Indenture.

     

    The
      Holder of this Note or Beneficial Owner of any interest herein is deemed to
      represent that either (1) it is not acquiring this Note with Plan Assets or
      (2)
      (A) the acquisition, holding and transfer of this Note will not give rise to
      a
      nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
      of
      the Code and (B) this Note is rated investment grade or better and such person
      believes that this Note is properly treated as indebtedness without substantial
      equity features for purposes of the DOL Regulations, and agrees to so treat
      this
      Note. Alternatively, regardless of the rating of this Note, such person may
      provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
      which opinion of counsel will not be at the expense of the Issuer, the Seller,
      the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee,
      the
      Servicer or any successor servicer which opines that the acquisition, holding
      and transfer of this Note or interest herein is permissible under applicable
      law, will not constitute or result in a non-exempt prohibited transaction under
      ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
      the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
      Trustee, the Servicer or any successor servicer to any obligation in addition
      to
      those undertaken in the Indenture or other Operative Agreements.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Note Register of the Issuer.
      Upon surrender for registration of transfer of, or presentation of a written
      instrument of transfer for, this Note at the office or agency designated by
      the
      Issuer pursuant to the Indenture, accompanied by proper instruments of
      assignment in form satisfactory to the Indenture Trustee, one or more new Notes
      of any authorized denominations and of a like aggregate initial Note Balance,
      will be issued to the designated transferee or transferees.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuer,
      the
      Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
      treat
      the Person in whose name this Note is registered as the owner of such Note
      (i)
      on the applicable Record Date for the purpose of making payments and interest
      of
      such Note and (ii) on any other date for all other purposes whatsoever, as
      the
      owner hereof, whether or not this Note be overdue, and neither the Issuer,
      the
      Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
      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 Issuer and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Issuer
      and the Holders of a majority of all Notes at the time outstanding. The
      Indenture also contains provisions permitting the Holders of Notes representing
      specified percentages of the aggregate Note Balance of the Notes on behalf
      of
      the Holders of all the Notes, to waive any past Default under the Indenture
      and
      its consequences. Any such waiver by the Holder, at the time of the giving
      thereof, of this Note (or any one or more predecessor Notes) shall bind the
      Holder of every 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 such Note. The Indenture also permits the Issuer and the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

    Initially,
      this Note will be registered in the name of Cede & Co. as nominee of DTC,
      acting in its capacity as the Depository for this Note. This Note will be
      delivered by the clearing agency in denominations as provided in the Indenture
      and subject to certain limitations therein set forth. This Note is exchangeable
      for a like aggregate initial Note Balance of Notes of different authorized
      denominations, as requested by the Holder surrendering same.

     

    Unless
      the Certificate of Authentication hereon has been executed by the Indenture
      Trustee by manual signature, this Note shall not be entitled to any benefit
      under the Indenture, or be valid or obligatory for any purpose.

     

    AS
      PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
      BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
      NEW
      YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
      by
      Wilmington Trust Company, not in its individual capacity but solely as Owner
      Trustee.

     

    Dated:
      April ____, 2006

     

    
      	 	 	 	 	 	 	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST 2006-1

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              BY:
                WILMINGTON TRUST COMPANY, not in its individual capacity but solely
                in its
                capacity as Owner Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes referred to in the within-mentioned Indenture.

     

    
      	
              JPMORGAN
                CHASE BANK, N.A.,

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of the Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations:

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

    Additional
      abbreviations may also be used though not in the above list.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

    (Please
      print or typewrite name and address, including zip code, of
      assignee)

     

    

    
      	 

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes 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 by __________________________________

     

    NOTICE:
      The signature(s) to this assignment must correspond with the name as it appears
      upon the face of the within Note in every particular, without alteration or
      enlargement or any change whatsoever. Signature(s) must be guaranteed by a
      commercial bank or by a member firm of the New York Stock Exchange or another
      national securities exchange. Notarized or witnessed signatures are not
      acceptable.

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A-13

     

    FORM
      OF
      CLASS M-9 NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

    THIS
      NOTE
      IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES,
      THE CLASS M-3 NOTES, THE CLASS M-4 NOTES, THE CLASS M-5 NOTES, THE CLASS M-6
      NOTES, THE CLASS M-7 NOTES AND THE CLASS M-8 NOTES TO THE EXTENT DESCRIBED
      IN
      THE INDENTURE REFERRED TO HEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

    ASSET-BACKED
      NOTES, SERIES 2006-1

    CLASS
      M-9

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $15,022,000.00

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $15,022,000.00

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. 65106A AW 3

            

    

    

    Newcastle
      Mortgage Securities Trust 2006-1 (the “Issuer”), a Delaware statutory trust, for
      value received, hereby promises to pay to Cede & Co. or registered assigns,
      the Aggregate Note Balance in monthly installments on the twenty-fifth day
      of
      each month or, if such day is not a Business Day, the next succeeding Business
      Day (each a “Payment Date”), commencing in April 2006 and ending on or before
      the Payment Date occurring on the Final Stated Maturity Date and to pay interest
      on the Note Balance of this Note (this “Note”) outstanding from time to time as
      provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
      2006-1 (the “Notes”), issued under an Indenture dated as of April 6, 2006 (the
“Indenture”), between the Issuer and JPMorgan Chase Bank, N.A., as indenture
      trustee (the “Indenture Trustee”, which term includes any successor Indenture
      Trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the respective rights
      thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
      and the terms upon which the Notes are to be authenticated and delivered. All
      terms used in this Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    Payments
      of principal and interest on this Note will be made on each Payment Date to
      the
      Noteholder of record as of the related Record Date. The “Note Balance” of a Note
      as of any date of determination is equal to the initial Note Balance thereof,
      reduced by the aggregate of all amounts previously paid with respect to such
      Note on account of principal and the aggregate amount of cumulative Realized
      Losses allocated to such Note on all prior Payment Dates.

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, 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 Issuer with respect to this Note shall be equal to this
      Note’s pro
      rata
      share of
      the aggregate payments on all Class M-9 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

    All
      principal and interest accrued on the Notes, if not previously paid, will become
      finally due and payable at the Final Stated Maturity Date.

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Majority
      Certificateholder on any Payment Date on or after the Payment Date on which
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
      prior Due Period is less than or equal to 20% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of Cut-off Date.

     

    The
      Issuer shall not be liable upon the indebtedness evidenced by the Notes except
      to the extent of amounts available from the Trust Estate which constitutes
      security for the payment of the Notes. The assets included in the Trust Estate
      will be the sole source of payments on the Class M-9 Notes, and each Holder
      hereof, by its acceptance of this Note, agrees that (i) such Note will be
      limited in right of payment to amounts available from the Trust Estate as
      provided in the Indenture and (ii) such Holder shall have no recourse to the
      Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Originator,
      the Servicer or any of their respective affiliates, or to the assets of any
      of
      the foregoing entities, except the assets of the Issuer pledged to secure the
      Class M-9 Notes pursuant to the Indenture and the rights conveyed to the Issuer
      under the Indenture.

     

    Any
      payment of principal or interest payable on this Note which is punctually paid
      on the applicable Payment Date shall be paid to the Person in whose name such
      Note is registered at the close of business on the Record Date for such Payment
      Date by check mailed to such person’s address as it appears in the Note Register
      on such Record Date, except for the final installment of principal and interest
      payable with respect to such Note, which shall be payable as provided below.
      Notwithstanding the foregoing, upon written request with appropriate
      instructions by the Holder of this Note delivered to the Indenture Trustee
      at
      least five Business Days prior to the Record Date, any payment of principal
      or
      interest, other than the final installment of principal or interest, shall
      be
      made by wire transfer to an account in the United States designated by such
      Holder. All scheduled reductions in the Note Balance of a Note (or one or more
      predecessor Notes) effected by payments of principal made on any Payment Date
      shall be binding upon all Holders of this Note and of any note issued upon
      the
      registration of transfer thereof or in exchange therefor or in lieu thereof,
      whether or not such payment is noted on such Note. The final payment of this
      Note shall be payable upon presentation and surrender thereof on or after the
      Payment Date thereof at the office or agency of the Issuer maintained by it
      for
      such purpose pursuant to Section 3.02 of the Indenture.

     

    Subject
      to the foregoing provisions, each Note delivered under the Indenture, upon
      registration of transfer of or in exchange for or in lieu of any other Note
      shall carry the right to unpaid principal and interest that were carried by
      such
      other Note.

     

    If
      an
      Event of Default as defined in the Indenture shall occur and be continuing
      with
      respect to the Notes, the Notes may become or be declared due and payable in
      the
      manner and with the effect provided in the Indenture. If any such acceleration
      of maturity occurs prior to the payment of the entire unpaid Note Balance of
      the
      Notes, the amount payable to the Holder of this Note will be equal to the sum
      of
      the unpaid Note Balance of the Notes, together with accrued and unpaid interest
      thereon as described in the Indenture. The Indenture provides that,
      notwithstanding the acceleration of the maturity of the Notes, under certain
      circumstances specified therein, all amounts collected as proceeds of the Trust
      Estate securing the Notes or otherwise shall continue to be applied to payments
      of principal of and interest on the Notes as if they had not been declared
      due
      and payable.

     

    The
      failure to pay any Unpaid Interest Shortfall Amount at any time when funds
      are
      not available to make such payment as provided in the Indenture shall not
      constitute an Event of Default under the Indenture.

     

    The
      Holder of this Note or Beneficial Owner of any interest herein is deemed to
      represent that either (1) it is not acquiring this Note with Plan Assets or
      (2)
      (A) the acquisition, holding and transfer of this Note will not give rise to
      a
      nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
      of
      the Code and (B) this Note is rated investment grade or better and such person
      believes that this Note is properly treated as indebtedness without substantial
      equity features for purposes of the DOL Regulations, and agrees to so treat
      this
      Note. Alternatively, regardless of the rating of this Note, such person may
      provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
      which opinion of counsel will not be at the expense of the Issuer, the Seller,
      the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee,
      the
      Servicer or any successor servicer which opines that the acquisition, holding
      and transfer of this Note or interest herein is permissible under applicable
      law, will not constitute or result in a non-exempt prohibited transaction under
      ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
      the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
      Trustee, the Servicer or any successor servicer to any obligation in addition
      to
      those undertaken in the Indenture or other Operative Agreements.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Note Register of the Issuer.
      Upon surrender for registration of transfer of, or presentation of a written
      instrument of transfer for, this Note at the office or agency designated by
      the
      Issuer pursuant to the Indenture, accompanied by proper instruments of
      assignment in form satisfactory to the Indenture Trustee, one or more new Notes
      of any authorized denominations and of a like aggregate initial Note Balance,
      will be issued to the designated transferee or transferees.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuer,
      the
      Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
      treat
      the Person in whose name this Note is registered as the owner of such Note
      (i)
      on the applicable Record Date for the purpose of making payments and interest
      of
      such Note and (ii) on any other date for all other purposes whatsoever, as
      the
      owner hereof, whether or not this Note be overdue, and neither the Issuer,
      the
      Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
      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 Issuer and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Issuer
      and the Holders of a majority of all Notes at the time outstanding. The
      Indenture also contains provisions permitting the Holders of Notes representing
      specified percentages of the aggregate Note Balance of the Notes on behalf
      of
      the Holders of all the Notes, to waive any past Default under the Indenture
      and
      its consequences. Any such waiver by the Holder, at the time of the giving
      thereof, of this Note (or any one or more predecessor Notes) shall bind the
      Holder of every 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 such Note. The Indenture also permits the Issuer and the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

    Initially,
      this Note will be registered in the name of Cede & Co. as nominee of DTC,
      acting in its capacity as the Depository for this Note. This Note will be
      delivered by the clearing agency in denominations as provided in the Indenture
      and subject to certain limitations therein set forth. This Note is exchangeable
      for a like aggregate initial Note Balance of Notes of different authorized
      denominations, as requested by the Holder surrendering same.

     

    Unless
      the Certificate of Authentication hereon has been executed by the Indenture
      Trustee by manual signature, this Note shall not be entitled to any benefit
      under the Indenture, or be valid or obligatory for any purpose.

     

    AS
      PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
      BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
      NEW
      YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
      by
      Wilmington Trust Company, not in its individual capacity but solely as Owner
      Trustee.

     

    Dated:
      April ____, 2006

     

    
      	 	 	 	 	 	 	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST 2006-1

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              BY:
                WILMINGTON TRUST COMPANY, not in its individual capacity but solely
                in its
                capacity as Owner Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes referred to in the within-mentioned Indenture.

     

    
      	
              JPMORGAN
                CHASE BANK, N.A.,

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of the Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations:

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

    Additional
      abbreviations may also be used though not in the above list.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

    (Please
      print or typewrite name and address, including zip code, of
      assignee)

     

    

    
      	 

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes 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 by __________________________________

     

    NOTICE:
      The signature(s) to this assignment must correspond with the name as it appears
      upon the face of the within Note in every particular, without alteration or
      enlargement or any change whatsoever. Signature(s) must be guaranteed by a
      commercial bank or by a member firm of the New York Stock Exchange or another
      national securities exchange. Notarized or witnessed signatures are not
      acceptable.

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A-14

     

    FORM
      OF
      CLASS M-10 NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

    THIS
      NOTE
      IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES,
      THE CLASS M-3 NOTES, THE CLASS M-4 NOTES, THE CLASS M-5 NOTES, THE CLASS M-6
      NOTES, THE CLASS M-7 NOTES, THE CLASS M-8 NOTES AND THE CLASS M-9 NOTES TO
      THE
      EXTENT DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

    ASSET-BACKED
      NOTES, SERIES 2006-1

    CLASS
      M-10

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $15,022,000.00

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $15,022,000.00

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. 65106A AX 1

            

    

    

    Newcastle
      Mortgage Securities Trust 2006-1 (the “Issuer”), a Delaware statutory trust, for
      value received, hereby promises to pay to Cede & Co. or registered assigns,
      the Aggregate Note Balance in monthly installments on the twenty-fifth day
      of
      each month or, if such day is not a Business Day, the next succeeding Business
      Day (each a “Payment Date”), commencing in April 2006 and ending on or before
      the Payment Date occurring on the Final Stated Maturity Date and to pay interest
      on the Note Balance of this Note (this “Note”) outstanding from time to time as
      provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
      2006-1 (the “Notes”), issued under an Indenture dated as of April 6, 2006 (the
“Indenture”), between the Issuer and JPMorgan Chase Bank, N.A., as indenture
      trustee (the “Indenture Trustee”, which term includes any successor Indenture
      Trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the respective rights
      thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
      and the terms upon which the Notes are to be authenticated and delivered. All
      terms used in this Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    Payments
      of principal and interest on this Note will be made on each Payment Date to
      the
      Noteholder of record as of the related Record Date. The “Note Balance” of a Note
      as of any date of determination is equal to the initial Note Balance thereof,
      reduced by the aggregate of all amounts previously paid with respect to such
      Note on account of principal and the aggregate amount of cumulative Realized
      Losses allocated to such Note on all prior Payment Dates.

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, 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 Issuer with respect to this Note shall be equal to this
      Note’s pro
      rata
      share of
      the aggregate payments on all Class M-10 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

    All
      principal and interest accrued on the Notes, if not previously paid, will become
      finally due and payable at the Final Stated Maturity Date.

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Majority
      Certificateholder on any Payment Date on or after the Payment Date on which
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
      prior Due Period is less than or equal to 20% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of Cut-off Date.

     

    The
      Issuer shall not be liable upon the indebtedness evidenced by the Notes except
      to the extent of amounts available from the Trust Estate which constitutes
      security for the payment of the Notes. The assets included in the Trust Estate
      will be the sole source of payments on the Class M-10 Notes, and each Holder
      hereof, by its acceptance of this Note, agrees that (i) such Note will be
      limited in right of payment to amounts available from the Trust Estate as
      provided in the Indenture and (ii) such Holder shall have no recourse to the
      Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Originator,
      the Servicer or any of their respective affiliates, or to the assets of any
      of
      the foregoing entities, except the assets of the Issuer pledged to secure the
      Class M-10 Notes pursuant to the Indenture and the rights conveyed to the Issuer
      under the Indenture.

     

    Any
      payment of principal or interest payable on this Note which is punctually paid
      on the applicable Payment Date shall be paid to the Person in whose name such
      Note is registered at the close of business on the Record Date for such Payment
      Date by check mailed to such person’s address as it appears in the Note Register
      on such Record Date, except for the final installment of principal and interest
      payable with respect to such Note, which shall be payable as provided below.
      Notwithstanding the foregoing, upon written request with appropriate
      instructions by the Holder of this Note delivered to the Indenture Trustee
      at
      least five Business Days prior to the Record Date, any payment of principal
      or
      interest, other than the final installment of principal or interest, shall
      be
      made by wire transfer to an account in the United States designated by such
      Holder. All scheduled reductions in the Note Balance of a Note (or one or more
      predecessor Notes) effected by payments of principal made on any Payment Date
      shall be binding upon all Holders of this Note and of any note issued upon
      the
      registration of transfer thereof or in exchange therefor or in lieu thereof,
      whether or not such payment is noted on such Note. The final payment of this
      Note shall be payable upon presentation and surrender thereof on or after the
      Payment Date thereof at the office or agency of the Issuer maintained by it
      for
      such purpose pursuant to Section 3.02 of the Indenture.

     

    Subject
      to the foregoing provisions, each Note delivered under the Indenture, upon
      registration of transfer of or in exchange for or in lieu of any other Note
      shall carry the right to unpaid principal and interest that were carried by
      such
      other Note.

     

    If
      an
      Event of Default as defined in the Indenture shall occur and be continuing
      with
      respect to the Notes, the Notes may become or be declared due and payable in
      the
      manner and with the effect provided in the Indenture. If any such acceleration
      of maturity occurs prior to the payment of the entire unpaid Note Balance of
      the
      Notes, the amount payable to the Holder of this Note will be equal to the sum
      of
      the unpaid Note Balance of the Notes, together with accrued and unpaid interest
      thereon as described in the Indenture. The Indenture provides that,
      notwithstanding the acceleration of the maturity of the Notes, under certain
      circumstances specified therein, all amounts collected as proceeds of the Trust
      Estate securing the Notes or otherwise shall continue to be applied to payments
      of principal of and interest on the Notes as if they had not been declared
      due
      and payable.

     

    The
      failure to pay any Unpaid Interest Shortfall Amount at any time when funds
      are
      not available to make such payment as provided in the Indenture shall not
      constitute an Event of Default under the Indenture.

     

    The
      Holder of this Note or Beneficial Owner of any interest herein is deemed to
      represent that either (1) it is not acquiring this Note with Plan Assets or
      (2)
      (A) the acquisition, holding and transfer of this Note will not give rise to
      a
      nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
      of
      the Code and (B) this Note is rated investment grade or better and such person
      believes that this Note is properly treated as indebtedness without substantial
      equity features for purposes of the DOL Regulations, and agrees to so treat
      this
      Note. Alternatively, regardless of the rating of this Note, such person may
      provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
      which opinion of counsel will not be at the expense of the Issuer, the Seller,
      the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee,
      the
      Servicer or any successor servicer which opines that the acquisition, holding
      and transfer of this Note or interest herein is permissible under applicable
      law, will not constitute or result in a non-exempt prohibited transaction under
      ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
      the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
      Trustee, the Servicer or any successor servicer to any obligation in addition
      to
      those undertaken in the Indenture or other Operative Agreements.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Note Register of the Issuer.
      Upon surrender for registration of transfer of, or presentation of a written
      instrument of transfer for, this Note at the office or agency designated by
      the
      Issuer pursuant to the Indenture, accompanied by proper instruments of
      assignment in form satisfactory to the Indenture Trustee, one or more new Notes
      of any authorized denominations and of a like aggregate initial Note Balance,
      will be issued to the designated transferee or transferees.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuer,
      the
      Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
      treat
      the Person in whose name this Note is registered as the owner of such Note
      (i)
      on the applicable Record Date for the purpose of making payments and interest
      of
      such Note and (ii) on any other date for all other purposes whatsoever, as
      the
      owner hereof, whether or not this Note be overdue, and neither the Issuer,
      the
      Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
      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 Issuer and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Issuer
      and the Holders of a majority of all Notes at the time outstanding. The
      Indenture also contains provisions permitting the Holders of Notes representing
      specified percentages of the aggregate Note Balance of the Notes on behalf
      of
      the Holders of all the Notes, to waive any past Default under the Indenture
      and
      its consequences. Any such waiver by the Holder, at the time of the giving
      thereof, of this Note (or any one or more predecessor Notes) shall bind the
      Holder of every 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 such Note. The Indenture also permits the Issuer and the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

    Initially,
      this Note will be registered in the name of Cede & Co. as nominee of DTC,
      acting in its capacity as the Depository for this Note. This Note will be
      delivered by the clearing agency in denominations as provided in the Indenture
      and subject to certain limitations therein set forth. This Note is exchangeable
      for a like aggregate initial Note Balance of Notes of different authorized
      denominations, as requested by the Holder surrendering same.

     

    Unless
      the Certificate of Authentication hereon has been executed by the Indenture
      Trustee by manual signature, this Note shall not be entitled to any benefit
      under the Indenture, or be valid or obligatory for any purpose.

     

    AS
      PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
      BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
      NEW
      YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
      by
      Wilmington Trust Company, not in its individual capacity but solely as Owner
      Trustee.

     

    Dated:
      April ____, 2006

     

    
      	 	 	 	 	 	 	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST 2006-1

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              BY:
                WILMINGTON TRUST COMPANY, not in its individual capacity but solely
                in its
                capacity as Owner Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes referred to in the within-mentioned Indenture.

     

    
      	
              JPMORGAN
                CHASE BANK, N.A.,

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of the Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations:

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

    Additional
      abbreviations may also be used though not in the above list.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

    (Please
      print or typewrite name and address, including zip code, of
      assignee)

     

    

    
      	 

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes 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 by __________________________________

     

    NOTICE:
      The signature(s) to this assignment must correspond with the name as it appears
      upon the face of the within Note in every particular, without alteration or
      enlargement or any change whatsoever. Signature(s) must be guaranteed by a
      commercial bank or by a member firm of the New York Stock Exchange or another
      national securities exchange. Notarized or witnessed signatures are not
      acceptable.

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A-15

     

    FORM
      OF
      CLASS M-11 NOTES

     

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

    THIS
      NOTE
      IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES,
      THE CLASS M-3 NOTES, THE CLASS M-4 NOTES, THE CLASS M-5 NOTES, THE CLASS M-6
      NOTES, THE CLASS M-7 NOTES, THE CLASS M-8 NOTES, THE CLASS M-9 NOTES AND THE
      CLASS M-10 NOTES TO THE EXTENT DESCRIBED IN THE INDENTURE REFERRED TO
      HEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEWCASTLE
      MORTGAGE SECURITIES TRUST 2006-1

    ASSET-BACKED
      NOTES, SERIES 2006-1

    CLASS
      M-11

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $7,511,000.00

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $7,511,000.00

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. 65106A AY 9

            

    

    

    Newcastle
      Mortgage Securities Trust 2006-1 (the “Issuer”), a Delaware statutory trust, for
      value received, hereby promises to pay to Cede & Co. or registered assigns,
      the Aggregate Note Balance in monthly installments on the twenty-fifth day
      of
      each month or, if such day is not a Business Day, the next succeeding Business
      Day (each a “Payment Date”), commencing in April 2006 and ending on or before
      the Payment Date occurring on the Final Stated Maturity Date and to pay interest
      on the Note Balance of this Note (this “Note”) outstanding from time to time as
      provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuer’s Asset-Backed Notes, Series
      2006-1 (the “Notes”), issued under an Indenture dated as of April 6, 2006 (the
“Indenture”), between the Issuer and JPMorgan Chase Bank, N.A., as indenture
      trustee (the “Indenture Trustee”, which term includes any successor Indenture
      Trustee under the Indenture), to which Indenture and all indentures supplemental
      thereto reference is hereby made for a statement of the respective rights
      thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
      and the terms upon which the Notes are to be authenticated and delivered. All
      terms used in this Note which are defined in the Indenture shall have the
      meanings assigned to them in the Indenture.

     

    Payments
      of principal and interest on this Note will be made on each Payment Date to
      the
      Noteholder of record as of the related Record Date. The “Note Balance” of a Note
      as of any date of determination is equal to the initial Note Balance thereof,
      reduced by the aggregate of all amounts previously paid with respect to such
      Note on account of principal and the aggregate amount of cumulative Realized
      Losses allocated to such Note on all prior Payment Dates.

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, 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 Issuer with respect to this Note shall be equal to this
      Note’s pro
      rata
      share of
      the aggregate payments on all Class M-11 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

    All
      principal and interest accrued on the Notes, if not previously paid, will become
      finally due and payable at the Final Stated Maturity Date.

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Majority
      Certificateholder on any Payment Date on or after the Payment Date on which
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
      prior Due Period is less than or equal to 20% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of Cut-off Date.

     

    The
      Issuer shall not be liable upon the indebtedness evidenced by the Notes except
      to the extent of amounts available from the Trust Estate which constitutes
      security for the payment of the Notes. The assets included in the Trust Estate
      will be the sole source of payments on the Class M-11 Notes, and each Holder
      hereof, by its acceptance of this Note, agrees that (i) such Note will be
      limited in right of payment to amounts available from the Trust Estate as
      provided in the Indenture and (ii) such Holder shall have no recourse to the
      Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Originator,
      the Servicer or any of their respective affiliates, or to the assets of any
      of
      the foregoing entities, except the assets of the Issuer pledged to secure the
      Class M-11 Notes pursuant to the Indenture and the rights conveyed to the Issuer
      under the Indenture.

     

    Any
      payment of principal or interest payable on this Note which is punctually paid
      on the applicable Payment Date shall be paid to the Person in whose name such
      Note is registered at the close of business on the Record Date for such Payment
      Date by check mailed to such person’s address as it appears in the Note Register
      on such Record Date, except for the final installment of principal and interest
      payable with respect to such Note, which shall be payable as provided below.
      Notwithstanding the foregoing, upon written request with appropriate
      instructions by the Holder of this Note delivered to the Indenture Trustee
      at
      least five Business Days prior to the Record Date, any payment of principal
      or
      interest, other than the final installment of principal or interest, shall
      be
      made by wire transfer to an account in the United States designated by such
      Holder. All scheduled reductions in the Note Balance of a Note (or one or more
      predecessor Notes) effected by payments of principal made on any Payment Date
      shall be binding upon all Holders of this Note and of any note issued upon
      the
      registration of transfer thereof or in exchange therefor or in lieu thereof,
      whether or not such payment is noted on such Note. The final payment of this
      Note shall be payable upon presentation and surrender thereof on or after the
      Payment Date thereof at the office or agency of the Issuer maintained by it
      for
      such purpose pursuant to Section 3.02 of the Indenture.

     

    Subject
      to the foregoing provisions, each Note delivered under the Indenture, upon
      registration of transfer of or in exchange for or in lieu of any other Note
      shall carry the right to unpaid principal and interest that were carried by
      such
      other Note.

     

    If
      an
      Event of Default as defined in the Indenture shall occur and be continuing
      with
      respect to the Notes, the Notes may become or be declared due and payable in
      the
      manner and with the effect provided in the Indenture. If any such acceleration
      of maturity occurs prior to the payment of the entire unpaid Note Balance of
      the
      Notes, the amount payable to the Holder of this Note will be equal to the sum
      of
      the unpaid Note Balance of the Notes, together with accrued and unpaid interest
      thereon as described in the Indenture. The Indenture provides that,
      notwithstanding the acceleration of the maturity of the Notes, under certain
      circumstances specified therein, all amounts collected as proceeds of the Trust
      Estate securing the Notes or otherwise shall continue to be applied to payments
      of principal of and interest on the Notes as if they had not been declared
      due
      and payable.

     

    The
      failure to pay any Unpaid Interest Shortfall Amount at any time when funds
      are
      not available to make such payment as provided in the Indenture shall not
      constitute an Event of Default under the Indenture.

     

    The
      Holder of this Note or Beneficial Owner of any interest herein is deemed to
      represent that either (1) it is not acquiring this Note with Plan Assets or
      (2)
      (A) the acquisition, holding and transfer of this Note will not give rise to
      a
      nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
      of
      the Code and (B) this Note is rated investment grade or better and such person
      believes that this Note is properly treated as indebtedness without substantial
      equity features for purposes of the DOL Regulations, and agrees to so treat
      this
      Note. Alternatively, regardless of the rating of this Note, such person may
      provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
      which opinion of counsel will not be at the expense of the Issuer, the Seller,
      the Originator, any Underwriter, the Owner Trustee, the Indenture Trustee,
      the
      Servicer or any successor servicer which opines that the acquisition, holding
      and transfer of this Note or interest herein is permissible under applicable
      law, will not constitute or result in a non-exempt prohibited transaction under
      ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
      the Originator, the Depositor, any Underwriter, the Owner Trustee, the Indenture
      Trustee, the Servicer or any successor servicer to any obligation in addition
      to
      those undertaken in the Indenture or other Operative Agreements.

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Note may be registered on the Note Register of the Issuer.
      Upon surrender for registration of transfer of, or presentation of a written
      instrument of transfer for, this Note at the office or agency designated by
      the
      Issuer pursuant to the Indenture, accompanied by proper instruments of
      assignment in form satisfactory to the Indenture Trustee, one or more new Notes
      of any authorized denominations and of a like aggregate initial Note Balance,
      will be issued to the designated transferee or transferees.

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuer,
      the
      Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
      treat
      the Person in whose name this Note is registered as the owner of such Note
      (i)
      on the applicable Record Date for the purpose of making payments and interest
      of
      such Note and (ii) on any other date for all other purposes whatsoever, as
      the
      owner hereof, whether or not this Note be overdue, and neither the Issuer,
      the
      Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee
      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 Issuer and
      the
      rights of the Holders of the Notes under the Indenture at any time by the Issuer
      and the Holders of a majority of all Notes at the time outstanding. The
      Indenture also contains provisions permitting the Holders of Notes representing
      specified percentages of the aggregate Note Balance of the Notes on behalf
      of
      the Holders of all the Notes, to waive any past Default under the Indenture
      and
      its consequences. Any such waiver by the Holder, at the time of the giving
      thereof, of this Note (or any one or more predecessor Notes) shall bind the
      Holder of every 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 such Note. The Indenture also permits the Issuer and the
      Indenture Trustee to amend or waive certain terms and conditions set forth
      in
      the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

    Initially,
      this Note will be registered in the name of Cede & Co. as nominee of DTC,
      acting in its capacity as the Depository for this Note. This Note will be
      delivered by the clearing agency in denominations as provided in the Indenture
      and subject to certain limitations therein set forth. This Note is exchangeable
      for a like aggregate initial Note Balance of Notes of different authorized
      denominations, as requested by the Holder surrendering same.

     

    Unless
      the Certificate of Authentication hereon has been executed by the Indenture
      Trustee by manual signature, this Note shall not be entitled to any benefit
      under the Indenture, or be valid or obligatory for any purpose.

     

    AS
      PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
      BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
      NEW
      YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
      by
      Wilmington Trust Company, not in its individual capacity but solely as Owner
      Trustee.

     

    Dated:
      April ____, 2006

     

    
      	 	 	 	 	 	 	
              NEWCASTLE
                MORTGAGE SECURITIES TRUST 2006-1

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              BY:
                WILMINGTON TRUST COMPANY, not in its individual capacity but solely
                in its
                capacity as Owner Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This
      is
      one of the Notes referred to in the within-mentioned Indenture.

     

    
      	
              JPMORGAN
                CHASE BANK, N.A.,

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

    The
      following abbreviations, when used in the inscription on the face of the Note,
      shall be construed as though they were written out in full according to
      applicable laws or regulations:

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

            	
              as
                joint tenants with right of survivorship and not as tenants in
                common

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

    Additional
      abbreviations may also be used though not in the above list.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

    (Please
      print or typewrite name and address, including zip code, of
      assignee)

     

    

    
      	 

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes 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 by __________________________________

     

    NOTICE:
      The signature(s) to this assignment must correspond with the name as it appears
      upon the face of the within Note in every particular, without alteration or
      enlargement or any change whatsoever. Signature(s) must be guaranteed by a
      commercial bank or by a member firm of the New York Stock Exchange or another
      national securities exchange. Notarized or witnessed signatures are not
      acceptable.

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      B

     

    INTEREST
      RATE SWAP AGREEMENT

     

    

     

     

    

      ISDA®

       

      International
        Swaps and Derivatives Association, Inc.

       

       

      NOVATION
        AGREEMENT

       

      dated
        as
        of April 6, 2005 among:

       

      THE
        ROYAL BANK OF SCOTLAND PLC (the
        “Remaining
        Party”),

       

      NEWCASTLE
        INVESTMENT CORP
        (the
“Transferor”)
        

       

      AND

       

      NEWCASTLE
        MORTGAGE SECURITIES TRUST 2006-1

       

      (the
        “Transferee”).

       

      The
        Transferor and the Remaining Party have entered into a certain transaction
        (the
“Old
        Transaction”)
        evidenced by a Confirmation dated March 16, 2006 with RBS Reference Number
        D6929006 (the “Old
        Confirmation”)
        attached hereto as Exhibit I and subject to a 1992 ISDA Master Agreement
        dated
        as of February 2, 2006 (the “Old
        Agreement”).
        

       

      The
        Transferor, the Remaining Party and the Transferee agree that, effective
        as of
        April 6, 2006 (the “Novation
        Date”)
        the
        Transferor shall transfer by novation to the Transferee all of its rights,
        liabilities, duties and obligations under and in respect of the Old Transaction
        (other than with respect to the April Payment Obligations) with the effect
        that
        the Transferee and the Remaining Party enter into a new transaction (the
        “New
        Transaction”)
        between them having terms identical (except as modified pursuant to this
        Novation Agreement) to those of the Old Transaction, except that the New
        Transaction shall be subject to the terms of the 1992 ISDA Master Agreement
        dated as of April 6 2006, (the “New
        Agreement”)
        and no
        longer subject to the Old Agreement, as more particularly described
        below.

       

      The
        Remaining Party wishes to accept the Transferee as its sole counterparty
        with
        respect to the New Transaction.

       

      The
        Transferor and the Remaining Party wish to have released and discharged,
        as a
        result and to the extent of the transfer described above, their respective
        obligations (other than with respect to the April Payment Obligations) under
        and
        in respect of the Old Transaction.

       

      “April
        Payment Obligations”
means,
        for the Payment Date falling on April 2006, the obligations of (i) the Remaining
        Party, as Floating Rate Payer, to pay the Floating Amount to the Transferor
        and
        (ii) the Transferor, as Fixed Rate Payer, to pay the Fixed Amount to the
        Remaining Party.

       

      Accordingly,
        the parties agree as follows:

       

       

      
        	
                1

              	
                Definitions

              

      

      Terms
        defined in the ISDA Master Agreement (Multicurrency-Cross Border) as published
        in 1992 by the International Swaps and Derivatives Association, Inc. (the
        “1992
        ISDA Master Agreement”)
        are
        used herein as so defined, unless otherwise provided herein. 

       

       

      
        	
                2

              	
                Transfer,
                  Release, Discharge and
                  Undertakings

              

      

      Subject
        to the execution and delivery of the New Agreement by each of the parties
        thereto to the other, with effect from and including the Novation Date and
        in
        consideration of the mutual representations, warranties and covenants contained
        in this Novation Agreement and other good and valuable consideration (the
        receipt and sufficiency of which are hereby acknowledged by each of the
        parties):

       

      
        	 	
                (a)

              	
                subject
                  to Section 2(d) of this Novation Agreement the Remaining Party
                  and the
                  Transferor are, except with respect to the April Payment Obligations,
                  each
                  released and discharged from further obligations to each other
                  with
                  respect to the Old Transaction and their respective rights against
                  each
                  other thereunder are cancelled, provided that such release and
                  discharge
                  shall not affect any rights, liabilities or obligations of the Remaining
                  Party or the Transferor with respect to payments or other obligations
                  due
                  and payable or due to be performed prior to the Novation Date,
                  and all
                  such payments and obligations shall be paid or performed by the
                  Remaining
                  Party or the Transferor in accordance with the terms of the Old
                  Transaction;

              

      

       

      
        	 	
                (b)

              	
                in
                  respect of the New Transaction, the Remaining Party and the Transferee
                  each undertake liabilities and obligations towards the other and
                  acquire
                  rights against each other identical in their terms to the Old Transaction
                  (and, for the avoidance of doubt, as if the Transferee were the
                  Transferor
                  and with the Remaining Party remaining the Remaining Party, save
                  for the
                  April Payment Obligations and any other rights, liabilities or
                  obligations
                  of the Remaining Party or the Transferor with respect to payments
                  or other
                  obligations due and payable or due to be performed prior to the
                  Novation
                  Date);

              

      

       

      
        	 	
                (c)

              	
                the
                  New Transaction shall be governed by, form part of, and be subject
                  to the
                  New Agreement and the Old Confirmation (which, in conjunction and
                  as
                  deemed modified to be consistent with this Novation Agreement,
                  shall be
                  deemed to be a Confirmation between the Remaining Party and the
                  Transferee), and the offices of the Remaining Party and the Transferee
                  for
                  purposes of the New Transaction shall be their offices at their
                  addresses
                  for notices provided for in the New Agreement;
                  and

              

      

       

      
        	 	
                (d)

              	
                on
                  the Novation Date, if applicable, the Remaining Party shall transfer
                  all
                  of the Posted Collateral (as defined in the Credit Support Annex
                  to the
                  Old Agreement) held by it in respect of the Old Transaction to
                  the account
                  or accounts of the Transferor identified by it by notice given
                  to the
                  Remaining Party as provided in the Old Agreement, and the Transferor
                  shall
                  transfer all Posted Collateral held by it in respect of the Old
                  Transactions to the account or accounts of the Remaining Party
                  identified
                  by it by notice given to the Transferor as provided in the Old
                  Agreement,
                  in each case together with all Interest Amount and Distributions
                  thereon
                  (as so defined). The Remaining Party’s or the Transferor’s failure to
                  effect these transfers will continue to constitute Potential Events
                  of
                  Default and may constitute Events of Default under the Old Agreement
                  notwithstanding the transfer by novation contemplated
                  herein.

              

      

       

       

      
        	
                3

              	
                Representations
                  and Warranties

              

      

      (a) On
        the
        date of this Novation Agreement:

       

      
        	 	
                (i)

              	
                Each
                  of the parties makes to each of the other parties those representations
                  and warranties set forth in Section 3(a) of the 1992 ISDA Master
                  Agreement
                  with references in such Section to “this Agreement” or “any Credit Support
                  Document” being deemed references to this Novation Agreement
                  alone.

              

      

       

      
        	 	
                (ii)

              	
                The
                  Remaining Party and the Transferor each makes to the other, and
                  the
                  Remaining Party and the Transferee each makes to the other, the
                  representation set forth in Section 3(b) of the 1992 ISDA Master
                  Agreement, in each case with respect to the Old Agreement or the
                  New
                  Agreement, as the case may be, and taking into account the parties
                  entering into and performing their obligations under this Novation
                  Agreement.

              

      

       

      
        	 	
                (iii)

              	
                Each
                  of the Remaining Party and the Transferor represents and warrants
                  to each
                  other and the Transferee that: 

              

      

       

      
        	 	
                (A)

              	
                it
                  has made no prior transfer (whether by way of security or otherwise)
                  of
                  the Old Agreement or any interest or obligation in or under the
                  Old
                  Agreement or in respect of the Old Transaction;
                  and

              

      

       

      
        	 	
                (B)

              	
                without
                  prejudice to the obligations of the Remaining Party and the Transferor
                  referred to in Section 2(d) of this Novation Agreement, as of the
                  Novation
                  Date, all obligations of the Remaining Party and the Transferor
                  under the
                  Old Transaction required to be performed before the Novation Date
                  have
                  been fulfilled.

              

      

       

      
        	 	
                (iv)

              	
                Each
                  party represents to each of the other
                  parties:

              

      

       

      
        	 	
                (A)

              	
                Non-Reliance
                  In
                  the case of the Remaining Party, Transferee and the Transferor,
                  each is
                  acting for its own account and has made its own independent decisions
                  to
                  enter into this Novation Agreement and as to whether this Novation
                  Agreement is appropriate or proper for it based upon its own judgment
                  and
                  upon advice from such advisers as it has deemed necessary. It is
                  not
                  relying on any communication (written or oral) of the other parties
                  as
                  investment advice or as a recommendation to enter into this Novation
                  Agreement; it being understood that information and explanations
                  related
                  to the terms and conditions of this Novation Agreement shall not
                  be
                  considered investment advice or a recommendation to enter into
                  this
                  Novation Agreement. No communication (written or oral) received
                  from any
                  of the other parties shall be deemed to be an assurance or guarantee
                  as to
                  the expected results of this Novation
                  Agreement;

              

      

       

      
        	 	
                (B)

              	
                Assessment
                  and Understanding
                  It
                  is capable of assessing the merits of and understanding (on its
                  own behalf
                  or through independent professional advice), and understands and
                  accepts,
                  the terms, conditions and risks of this Novation Agreement. It
                  is also
                  capable of assuming, and assumes, the risks of this Novation Agreement;
                  and

              

      

       

      
        	 	
                (C)

              	
                Status
                  of Parties
                  None of the other parties is acting as a fiduciary for or an adviser
                  to it
                  in respect of this Novation
                  Agreement.

              

      

       

      
        	 	
                (D)

              	
                Owner
                  Trustee Capacity
                  It
                  is expressly understood and agreed by the parties hereto that (i)
                  this
                  Novation Agreement is executed and delivered by Wilmington Trust
                  Company,
                  not individually or personally but solely as Owner Trustee for
                  Newcastle
                  Mortgage Securities Trust 2006-1 in the exercise of the powers
                  and
                  authority conferred and vested in it, (ii) each of the representations,
                  undertakings and agreements herein made on the part of Newcastle
                  Mortgage
                  Securities Trust 2006-1 is made and intended not as personal
                  representations, undertakings and agreements by Wilmington Trust
                  Company
                  but is made and intended for the purpose of binding only Newcastle
                  Mortgage Securities Trust 2006-1, (iii) nothing herein contained
                  shall be
                  construed as creating any liability on the part of 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 (iv) absent its wilful
                  misconduct
                  or gross negligence with respect to its obligations under the Trust
                  Agreement, under no circumstances shall Wilmington Trust Company
                  be
                  personally liable for the payment of any indebtedness or expenses
                  of the
                  Newcastle Mortgage Securities Trust 2006-1 or be liable for the
                  breach or
                  failure of any obligation, representation, warranty or covenant
                  made or
                  undertaken by Newcastle Mortgage Securities Trust 2006-1 under
                  this
                  Novation Agreement or any other related
                  documents.

              

      

       

      
        	 	
                (b)

              	
                The
                  Transferor makes no representation or warranty and does not assume
                  any
                  responsibility with respect to the legality, validity, effectiveness,
                  adequacy or enforceability of the New Transaction or the New Agreement
                  or
                  any documents relating thereto and assumes no responsibility for
                  the
                  condition, financial or otherwise, of the Remaining Party, the
                  Transferee
                  or any other person or for the performance and observance by the
                  Remaining
                  Party, the Transferee or any other person of any of its obligations
                  under
                  the New Transaction or the New Agreement or any document relating
                  thereto
                  and any and all such conditions and warranties, whether express
                  or implied
                  by law or otherwise, are hereby
                  excluded.

              

      

       

       

      
        	
                4

              	
                Counterparts

              

      

      This
        Novation Agreement (and each amendment, modification and waiver in respect
        of
        it) may be executed and delivered in counterparts (including by facsimile
        transmission), each of which will be deemed an original.

       

       

      
        	
                5

              	
                Costs
                  and Expenses

              

      

      Except
        as
        otherwise agreed the parties will each pay their own costs and expenses
        (including legal fees) incurred in connection with this Novation Agreement
        and
        as a result of the negotiation, preparation and execution of this Novation
        Agreement.

       

       

      
        	
                6

              	
                Amendments

              

      

      No
        amendment, modification or waiver in respect of this Novation Agreement will
        be
        effective unless (i) the Rating Agency Condition (as defined in the New
        Agreement) is satisfied and (ii) in writing (including a writing evidenced
        by a
        facsimile transmission) and executed by each of the parties or confirmed
        by an
        exchange of telexes or electronic messages on an electronic messaging
        system.

       

       

      
        	
                7

              	
                Amendments
                  to Old Confirmation Incorporated into the New
                  Agreement

              

      

      The
        Remaining Party and the Transferee each agree that on and from the date of
        this
        Novation Agreement the Old Confirmation is hereby amended by:

       

      (a)
         by
        deleting in its entirety the table
        contained in the schedule to the Old Confirmation entitled “Notional Schedule -
        D6929006” and replacing it with table set forth in Exhibit II hereto;

       

      (b) The
        following in inserted into the Old Confirmation in a new row immediately
        following “Fixed Rate Payer Payment Dates”:

            
“Fixed
        Amounts: The
        Fixed
        Amount payable by Fixed Rate Payer shall be an amount equal to (i) Notional
        Amount * (ii) Fixed Rate * (iii) 250 * (iv) Fixed Rate Day Count
        Fraction.”

       

      (c) The
        following is inserted into the Old Confirmation in a new row immediately
        following “Floating Rate Payer Dates”:

           
“Floating
        Amounts: The
        Floating Amount payable by Floating Rate Payer shall be an amount equal to
        (i)
        Notional Amount * (ii) Floating Rate Option * (iii) 250 * (iv) Floating Rate
        Day
        Count Fraction.”

       

      
        	
                8

              	
                Agency
                  Role of Greenwich Capital Markets,
                  Inc.

              

      

      In
        connection with this Novation Agreement, Greenwich Capital Markets, Inc.
        has
        acted as agent on behalf of the Remaining Party. Greenwich Capital Markets,
        Inc.
        has not guaranteed and is not otherwise responsible for the obligations of
        the
        Remaining Party under this Agreement. 

       

      
        	9	
                (a)

              	Governing Law This
                Novation Agreement will be governed by and construed in accordance
                with
                the laws of the State of New York without reference to the conflict
                of
                laws provisions thereof.

        	 	
                (b)

              	
                Jurisdiction
                  The terms of Section 13(b) of the 1992 ISDA Master Agreement shall
                  apply
                  to this Novation Agreement with references in such Section to “this
                  Agreement” being deemed references to this Novation Agreement
                  alone.

              

      

       

       

      
        	
                10

              	
                Account
                  Details for the Transferee

              

      

      Account
        for payments to the Transferee:

       

      JPMorgan
        Chase Bank, N.A. 

      ABA:
               021000021 

      DDA;
               507947541 

      Ref:
               Newcastle 2006-1

       

      In
        Witness Whereof the
        parties have executed this Novation Agreement on the respective dates specified
        below with effect from and including the Novation Date.

       

      THE
        ROYAL BANK OF SCOTLAND PLC  

      By:
        Greenwich Capital Markets, Inc., its agent

       

       

      By: ______________________________

      Name:
        

      Title:
        

      Date:

       

       

      NEWCASTLE
        INVESTMENT CORP.

       

      By: ______________________________

      Name:
        

      Title:
        

      Date:

       

      Agreed
        and Accepted to by:

       

      NEWCASTLE
        MORTGAGE SECURITIES TRUST 2006-1

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

       

      
        By: ______________________________

        Name:
          

        Title:
          

        Date:

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      Exhibit
        I

       

      [AVAILABLE
        UPON REQUEST]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Exhibit
        II

       

      NOTIONAL
        SCHEDULE - D6929006

      All
        dates
        subject to adjustment in accordance with the Modified Following Business
        Day
        Convention

       

      
        	
                From
                  and including*

              	
                To
                  but excluding*

              	
                Notional
                  Amount

                (USD)

              
	
                02/28/06

              	
                03/28/06

              	
                5,688,376.00
                  

              
	
                03/28/06

              	
                04/25/06

              	
                5,603,044.00
                  

              
	
                04/25/06

              	
                05/25/06

              	
                5,512,924.00
                  

              
	
                05/25/06

              	
                06/25/06

              	
                5,417,020.00
                  

              
	
                06/25/06

              	
                07/25/06

              	
                5,315,180.00
                  

              
	
                07/25/06

              	
                08/25/06

              	
                5,204,592.00
                  

              
	
                08/25/06

              	
                09/25/06

              	
                5,082,848.00
                  

              
	
                09/25/06

              	
                10/25/06

              	
                4,949,692.00
                  

              
	
                10/25/06

              	
                11/25/06

              	
                4,808,008.00
                  

              
	
                11/25/06

              	
                12/25/06

              	
                4,661,864.00
                  

              
	
                12/25/06

              	
                01/25/07

              	
                4,512,668.00
                  

              
	
                01/25/07

              	
                02/25/07

              	
                4,360,228.00
                  

              
	
                02/25/07

              	
                03/25/07

              	
                4,210,332.00
                  

              
	
                03/25/07

              	
                04/25/07

              	
                4,068,460.00
                  

              
	
                04/25/07

              	
                05/25/07

              	
                3,933,888.00
                  

              
	
                05/25/07

              	
                06/25/07

              	
                3,805,992.00
                  

              
	
                06/25/07

              	
                07/25/07

              	
                3,683,224.00
                  

              
	
                07/25/07

              	
                08/25/07

              	
                3,565,308.00
                  

              
	
                08/25/07

              	
                09/25/07

              	
                3,451,996.00
                  

              
	
                09/25/07

              	
                10/25/07

              	
                3,343,072.00
                  

              
	
                10/25/07

              	
                11/25/07

              	
                2,996,808.00
                  

              
	
                11/25/07

              	
                12/25/07

              	
                1,592,628.00
                  

              
	
                12/25/07

              	
                01/25/08

              	
                1,533,680.00
                  

              
	
                01/25/08

              	
                02/25/08

              	
                1,480,116.00
                  

              
	
                02/25/08

              	
                03/25/08

              	
                1,428,128.00
                  

              
	
                03/25/08

              	
                04/25/08

              	
                1,378,572.00
                  

              
	
                04/25/08

              	
                05/25/08

              	
                1,331,268.00
                  

              
	
                05/25/08

              	
                06/25/08

              	
                1,286,044.00
                  

              
	
                06/25/08

              	
                07/25/08

              	
                1,242,764.00
                  

              
	
                07/25/08

              	
                08/25/08

              	
                1,201,048.00
                  

              
	
                08/25/08

              	
                09/25/08

              	
                1,160,856.00
                  

              
	
                09/25/08

              	
                10/25/08

              	
                1,121,044.00
                  

              
	
                10/25/08

              	
                11/25/08

              	
                1,003,700.00
                  

              
	
                11/25/08

              	
                12/25/08

              	
                644,712.00
                  

              
	
                12/25/08

              	
                01/25/09

              	
                609,852.00
                  

              
	
                01/25/09

              	
                02/25/09

              	
                577,416.00
                  

              
	
                02/25/09

              	
                03/25/09

              	
                547,292.00
                  

              
	
                03/25/09

              	
                04/25/09

              	
                591,152.00
                  

              
	
                04/25/09

              	
                05/25/09

              	
                613,368.00
                  

              
	
                05/25/09

              	
                06/25/09

              	
                596,176.00
                  

              
	
                06/25/09

              	
                07/25/09

              	
                578,108.00
                  

              
	
                07/25/09

              	
                08/25/09

              	
                561,152.00
                  

              
	
                08/25/09

              	
                09/25/09

              	
                545,204.00
                  

              
	
                09/25/09

              	
                10/25/09

              	
                530,224.00
                  

              
	
                10/25/09

              	
                11/25/09

              	
                516,140.00
                  

              
	
                11/25/09

              	
                12/25/09

              	
                502,428.00
                  

              
	
                12/25/09

              	
                01/25/10

              	
                487,060.00
                  

              
	
                01/25/10

              	
                02/25/10

              	
                476,068.00
                  

              
	
                02/25/10

              	
                03/25/10

              	
                463,396.00
                  

              
	
                03/25/10

              	
                04/25/10

              	
                451,048.00
                  

              
	
                04/25/10

              	
                05/25/10

              	
                439,016.00
                  

              
	
                05/25/10

              	
                06/25/10

              	
                424,900.00
                  

              
	
                06/25/10

              	
                07/25/10

              	
                415,872.00
                  

              
	
                07/25/10

              	
                08/25/10

              	
                404,748.00
                  

              
	
                08/25/10

              	
                09/25/10

              	
                393,912.00
                  

              
	
                09/25/10

              	
                10/25/10

              	
                381,212.00
                  

              
	
                10/25/10

              	
                11/25/10

              	
                369,184.00
                  

              
	
                11/25/10

              	
                12/25/10

              	
                359,300.00
                  

              
	
                12/25/10

              	
                01/25/11

              	
                349,668.00
                  

              
	
                01/25/11

              	
                02/25/11

              	
                340,284.00
                  

              
	
                02/25/11

              	
                03/25/11

              	
                329,208.00
                  

              
	
                03/25/11

              	
                04/25/11

              	
                322,244.00
                  

              
	
                04/25/11

              	
                05/25/11

              	
                313,584.00
                  

              
	
                05/25/11

              	
                06/25/11

              	
                305,152.00
                  

              
	
                06/25/11

              	
                07/25/11

              	
                296,936.00
                  

              
	
                07/25/11

              	
                08/25/11

              	
                287,468.00
                  

              
	
                08/25/11

              	
                09/25/11

              	
                281,144.00
                  

              
	
                09/25/11

              	
                10/25/11

              	
                273,556.00
                  

              

      

       

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

      (Multicurrency—Cross
        Border)

      ISDA®

      International
        Swap and Derivatives Association, Inc.

       

      MASTER
        AGREEMENT

       

      dated
        as
        of April 6,
        2006

      

      
        	
                THE
                  ROYAL BANK OF SCOTLAND PLC

              	
                and

              	
                NEWCASTLE
                  MORTGAGE SECURITIES TRUST
                  2006-1

              

      

       

      
        	
                ("Party
                  A")

              	 	
                ("Party
                  B")

              

      

      

      
        	
                have
                  entered and/or anticipate entering into one or more transactions
                  (each a
                  “Transaction”) that are or will be governed by this Master
                  Agreement, which includes the schedule (the “Schedule”),
                  and the documents and other confirming evidence (each
                  a “Confirmation”) exchanged between the parties confirming those
                  Transactions. 

              
	
                Accordingly,
                  the parties agree as follows:—

                 

              
	
                1. Interpretation

              
	 
	
                (a)  Definitions.
                  The
                  terms defined in Section 14 and in the Schedule will have
                  the meanings therein specified for the purpose of this
                  Master Agreement.

                 

              
	
                (b) Inconsistency.
                  In
                  the event of any inconsistency between the provisions of
                  the Schedule and the
                  other provisions of this Master Agreement, the Schedule
                  will prevail. In the event of any inconsistency
                  between the provisions of any Confirmation and this Master
                  Agreement (including the Schedule), such
                  Confirmation will prevail for the purpose of
                  the relevant Transaction.

                 

              
	
                (c) Single
                  Agreement. All
                  Transactions are entered into in reliance on the
                  fact that this Master Agreement and all
                  Confirmations form a single agreement between the parties
                  (collectively referred to as
                  this “Agreement”), and the parties would not otherwise enter
                  into any Transactions.

                 

              
	
                2. Obligations

                 

              
	
                (a) General
                  Conditions.

                 

              
	
                (i) Each
                  party will make each payment or delivery specified in each Confirmation
                  to be made by it, subject to the other provisions
                  of this Agreement.

                 

              
	
                (ii) Payments
                  under this Agreement will be made on the due date for value on
                  that
                  date in the place
                  of the account specified in the relevant Confirmation or
                  otherwise pursuant to this Agreement, in
                  freely transferable funds and in the manner customary for
                  payments in the required currency. Where
                  settlement is by delivery (that is, other than by payment), such
                  delivery will be made for receipt on the due date in
                  the manner customary for the relevant obligation unless
                  otherwise specified in the
                  relevant Confirmation or elsewhere in this
                  Agreement.

                 

              
	
                (iii) Each
                  obligation of each party under Section 2(a)(i) is subject to (1)
                  the condition precedent that no Event of Default
                  or Potential Event of Default with respect to the other
                  party has occurred and is continuing, (2) the
                  condition precedent that no Early Termination Date
                  in respect of the relevant Transaction has
                  occurred or been effectively designated and (3)
                  each other applicable condition precedent specified in
                  this Agreement.

              

      

      

      

      

      Copyright
        © 1992 by International Swap and Derivatives Association, Inc.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                (b) Change
                  of Account. Either
                  party may change its account for receiving a payment
                  or delivery by giving notice to the other party at
                  least five Local Business Days prior to the scheduled date for
                  the payment or delivery to which such change applies unless
                  such other party gives timely notice of a reasonable objection
                  to such change.

                 

              
	
                (c) Netting.
                  If
                  on any date amounts would otherwise be payable:—

                 

              
	
                (i) in
                  the same currency; and

                 

              
	
                (ii) in
                  respect of the same Transaction,

                 

              
	
                by
                  each party to the other, then, on such date, each party's obligation
                  to
                  make payment of any such amount will be automatically
                  satisfied and discharged and, if the aggregate amount that would
                  otherwise have been
                  payable by one party exceeds the aggregate amount that would otherwise
                  have been payable by the other party, replaced by an
                  obligation upon the party by whom the larger aggregate amount
                  would have been payable to pay
                  to the other party the excess of the larger aggregate amount over
                  the
                  smaller aggregate amount.

                 

              
	
                The
                  parties may elect in respect of two or more Transactions that a
                  net amount
                  will be determined in respect of all amounts
                  payable on the same date in the same currency in respect of such
                  Transactions, regardless of
                  whether such amounts are payable in respect of the same
                  Transaction. The election may be made in the
                  Schedule or a Confirmation by specifying that subparagraph (ii)
                  above will not apply to the Transactions identified as being
                  subject to the election, together with the starting date (in which
                  case
                  subparagraph (ii) above will not, or will cease to, apply
                  to such Transactions from such date). This election may be made
                  separately for different groups of Transactions and will apply
                  separately to each pairing of Offices through
                  which the parties make and receive payments or
                  deliveries.

                 

              
	
                (d) Deduction
                  or Withholding for Tax.

                 

              
	
                (i) Gross-Up.
                  All
                  payments under this Agreement will be made without
                  any deduction or withholding for or on account of any Tax
                  unless such deduction or withholding is required by any
                  applicable law, as modified by the practice of any relevant
                  governmental revenue
                  authority, then in
                  effect. If a party is so required to deduct or withhold, then that
                  party
                  (“X”) will:—

                 

              
	
                (1) promptly
                  notify the other party (“Y”) of such requirement;

                 

              
	
                (2) pay
                  to the relevant authorities the full amount required to be
                  deducted or withheld (including the full amount
                  required to be deducted or withheld from any additional amount
                  paid by X to Y under this Section 2(d)) promptly upon the earlier of
                  determining that such deduction or withholding is
                  required or receiving notice that such amount has been assessed
                  against Y;

                 

              
	
                (3) promptly
                  forward to Y an official receipt (or a certified copy), or
                  other documentation reasonably acceptable to Y, evidencing such
                  payment to such authorities; and

                 

              
	
                (4) if
                  such Tax is an Indemnifiable Tax, pay to Y, in addition to the
                  payment
                  to which Y is otherwise entitled under this
                  Agreement, such additional amount as is necessary
                  to ensure that the net amount
                  actually received by Y (free and clear of Indemnifiable Taxes,
                  whether assessed
                  against X or Y) will equal the full amount Y would have received
                  had no such deduction or withholding been required.
                  However, X will not be required to pay any additional amount to
                  Y to the extent that it would not be required to be paid but
                  for:—

                 

              
	
                (A) the
                  failure by Y to comply with or perform any
                  agreement contained in Section 4(a)(i), 4(a)(iii) or
                  4(d); or

                 

              
	
                (B) the
                  failure of a representation made by Y pursuant to Section 3(f)
                  to
                  be accurate and true unless such failure would not
                  have occurred but for (I) any action taken by a taxing
                  authority, or brought in a court of competent jurisdiction, on or
                  after the date on which a Transaction is entered into
                  (regardless of whether such action is taken or brought with
                  respect to a party to this Agreement) or (II) a Change in Tax
                  Law.

                 

              
	
                (ii) Liability.
                  If:—

                 

              
	
                (1) X
                  is required by any applicable law, as modified by the practice
                  of
                  any relevant governmental revenue authority, to make any
                  deduction
                  or withholding in respect of which X
                  would not be required to pay an additional amount to Y under
                  Section 2(d)(i)(4);

                 

              
	
                (2) X
                  does not so deduct or withhold; and

                 

              
	
                (3) a
                  liability resulting from such Tax is assessed directly against
                  X,

                 

              
	
                then,
                  except to the extent Y has satisfied or then satisfies the liability
                  resulting from such Tax, Y will promptly pay to X the
                  amount of such liability (including any related liability
                  for interest, but including any related liability for
                  penalties only if Y has failed to comply with or perform any
                  agreement contained in Section 4(a)(i), 4(a)(iii) or
                  4(d)).

                 

              
	
                (e) Default
                  Interest; Other Amounts. Prior
                  to the occurrence or effective designation of an Early
                  Termination Date in respect of the relevant Transaction, a party that
                  defaults in the performance of any payment obligation
                  will, to the extent permitted by law and subject to
                  Section 6(c), be required to pay interest
                  (before as well
                  as after judgment) on the overdue amount to the other party on
                  demand in
                  the same currency
                  as such overdue amount, for the period from (and including) the
                  original due date for payment to (but excluding) the date
                  of actual payment, at the Default Rate. Such interest will be calculated
                  on the basis of daily compounding
                  and the actual number of days elapsed. If, prior to the occurrence
                  or
                  effective designation
                  of an Early Termination Date in respect of the relevant
                  Transaction, a party defaults in the performance of
                  any obligation required to be settled by delivery, it will
                  compensate
                  the other party on demand
                  if
                  and to the extent provided for in the relevant Confirmation
                  or elsewhere in this Agreement.

                 

              
	
                3. Representations

                 

              
	
                Each
                  party represents to the other party (which representations will
                  be
                  deemed to be repeated
                  by each party on each date on which a Transaction is
                  entered into and, in the
                  case of the representations
                  in
                  Section 3(f), at all times until the termination of
                  this Agreement) that:—

                 

              
	
                (a) Basic
                  Representations.

                 

              
	
                (i) Status.
                  It
                  is duly organised and validly existing under the laws of the
                  jurisdiction of its organisation or incorporation and, if
                  relevant under such laws, in good standing;

                 

              
	
                (ii) Powers.
                  It
                  has the power to execute this Agreement and any other
                  documentation relating to this Agreement to which it is a
                  party, to
                  deliver this Agreement and any other
                  documentation relating to this Agreement that it is
                  required by this Agreement to deliver and to perform its obligations
                  under this Agreement and any obligations it has under any Credit
                  Support Document to which it is a party and has taken
                  all necessary action to authorise such execution, delivery and
                  performance;

                 

              
	
                (iii) No
                  Violation or Conflict.
                  Such
                  execution, delivery and
                  performance do not
                  violate or  conflict with any law applicable to it,
                  any provision of its constitutional documents, any order or judgment
                  of any court or other agency of government applicable to it or
                  any of its assets or any contractual restriction binding on
                  or affecting it or any of its assets;

                 

              
	
                (iv) Consents.
                  All
                  governmental and other consents that are required to have been
                  obtained by it with respect to this Agreement or any
                  Credit Support Document to which it is a party have been
                  obtained and are in full force and effect and all conditions of any
                  such consents have been complied with; and

                 

              
	
                (v) Obligations
                  Binding. Its
                  obligations under
                  this Agreement and any
                  Credit Support Document to which it is a party
                  constitute its legal, valid and binding obligations,
                  enforceable in accordance with their respective terms
                  (subject to applicable bankruptcy, reorganisation, insolvency,
                  moratorium or similar laws affecting creditors' rights generally
                  and subject, as to enforceability, to equitable principles of
                  general application (regardless of whether enforcement
                  is sought in a proceeding in equity or at
                  law)).

                 

              
	
                (b) Absence
                  of Certain Events. No
                  Event of Default or Potential Event of Default or,
                  to its knowledge, Termination Event
                  with respect to it has occurred
                  and is continuing and
                  no such event
                  or
                  circumstance would occur as a
                  result of its entering into or performing its
                  obligations under this Agreement
                  or
                  any Credit Support Document to which it is a
                  party.

                 

              
	
                (c) Absence
                  of Litigation.
                  There
                  is not pending or, to its knowledge, threatened against it or
                  any of its Affiliates any action, suit or proceeding
                  at law or in equity or before any court,
                  tribunal, governmental body, agency or official or any
                  arbitrator that is likely to affect the legality, validity or
                  enforceability against it of this Agreement or
                  any Credit Support Document
                  to
                  which it is a party or its ability to perform its obligations
                  under this Agreement or such Credit Support
                  Document.

                 

              
	
                (d) Accuracy
                  of Specified Information. All
                  applicable information
                  that
                  is
                  furnished in writing by or on behalf of it to the
                  other party and is identified for the purpose of this Section 3(d)
                  in the
                  Schedule is, as of the date of the information,
                  true, accurate and complete in every material respect.

                 

              
	
                (e) Payer
                  Tax Representation. Each
                  representation specified in the Schedule as being made by it for
                  the purpose of this Section 3(e) is accurate and
                  true.

                 

              
	
                (f) Payee
                  Tax Representations. Each
                  representation specified in the Schedule as being
                  made by it for the purpose of this Section 3(f)
                  is accurate and true.

                 

              
	
                4. Agreements

                 

              
	
                Each
                  party agrees with the other that, so long as either party has or
                  may have
                  any obligation under this Agreement or under any
                  Credit Support Document to which it is a party:—

                 

              
	
                (a) Furnish
                  Specified Information. It
                  will deliver to the other party or, in certain cases under
                  subparagraph (iii) below, to such government or taxing authority
                  as the other party reasonably directs:—

                 

              
	
                (i) any
                  forms, documents or certificates relating to taxation specified
                  in the
                  Schedule or any Confirmation;

                 

              
	
                (ii) any
                  other documents specified in the Schedule or any Confirmation;
                  and

                 

              
	
                (iii) upon
                  reasonable demand by such other party, any form or document that
                  may
                  be required or reasonably requested in writing in order to
                  allow such other party or its Credit Support Provider to
                  make a payment under this Agreement or any applicable Credit
                  Support Document without any deduction or withholding for
                  or on account of any Tax or with such deduction
                  or withholding at a reduced rate (so long as the
                  completion, execution or submission of such form or document would
                  not materially prejudice the legal or commercial position of the
                  party in receipt of such demand), with any such form or
                  document to be accurate and completed in a manner
                  reasonably satisfactory to such other party and to be
                  executed
                  and to be delivered with any
                  reasonably required certification,

                 

              
	
                in
                  each case by the date specified in the Schedule or such Confirmation
                  or,
                  if none is specified, as soon as
                  reasonably practicable.

                 

              
	
                (b) Maintain
                  Authorisations. It will
                  use all reasonable efforts to maintain in full force
                  and effect all consents of any governmental or other
                  authority that are required to be obtained by it with
                  respect to this Agreement or any
                  Credit Support Document to which
                  it is a party and will use
                  all reasonable efforts to obtain any that may become
                  necessary in the future.

                 

              
	
                (c) Comply
                  with Laws. It
                  will comply in all material respects with all applicable laws
                  and orders to which it may
                  be subject if failure
                  so
                  to comply would materially impair its ability to perform
                  its obligations under this Agreement or any Credit Support
                  Document to which it is a party.

                 

              
	
                (d) Tax
                  Agreement. It
                  will give notice of any failure of a representation made by it
                  under Section 3(f) to be accurate and true promptly
                  upon learning of such failure.

                 

              
	
                (e) Payment
                  of Stamp Tax. Subject
                  to Section 11, it will pay any Stamp Tax levied or imposed upon
                  it or in respect
                  of its execution or performance
                  of
                  this Agreement by
                  a jurisdiction in which it is incorporated,

              
	
                organised,
                  managed and controlled, or considered to have its seat, or in which
                  a
                  branch or office through which it is
                  acting for the purpose of this Agreement is located
                  (“Stamp Tax Jurisdiction”) and will indemnify the other party
                  against any Stamp Tax levied or imposed upon
                  the other party or in respect of the other party's execution or performance
                  of this Agreement by any such
                  Stamp Tax Jurisdiction which is not also a Stamp
                  Tax Jurisdiction with respect to the other party.

                 

              
	
                5. Events
                  of Default and Termination Events

                 

              
	
                (a) Events
                  of Default. The
                  occurrence at any time with respect to a party or, if
                  applicable, any Credit Support Provider of
                  such party or any Specified
                  Entity of such party of any of the following events constitutes
                  an event of default (an “Event of Default”) with respect to such
                  party:—

                 

              
	
                (i) Failure
                  to Pay or Deliver. Failure
                  by the party to make, when due, any payment under this
                  Agreement or delivery under Section 2(a)(i) or 2(e) required to
                  be made by it if such failure is not remedied on or before
                  the third Local Business Day after notice of such failure is given
                  to the
                  party;

                 

              
	
                (ii) Breach
                  of Agreement. Failure
                  by the party to comply with or perform any agreement or
                  obligation (other than an obligation to make any payment under this
                  Agreement or delivery under Section 2(a)(i) or 2(e) or to
                  give notice of a Termination Event or any
                  agreement or obligation under Section 4(a)(i),
                  4(a)(iii) or 4(d)) to be complied with or performed by the
                  party in accordance with this Agreement if such
                  failure is not remedied on or before the thirtieth day
                  after notice of such failure is given to the
                  party;

                 

              
	
                (iii) Credit
                  Support Default.

                 

              
	
                (1) Failure
                  by the party or any Credit Support Provider of such party to
                  comply with or perform any agreement or obligation to
                  be complied with or performed by it in accordance
                  with any Credit Support Document if such failure is continuing
                  after any applicable grace
                  period has elapsed;

                 

              
	
                (2) the
                  expiration or termination
                  of
                  such Credit Support Document or the failing or ceasing
                  of such Credit
                  Support Document to be in full force and
                  effect for the purpose of this Agreement (in either case
                  other than in accordance with its terms)
                  prior to the satisfaction
                  of all obligations of such party
                  under each Transaction to which
                  such Credit Support Document relates without
                  the written consent of the other party; or

                 

              
	
                (3) the
                  party or such
                  Credit Support
                  Provider disaffirms, disclaims, repudiates or rejects, in
                  whole or in part, or challenges the validity of, such Credit
                  Support Document;

                 

              
	
                (iv) Misrepresentation.
                  A
                  representation (other than a representation under
                  Section 3(e) or (f))
                  made or repeated
                  or deemed to have been made or repeated by the party or
                  any Credit Support
                  Provider of such
                  party in this Agreement or any Credit Support Document proves
                  to have been
                  incorrect or misleading
                  in any
                  material respect when made or repeated or deemed to
                  have been made
                  or repeated;

                 

              
	
                (v) Default
                  under Specified Transaction. The
                  party, any Credit Support Provider of such party or
                  any applicable Specified
                  Entity of such party (1) defaults under a Specified
                  Transaction and, after
                  giving effect
                  to any applicable notice requirement or grace period, there occurs
                  a
                  liquidation of, an
                  acceleration of obligations
                  under, or an
                  early termination of, that Specified Transaction, (2) defaults,
                  after giving effect to any applicable notice requirement or
                  grace period, in making any payment or delivery due on
                  the last payment, delivery or exchange date of, or any payment
                  on early termination of, a Specified Transaction (or
                  such default continues for at least three Local
                  Business Days if there is no applicable notice
                  requirement or grace period) or (3) disaffirms,
                  disclaims, repudiates or rejects, in whole or in part,
                  a Specified Transaction (or such action is taken by any
                  person or entity appointed or empowered to operate it
                  or act on its behalf);

                 

              
	
                (vi) Cross
                  Default. If
                  “Cross Default” is specified in
                  the Schedule as applying to the party, the occurrence or existence
                  of (1) a default, event of default or other similar condition or
                  event
                  (however

                 

              
	
                described)
                  in respect of such
                  party, any Credit Support Provider of such party
                  or any applicable Specified Entity of such party under
                  one or more agreements or instruments relating to Specified
                  Indebtedness of any of them (individually or collectively) in an
                  aggregate amount of not less than the applicable Threshold
                  Amount (as
                  specified in the Schedule) which has resulted in such Specified
                  Indebtedness becoming, or becoming capable at such time of being
                  declared, due and payable under such agreements or
                  instruments, before it would
                  otherwise have been due and payable or (2) a default
                  by such party, such Credit Support Provider or such Specified
                  Entity (individually or collectively) in making one or
                  more payments on the due date thereof
                  in an aggregate
                  amount of not less than the applicable Threshold Amount
                  under such agreements or instruments (after giving effect to any
                  applicable notice requirement or grace period);

                 

              
	
                (vii) Bankruptcy.
                  The
                  party, any Credit Support Provider
                  of
                  such party or any applicable Specified Entity of such
                  party:—

                 

              
	
                (1) is
                  dissolved (other than pursuant to a consolidation, amalgamation
                  or
                  merger); (2) becomes
                  insolvent or is
                  unable to
                  pay its debts or fails or admits in writing
                  its inability generally to pay its debts as they
                  become due; (3) makes a general assignment,
                  arrangement or composition with or for the benefit of
                  its creditors; (4) institutes or has instituted
                  against it a proceeding seeking a judgment of
                  insolvency or bankruptcy or any other relief under
                  any bankruptcy or insolvency law or
                  other similar law affecting
                  creditors' rights, or a petition is presented for its
                  winding-up or liquidation, and, in the case of any such
                  proceeding or petition instituted or
                  presented against it, such proceeding or petition (A) results in
                  a judgment of insolvency or bankruptcy or the entry of
                  an order for relief or the making of an order for its winding-up or
                  liquidation or (B) is
                  not dismissed, discharged, stayed or restrained in each
                  case within 30 days of the institution
                  or presentation thereof; (5) has
                  a resolution
                  passed for its winding-up, official management or
                  liquidation (other than pursuant to a consolidation,
                  amalgamation or merger); (6) seeks or becomes subject
                  to the appointment of an administrator, provisional liquidator,
                  conservator, receiver,
                  trustee, custodian or other similar official
                  for it or for all or substantially all its assets; (7)
                  has a secured party take possession of all or substantially all
                  its
                  assets or has a distress, execution, attachment,
                  sequestration
                  or other legal process
                  levied, enforced or sued on or against all or
                  substantially all its assets and such secured party
                  maintains possession, or any such process
                  is not dismissed, discharged, stayed or restrained, in each
                  case within 30 days thereafter; (8) causes or is subject to
                  any event with respect to it which, under the applicable
                  laws of any jurisdiction, has an analogous effect to any of the
                  events specified in clauses (1) to (7) (inclusive);
                  or (9) takes any action in
                  furtherance of, or indicating its consent to, approval
                  of, or acquiescence in, any of the foregoing acts;
                  or

                 

              
	
                (viii) Merger
                  Without Assumption. The
                  party or any Credit Support Provider of such party
                  consolidates or amalgamates
                  with, or merges with or into,
                  or transfers all or substantially all its assets
                  to, another entity and, at the time of such consolidation,
                  amalgamation, merger or transfer:—

                 

              
	
                (1) the
                  resulting, surviving or transferee entity fails
                  to assume all the obligations of such party
                  or such Credit Support Provider under this Agreement or any
                  Credit Support Document to which it or its predecessor
                  was a party by operation of law or pursuant to an agreement
                  reasonably satisfactory to the other party to this Agreement;
                  or

                 

              
	
                (2) the
                  benefits of any Credit Support Document fail to extend (without
                  the
                  consent of the other party) to the performance by such
                  resulting, surviving or transferee entity of its
                  obligations under this Agreement.

                 

              
	
                (b) Termination
                  Events. The
                  occurrence at any time with respect to a party or, if
                  applicable, any Credit Support Provider of
                  such party or any Specified
                  Entity of such party of any event specified below constitutes
                  an Illegality if the event is specified in (i) below, a Tax
                  Event if the event is specified in (ii) below or a Tax
                  Event Upon Merger if the event is specified in (iii) below, and,
                  if specified to be
                  applicable, a Credit Event 

                 

              

      

      

      
        	
                Upon
                  Merger if the event is specified pursuant to (iv) below
                  or
                  an Additional Termination Event if the event
                  is specified pursuant to (v) below:—

                 

              
	
                (i) Illegality.
                  Due
                  to
                  the adoption of, or any change in, any
                  applicable law after the date on which
                  a Transaction is entered into, or due to the promulgation
                  of, or any change in, the interpretation by
                  any court, tribunal or regulatory authority with competent
                  jurisdiction of any applicable law after
                  such date, it becomes unlawful (other than as a result of a
                  breach by the party of Section 4(b)) for
                  such party (which will be the Affected Party):—

                 

              
	
                (1) to
                  perform any absolute or contingent obligation to make a payment
                  or delivery or to receive a payment or delivery
                  in respect of such Transaction or to comply with any other
                  material provision of this Agreement relating to such Transaction;
                  or

                 

              
	
                (2) to
                  perform, or for any Credit Support
                  Provider of such
                  party to perform, any contingent
                  or other obligation which the party (or such Credit Support
                  Provider) has under any Credit
                  Support Document relating to such Transaction;

                 

              
	
                (ii) Tax
                  Event. Due
                  to (x) any action
                  taken by a taxing authority, or brought in a court of competent
                  jurisdiction, on or after the date on which a Transaction
                  is entered into (regardless of whether such
                  action is taken or brought with respect to a party to this
                  Agreement) or (y) a Change in Tax Law,
                  the party (which will be the Affected Party) will, or there is a
                  substantial likelihood that it will, on
                  the next succeeding Scheduled Payment Date (1) be required to
                  pay to the other party an additional amount in respect
                  of an Indemnifiable Tax under Section 2(d)(i)(4) (except
                  in respect of interest under Section 2(e),
                  6(d)(ii) or 6(e)) or (2) receive a payment from which an amount
                  is required to be deducted or withheld for or on
                  account of a Tax (except in respect of interest
                  under Section 2(e), 6(d)(ii) or 6(e)) and no
                  additional amount is required to be paid in respect of
                  such Tax under Section 2(d)(i)(4) (other than by
                  reason of Section 2(d)(i)(4)(A) or (B));

                 

              
	
                (iii) Tax
                  Event Upon Merger. The
                  party (the “Burdened Party”) on the next succeeding Scheduled
                  Payment Date will
                  either (1) be required to pay an additional
                  amount in respect of an Indemnifiable Tax under Section
                  2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii)
                  or 6(e)) or (2) receive a
                  payment from which an amount has been deducted or withheld for
                  or
                  on account of any Indemnifiable Tax
                  in respect of which the other
                  party is not required to pay an additional amount
                  (other than by reason of Section 2(d)(i)(4)(A) or (B)), in
                  either case as a result of a party
                  consolidating or amalgamating with, or merging with or into, or
                  transferring all or substantially all its assets to,
                  another entity (which will be the Affected Party) where such action
                  does not constitute an event described in Section
                  5(a)(viii);

                 

              
	
                (iv)  Credit
                  Event Upon Merger. If
                  “Credit Event Upon Merger” is specified in the
                  Schedule as applying
                  to the party,
                  such party (“X”), any Credit Support Provider of X or any applicable
                  Specified Entity of X
                  consolidates or amalgamates
                  with, or merges with or into,
                  or transfers all or substantially all its assets
                  to, another entity and such action does
                  not constitute an event described
                  in
                  Section 5(a)(viii) but the creditworthiness of the
                  resulting, surviving or transferee entity is materially
                  weaker than that of X, such Credit Support
                  Provider or such Specified Entity,
                  as
                  the case may be, immediately prior
                  to such action (and, in such event, X or its successor
                  or transferee, as appropriate, will be the Affected Party);
                  or

                 

              
	
                (v) Additional
                  Termination Event. If
                  any “Additional Termination Event” is specified in the
                  Schedule or any Confirmation as applying, the occurrence of such
                  event (and, in such event, the Affected Party or
                  Affected Parties shall be as specified for such Additional
                  Termination Event in the Schedule or such
                  Confirmation).

                 

              
	
                (c) Event
                  of Default and Illegality. If
                  an event or circumstance which would otherwise constitute or
                  give rise to an Event of Default also constitutes an
                  Illegality, it will be treated as an
                  Illegality and will not
                  constitute an Event of
                  Default.

              

      

       

      

      
        	
                6. Early
                  Termination

                 

              
	
                (a) Right
                  to Terminate Following Event of Default. If
                  at any time an Event of Default with respect to
                  a party (the “Defaulting Party”) has occurred and is then
                  continuing, the other party (the “Non-defaulting
                  Party”) may, by
                  not more than 20 days notice to
                  the Defaulting Party specifying the relevant Event of Default,
                  designate a day not earlier than the day such notice is
                  effective as an Early Termination Date in respect of
                  all outstanding Transactions. If, however, “Automatic Early
                  Termination” is specified in the Schedule as
                  applying to a party, then an Early Termination Date in
                  respect of all outstanding Transactions will occur immediately upon the
                  occurrence with respect to such party of an Event
                  of Default specified in Section 5(a)(vii)(l), (3), (5),
                  (6)
                  or, to the extent analogous thereto, (8), and as of
                  the time immediately preceding the institution of the
                  relevant proceeding or the presentation of the
                  relevant petition upon the occurrence with respect
                  to such party of an Event of Default
                  specified in Section 5(a)(vii)(4) or, to the extent
                  analogous thereto, (8).

                 

              
	
                (b) Right
                  to Terminate Following Termination Event.

                 

              
	
                (i) Notice.
                  If
                  a Termination Event occurs, an Affected Party will, promptly upon
                  becoming aware of
                  it, notify the other
                  party, specifying the nature of that Termination Event
                  and each Affected Transaction
                  and will also give
                  such other information about
                  that Termination Event as the
                  other party may reasonably
                  require.

                 

              
	
                (ii) Transfer
                  to Avoid Termination Event. If
                  either an Illegality under Section 5(b)(i)(l) or a Tax
                  Event occurs and there is only one Affected Party, or if a Tax
                  Event Upon Merger occurs and the Burdened Party is the
                  Affected Party, the Affected Party will, as a condition to its
                  right to designate an Early Termination Date under
                  Section 6(b)(iv), use all reasonable efforts (which
                  will not require such party to incur a loss,
                  excluding
                  immaterial, incidental expenses)
                  to transfer within 20 days after it gives notice under
                  Section 6(b)(i) all its rights and obligations under this
                  Agreement in respect of the Affected Transactions
                  to another of its Offices or Affiliates so that
                  such Termination Event ceases to exist.

                 

              
	
                If
                  the Affected Party is not able to make such a transfer it will
                  give notice
                  to the other party to that effect within such
                  20 day period, whereupon the other party may effect such
                  a transfer within
                  30 days after the notice is given under Section
                  6(b)(i).

                 

              
	
                Any
                  such transfer by a party under this Section 6(b)(ii) will be subject
                  to
                  and conditional upon the prior written consent of the
                  other party, which consent will not be withheld if
                  such other party's policies in effect at such time
                  would permit it to enter into transactions with
                  the transferee on the terms proposed.

                 

              
	
                (iii) Two
                  Affected Parties. If
                  an Illegality under Section 5(b)(i)( 1) or
                  a
                  Tax Event occurs and there are two Affected Parties,
                  each party will use
                  all reasonable efforts to reach agreement within 30 days
                  after notice thereof is given under Section 6(b)(i) on action to
                  avoid that Termination Event.

                 

              
	
                (iv) Right to
                  Terminate. If:—

                 

              
	
                (1) a
                  transfer under
                  Section 6(b)(ii) or an agreement
                  under Section 6(b)(iii), as the case may
                  be, has not been effected with respect to all Affected
                  Transactions within 30 days after an
                  Affected Party gives notice under Section 6(b)(i);
                  or

                 

              
	
                (2) an
                  Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger
                  or an Additional Termination Event occurs,
                  or a Tax Event
                  Upon Merger occurs and the Burdened Party is not
                  the Affected Party,

                 

              
	
                either
                  party in the case of an Illegality, the
                  Burdened Party in the
                  case of a Tax Event Upon Merger,
                  any Affected Party in the case of a Tax Event or an Additional
                  Termination Event if there is more
                  than one Affected Party, or the party which is not the Affected
                  Party in the case of a Credit Event
                  Upon Merger or an Additional Termination Event if there is only
                  one Affected Party may, by not more than 20 days
                  notice to
                  the other party and provided that the relevant
                  Termination Event is then continuing,
                  designate a day not earlier than the day such notice is effective
                  as
                  an Early Termination Date in respect of all Affected
                  Transactions.

              

      

      

      
        	
                (c) Effect
                  of Designation.

                 

              
	
                (i) If
                  notice designating an Early Termination Date is given under Section
                  6(a)
                  or (b), the Early Termination Date will occur on the
                  date so designated, whether or not the
                  relevant Event of Default or Termination Event is
                  then continuing.

                 

              
	
                (ii) Upon
                  the occurrence or effective designation of an Early
                  Termination Date, no further
                  payments or deliveries under Section 2(a)(i) or 2(e) in respect
                  of the Terminated Transactions will be required to
                  be made, but without prejudice to the
                  other provisions of this Agreement. The amount,
                  if any, payable in
                  respect of an Early Termination Date shall
                  be
                  determined pursuant to Section 6(e).

                 

              
	
                (d) Calculations.

                 

              
	
                (i) Statement.
                  On
                  or as soon as reasonably practicable following the
                  occurrence of an Early
                  Termination Date, each
                  party will make the calculations on its
                  part, if any, contemplated by Section 6(e)
                  and will provide to the other party a statement (1) showing, in
                  reasonable detail, such calculations (including all relevant
                  quotations and specifying any amount
                  payable under Section 6(e)) and (2) giving
                  details of the
                  relevant account to which any
                  amount payable to it is to be paid. In the
                  absence of written confirmation from the
                  source of a quotation obtained in determining a Market
                  Quotation, the records of
                  the party obtaining such quotation will be conclusive
                  evidence of the existence and accuracy of such
                  quotation.

                 

              
	
                (ii) Payment
                  Date. An
                  amount calculated as being due in respect of any
                  Early Termination Date under Section 6(e) will
                  be payable on the day that notice of the amount payable
                  is effective (in the case of an Early
                  Termination Date which is designated or occurs as a result of
                  an Event of Default) and on the day
                  which is two Local Business Days after the day on
                  which notice of the amount payable is effective (in
                  the
                  case of an Early Termination Date which
                  is
                  designated as a result of a Termination
                  Event). Such amount will be paid together with (to the extent
                  permitted under applicable law)
                  interest thereon (before as well
                  as after judgment) in the Termination Currency, from (and including)
                  the relevant Early Termination Date to (but excluding) the date
                  such amount is paid, at the Applicable Rate. Such
                  interest will be calculated on the basis of daily
                  compounding and the actual
                  number of days elapsed.

                 

              
	
                (e) Payments
                  on Early Termination. If
                  an Early Termination Date
                  occurs, the following provisions shall apply based
                  on the parties' election in the Schedule of a payment measure,
                  either “Market Quotation” or “Loss”, and a
                  payment method, either the “First Method” or the “Second Method”. If the
                  parties fail to designate a payment
                  measure or payment method in the Schedule, it will be
                  deemed that “Market Quotation”
                  or the “Second Method”, as
                  the case may be, shall apply. The amount,
                  if any, payable in respect of an Early
                  Termination Date and determined pursuant to this Section will be
                  subject to any Set-off.

                 

              
	
                (i) Events
                  of Default. If
                  the Early Termination Date results from an Event of Default:—

                 

              
	
                (1) First
                  Method and Market Quotation.
                  If
                  the First Method and Market Quotation apply, the
                  Defaulting Party will
                  pay to the Non-defaulting Party the excess, if a positive
                  number, of (A) the
                  sum of the Settlement Amount (determined by the
                  Non-defaulting Party) in respect of the Terminated Transactions and
                  the Termination Currency Equivalent of the Unpaid Amounts owing
                  to the Non-defaulting Party over (B) the Termination Currency
                  Equivalent of the Unpaid Amounts owing to the
                  Defaulting Party.

                 

              
	
                (2) First
                  Method and Loss. If
                  the First Method and Loss apply, the
                  Defaulting Party will pay
                  to the Non-defaulting Party, if a positive number, the
                  Non-defaulting Party's Loss in respect
                  of this Agreement.

                 

              
	
                (3) Second
                  Method and Market Quotation. If
                  the Second Method and Market Quotation apply,
                  an amount will be payable equal to (A) the sum of the Settlement
                  Amount (determined by
                  the 

                 

              
	
                Non-defaulting
                  Party) in
                  respect of the Terminated Transactions and
                  the Termination Currency
                  Equivalent of the
                  Unpaid Amounts owing to the Non-defaulting Party less (B) the Termination
                  Currency Equivalent of the Unpaid Amounts owing to the
                  Defaulting Party. If that amount is a positive number, the
                  Defaulting Party will pay it to the Non-defaulting Party; if
                  it is a negative
                  number, the Non-defaulting
                  Party will pay the absolute value of that amount to the Defaulting
                  Party.

                 

              
	
                (4) Second
                  Method and Loss.
                  If
                  the Second Method and Loss apply, an
                  amount will be payable
                  equal to the Non-defaulting Party's Loss in respect of this
                  Agreement. If that amount is a
                  positive number, the
                  Defaulting Party will pay it to the Non-defaulting Party;
                  if it is a negative number, the Non-defaulting
                  Party will pay the absolute value of that amount
                  to the Defaulting Party.

                 

              
	
                (ii) Termination
                  Events. If
                  the Early Termination Date results from a Termination Event:—

                 

              
	
                (1) One
                  Affected Party.
                  If
                  there is one Affected Party, the amount payable will be determined
                  in accordance with Section
                  6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if Loss
                  applies, except that,
                  in either case, references to the Defaulting Party and
                  to the Non-defaulting Party will be deemed to be
                  references to the Affected Party and the party
                  which is not the Affected Party, respectively,
                  and, if Loss applies and fewer than all the Transactions are being
                  terminated, Loss shall be calculated in respect of all
                  Terminated Transactions.

                 

              
	
                (2) Two
                  Affected Parties. If
                  there are two Affected Parties:—

                 

              
	
                (A) if
                  Market Quotation applies, each party will determine
                  a Settlement Amount in respect of the Terminated
                  Transactions, and an amount will be payable
                  equal to (I) the sum of (a) one-half of the
                  difference between the Settlement Amount of the party with
                  the higher Settlement Amount (“X”) and the Settlement
                  Amount of the party with the
                  lower Settlement Amount (“Y”) and (b) the Termination
                  Currency Equivalent of the Unpaid Amounts owing
                  to X less (II) the Termination Currency Equivalent of the Unpaid
                  Amounts owing to Y; and

                 

              
	
                (B) if
                  Loss applies, each party will determine its
                  Loss in respect of this Agreement (or,
                  if fewer than all the Transactions are being terminated, in
                  respect of all Terminated Transactions) and an
                  amount will be payable equal to one-half
                  of
                  the difference between the Loss of
                  the party with the higher Loss (“X”) and
                  the Loss of the party with the lower
                  Loss (“Y”).

                 

              
	
                If
                  the amount payable is a positive number, Y will pay it to X; if
                  it is
                  a negative number, X will pay the absolute
                  value of that amount to Y.

                 

              
	
                (iii) Adjustment
                  for Bankruptcy. In
                  circumstances where an Early Termination Date occurs
                  because “Automatic Early Termination” applies in respect of a
                  party, the amount determined under
                  this Section 6(e) will be subject to such adjustments as
                  are appropriate and permitted by law to
                  reflect any payments or
                  deliveries made by one
                  party to the other under this Agreement (and retained
                  by such other party) during the period from the relevant
                  Early Termination Date to the date for
                  payment determined under Section 6(d)(ii).

                 

              
	
                (iv) Pre-Estimate.
                  The
                  parties
                  agree that if Market Quotation
                  applies an amount recoverable under
                  this Section 6(e) is a reasonable pre-estimate of loss and
                  not a penalty. Such amount is payable for
                  the loss of bargain and the loss of protection against
                  future risks and except as otherwise provided
                  in this Agreement neither party will be entitled to recover
                  any additional damages as a consequence
                  of such losses.

                 

              
	
                7. Transfer

                 

              
	
                Subject
                  to Section 6(b)(ii), neither this Agreement nor any interest or
                  obligation
                  in or under this Agreement
                  may be transferred (whether
                  by way of security or otherwise) by either party without
                  the prior written consent
                  of the other party, except that: —

                 

              
	
                (a) a
                  party may make such a transfer of this Agreement pursuant to
                  a consolidation or amalgamation
                  with, or merger with or into, or transfer of all or
                  substantially all its assets to,
                  another entity (but without
                  prejudice to any other right or remedy under this
                  Agreement); and

                 

              
	
                (b) a
                  party may make such a transfer of all or any part of its interest
                  in
                  any amount payable to it from
                  a Defaulting Party under Section 6(e).

                 

              
	
                Any
                  purported transfer that is not in compliance with this Section
                  will be
                  void.

                 

              
	
                8. Contractual
                  Currency

                 

              
	
                (a) Payment
                  in the Contractual Currency. Each
                  payment under this Agreement will be made in the
                  relevant currency specified
                  in this Agreement for that payment (the “Contractual Currency”). To the extent
                  permitted by applicable law, any obligation to make payments
                  under this Agreement in the Contractual
                  Currency will not be discharged or satisfied by any tender in
                  any currency other than the Contractual
                  Currency, except to the
                  extent such tender results in the actual receipt
                  by
                  the party to which payment is owed,
                  acting in a reasonable manner and
                  in good faith in converting the currency
                  so
                  tendered into the Contractual Currency, of the full amount
                  in the Contractual Currency of all amounts
                  payable in respect of this Agreement.
                  If for any reason the amount in the Contractual Currency so
                  received falls short of the amount in the
                  Contractual Currency payable
                  in respect of this Agreement, the party required
                  to
                  make the payment will, to the extent permitted by
                  applicable law, immediately pay such additional amount
                  in the Contractual Currency
                  as may be necessary to
                  compensate for the shortfall. If for any reason
                  the amount in the Contractual Currency
                  so received exceeds the amount
                  in the Contractual Currency payable
                  in
                  respect of this Agreement, the party
                  receiving the payment will refund promptly the amount of such
                  excess.

                 

              
	
                (b) Judgments.
                  To
                  the extent permitted by applicable law, if any judgment or
                  order expressed in a currency other than the
                  Contractual Currency is rendered (i) for the payment
                  of
                  any amount owing in respect
                  of this Agreement, (ii) for the payment of any
                  amount relating to any early
                  termination in respect of this
                  Agreement or (iii) in respect
                  of a judgment or order of another court for the
                  payment of any amount described
                  in (i) or (ii) above, the party seeking recovery, after
                  recovery in full of the aggregate amount to which such
                  party is entitled pursuant to the judgment or order, will
                  be entitled to receive immediately from the other
                  party the amount of any shortfall of the Contractual
                  Currency received by such party as a consequence of
                  sums paid in such other currency and will refund promptly
                  to the other party any excess of the Contractual
                  Currency received by such party as a consequence of sums paid in
                  such other currency if such shortfall or
                  such excess arises or results from any variation between the
                  rate of exchange at which the Contractual
                  Currency is converted into the
                  currency of the judgment or order for
                  the purposes of such judgment or order
                  and the rate of exchange at which such party is able,
                  acting in a reasonable manner and in good faith in
                  converting the currency received
                  into the Contractual Currency, to purchase
                  the Contractual Currency with
                  the amount of the currency of the judgment or order
                  actually received by such party. The term “rate of
                  exchange” includes, without
                  limitation, any premiums and costs
                  of
                  exchange payable in connection with the
                  purchase of or conversion into the Contractual
                  Currency.

                 

              
	
                (c) Separate
                  Indemnities. To
                  the extent permitted by applicable law,
                  these indemnities constitute separate and independent
                  obligations from the other obligations in this Agreement,
                  will be enforceable as separate and independent
                  causes of action, will apply notwithstanding any indulgence
                  granted by the party to which any payment is
                  owed and will not be affected by judgment being obtained or
                  claim or proof being made for any other sums
                  payable in respect of this Agreement.

                 

              
	
                (d) Evidence
                  of Loss. For
                  the purpose of this Section 8, it will be sufficient for
                  a party to demonstrate that it would have
                  suffered a loss had an actual exchange or purchase been made.

                 

              
	
                9. Miscellaneous

                 

              
	
                (a) Entire
                  Agreement. This
                  Agreement constitutes the entire agreement and understanding of the parties
                  with respect to its subject matter and supersedes all oral
                  communication and prior writings with respect
                  thereto.

                 

              
	
                (b) Amendments.
                  No
                  amendment, modification or waiver in respect of this
                  Agreement will be effective unless in writing
                  (including a writing evidenced by a facsimile transmission) and
                  executed
                  by each of the parties or confirmed by an
                  exchange of telexes or electronic messages on an electronic messaging
                  system.

                 

              
	
                (c) Survival
                  of Obligations. Without
                  prejudice to Sections 2(a)(iii) and 6(c)(ii),
                  the obligations of the parties under this
                  Agreement will survive the termination of any Transaction.

                 

              
	
                (d) Remedies
                  Cumulative. Except
                  as provided in this Agreement, the
                  rights, powers, remedies and
                  privileges provided in this Agreement are cumulative and not
                  exclusive of any rights, powers, remedies
                  and privileges provided by law.

                 

              
	
                (e) Counterparts
                  and Confirmations.

                 

              
	
                (i) This
                  Agreement (and each amendment, modification and waiver in respect
                  of it) may be executed and delivered in
                  counterparts (including by facsimile transmission), each
                  of which will be deemed an original.

                 

              
	
                (ii) The
                  parties intend that they are legally
                  bound by the terms of each Transaction
                  from the moment they agree to those terms
                  (whether orally or otherwise).
                  A Confirmation shall be entered into as
                  soon as practicable and may be executed and delivered in
                  counterparts (including by facsimile
                  transmission) or be created by an exchange of telexes or by an
                  exchange of electronic messages on an electronic messaging system,
                  which in
                  each case will be sufficient
                  for all purposes to evidence a binding supplement to
                  this Agreement. The parties will specify therein or
                  through another effective
                  means that any such counterpart, telex or electronic
                  message constitutes a
                  Confirmation.

                 

              
	
                (f) No
                  Waiver of Rights.
                  A
                  failure
                  or delay in exercising any right,
                  power or privilege in respect of this
                  Agreement will not
                  be presumed to operate
                  as
                  a waiver, and a single or partial exercise
                  of any right, power or privilege will not be
                  presumed to preclude any subsequent or further exercise, of that
                  right, power or privilege or the exercise of any other
                  right, power or privilege.

                 

              
	
                (g) Headings.
                  The
                  headings used in this Agreement are for convenience of reference
                  only and are not to affect the construction
                  of or to be taken into consideration in interpreting this
                  Agreement.

                 

              
	
                10. Offices;
                  Multibranch Parties

                 

              
	
                (a) If
                  Section 10(a) is specified in the Schedule as applying, each party
                  that
                  enters into a Transaction through an Office other
                  than its head or home office represents to the other party
                  that, notwithstanding the place of booking office
                  or jurisdiction
                  of incorporation or organisation
                  of
                  such party, the obligations of such party are the same
                  as if it had entered into the Transaction through its head
                  or
                  home office. This representation
                  will be deemed to be repeated by such party on each date on
                  which a Transaction is entered
                  into.

                 

              
	
                (b) Neither
                  party may change the Office through which it makes and
                  receives payments or deliveries
                  for the purpose of a Transaction without the prior written
                  consent of the other party.

              
	
                (c) If
                  a party is specified as a Multibranch Party in the Schedule, such
                  Multibranch Party may make
                  and receive payments or deliveries under
                  any Transaction through any Office listed
                  in
                  the Schedule, and the
                  Office through which it makes and receives payments or
                  deliveries with respect to a Transaction will be
                  specified in the relevant Confirmation.

                 

              
	
                11. Expenses

                 

              
	
                A
                  Defaulting Party will, on demand, indemnify and hold harmless the
                  other
                  party for and against all
                  reasonable out-of-pocket expenses, including legal fees and
                  Stamp Tax, incurred by such other party by
                  reason of the enforcement
                  and protection of its rights under this Agreement or
                  any Credit Support Document 

                 

              
	
                to which the Defaulting
                  Party is a party or by reason of the early
                  termination of any Transaction, including,
                  but not limited to, costs of collection.

                 

              
	
                12. Notices

                 

              
	
                (a) Effectiveness. Any
                  notice or other
                  communication in respect of this Agreement
                  may be given in any manner set forth below
                  (except that a notice or other communication
                  under Section 5 or 6 may not be given
                  by facsimile transmission or electronic messaging system) to the
                  address or number or in accordance with
                  the electronic messaging system details provided (see the
                  Schedule) and will be deemed effective as
                  indicated:—

                 

              
	
                (i) if
                  in writing and delivered in person or by courier, on the date it
                  is
                  delivered;

                 

              
	
                (ii) if
                  sent by telex, on the date the recipient's answerback is
                  received;

                 

              
	
                (iii) if
                  sent by facsimile transmission, on the date that transmission is
                  received by a responsible employee of  the
                  recipient in legible form (it being agreed that the burden of
                  proving receipt will be on the sender and
                  will not be met by a transmission report generated by
                  the sender's facsimile machine);

                 

              
	
                (iv) if
                  sent by certified or registered mail (airmail, if overseas) or
                  the equivalent (return receipt
                  requested), on the date that mail is delivered or its
                  delivery is attempted; or

                 

              
	
                (v) if
                  sent by electronic messaging system, on the date that electronic
                  message
                  is received, unless
                  the
                  date of that delivery (or attempted delivery) or that receipt,
                  as
                  applicable, is not a Local Business
                  Day or that communication
                  is delivered (or attempted)
                  or
                  received, as applicable, after the close of business
                  on a Local Business Day,
                  in which case that communication
                  shall be deemed given and effective on the first
                  following day that is a Local Business
                  Day.

              
	
                 

              
	
                (b) Change
                  of Addresses.
                  Either
                  party may by notice to the other change the
                  address, telex or facsimile
                  number or electronic messaging
                  system details at which notices
                  or
                  other communications are to be given to
                  it.

              
	
                 

              
	
                13. Governing
                  Law and Jurisdiction

                 

              
	
                (a) Governing
                  Law. This
                  Agreement will be governed by and construed
                  in accordance with the law
                  specified in the Schedule.

                 

              
	
                (b) Jurisdiction.
                  With
                  respect to any suit, action or
                  proceedings relating to this Agreement
                  (“Proceedings”), each party irrevocably:—

                 

              
	
                (i) submits
                  to the jurisdiction
                  of the English courts, if this Agreement
                  is expressed to be governed
                  by English law, or to the non-exclusive jurisdiction of the
                  courts of the State of New York and the
                  United States District Court located in the Borough of Manhattan
                  in New York City, if this
                  Agreement is expressed to be governed by the laws of the
                  State of New York; and

                 

              
	
                (ii) waives
                  any objection which it may have at any time to the laying
                  of venue of any Proceedings
                  brought in any such court, waives any claim that such
                  Proceedings have been brought in an
                  inconvenient forum and further waives the right to object,
                  with respect to such Proceedings, that
                  such court does not have any jurisdiction over such
                  party.

                 

              
	
                Nothing
                  in this Agreement precludes either party from bringing Proceedings
                  in any other jurisdiction
                  (outside, if this Agreement is expressed to be
                  governed by English law, the Contracting States, as defined
                  in Section 1(3) of
                  the Civil Jurisdiction and Judgments Act 1982 or
                  any modification, extension or
                  reenactment thereof for the time being in force) nor will
                  the bringing of Proceedings in any one or more
                  jurisdictions preclude the bringing of Proceedings in any
                  other jurisdiction.

                 

              
	
                (c) Service
                  of Process. Each
                  party
                  irrevocably appoints the Process Agent
                  (if any) specified opposite
                  its name in the Schedule
                  to receive, for it and on its behalf, service of process
                  in
                  any Proceedings. If for any reason
                  any party's Process Agent is unable to act as such, such party
                  will
                  promptly notify the other party
                  and within 30 days appoint a substitute process agent
                  acceptable to the other party. The parties irrevocably
                  consent to service of process given in the manner provided
                  for notices in Section 12. Nothing in this
                  Agreement will affect the right of either party to serve
                  process in any other manner permitted by law.

              
	
                 

              
	
                (d) Waiver
                  of Immunities. Each
                  party irrevocably waives, to the fullest
                  extent permitted by applicable
                  law, with respect to itself
                  and its
                  revenues and assets (irrespective of their use or
                  intended use), all immunity
                  on the grounds of sovereignty
                  or other similar grounds from
                  (i) suit, (ii) jurisdiction of any court, (iii) relief
                  by way of injunction, order
                  for specific performance or for recovery of property,
                  (iv) attachment of its assets
                  (whether before or after judgment) and (v) execution or
                  enforcement of any judgment to which it or its
                  revenues or assets might otherwise be entitled in any
                  Proceedings in the courts of any jurisdiction and
                  irrevocably agrees, to the extent permitted
                  by applicable law, that it will
                  not claim any such immunity in any
                  Proceedings.

                 

              
	
                14. Definitions

                 

              
	
                As
                  used in this Agreement:—

                 

              
	
                “Additional
                  Termination Event” has
                  the meaning specified in Section 5(b).

                 

              
	
                “Affected
                  Party” has
                  the meaning specified in Section 5(b).

                 

              
	
                “Affected
                  Transactions” means
                  (a) with respect to any Termination Event
                  consisting of an Illegality, Tax
                  Event or Tax Event Upon Merger, all Transactions
                  affected by the occurrence of such Termination Event
                  and (b) with respect to any other Termination Event,
                  all Transactions.

                 

              
	
                “Affiliate”
                  means,
                  subject to the Schedule, in relation to any person, any
                  entity controlled, directly or
                  indirectly, by the person, any entity that controls,
                  directly or indirectly, the person or
                  any entity directly or indirectly under common
                  control with the person. For this
                  purpose, “control” of any entity or person means
                  ownership of a majority of the voting power of the entity
                  or person.

                 

              
	
                “Applicable
                  Rate” means:—

                 

              
	
                (a) in
                  respect of obligations payable or deliverable (or which would have
                  been
                  but for Section 2(a)(iii))
                  by a Defaulting Party, the Default Rate;

                 

              
	
                (b) in
                  respect of an obligation
                  to pay an amount under Section 6(e) of
                  either party from and after the date
                  (determined in accordance with Section 6(d)(ii)) on which
                  that amount is payable, the Default Rate;

                 

              
	
                (c) in
                  respect of
                  all other obligations payable or deliverable
                  (or which would have been but for
                  Section 2(a)(iii)) by a Non-defaulting Party, the
                  Non-default Rate; and

                 

              
	
                (d) in
                  all other cases, the Termination Rate.

                 

              
	
                “Burdened
                  Party” has
                  the meaning specified in Section 5(b).

                 

              
	
                “Change
                  in Tax Law” means
                  the enactment,
                  promulgation, execution or ratification of,
                  or any change in or
                  amendment to, any law (or
                  in the application or official interpretation
                  of
                  any law) that occurs on or after the
                  date on which the relevant Transaction is entered
                  into.

                 

              
	
                “consent”
                  includes
                  a consent, approval, action, authorisation, exemption,
                  notice, filing, registration or
                  exchange control consent.

                 

              
	
                “Credit
                  Event Upon Merger” has
                  the meaning specified in Section 5(b).

                 

              
	
                “Credit
                  Support Document” means
                  any
                  agreement or instrument that is specified as such
                  in
                  this Agreement.

                 

              
	
                “Credit
                  Support Provider” has
                  the meaning specified in the Schedule.

                 

              
	
                “Default
                  Rate” means
                  a rate per annum equal to the cost (without proof or evidence of
                  any actual cost) to the relevant payee (as
                  certified by it) if it were to fund or of funding the relevant
                  amount plus
                  1% per
                  annum.

                 

              
	
                “Defaulting
                  Party” has
                  the meaning specified in Section 6(a).

                 

              
	
                “Early
                  Termination Date” means
                  the date determined in accordance with Section 6(a) or
                  6(b)(iv).

                 

              
	
                “Event
                  of Default” has
                  the meaning specified in Section 5(a) and,
                  if applicable, in the Schedule.

                 

              
	
                “Illegality”
                  has
                  the meaning specified in Section 5(b).

                 

              
	
                “Indemnifiable
                  Tax” means
                  any Tax other than a Tax that would not be imposed
                  in respect of a payment
                  under this Agreement but for a present or former connection
                  between the jurisdiction of the government or
                  taxation authority imposing
                  such Tax and the recipient of such payment or a person
                  related to such recipient
                  (including, without limitation, a connection arising from such
                  recipient or related person being or having
                  been a citizen or resident of such jurisdiction, or
                  being or having been organised,
                  present or engaged in a
                  trade or business in such jurisdiction, or having or having
                  had a permanent establishment or fixed place of
                  business in such jurisdiction,
                  but excluding a connection arising solely from such
                  recipient or related person
                  having executed, delivered, performed its obligations or
                  received a payment under, or enforced, this
                  Agreement or a Credit Support Document).

                 

              
	
                “law” includes
                  any treaty, law, rule
                  or regulation (as modified, in the case of tax matters,
                  by the practice of
                  any relevant governmental revenue authority) and
                  “lawful”
                  and
                  “unlawful”
                  will
                  be construed
                  accordingly.

                 

              
	
                “Local
                  Business Day” means,
                  subject to the Schedule, a day on which commercial
                  banks are open for business (including dealings
                  in foreign exchange and foreign currency deposits) (a)
                  in relation to any
                  obligation under Section 2(a)(i), in
                  the place(s) specified in the relevant Confirmation
                  or, if not so specified,
                  as otherwise agreed by
                  the parties in writing or determined pursuant
                  to
                  provisions contained, or incorporated
                  by reference, in this Agreement, (b) in relation
                  to any other payment, in the place where the relevant account
                  is located and, if different, in the principal
                  financial centre, if any, of the currency of
                  such payment, (c) in relation to any notice
                  or other communication, including notice contemplated under
                  Section 5(a)(i), in the
                  city specified in the address for notice provided by
                  the recipient and, in the case of a notice contemplated
                  by Section 2(b), in the place where the relevant
                  new account is to
                  be located and (d) in relation to
                  Section 5(a)(v)(2), in the
                  relevant locations for performance with respect to such Specified
                  Transaction.

                 

              
	
                “Loss”
                  means,
                  with respect to this Agreement or one or more Terminated Transactions,
                  as
                  the case may be, and
                  a party, the Termination Currency Equivalent of an amount
                  that party reasonably determines in good faith to be
                  its total losses and
                  costs (or
                  gain, in which case expressed
                  as
                  a negative number) in connection with this Agreement
                  or that Terminated Transaction
                  or group of Terminated Transactions, as the case may
                  be, including any loss of
                  bargain, cost of funding or, at the election of such
                  party but without duplication, loss or
                  cost incurred as a result
                  of its terminating, liquidating, obtaining or
                  reestablishing any hedge or related
                  trading position (or any gain
                  resulting from any of them). Loss includes losses and
                  costs
                  (or gains) in respect of any payment or delivery
                  required to have been made
                  (assuming satisfaction of each applicable
                  condition precedent) on or before the relevant Early Termination Date
                  and not made, except, so as to avoid duplication, if
                  Section 6(e)(i)(1) or (3) or
                  6(e)(ii)(2)(A) applies. Loss
                  does not include a party's legal fees and out-of-pocket expenses referred to under
                  Section
                  11. A party will determine its Loss as of the relevant
                  Early Termination Date, or, if that is not reasonably
                  practicable, as of the earliest date thereafter as is
                  reasonably practicable. A party may (but need not) determine
                  its Loss by reference to
                  quotations of relevant rates or prices from
                  one or more leading dealers in the relevant
                  markets.

                 

              
	
                “Market
                  Quotation” means,
                  with respect to one or more Terminated Transactions and
                  a party making the
                  determination, an amount determined on the basis of
                  quotations from Reference Market-makers. Each
                  quotation will be for an amount, if any, that would be paid
                  to such party (expressed as a negative number)
                  or by such party (expressed
                  as a positive number) in consideration of an
                  agreement between such party (taking
                  into account any existing Credit Support Document with
                  respect to the obligations of such party) and the
                  quoting Reference Market-maker to enter into a transaction (the
                  “Replacement Transaction”) that would
                  have the effect of preserving for such party the
                  economic equivalent of any payment or delivery (whether
                  the underlying obligation was absolute or contingent and
                  assuming the satisfaction of each applicable
                  condition precedent) by the
                  parties under Section 2(a)(i) in respect of such
                  Terminated Transaction or group
                  of Terminated Transactions that
                  would, but for the occurrence of the relevant
                  Early Termination Date, have been
                  required after that date. For
                  this purpose, Unpaid Amounts in respect of the Terminated Transaction or
                  group of Terminated Transactions are to be excluded but,
                  without limitation, any payment or delivery that
                  would, but for the relevant Early Termination Date, have
                  been required (assuming satisfaction of each
                  applicable condition precedent) after that Early Termination
                  Date is to be included. The Replacement
                  Transaction would be subject
                  to such documentation as such party and the Reference Market-maker may, in
                  good faith, agree. The
                  party making the determination (or its
                  agent) will request each Reference
                  Market maker to provide its quotation to the extent
                  reasonably practicable as of the same day and time
                  (without regard to different time zones) on or as soon as
                  reasonably practicable after the relevant Early
                  Termination Date. The day and
                  time as of which those quotations are to be obtained
                  will be selected in good
                  faith by the party obliged to
                  make a determination under Section 6(e), and,
                  if each party is so obliged, after
                  consultation with the other. If more than three quotations
                  are provided, the Market Quotation will be the
                  arithmetic mean of the quotations, without
                  regard to the quotations having the highest
                  and lowest values. If
                  exactly three such quotations are provided, the Market
                  Quotation will be the quotation remaining after
                  disregarding the highest and lowest quotations. For this
                  purpose, if more than one quotation has the same
                  highest value or lowest
                  value, then one of such quotations shall be disregarded.
                  If fewer than three quotations are provided, it will
                  be deemed that the Market Quotation in respect
                  of
                  such Terminated Transaction or group
                  of Terminated Transactions cannot be
                  determined.

              
	
              
	
                “Non-default
                  Rate” means
                  a rate
                  per annum equal to the cost (without proof or evidence of any actual cost)
                  to the Non-defaulting Party (as certified by it) if it were
                  to fund the relevant amount.

                 

              
	
                “Non-defaulting
                  Party” has
                  the meaning specified in Section 6(a).

                 

              
	
                “Office”
                  means
                  a branch or office of a party, which may be such party's head or
                  home
                  office.

                 

              
	
                “Potential
                  Event of Default” means
                  any
                  event which, with the giving of notice or
                  the lapse of time or both,
                  would constitute an Event of Default.

                 

              
	
                “Reference
                  Market-makers” means
                  four leading dealers in the relevant
                  market selected by the party
                  determining a Market Quotation in good faith (a) from among
                  dealers of the highest credit standing which
                  satisfy all the criteria that such party applies generally
                  at the time in deciding whether to offer or to make
                  an extension of credit and
                  (b) to the extent practicable, from among such dealers
                  having an office in the same city.

                 

              
	
                “Relevant
                  Jurisdiction” means,
                  with respect to a party, the jurisdictions (a) in
                  which the party is incorporated, organised, managed
                  and controlled or considered to have
                  its seat, (b) where an Office through
                  which the party is acting for purposes of this Agreement is
                  located, (c) in which the party executes this
                  Agreement and (d) in relation to any payment, from or
                  through which such payment is
                  made.

                 

              
	
                “Scheduled
                  Payment Date” means
                  a date on which a payment or delivery is to be
                  made under Section 2(a)(i)
                  with respect to a Transaction.

                 

              
	
                “Set-off”
                  means
                  set-off, offset, combination of accounts, right of retention or
                  withholding or similar right
                  or requirement to which
                  the payer of an amount
                  under Section 6 is entitled
                  or
                  subject (whether arising under
                  this Agreement, another contract, applicable law or
                  otherwise) that is exercised by, or imposed on, such
                  payer.

                 

              
	
                “Settlement
                  Amount” means,
                  with respect to a party and any Early Termination Date, the sum
                  of:—

                 

              
	
                (a) the
                  Termination Currency
                  Equivalent of the Market Quotations (whether
                  positive or negative) for each
                  Terminated Transaction or group
                  of Terminated Transactions for which
                  a
                  Market Quotation is determined; and

              
	
                 

              
	
                (b) such
                  party's Loss (whether positive or negative and without reference
                  to any Unpaid Amounts) for
                  each Terminated Transaction or
                  group of Terminated Transactions for which a Market Quotation cannot be
                  determined or would not (in the reasonable belief of the
                  party making the determination) produce a
                  commercially reasonable result.

                 

              
	
                “Specified
                  Entity” has
                  the meaning specified in the Schedule.

                 

              
	
                “Specified
                  Indebtedness” means,
                  subject to the Schedule, any obligation
                  (whether present or future,
                  contingent or otherwise, as principal or surety or
                  otherwise) in respect of borrowed money.

                 

              
	
                “Specified
                  Transaction” means,
                  subject
                  to the Schedule, (a) any transaction (including
                  an agreement with respect
                  thereto) now existing or hereafter
                  entered into between one party to this
                  Agreement (or any Credit Support Provider of such party or any
                  applicable Specified Entity of such party) and the other
                  party to this Agreement (or
                  any Credit Support Provider of
                  such
                  other party or
                  any applicable Specified Entity of
                  such other party) which is
                  a rate swap transaction, basis swap, forward rate
                  transaction, commodity
                  swap, commodity option, equity or
                  equity index swap, equity or equity index option, bond
                  option, interest rate option, foreign exchange transaction,
                  cap transaction, floor transaction, collar
                  transaction, currency swap
                  transaction, cross-currency rate swap
                  transaction, currency option or any other similar
                  transaction (including any option
                  with respect to any of these
                  transactions), (b) any combination of these
                  transactions and (c) any other
                  transaction identified as a Specified
                  Transaction in  this Agreement or the
                  relevant
                  confirmation.

                 

              
	
                “Stamp
                  Tax” means
                  any stamp, registration, documentation or similar tax.

                 

              
	
                “Tax”
                  means
                  any present
                  or future tax, levy, impost, duty, charge,
                  assessment or fee of any nature (including
                  interest, penalties and additions thereto) that is imposed
                  by any government or other taxing authority in
                  respect of any payment under this Agreement
                  other than a stamp, registration, documentation
                  or
                  similar tax.

                 

              
	
                “Tax
                  Event” has
                  the meaning specified in Section 5(b).

                 

              
	
                “Tax
                  Event Upon Merger” has
                  the meaning specified in Section 5(b).

                 

              
	
                “Terminated
                  Transactions” means
                  with respect to any Early Termination Date
                  (a) if resulting from a Termination Event, all Affected Transactions
                  and (b) if resulting from
                  an
                  Event of Default, all Transactions
                  (in either case) in effect immediately
                  before the effectiveness of the notice designating that Early Termination
                  Date (or, if “Automatic Early Termination”
                  applies, immediately before that Early Termination Date).

                 

              
	
                “Termination
                  Currency” has
                  the meaning specified in the Schedule.

                 

              
	
                “Termination
                  Currency Equivalent” means,
                  in respect of any
                  amount denominated in the Termination
                  Currency, such Termination Currency
                  amount and, in respect of any amount denominated in a currency other
                  than the Termination Currency
                  (the “Other Currency”), the amount in
                  the Termination Currency determined
                  by the party making the relevant determination as
                  being required to purchase such amount of such Other
                  Currency as at the relevant Early
                  Termination Date, or, if the relevant Market Quotation or Loss (as the case
                  may be), is determined as of a
                  later date, that later date, with the
                  Termination Currency at the rate equal to
                  the spot exchange rate of the foreign exchange agent
                  (selected as provided below) for the purchase of such
                  Other Currency with the Termination Currency at or about 11:00
                  a.m. (in the city in which such foreign
                  exchange agent is located) on such date as would be
                  customary for the determination of such a rate for the
                  purchase of such Other Currency for value on the
                  relevant Early Termination Date
                  or that later date. The
                  foreign exchange agent will, if only one party is obliged
                  to make a determination under Section 6(e), be
                  selected in good faith by that party and
                  otherwise will be agreed by the parties.

                 

              
	
                “Termination
                  Event” means
                  an Illegality, a Tax Event or a Tax Event Upon Merger or,
                  if specified to be
                  applicable, a Credit Event Upon Merger or an Additional
                  Termination Event.

                 

              
	
                “Termination
                  Rate” means
                  a rate per annum equal to the arithmetic mean of
                  the cost (without proof or
                  evidence of any actual cost) to each party (as
                  certified by such party) if it were to
                  fund or of funding such amounts.

                 

              
	
                “Unpaid
                  Amounts” owing
                  to any
                  party means, with respect to an Early Termination
                  Date, the aggregate of
                  (a) in respect of all Terminated
                  Transactions, the amounts
                  that became payable (or that would have become
                  payable but for Section 2(a)(iii)) to such party under
                  Section 2(a)(i) on or prior to such Early Termination
                  Date and which remain unpaid as at such Early
                  Termination Date and (b) in respect of each Terminated
                  Transaction, for each obligation
                  under Section 2(a)(i) which was (or
                  would have been but for
                  Section 2(a) (iii)) required
                  to be settled by delivery to such party on or prior to such Early Termination Date
                  and which has not been so settled as at such Early
                  Termination Date, an amount equal to the fair market value of that
                  which
                  was (or would have been) required to be delivered as of
                  the originally scheduled date for delivery, in each case
                  together with (to the extent permitted
                  under applicable law) interest, in the currency
                  of such amounts, from
                  (and including) the date such amounts or
                  obligations were or would have been required
                  to have been paid or
                  performed to (but excluding) such Early
                  Termination Date, at the Applicable Rate. Such
                  amounts of interest will be calculated on the basis of
                  daily compounding and the actual number of days
                  elapsed. The fair market value of any obligation referred to in
                  clause (b) above shall be reasonably
                  determined by the party
                  obliged to make the determination
                  under Section 6(e) or, if each party is so obliged,
                  it shall be the average of the Termination Currency
                  Equivalents of the fair market values reasonably
                  determined by both parties.

              
	
                 

              
	
                IN
                  WITNESS WHEREOF the parties have executed this document on the
                  respective dates specified below with effect from
                  the date specified on the first page of this
                  document.

              

      

      

      

      
        	
                THE
                  ROYAL BANK OF SCOTLAND PLC

                By:
                  Greenwich Capital Markets, Inc., its agent

              	
                NEWCASTLE
                  MORTGAGE SECURITIES

                TRUST
                  2006-1

                By:
                  Wilmington Trust Company, not in its

                individual
                  capacity, but solely as Owner
                  Trustee

              

      

      

      

      
        	
                By: _____________________________________

                Name: 

                Title:  

                Date:  

              	
                By: _____________________________________

                Name: 

                Title: 

                Date: 

              

      

      
 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
 

    

      

      (Multicurrency
        - Cross Border)

      

      

      ISDA®

      International
        Swaps and Derivatives Association, Inc.

      

      

      SCHEDULE
        

      to
        the 

      Master
        Agreement

      

      

      dated
        as
        of April 6, 2006

       

      between

      

      

      
        	
                THE
                  ROYAL BANK OF SCOTLAND PLC

              	
                
and

              	
                
NEWCASTLE
                  MORTGAGE SECURITIES TRUST 2006-1

                 

              
	
                _______________________________________

                ("Party
                  A")

              	 	
                _________________________________________

                ("Party
                  B")

              

      

      

      

      Part
        1

       

      Termination
        Provisions.

       

      (a) "Specified
        Entity"
        means in
        relation to Party A for the purpose of:

       

      
        	
                Section
                  5(a)(v),

              	
                Not
                  Applicable

              
	
                Section
                  5(a)(vi),

              	
                Not
                  Applicable

              
	
                Section
                  5(a)(vii),

              	
                Not
                  Applicable

              
	
                Section
                  5(b)(iv),

              	
                Not
                  Applicable

                 

              

      

      and
        in
        relation to Party B for the purpose of:

       

      
        	
                Section
                  5(a)(v),

              	
                Not
                  Applicable

              
	
                Section
                  5(a)(vi),

              	
                Not
                  Applicable

              
	
                Section
                  5(a)(vii),

              	
                Not
                  Applicable

              
	
                Section
                  5(b)(iv),

              	
                Not
                  Applicable

                 

              

      

      (b) "Specified
        Transaction"
        will
        have the meaning specified in Section 14 of this Agreement.

       

      (c) Certain
        Events of Default.
        The
        following Events of Default will apply to the parties as specified below,
        and
        the definition of "Event of Default" in Section 14 is deemed to be modified
        accordingly:

       

      Section
        5(a)(i) (Failure
        to Pay or Deliver)
        will
        apply to Party A and Party B; provided, however, that the reference to “third
        Local Business Day” shall be amended to be “second Local Business Day”.

      Section
        5(a)(ii) (Breach
        of Agreement)
        will
        not apply to Party A or Party B.

      Section
        5(a)(iii) (Credit
        Support Default)
        will
        apply to Party A and will not apply to Party B. 

      Section
        5(a)(iv) (Misrepresentation)
        will
        not apply to Party A or Party B. 

      Section
        5(a)(v) (Default
        under Specified Transaction)
        will
        not apply to Party A or Party B.

      Section
        5(a)(vi) (Cross
        Default)
        will
        not apply to Party A or Party B.

      Section
        5(a)(vii) (Bankruptcy)
        will
        apply to Party A and Party B; provided
        that
        clause (2) thereof shall not apply to Party B so long as the occurrence of
        the
        events described therein are due solely to the application of the priority
        of
        payments in the Indenture.

      Section
        5(a)(viii) (Merger
        without Assumption)
        will
        apply to Party A and will not apply to Party B.

       

      (d) Termination
        Events.
        The
        following Termination Events will apply to the parties as specified
        below:

       

      Section
        5(b)(i) (Illegality)
        will
        apply to Party A and Party B.

      Section
        5(b)(ii) (Tax
        Event)
        will
        apply to Party A and Party B.

      Section
        5(b)(iii) (Tax
        Event upon Merger)
        will
        apply to Party A and will not apply to Party B; provided for clarification
        that
        Party B may be a Burdened Party for purpose of this provision.

      Section
        5(b)(iv) (Credit
        Event upon Merger)
        will
        not apply to Party A or Party B.

      

      (e) The
        "Automatic
        Early Termination"
        provision of Section 6(a) of this Agreement will not apply to Party A and
        will
        not apply to Party B.

       

      (f) Payments
        on Early Termination.
        For the
        purpose of Section 6(e) of this Agreement:

       

      
        	 	
                (i)

              	
                Market
                  Quotation will apply.

              

      

       

      
        	 	
                (ii)

              	
                The
                  Second Method will apply.

              

      

       

      (g) "Termination
        Currency"
        means
        United States Dollars.

       

      (h) Additional
        Termination Events.
        The
        following Additional Termination Events will apply, in each case with respect
        to
        Party B as the sole Affected Party (unless otherwise provided
        below): 

       

      
        	 	
                (i)

              	
                Party
                       A fails to comply with the Downgrade Provisions as set forth
                  in Part 5(b).
                  For all purposes of this Agreement, Party A shall be the sole Affected
                  Party with respect to the occurrence of a Termination Event described
                  in
                  this Part 1(h)(i).

              

      

       

      
        	 	
                (ii)

              	
                The
                  trust
                  under the Indenture is terminated pursuant to the
                  Indenture.

              

      

       

      
        	 	
                (iii)

              	
                The
                  Indenture is amended or modified without the prior written consent
                  of
                  Party A, where such consent is required under the terms of the
                  Indenture.

              

      

       

      (iv)
        The
        Sale and Servicing Agreement is amended or modified without the prior written
        consent of Party A, where such consent is required under the terms of the
        Sale
        and Servicing Agreement.

       

      
        	 	
                (v)

              	
                Notice
                  of the requisite amount of the Majority Certificateholder’s intention to
                  exercise its option to purchase the Mortgage Loans pursuant to
                  Section
                  8.07 of the Indenture is given by the Servicer pursuant to Section
                  8.07(b)
                  of the Indenture (such event, an “Optional
                  Redemption”)
                  and the Transactions hereunder are not transferred to the Sponsor
                  or an
                  affiliate thereof in accordance with the provisions of Part 5(f)
                  hereof.
                  If an Additional Termination Event occurs under this Part 1(h)(v),
                  RBS is
                  required to designate an Early Termination Date and terminate this
                  Agreement in accordance with Section 6 of the Master
                  Agreement.

              

      

       

      
        	 	
                (v)

              	
                If
                  (i) the Depositor still has a reporting obligation with respect to
                  the Transaction hereunder pursuant to Regulation AB and (ii) Party A
                  has not, within 5 Business Days (without giving effect to any grace
                  period
                  otherwise provided herein or otherwise) after a Swap Disclosure
                  Event
                  complied with any of the provisions set forth in Part 5(o)(ii)
                  below, then
                  an Additional Termination Event shall have occurred with respect
                  to Party
                  A and Party A shall be the sole Affected Party with respect to
                  such
                  Additional Termination Event.

              

      

       

      Part
        2

       

      Tax
        Representations.

       

      (a) Payer
        Representations.
        For the
        purpose of Section 3(e) of this Agreement, Party A will make the following
        representation and Party B will make the following representation:

       

      It
        is not
        required by any applicable law, as modified by the practice of any relevant
        governmental revenue authority, of any Relevant Jurisdiction to make any
        deduction or withholding for or on account of any Tax from any payment (other
        than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to
        be made
        by it to the other party under this Agreement. In making this representation,
        it
        may rely on (i) the accuracy of any representations made by the other party
        pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of the
        agreement contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and
        the
        accuracy and effectiveness of any document provided by the other party pursuant
        to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the satisfaction
        of
        the agreement of the other party contained in Section 4(d) of this Agreement,
        provided
        that it
        shall not be a breach of this representation where reliance is placed on
        clause
        (ii) and the other party does not deliver a form or document under Section
        4(a)(iii) of this Agreement by reason of material prejudice to its legal
        or
        commercial position.

       

      (b) Payee
        Representations.
        For the
        purpose of Section 3(f) of this Agreement, Party A and Party B make the
        representations specified below, if any:

       

      
        	(i)  	
                Party
                  A represents that:

              

      

      

      (a)
        It is
        a tax resident of the United Kingdom.

      

      (b)
        It is
        a “foreign person” within the meaning of the U.S. Treasury Regulations
        concerning information reporting and backup withholding tax (as in effect
        January 1, 2001), unless Party A provides written notice to Party B that
        it is
        no longer a foreign person.

      

      (c)
        In
        respect of each Transaction it enters into through an office or discretionary
        agent in the United States or which otherwise is allocated (in whole or in
        part)
        for United States federal income tax purposes to such United States trade
        or
        business, each payment received or to be received by it under such Transaction
        (or portion thereof, if applicable) will be effectively connected with its
        conduct of a trade or business in the United States; and 

      

      (d)
        In
        respect of all other Transactions or portions thereof, no such payment received
        or to be received by it in connection with this Agreement is attributable
        to a
        trade or business carried on by it through a permanent establishment in the
        United States.

      

      
        	(ii)  	
                Party
                  B represents
                  that it is a Delaware statutory
                  trust.

              

      

      

       

      Part
        3

       

      Agreement
        to Deliver Documents.

       

      For
        the
        purpose of Sections 4(a)(i) and (ii) of this Agreement, each party agrees
        to
        deliver the following documents, as applicable:

       

      (a) Tax
        forms, documents or certificates to be delivered are:

       

      
        	
                Party
                  required to
                  deliver

                document

              	
                Form/Document/Certificate

              	
                Date
                  by which to be delivered

              
	
                Party
                  A and Party B

              	
                Any
                  form or document required or reasonably requested to allow the
                  other party
                  to make payments under the Agreement without any deduction or withholding
                  for or on account of any Tax, or with such deduction or withholding
                  at a
                  reduced rate.

              	
                Promptly
                  upon reasonable demand by the other
                  party.

              

      

      

       

      (b)
        Other
        documents to be delivered are:

       

      

      
        	
                Party
                  required
                  to

                deliver
                  document

              	
                Form/Document/Certificate

              	
                Date
                  by which

                to
                  be delivered

              	
                Covered
                  by

                Section 3(d)

                Representation

              
	
                Party
                  B

              	
                Certified
                  copy of the Board of Directors resolution (or equivalent authorizing
                  documentation) which sets forth the authority of each signatory
                  to this
                  Agreement and each Credit Support Document (if any) signing on
                  its behalf
                  and the authority of such party to enter into Transactions contemplated
                  and performance of its obligations hereunder.

              	
                Concurrently
                  with the execution and delivery of this Agreement.

              	
                Yes

              
	
                Party
                  A and Party B

              	
                Incumbency
                  Certificate (or, if available the current authorized signature
                  book or
                  equivalent authorizing documentation) specifying the names, titles,
                  authority and specimen signatures of the persons authorized to
                  execute
                  this Agreement which sets forth the specimen signatures of each
                  signatory
                  to this Agreement, each Confirmation and each Credit Support Document
                  (if
                  any) signing on its behalf.

              	
                Concurrently
                  with the execution and delivery of this Agreement unless previously
                  delivered and still in full force and effect.

              	
                Yes

              
	
                Party
                  B

              	
                An
                  executed copy of the Indenture.

              	
                Within
                  30 days after the date of this Agreement.

              	
                No

              
	
                Party
                  A and Party B

              	
                Opinions
                  of counsel of Party A and Party B reasonably satisfactory to each
                  of Party
                  A and Party B.

              	
                Concurrently
                  with the execution and delivery of the Confirmation.

              	
                No

              

      

      

       

      Part
        4.

       

      Miscellaneous.

       

      (a) Addresses
        for Notices.
        For the
        purposes of Section 12(a) of this Agreement: 

       

      Party
        A:

       

       

      Addresses
        for notices to Party A under Sections 5 or 6 (other than notices under Section
        5(a)(i)) shall be sent to:

      

      The
        Royal
        Bank of Scotland plc

      c/o
        RBS
        Financial Markets

      Level
        7,
        135 Bishopsgate

      London
        EC2M 3UR

      Attn:
        Head of Legal, Financial Markets 

      Tel:
        44
        207 085 5000

      Fax:
        44
        207 085 8411

      

      Copy
        To: 

      

      600
        Steamboat Road

      Greenwich,
        CT 06830

      Attn:
        Legal Department - Derivatives Documentation

      Tel.:
        203-618-2531/32

      Fax:
        203-618-2533/34

      

      All
        other
        notices to Party A shall be sent directly to the Office through which Party
        A is
        acting for the relevant Transaction, using the address and contact particulars
        specified in the Confirmation of that Transaction or otherwise
        notified.

      

      Newcastle
        Mortgage Securities Trust 2006-1

      c/o
        JPMorgan Chase Bank, N.A. 

      Worldwide
        Securities Services 

      4
        New
        York, Plaza 6th Floor 

      New
        York,
        New York 10004 

      Attention:
        Steve M. Husbands 

      Phone:
           212-623-4496 

      Fax:
               212-623-5930

      

      Copy
        To: 

      

      Fortress
        Investment Group

      1345
        Avenue of the Americas

      New
        York,
        New York 10105

      Attn:
        Debra Hess

      Tel:
        212-515-4672

      Fax:
        212-798-6060

       

      (b) Process
        Agent. For
        the
        purposes of Section 13(c) of this Agreement:

       

      Party
        A
        appoints as its Process Agent: Not Applicable.

       

      Party
        B
        appoints as its Process Agent: Not Applicable.

       

      (c) Offices.
        With
        respect to Party A, the provisions of Section 10(a) will apply to this
        Agreement.

       

      (d) Multibranch
        Party.
        For the
        purpose of Section 10(c) of this Agreement:

       

      Party
        A
        is a Multibranch Party and may act through its New York and London offices;
        and

      Party
        B
        is not a Multibranch Party.

       

      (e) Calculation
        Agent.
        The
        Calculation Agent is Party A.

       

      (f) Credit
        Support Document.
        In
        relation to Party A, Not Applicable; and in relation to Party B, the Indenture.
        

       

      (g) Credit
        Support Provider.

       

      Credit
        Support Provider means in relation to Party A: Not Applicable.

      Credit
        Support Provider means in relation to Party B: Not Applicable.

       

      (h) Governing
        Law.
        This
        Agreement will be governed by and construed in accordance with the laws of
        the
        State of New York (without reference to choice of law doctrine other than
        New
        York General Obligations Law Sections 5-1401 and 5-1402).

       

      (i) Netting
        of Payments.
        Subparagraph (ii) of Section 2(c) of this Agreement will apply to all
        Transactions (in each case starting from the date of this
        Agreement).

       

      (j) "Affiliate."
        Party B
        shall be deemed to have no Affiliates, including for purposes of Section
        6(b)(ii).

       

      (k) Jurisdiction.
        Section
        13(b) is hereby amended by: (i) deleting in the second line of subparagraph
        (i)
        thereof the word "non-", (ii) deleting “; and” from the end of subparagraph 1
        and inserting “.” at the end of such provision, and (iii) deleting the final
        paragraph thereof.

       

      (l) Waiver
        of Jury Trial.
        Each
        party waives, to the fullest extent permitted by applicable law, any right
        it
        may have to a trial by jury in respect of any suit, action or proceeding
        relating to this Agreement or any Credit Support Document. Each party certifies
        (i) that no representative, agent or attorney of the other party or any Credit
        Support Provider has represented, expressly or otherwise, that such other
        party
        would not, in the event of such a suit, action or proceeding, seek to enforce
        the foregoing waiver and (ii) acknowledges that it and the other party have
        been
        induced to enter into this Agreement and provide for any Credit Support
        Document, as applicable, by, among other things, the mutual waivers and
        certifications in this Section.

       

      (m) Consent
        to Recording.
        Each
        party (i) consents to the recording of the telephone conversations of trading
        and marketing personnel of the parties and their Affiliates in connection
        with
        this Agreement or any potential transaction and (ii) if applicable, agrees
        to
        obtain any necessary consent of, and give notice of such recording to, such
        personnel of it and its Affiliates. 

       

      (n) Severability.
        If any
        term, provision, covenant, or condition of this Agreement, or the application
        thereof to any party or circumstance, shall be held to be illegal, invalid
        or
        unenforceable (in whole or in part) for any reason, the remaining terms,
        provisions, covenants and conditions hereof shall continue in full force
        and
        effect as if this Agreement had been executed with the illegal, invalid or
        unenforceable portion eliminated, so long as this Agreement as so modified
        continues to express, without material change, the original intentions of
        the
        parties as to the subject matter of this Agreement and the deletion of such
        portion of this Agreement will not substantially impair the respective benefits
        or expectations of the parties to this Agreement.

       

      The
        parties shall endeavor to engage in good faith negotiations to replace any
        illegal, invalid or unenforceable term, provision, covenant or condition
        with a
        valid or enforceable term, provision, covenant or condition, the economic
        effect
        of which comes as close as possible to that of the illegal, invalid or
        unenforceable term, provision, covenant or condition.

       

      Part
        5.

       

      Other
        Provisions.

       

      (a) Definitions. 

       

      This
        Agreement, including each Confirmation and each Swap Transaction, is subject
        to
        the 2000 ISDA Definitions, as amended, supplemented, updated, and superseded
        from time to time (the "Definitions"), as published by the International
        Swaps
        and Derivatives Association, Inc. ("ISDA") and will be governed in all respects
        by the Definitions (except that references to "Swap Transactions" shall be
        deemed to be references to "Transactions"). The Definitions are incorporated
        by
        reference in, and made part of, this Agreement and each Confirmation as if
        set
        forth in full in this Agreement and such Confirmations. In the event of any
        inconsistency between the provisions of this Agreement and the Definitions,
        this
        Agreement will prevail (and, in the event of any inconsistency between any
        Confirmation and the Definitions, the Confirmation will control). Any reference
        in a Confirmation to any Definitions which are amended or supplemented in
        this
        Schedule shall be deemed to be a reference to such Definitions as so amended
        or
        supplemented, unless the Confirmation states, by specific reference to any
        such
        amendment or supplement, that such amendment or supplement will not apply
        in
        respect of the Transaction to which such Confirmation relates. Any capitalized
        terms used but not otherwise defined in this Agreement shall have the meanings
        assigned to them (or incorporated by reference) in that certain Indenture
        dated
        as of April 6, 2006 between Party B and JPMorgan Chase Bank, National
        Association, as Indenture Trustee (the "Indenture") . 

       

      (b) Downgrade
        Provisions. 

      

      If
        a
        Ratings Event (as defined below) occurs with respect to Party A (or any
        applicable credit support provider), then Party A shall, within (30) days
        of
        such Ratings Event subject to the Rating Agency Condition (as hereinafter
        defined) at its own expense (unless, within 30 days of such Ratings Event,
        each
        of Standard and Poor’s, a Division of McGraw-Hill Companies, Inc. (“S&P”)
        and Moody’s Investors Service, Inc. (“Moody’s) (each a “Rating Agency”) has
        reconfirmed the rating of the Notes which was in effect immediately prior
        to
        such Ratings Event), (i) assign this Transaction hereunder to a third party
        that
        meets or exceeds, or as to which any applicable credit support provider of
        such
        third party meets or exceeds, the Approved Ratings Thresholds (as defined
        below)
        on terms substantially similar to this Confirmation, (ii) obtain a guaranty
        of
        Party A’s obligations under this Transaction from a third party that meets or
        exceeds the Approved Ratings Threshold, in form and substance or (iii) post
        collateral. For purposes of this Transaction, a “Ratings Event” shall occur with
        respect to Party A (or any applicable credit support provider), if its
        short-term unsecured and unsubordinated debt ceases to be rated at least
“A-1”
by S&P, its long-term unsecured and unsubordinated debt is rated “A1 On
        Watch for Downgrade” or lower by Moody’s or its short-term unsecured debt is
        rated “P1 On Watch for Downgrade” or lower by Moody’s (such ratings being
        referred to herein as the “Approved Ratings Thresholds.”) If (a) Party A’s
        (or any applicable credit support provider’s) long-term unsecured and
        unsubordinated debt ceases to be rated at least “BBB-” or Party A’s (or any
        applicable credit support provider’s) short-term unsecured and unsubordinated
        debt ceases to be rated at least “A-3” or is withdrawn by S&P or (b) Party
        A’s (or any applicable credit support provider’s) long-term unsecured and
        unsubordinated debt is rated at “A3” or lower or Party A’s (or any applicable
        credit support provider’s) short-term unsecured and unsubordinated debt is rated
“P2” or lower by Moody’s then Party A shall, within (10) days of such downgrade
        or withdrawal, subject to the Rating Agency Condition (as hereinafter defined)
        and at its own expense (i) assign this Transaction hereunder to a third party
        that meets or exceeds, or as to which any applicable credit support provider
        of
        such third party meets or exceeds, the Approved Ratings Thresholds on terms
        substantially similar to this Confirmation or (ii) obtain a guaranty of Party
        A’s obligations under this Transaction from a third party that meets or exceeds
        the Approved Ratings Threshold. “Rating Agency Condition” means, with respect to
        any particular proposed act or omission to act hereunder that the party acting
        or failing to act must consult with each of the Rating Agencies then providing
        a
        rating of the Notes and receive from each of the Rating Agencies a prior
        written
        confirmation that the proposed action or inaction would not cause a downgrade
        or
        withdrawal of the then-current rating of the Notes.

       

      (c) Section
        3(a) of this Agreement is hereby amended to include the following additional
        representations after paragraph 3(a)(v):

       

      (vi)
        Eligible
        Contract Participant.
        It is an
        "eligible contract participant" as defined in section 1a(12) of the U.S.
        Commodity Exchange Act.

       

      (vii)
        Individual
        Negotiation.
        This
        Agreement and each Transaction hereunder is subject to individual negotiation
        by
        the parties.

       

      (viii)
        Relationship
        between Party A and Party B.
        Subject
        as provided in Part 5(g), each of Party A and Party B will be deemed to
        represent to the other on the date on which it enters into a Transaction
        or an
        amendment thereof that (absent a written agreement between Party A and Party
        B
        that expressly imposes affirmative obligations to the contrary for that
        Transaction):

       

      (1) Principal.
        It is
        acting as principal and not as agent when entering into this Agreement and
        each
        Transaction. 

       

      (2) Non-Reliance.
        It
        is
        acting for its own account and it has made its own independent decisions
        to
        enter into that Transaction and as to whether that Transaction is appropriate
        or
        proper for it based upon its own judgment and upon advice from such advisors
        as
        it has deemed necessary. It is not relying on any communication (written
        or
        oral) of the other party as investment advice or as a recommendation to enter
        into that Transaction; it being understood that information and explanations
        related to the terms and conditions of a Transaction shall not be considered
        investment advice or a recommendation to enter into that Transaction. No
        communication (written or oral) received from the other party shall be deemed
        to
        be an assurance or guarantee as to the expected results of that
        Transaction.

       

      (3) Evaluation
        and Understanding. It
        is
        capable of evaluating and understanding (on its own behalf or through
        independent professional advice), and understands and accepts, the terms,
        conditions and risks of this Agreement and each Transaction hereunder. It
        is
        also capable of assuming, and assumes, all financial and other risks of this
        Agreement and each Transaction hereunder. 

       

      (4) Status
        of Parties. The
        other
        party is not acting as a fiduciary or an advisor for it in respect of that
        Transaction. 

       

      (d) Section
        4
        is hereby amended by adding the following new agreement: 

       

      (f)
        Actions
        Affecting Representations. Party
        B
        agrees not to take any action during the term of this Agreement or any
        Transaction hereunder that renders or could render any of the representations
        and warranties in this Agreement untrue, incorrect, or incomplete, and if
        any
        event or condition occurs that renders or could render any such representation
        untrue, incorrect, or incomplete, Party B will immediately give written notice
        thereof to Party A.

       

      (e) Section
        1(c). For
        purposes of Section 1(c) of the Agreement, this Transaction shall be the
        sole
        Transaction under the Agreement. 

       

      (f) Transfer.
        

       

      Neither
        Party A nor Party B is permitted to assign, novate or transfer (whether by
        way
        of security or otherwise) as a whole or in part any of its rights,
        obligations or interests under this Agreement or any Transaction without
        the
        prior written consent of the other party; provided,
        however,
        that
        (i) upon an Optional Redemption, Party B will make such a transfer or assignment
        of this Agreement solely to NIC OTC LLC, so long as (x) if an Early Termination
        Date were to occur at the time of such transfer or assignment, Party A would
        have an obligation to make a payment pursuant to Section 6(e) of the Master
        Agreement and (y) NIC OTC LLC is the party exercising such Optional Redemption
        and is an affiliate of the Sponsor (a “Transferee”) provided,
        however, that
        prior to such transfer or assignment such Transferee must agree in writing
        with,
        and to the satisfaction of, the parties hereto that if after such transfer
        or
        assignment, Party A determines in its sole discretion that such transfer
        or
        assignment is inconsistent with Party A’s then current credit and risk
        management policies, an Additional Termination Event will occur and the
        Transferee will be the sole Affected Party under the transferred Agreement,
        (ii)
        Party A may make such a transfer or assignment of this Agreement pursuant
        to a
        consolidation or amalgamation with, or merger with or into, or transfer of
        substantially all of its assets to, another entity, or an incorporation,
        reincorporation or reconstitution, and (iii) Party A may transfer or assign
        this
        Agreement pursuant to and in accordance with Part 5(b) or Part 5(o) herein
        to
        any Person, including, without limitation, another of Party A’s offices,
        branches or affiliates (any such Person, office, branch or affiliate, a
“Transferee”) on at least five Business Days’ prior written notice to Party B
        and the Trustee; provided
        that,
        with respect to clauses (i) and (iii), (A) as of the date of such transfer
        the
        Transferee will not be required to withhold or deduct on account of a Tax
        from
        any payments under this Agreement unless the Transferee will be required
        to make
        payments of additional amounts pursuant to Section 2(d)(i)(4) of this Agreement
        in respect of such Tax (B) a Termination Event or Event of Default does not
        occur under this Agreement as a result of such transfer; (C) such notice
        is
        accompanied by a written instrument pursuant to which the Transferee acquires
        and assumes the rights and obligations of the transferring party so transferred;
        and (D) the transferring party will be responsible for any costs or expenses
        incurred in connection with such transfer. The transferring party to the
        Transaction will execute such documentation as is reasonably deemed necessary
        by
        the remaining party, for the effectuation of any such transfer. Notwithstanding
        the foregoing, no such transfer except for a transfer in connection with
        an
        Optional Redemption pursuant to clause (i) of this Part 5(f) shall be made
        unless the transferring party obtains a prior written acknowledgment from
        each
        of the Rating Agencies that, notwithstanding such transfer, the then-current
        ratings of the Notes will not be reduced or withdrawn. 

       

      Except
        as
        specified otherwise in the documentation evidencing a transfer or assignment,
        a
        transfer or assignment of all the obligations of the transferring party will
        constitute an acceptance and assumption of such obligations (and any related
        interests so transferred) by the Transferee, a novation of the Transferee
        in
        place of the transferring party with respect to such obligations (and any
        related interests so transferred), and a release and discharge by the remaining
        party of the transferring party from, and an agreement by the remaining party
        not to make any claim for payment, liability, or otherwise against the
        transferring party with respect to, such obligations from and after the
        effective date of the transfer.

       

      (g) Trustee
        Capacity. It
        is
        expressly understood and agreed by the parties hereto that (i) this Agreement
        is
        executed and delivered by Wilmington Trust Company, not individually or
        personally but solely as Owner Trustee for Newcastle Mortgage Securities
        Trust
        2006-1, in the exercise of the powers and authority conferred and vested
        in it,
        (ii) each of the representations, undertakings and agreements herein made
        on the
        part of Newcastle Mortgage Securities Trust 2006-1 is made and intended not
        as
        personal representations, undertakings and agreements by Wilmington Trust
        Company but is made and intended for the purpose of binding only Newcastle
        Mortgage Securities Trust 2006-1, (iii) nothing herein contained shall be
        construed as creating any liability on the part of 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 (iv) absent its wilful misconduct or gross negligence with respect
        to
        its obligations under the Trust Agreement, under no circumstances shall
        Wilmington Trust Company be personally liable for the payment of any
        indebtedness or expenses of the Newcastle Mortgage Securities Trust 2006-1
        or be
        liable for the breach or failure of any obligation, representation, warranty
        or
        covenant made or undertaken by Newcastle Mortgage Securities Trust 2006-1
        under
        this Agreement or any other related documents.

       

      (h) Proceedings.
        Party A
        shall not institute against or cause any other person to institute against,
        or
        join any other person in instituting against the Depositor or Party B, any
        bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
        or other proceedings under any federal or state bankruptcy, dissolution or
        similar law, for a period of one year and one day, or
        if
        different the applicable preference period then in effect,
        following indefeasible payment in full of the Notes. Nothing
        shall preclude, or be deemed to stop, Party A (i) from taking any action
        prior
        to the expiration of the aforementioned one year and one day period, or if
        longer the applicable preference period then in effect, in (A) any case or
        proceeding voluntarily filed or commenced by Party B or (B) any involuntary
        insolvency proceeding filed or commenced by a Person other than Party A,
        or (ii)
        from commencing against Party B or any of the Collateral any legal action
        which
        is not a bankruptcy, reorganization, arrangement, insolvency, moratorium,
        liquidation or similar proceeding. This Part 5(h) shall survive the termination
        of this Agreement.

       

      (i) Change
        of Account.
        Section
        2(b) of this Agreement is hereby amended by the addition of the following
        after
        the word "delivery" in the first line thereof:-

       

      "to
        another account in the same legal and tax jurisdiction as the original
        account"

      

      (j) Set-off.
        Notwithstanding
        any provision of this Agreement or any other existing or future agreements,
        each
        of Party A and Party B irrevocably waives as to itself any and all contractual
        rights it may have to set off, net, recoup or otherwise withhold or suspend
        or
        condition its payment or performance of any obligation to the other party
        under
        this Agreement against any obligation of one party hereto to the other party
        hereto arising outside of this Agreement (which Agreement includes without
        limitation, the Master Agreement to which this Schedule is attached, this
        Schedule and the Confirmation). The provisions for set-off set forth in Section
        6(e) of this Agreement shall not apply for purposes of this
        Transaction.

       

      (k) Notice
        of Certain Events or Circumstances.
        Each
        party agrees, upon learning of the occurrence or existence of any event or
        condition that constitutes (or that with the giving of notice or passage
        of time
        or both would constitute) an Event of Default or Termination Event with respect
        to such party, promptly to give the other party notice of such event or
        condition (or, in lieu of giving notice of such event or condition in the
        case
        of an event or condition that with the giving of notice or passage of time
        or
        both would constitute an Event of Default or Termination Event with respect
        to
        the party, to cause such event or condition to cease to exist before becoming
        an
        Event of Default or Termination Event); provided
        that
        failure to provide notice of such event or condition pursuant to this Part
        5(l)
        shall not constitute an Event of Default or a Termination Event.

       

      (l) Amendments.
        This
        Agreement will not be amended unless Party B shall have received (i) prior
        written confirmation from each of the Rating Agencies that such amendment
        will
        not cause it to downgrade or withdraw its then-current ratings of any
        outstanding Notes.
        

       

      (m) Gross-up.
        Section
        2(d)(i)(4) shall only apply in the event Party A is “X” and Party B is “Y”
thereunder.

       

      
        	
                (n)

              	
                Payment
                  Dates.
                  Notwithstanding anything to the contrary in the Agreement, (i)
                  Party B
                  will not be required to make any payment specified in a Confirmation
                  until
                  the next scheduled Payment Date (as defined in the Indenture) and
                  (ii) if
                  an amount is calculated as being due in respect of any Early Termination
                  Date under 6(e) from Party B to Party A, the payment will be due
                  on the
                  next subsequent Payment Date or if such Early Termination Date
                  is the
                  final Payment Date, on such final Payment
                  Date

              

      

       

      
        	
                (o)

              	
                Compliance
                  with Regulation AB.
                  

              

      

       

      (i) It
        shall
        be a swap disclosure event (“Swap Disclosure Event”) if, at any time after the
        date hereof while the Depositor has reporting obligations with respect to
        this
        Transaction pursuant to Regulation AB, the Depositor or Newcastle Investment
        Corp. (the “Sponsor”) notifies Party A that the aggregate “significance
        percentage” (calculated in accordance with the provisions of Item 1115 of
        Regulation AB) of all derivative instruments provided by Party A and any
        of its
        affiliates to Party B (collectively, the “Aggregate Significance Percentage”) is
        9% or more.

       

      (ii) Upon
        the
        occurrence of a Swap Disclosure Event while the Depositor has reporting
        obligations with respect to this Transaction pursuant to Regulation AB, Party
        A,
        at its own cost and expense (and without any expense or liability to the
        Depositor, the Sponsor, the Underwriters, the Depositor, the Trustee or the
        Issuing Entity), shall take one of the following actions:

       

      (a) provide
        to the Sponsor and the Depositor: (i) if the Aggregate Significance
        Percentage is 9% or more, but less than 20%, either, at the sole discretion
        of
        Party A, the information required under Item 1115(b)(1) or Item 1115(b)(2)
        of
        Regulation AB within 30 days of the Swap Disclosure Event (provided
        that
        if
        the significance percentage is or reaches 10% or higher on or after a Swap
        Disclosure Event, such information is to be provided within 5 Business Days)
        or
        (ii) if the Aggregate Significance Percentage is 20% or more, within five
        (5) Business Days, the information required under Item 1115(b)(2) of Regulation
        AB; or

       

      (b) within
        30
        days (provided
        that
        if
        the significance percentage is or reaches 10% or higher on or after a Swap
        Disclosure Event, Party A shall comply with this Part 5(o)(ii)(b) within
        5
        Business Days) assign its rights and delegate its obligations under the
        Transaction to a counterparty with the Approved Ratings Thresholds (or which
        satisfies the Rating Agency Condition), that (x) provides the information
        specified in clause (a) above to the Depositor and Sponsor and (y) enters
        into
        documentation substantially similar to the documentation then in place between
        Party A and Party B.

       

      
        	 	
                (iii)
                  For so long as the Aggregate Significance Percentage is 10% or
                  more the
                  Depositor has reporting obligations with respect to this Transaction,
                  Party A shall provide any updates to the information provided pursuant
                  to
                  clause (ii)(a) above to the Sponsor and the Depositor within five
                  (5)
                  Business Days following the availability thereof (but in no event
                  more
                  than 45 days after the end of each of Party A’s fiscal quarter for any
                  quarterly update, and in no event more than 90 days after the end
                  of Party
                  A’s fiscal year for any annual
                  update).

              

      

       

      (iv) All
        information provided pursuant to clause (ii) shall be in a form suitable
        for
        conversion to the format required for filing by the Depositor with the
        Commission via the Electronic Data Gathering and Retrieval System (EDGAR).
        The
        parties hereto acknowledge that electronic files in Adobe Acrobat format
        will be
        deemed to satisfy the requirements of this Party 5(o)(iv). In addition, any
        such
        information, if audited, shall be accompanied by any necessary auditor’s
        consents or, if such information is unaudited, shall be accompanied by an
        appropriate agreed-upon procedures letter from Party A’s accountants. If
        permitted by Regulation AB, any such information may be provided by reference
        to
        or incorporation by reference from reports filed pursuant to the Exchange
        Act.

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF,
        the
        parties have executed this document by their duly authorized officers with
        effect from the date so specified on the first page hereof.

       

      

       

      
        	
                THE
                  ROYAL BANK OF SCOTLAND PLC

                By:
                  Greenwich Capital Markets, Inc., its agent

              	
                NEWCASTLE
                  MORTGAGE SECURITIES

                TRUST
                  2006-1

                By:
                  Wilmington Trust Company, not in its

                individual
                  capacity, but solely as Owner Trustee

              
	
                ("Party
                  A")

              	
                ("Party
                  B")

                 

                 

              
	
                By:
                  ______________________________________

                Name:

                Title:

                Date:

              	
                By:
                  ______________________________________

                Name:

                Title:

                Date:

              

      

      

       

      

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    APPENDIX
      A

     

    DEFINITIONS

     

    “Accrual
      Period”: With respect to the Floating Rate Notes and each Payment Date, the
      period commencing on the preceding Payment Date (or in the case of the first
      such Accrual Period, commencing on the Closing Date) and ending on the day
      immediately preceding such Payment Date.

     

    “Additional
      Form 10-D Disclosure”: As defined in Section 4.02(a)(i) of the Sale and
      Servicing Agreement.

     

    “Adjustable-Rate
      Mortgage Loan”: A first lien Mortgage Loan which provides at any period during
      the life of such loan for the adjustment of the Mortgage Rate payable in respect
      thereto. The Adjustable-Rate Mortgage Loans are identified as such on the
      Mortgage Loan Schedule.

     

    “Adjusted
      Net Mortgage Rate”: With respect to any Mortgage Loan (or the related REO
      Property), as of any date of determination, a per annum rate of interest equal
      to the applicable Mortgage Rate for such Mortgage Loan as of the first day
      of
      the month preceding the month in which the related Payment Date occurs minus
      the
      sum of (i) the Indenture Trustee Fee Rate and (ii) the Servicing Fee
      Rate.

     

    “Adjustment
      Date”: With respect to each Adjustable-Rate Mortgage Loan, each adjustment date
      on which the Mortgage Rate of such Mortgage Loan changes pursuant to the related
      Mortgage Note. The first Adjustment Date following the Cut-off Date as to each
      Adjustable-Rate Mortgage Loan is set forth in the Mortgage Loan
      Schedule.

     

    “Administrator”:
      Newcastle Investment Corp. in the performance of its duties pursuant to Article
      VIII under the Sale and Servicing Agreement.

     

    “Advance”:
      As to any Mortgage Loan or REO Property, any advance made by the Servicer in
      respect of any Payment Date pursuant to Section 4.01 of the Sale and Servicing
      Agreement.

     

    “Advance
      Facility”: As defined in Section 3.29 of the Sale and Servicing
      Agreement.

     

    “Advance
      Facility Trustee”: As defined in Section 3.29 of the Sale and Servicing
      Agreement.

     

    “Advancing
      Person”: As defined in Section 3.29 of the Sale and Servicing
      Agreement.

     

    “Advance
      Reimbursement Amounts”: As defined in Section 3.29 of the Sale and Servicing
      Agreement.

     

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

     

    “Allocated
      Realized Loss Amount”: With respect to any Payment Date and any Class of
      Mezzanine Notes, the sum of (i) any Realized Loss allocated to such Class of
      Notes on such Payment Date and (ii) the amount of any Allocated Realized Loss
      Amount for such Class of Notes remaining unpaid from the previous Payment Date
      as reduced by an amount equal to the increase in the related Note Balance due
      to
      the receipt of Subsequent Recoveries. 

     

    “Assessment
      of Compliance”: As defined in Section 3.21 of the Sale and Servicing
      Agreement.

     

    “Assignment”:
      An assignment of Mortgage, notice of transfer or equivalent instrument, in
      recordable form, which is sufficient under the laws of the jurisdiction wherein
      the related Mortgaged Property is located to reflect or record the sale of
      the
      Mortgage.

     

    “Assignment
      Agreement”: The Assignment and Recognition Agreement, dated April 6, 2006, among
      the Seller, the Originator and the Depositor, pursuant to which certain of
      the
      Seller’s rights under the Master Agreement were assigned to the Depositor,
      substantially in the form attached as Exhibit A to the Sale and Servicing
      Agreement. 

     

    “Attestation
      Report”: As defined in Section 3.21 of the Sale and Servicing
      Agreement.

     

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

     

    “Authorized
      Officer”: With respect to the Issuer, any officer of the Owner Trustee 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 any authorized
      officer of the Servicer in its capacity as administrator of the Issuer pursuant
      to Article VIII of the Sale and Servicing Agreement.

     

    “Available
      Funds”: With respect to any Payment Date, an amount equal to the excess of (i)
      the sum of (a) the aggregate of the Monthly Payments on the Mortgage Loans
      due
      on the related Due Date and received on or prior to the related Determination
      Date, (b) Net Liquidation Proceeds, Insurance Proceeds, Principal Prepayments,
      Subsequent Recoveries, proceeds from repurchases of and substitutions for such
      Mortgage Loans and other unscheduled recoveries of principal and interest in
      respect of the Mortgage Loans received during the related Prepayment Period,
      (c)
      the aggregate of any amounts received in respect of a related REO Property
      withdrawn from any REO Account and deposited in the Collection Account for
      such
      Payment Date, (d) the aggregate of any amounts deposited in the Collection
      Account by the Servicer in respect of Prepayment Interest Shortfalls for such
      Payment Date, (e) the aggregate of any Advances made by the Servicer for such
      Payment Date, (f) the aggregate of any related advances made by the Indenture
      Trustee as successor Servicer for such Payment Date pursuant to Section 6.02
      of
      the Sale and Servicing Agreement over (ii) the sum of (a) amounts reimbursable
      or payable to the Servicer pursuant to Section 3.11(a) of the Sale and Servicing
      Agreement, the Indenture Trustee pursuant to Section 3.11(b) of the Sale and
      Servicing Agreement or the Swap Provider pursuant to Section 4.03 of the Sale
      and Servicing Agreement (including any Net Swap Payment and Swap Termination
      Payment owed to the Swap Provider but excluding any Swap Termination Payment
      owed to the Swap Provider resulting from a Swap Provider Trigger Event), (b)
      amounts deposited in the Collection Account or the Payment Account pursuant
      to
      clauses (a) through (f) above, as the case may be, in error, (c) the amount
      of
      any Prepayment Charges collected by the Servicer in connection with the full
      or
      partial prepayment of any of the Mortgage Loans, (d) the Indenture Trustee
      Fee
      payable from the Payment Account and (e) any indemnification payments or expense
      reimbursements made by the Trust pursuant to Section 5.03, Section 5.04 or
      Section 6.07 hereof.

     

    “Available
      Funds Rate”: For any Payment Date with respect to the Floating Rate Notes, a per
      annum rate equal to the product of (x) the weighted average of the Adjusted
      Net
      Mortgage Rates of the then outstanding Mortgage Loans minus an amount, expressed
      as a per annum rate, equal to the sum of (a) the product of (i) any Net Swap
      Payment owed to the Swap Provider divided by the aggregate Stated Principal
      Balance of the Mortgage Loans as of the last day of the prior Due Period and
      (ii) 12 and (b) the product of (i) any Swap Termination Payment (other than
      any
      Swap Termination Payment resulting from a Swap Provider Trigger Event), payable
      by the Issuer, divided by the aggregate Stated Principal Balance of the Mortgage
      Loans as of the last day of the prior Due Period and (ii) 12, multiplied by
      a
      fraction the numerator of which is the aggregate Stated Principal Balance of
      the
      Mortgage Loans as of the last day of the prior Due Period and the denominator
      of
      which is the aggregate Note Balance of the Floating Rate Notes immediately
      prior
      to such Payment Date and (y) a fraction, the numerator of which is 30 and the
      denominator of which is the actual number of days elapsed in the related
      Interest Accrual Period.

     

    “Bankruptcy
      Code”: The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code),
      as amended.

     

    “Basic
      Documents”: The Trust Agreement, the Certificate of Trust, the Indenture, the
      Sale and Servicing Agreement, the Assignment Agreement, the Interest Rate Swap
      Agreement, the Novation Agreement and the other documents and certificates
      delivered in connection with any of the above.

     

    “Basic
      Principal Payment Amount”: With respect to any Payment Date, the excess of (i)
      the Principal Remittance Amount for such Payment Date over (ii) the
      Overcollateralization Release Amount, if any, for such Payment
      Date.

     

    “Basis
      Risk Shortfall Amount”: With respect to any Class of Notes and any Payment Date,
      the sum of (i) the excess, if any, of (x) the amount of interest such Class
      of
      Notes for such Payment Date would have accrued on such Payment Date at its
      Note
      Rate (without regard to the Available Funds Rate) over (y) interest accrued
      on
      such Class of Notes at the Available Funds Rate and (ii) the unpaid portion
      of
      any Basis Risk Shortfall Amount from the prior Payment Dates together with
      interest accrued on such unpaid portion for the most recently ended Accrual
      Period at the related Note Rate (without regard to the Available Funds
      Rate).

     

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

     

    “Book-Entry
      Notes”: Beneficial interests in the Notes, ownership and transfers of which
      shall be made through book entries by the Depository as described in Section
      4.06 hereof.

     

    “Business
      Day”: Any day other than a Saturday, a Sunday or a day on which banking or
      savings institutions in the State of Delaware, the State of New York, the State
      of California, or in the city in which the Corporate Trust Office of the
      Indenture Trustee is located are authorized or obligated by law or executive
      order to be closed.

     

    “Certificate
      Distribution Account”: The account or accounts created and maintained pursuant
      to Section 3.10(c) of the Trust Agreement. The Certificate Distribution Account
      shall be an Eligible Account.

     

    “Certificate
      Paying Agent”: The meaning specified in Section 3.10 of the Trust
      Agreement.

     

    “Certificate
      Percentage Interest”: With respect to each Certificate, the Certificate
      Percentage Interest stated on the face thereof.

     

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

     

    “Certificate
      Registrar”: Initially, the Indenture Trustee, in its capacity as Certificate
      Registrar, or any successor to the Indenture Trustee in such
      capacity.

     

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

     

    “Certificates”
      or “Trust Certificates”: The Newcastle Mortgage Securities Trust 2006-1 Trust
      Certificates, Class C, Class XS and Class R, collectively evidencing the
      beneficial ownership interest in the Issuer and executed by the Owner Trustee
      in
      substantially the form set forth in Exhibit A to the Trust
      Agreement.

     

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

     

    “Certification”:
      As defined in Section 4.02(a)(iii) of the Sale and Servicing
      Agreement.

     

    “Class”:
      Collectively, all of the Notes bearing the same class designation.

     

    “Class
      A
      Notes”: Any of the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes or the
      Class A-4 Notes.

     

    “Class
      A-1 Notes”: Any one of the Class A-1 Notes executed by the Issuer and
      authenticated and delivered by the Indenture Trustee, substantially in the
      form
      annexed as Exhibit A-1 hereof.

     

    “Class
      A-2 Notes”: Any one of the Class A-2 Notes executed by the Issuer and
      authenticated and delivered by the Indenture Trustee, substantially in the
      form
      annexed as Exhibit A-2 hereof.

     

    “Class
      A-3 Notes”: Any one of the Class A-3 Notes executed by the Issuer and
      authenticated and delivered by the Indenture Trustee, substantially in the
      form
      annexed as Exhibit A-3 hereof.

     

    “Class
      A-4 Notes”: Any one of the Class A-4 Notes executed by the Issuer and
      authenticated and delivered by the Indenture Trustee, substantially in the
      form
      annexed as Exhibit A-4 hereof.

     

    “Class
      C
      Distribution Amount”: With respect to each Payment Date, the excess, if any, of
      (I) the sum of (a)(x) the excess of the Stated Principal Balance of the Mortgage
      Loans as of the last day of the prior Due Period over the aggregate Note Balance
      of the Floating Rate Notes, multiplied by (y) an interest rate equal to the
      Adjusted Net Mortgage Rate of the Mortgage Loans, divided by (z) 12, (b) any
      principal collections in respect of the Mortgage Loans to which the Certificates
      are entitled and (c) any Prepayment Charges collected during the related
      Prepayment Period, over (II) the aggregate of all Basis Risk Shortfall Amounts
      for such Payment Date.

     

    “Class
      M-1 Note”: Any
      one
      of the Class M-1 Notes executed by the Issuer and authenticated and delivered
      by
      the Indenture Trustee, substantially in the form annexed as Exhibit A-5
      hereof.

     

    “Class
      M-1 Principal Payment Amount”: With respect to any Payment Date, the excess of
      (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after taking
      into account the payment of the Senior Principal Payment Amount on such Payment
      Date) and (ii) the Note Balance of the Class M-1 Notes immediately prior to
      such
      Payment Date over (y) the lesser of (A) the product of (i) 63.90% and (ii)
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the last day
      of
      the related Due Period (after giving effect to scheduled payments of principal
      due during the related Due Period, to the extent received or advanced, and
      unscheduled collections of principal received during the related Prepayment
      Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans
      as
      of the last day of the related Due Period (after giving effect to scheduled
      payments of principal due during the related Due Period, to the extent received
      or advanced, and unscheduled collections of principal received during the
      related Prepayment Period) minus the Overcollateralization Floor.

     

    “Class
      M-2 Note”: Any one of the Class M-2 Notes executed by the Issuer and
      authenticated and delivered by the Indenture Trustee, substantially in the
      form
      annexed as Exhibit A-6 hereof.

     

    “Class
      M-2 Principal Payment Amount”: With respect to any Payment Date, the excess of
      (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after taking
      into account the payment of the Senior Principal Payment Amount on such Payment
      Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
      the payment of the Class M-1 Principal Payment Amount on such Payment Date)
      and
      (iii) the Note Balance of the Class M-2 Notes immediately prior to such Payment
      Date over (y) the lesser of (A) the product of (i) 70.20% and (ii) the aggregate
      Stated Principal Balance of the Mortgage Loans as of the last day of the related
      Due Period (after giving effect to scheduled payments of principal due during
      the related Due Period, to the extent received or advanced, and unscheduled
      collections of principal received during the related Prepayment Period) and
      (B)
      the aggregate Stated Principal Balance of the Mortgage Loans as of the last
      day
      of the related Due Period (after giving effect to scheduled payments of
      principal due during the related Due Period, to the extent received or advanced,
      and unscheduled collections of principal received during the related Prepayment
      Period) minus the Overcollateralization Floor.

     

    “Class
      M-3 Note”: Any one of the Class M-3 Notes executed by the Issuer and
      authenticated and delivered by the Indenture Trustee, substantially in the
      form
      annexed as Exhibit A-7 hereof.

     

    “Class
      M-3 Principal Payment Amount”: With respect to any Payment Date, the excess of
      (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after taking
      into account the payment of the Senior Principal Payment Amount on such Payment
      Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
      the payment of the Class M-1 Principal Payment Amount on such Payment Date),
      (iii) the Note Balance of the Class M-2 Notes (after taking into account the
      payment of the Class M-2 Principal Payment Amount on such Payment Date) and
      (iv)
      the Note Balance of the Class M-3 Notes immediately prior to such Payment Date
      over (y) the lesser of (A) the product of (i) 74.10% and (ii) the aggregate
      Stated Principal Balance of the Mortgage Loans as of the last day of the related
      Due Period (after giving effect to scheduled payments of principal due during
      the related Due Period, to the extent received or advanced, and unscheduled
      collections of principal received during the related Prepayment Period) and
      (B)
      the aggregate Stated Principal Balance of the Mortgage Loans as of the last
      day
      of the related Due Period (after giving effect to scheduled payments of
      principal due during the related Due Period, to the extent received or advanced,
      and unscheduled collections of principal received during the related Prepayment
      Period) minus the Overcollateralization Floor.

     

    “Class
      M-4 Note”: Any one of the Class M-4 Notes executed by the Issuer and
      authenticated and delivered by the Indenture Trustee, substantially in the
      form
      annexed as Exhibit A-8 hereof.

     

    “Class
      M-4 Principal Payment Amount”: With respect to any Payment Date, the excess of
      (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after taking
      into account the payment of the Senior Principal Payment Amount on such Payment
      Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
      the payment of the Class M-1 Principal Payment Amount on such Payment Date),
      (iii) the Note Balance of the Class M-2 Notes (after taking into account the
      payment of the Class M-2 Principal Payment Amount on such Payment Date), (iv)
      the Note Balance of the Class M-3 Notes (after taking into account the payment
      of the Class M-3 Principal Payment Amount on such Payment Date) and (v) the
      Note
      Balance of the Class M-4 Notes immediately prior to such Payment Date over
      (y)
      the lesser of (A) the product of (i) 77.30% and (ii) the aggregate Stated
      Principal Balance of the Mortgage Loans as of the last day of the related Due
      Period (after giving effect to scheduled payments of principal due during the
      related Due Period, to the extent received or advanced, and unscheduled
      collections of principal received during the related Prepayment Period) and
      (B)
      the aggregate Stated Principal Balance of the Mortgage Loans as of the last
      day
      of the related Due Period (after giving effect to scheduled payments of
      principal due during the related Due Period, to the extent received or advanced,
      and unscheduled collections of principal received during the related Prepayment
      Period) minus the Overcollateralization Floor.

     

    “Class
      M-5 Note”: Any one of the Class M-5 Notes executed by the Issuer and
      authenticated and delivered by the Indenture Trustee, substantially in the
      form
      annexed as Exhibit A-9 hereof.

     

    “Class
      M-5 Principal Payment Amount”: With respect to any Payment Date, the excess of
      (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after taking
      into account the payment of the Senior Principal Payment Amount on such Payment
      Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
      the payment of the Class M-1 Principal Payment Amount on such Payment Date),
      (iii) the Note Balance of the Class M-2 Notes (after taking into account the
      payment of the Class M-2 Principal Payment Amount on such Payment Date), (iv)
      the Note Balance of the Class M-3 Notes (after taking into account the payment
      of the Class M-3 Principal Payment Amount on such Payment Date), (v) the Note
      Balance of the Class M-4 Notes (after taking into account the payment of the
      Class M-4 Principal Payment Amount on such Payment Date) and (vi) the Note
      Balance of the Class M-5 Notes immediately prior to such Payment Date over
      (y)
      the lesser of (A) the product of (i) 80.40% and (ii) the aggregate Stated
      Principal Balance of the Mortgage Loans as of the last day of the related Due
      Period (after giving effect to scheduled payments of principal due during the
      related Due Period, to the extent received or advanced, and unscheduled
      collections of principal received during the related Prepayment Period) and
      (B)
      the aggregate Stated Principal Balance of the Mortgage Loans as of the last
      day
      of the related Due Period (after giving effect to scheduled payments of
      principal due during the related Due Period, to the extent received or advanced,
      and unscheduled collections of principal received during the related Prepayment
      Period) minus the Overcollateralization Floor.

     

    “Class
      M-6 Note”: Any one of the Class M-6 Notes executed by the Issuer and
      authenticated and delivered by the Indenture Trustee, substantially in the
      form
      annexed as Exhibit A-10 hereof.

     

    “Class
      M-6 Principal Payment Amount”: With respect to any Payment Date, the excess of
      (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after taking
      into account the payment of the Senior Principal Payment Amount on such Payment
      Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
      the payment of the Class M-1 Principal Payment Amount on such Payment Date),
      (iii) the Note Balance of the Class M-2 Notes (after taking into account the
      payment of the Class M-2 Principal Payment Amount on such Payment Date), (iv)
      the Note Balance of the Class M-3 Notes (after taking into account the payment
      of the Class M-3 Principal Payment Amount on such Payment Date), (v) the Note
      Balance of the Class M-4 Notes (after taking into account the payment of the
      Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note Balance
      of the Class M-5 Notes (after taking into account the payment of the Class
      M-5
      Principal Payment Amount on such Payment Date) and (vii) the Note Balance of
      the
      Class M-6 Notes immediately prior to such Payment Date over (y) the lesser
      of
      (A) the product of (i) 83.30% and (ii) the aggregate Stated Principal Balance
      of
      the Mortgage Loans as of the last day of the related Due Period (after giving
      effect to scheduled payments of principal due during the related Due Period,
      to
      the extent received or advanced, and unscheduled collections of principal
      received during the related Prepayment Period) and (B) the aggregate Stated
      Principal Balance of the Mortgage Loans as of the last day of the related Due
      Period (after giving effect to scheduled payments of principal due during the
      related Due Period, to the extent received or advanced, and unscheduled
      collections of principal received during the related Prepayment Period) minus
      the Overcollateralization Floor.

     

    “Class
      M-7 Note”: Any one of the Class M-7 Notes executed by the Issuer and
      authenticated and delivered by the Indenture Trustee, substantially in the
      form
      annexed as Exhibit A-11 hereof.

     

    “Class
      M-7 Principal Payment Amount”: With respect to any Payment Date, the excess of
      (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after taking
      into account the payment of the Senior Principal Payment Amount on such Payment
      Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
      the payment of the Class M-1 Principal Payment Amount on such Payment Date),
      (iii) the Note Balance of the Class M-2 Notes (after taking into account the
      payment of the Class M-2 Principal Payment Amount on such Payment Date), (iv)
      the Note Balance of the Class M-3 Notes (after taking into account the payment
      of the Class M-3 Principal Payment Amount on such Payment Date), (v) the Note
      Balance of the Class M-4 Notes (after taking into account the payment of the
      Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note Balance
      of the Class M-5 Notes (after taking into account the payment of the Class
      M-5
      Principal Payment Amount on such Payment Date), (vii) the Note Balance of the
      Class M-6 Notes (after taking into account the payment of the Class M-7
      Principal Payment Amount on such Payment Date) and (viii) the Note Balance
      of
      the Class M-6 Notes immediately prior to such Payment Date over (y) the lesser
      of (A) the product of (i) 86.10% and (ii) the aggregate Stated Principal Balance
      of the Mortgage Loans as of the last day of the related Due Period (after giving
      effect to scheduled payments of principal due during the related Due Period,
      to
      the extent received or advanced, and unscheduled collections of principal
      received during the related Prepayment Period) and (B) the aggregate Stated
      Principal Balance of the Mortgage Loans as of the last day of the related Due
      Period (after giving effect to scheduled payments of principal due during the
      related Due Period, to the extent received or advanced, and unscheduled
      collections of principal received during the related Prepayment Period) minus
      the Overcollateralization Floor.

     

    “Class
      M-8 Note”: Any one of the Class M-8 Notes executed by the Issuer and
      authenticated and delivered by the Indenture Trustee, substantially in the
      form
      annexed as Exhibit A-12 hereof.

     

    “Class
      M-8 Principal Payment Amount”: With respect to any Payment Date, the excess of
      (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after taking
      into account the payment of the Senior Principal Payment Amount on such Payment
      Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
      the payment of the Class M-1 Principal Payment Amount on such Payment Date),
      (iii) the Note Balance of the Class M-2 Notes (after taking into account the
      payment of the Class M-2 Principal Payment Amount on such Payment Date), (iv)
      the Note Balance of the Class M-3 Notes (after taking into account the payment
      of the Class M-3 Principal Payment Amount on such Payment Date), (v) the Note
      Balance of the Class M-4 Notes (after taking into account the payment of the
      Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note Balance
      of the Class M-5 Notes (after taking into account the payment of the Class
      M-5
      Principal Payment Amount on such Payment Date), (vii) the Note Balance of the
      Class M-6 Notes (after taking into account the payment of the Class M-6
      Principal Payment Amount on such Payment Date), (viii) the Note Balance of
      the
      Class M-7 Notes (after taking into account the payment of the Class M-7
      Principal Payment Amount on such Payment Date) and (ix) the Note Balance of
      the
      Class M-8 Notes immediately prior to such Payment Date over (y) the lesser
      of
      (A) the product of (i) 88.50% and (ii) the aggregate Stated Principal Balance
      of
      the Mortgage Loans as of the last day of the related Due Period (after giving
      effect to scheduled payments of principal due during the related Due Period,
      to
      the extent received or advanced, and unscheduled collections of principal
      received during the related Prepayment Period) and (B) the aggregate Stated
      Principal Balance of the Mortgage Loans as of the last day of the related Due
      Period (after giving effect to scheduled payments of principal due during the
      related Due Period, to the extent received or advanced, and unscheduled
      collections of principal received during the related Prepayment Period) minus
      the Overcollateralization Floor.

     

    “Class
      M-9 Note”: Any one of the Class M-9 Notes executed by the Issuer and
      authenticated and delivered by the Indenture Trustee, substantially in the
      form
      annexed as Exhibit A-13 hereof.

     

    “Class
      M-9 Principal Payment Amount”: With respect to any Payment Date, the excess of
      (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after taking
      into account the payment of the Senior Principal Payment Amount on such Payment
      Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
      the payment of the Class M-1 Principal Payment Amount on such Payment Date),
      (iii) the Note Balance of the Class M-2 Notes (after taking into account the
      payment of the Class M-2 Principal Payment Amount on such Payment Date), (iv)
      the Note Balance of the Class M-3 Notes (after taking into account the payment
      of the Class M-3 Principal Payment Amount on such Payment Date), (v) the Note
      Balance of the Class M-4 Notes (after taking into account the payment of the
      Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note Balance
      of the Class M-5 Notes (after taking into account the payment of the Class
      M-5
      Principal Payment Amount on such Payment Date), (vii) the Note Balance of the
      Class M-6 Notes (after taking into account the payment of the Class M-6
      Principal Payment Amount on such Payment Date), (viii) the Note Balance of
      the
      Class M-7 Notes (after taking into account the payment of the Class M-7
      Principal Payment Amount on such Payment Date), (ix) the Note Balance of the
      Class M-8 Notes (after taking into account the payment of the Class M-8
      Principal Payment Amount on such Payment Date) and (x) the Note Balance of
      the
      Class M-9 Notes immediately prior to such Payment Date over (y) the lesser
      of
      (A) the product of (i) 90.50% and (ii) the aggregate Stated Principal Balance
      of
      the Mortgage Loans as of the last day of the related Due Period (after giving
      effect to scheduled payments of principal due during the related Due Period,
      to
      the extent received or advanced, and unscheduled collections of principal
      received during the related Prepayment Period) and (B) the aggregate Stated
      Principal Balance of the Mortgage Loans as of the last day of the related Due
      Period (after giving effect to scheduled payments of principal due during the
      related Due Period, to the extent received or advanced, and unscheduled
      collections of principal received during the related Prepayment Period) minus
      the Overcollateralization Floor.

     

    “Class
      M-10 Note”: Any one of the Class M-10 Notes executed by the Issuer and
      authenticated and delivered by the Indenture Trustee, substantially in the
      form
      annexed as Exhibit A-14 hereof.

     

    “Class
      M-10 Principal Payment Amount”: With respect to any Payment Date, the excess of
      (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after taking
      into account the payment of the Senior Principal Payment Amount on such Payment
      Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
      the payment of the Class M-1 Principal Payment Amount on such Payment Date),
      (iii) the Note Balance of the Class M-2 Notes (after taking into account the
      payment of the Class M-2 Principal Payment Amount on such Payment Date), (iv)
      the Note Balance of the Class M-3 Notes (after taking into account the payment
      of the Class M-3 Principal Payment Amount on such Payment Date), (v) the Note
      Balance of the Class M-4 Notes (after taking into account the payment of the
      Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note Balance
      of the Class M-5 Notes (after taking into account the payment of the Class
      M-5
      Principal Payment Amount on such Payment Date), (vii) the Note Balance of the
      Class M-6 Notes (after taking into account the payment of the Class M-6
      Principal Payment Amount on such Payment Date), (viii) the Note Balance of
      the
      Class M-7 Notes (after taking into account the payment of the Class M-7
      Principal Payment Amount on such Payment Date), (ix) the Note Balance of the
      Class M-8 Notes (after taking into account the payment of the Class M-8
      Principal Payment Amount on such Payment Date), (x)
      the
      Note Balance of the Class M-9 Notes (after taking into account the payment
      of
      the Class M-9 Principal Payment Amount on such Payment Date)
      and (xi)
      the Note Balance of the Class M-10 Notes immediately prior to such Payment
      Date
      over (y) the lesser of (A) the product of (i) 92.50% and (ii) the aggregate
      Stated Principal Balance of the Mortgage Loans as of the last day of the related
      Due Period (after giving effect to scheduled payments of principal due during
      the related Due Period, to the extent received or advanced, and unscheduled
      collections of principal received during the related Prepayment Period) and
      (B)
      the aggregate Stated Principal Balance of the Mortgage Loans as of the last
      day
      of the related Due Period (after giving effect to scheduled payments of
      principal due during the related Due Period, to the extent received or advanced,
      and unscheduled collections of principal received during the related Prepayment
      Period) minus the Overcollateralization Floor.

     

    “Class
      M-11 Note”: Any one of the Class M-11 Notes executed by the Issuer and
      authenticated and delivered by the Indenture Trustee, substantially in the
      form
      annexed as Exhibit A-15 hereof.

     

    “Class
      M-11 Principal Payment Amount”: With respect to any Payment Date, the excess of
      (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after taking
      into account the payment of the Senior Principal Payment Amount on such Payment
      Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
      the payment of the Class M-1 Principal Payment Amount on such Payment Date),
      (iii) the Note Balance of the Class M-2 Notes (after taking into account the
      payment of the Class M-2 Principal Payment Amount on such Payment Date), (iv)
      the Note Balance of the Class M-3 Notes (after taking into account the payment
      of the Class M-3 Principal Payment Amount on such Payment Date), (v) the Note
      Balance of the Class M-4 Notes (after taking into account the payment of the
      Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note Balance
      of the Class M-5 Notes (after taking into account the payment of the Class
      M-5
      Principal Payment Amount on such Payment Date), (vii) the Note Balance of the
      Class M-6 Notes (after taking into account the payment of the Class M-6
      Principal Payment Amount on such Payment Date), (viii) the Note Balance of
      the
      Class M-7 Notes (after taking into account the payment of the Class M-7
      Principal Payment Amount on such Payment Date), (ix) the Note Balance of the
      Class M-8 Notes (after taking into account the payment of the Class M-8
      Principal Payment Amount on such Payment Date), (x) the Note Balance of the
      Class M-9 Notes (after taking into account the payment of the Class M-9
      Principal Payment Amount on such Payment Date), (xi) the Note Balance of the
      Class M-10 Notes (after taking into account the payment of the Class M-10
      Principal Payment Amount on such Payment Date) and (xii) the Note Balance of
      the
      Class M-11 Notes immediately prior to such Payment Date over (y) the lesser
      of
      (A) the product of (i) 93.50% and (ii) the aggregate Stated Principal Balance
      of
      the Mortgage Loans as of the last day of the related Due Period (after giving
      effect to scheduled payments of principal due during the related Due Period,
      to
      the extent received or advanced, and unscheduled collections of principal
      received during the related Prepayment Period) and (B) the aggregate Stated
      Principal Balance of the Mortgage Loans as of the last day of the related Due
      Period (after giving effect to scheduled payments of principal due during the
      related Due Period, to the extent received or advanced, and unscheduled
      collections of principal received during the related Prepayment Period) minus
      the Overcollateralization Floor.

     

    “Class
      XS
      Distribution Amount” With respect to each Payment Date, the excess, if any, of
      (I) the product of (x) a notional principal balance equal to the aggregate
      Note
      Balance of the Notes, (y) an interest rate equal to the excess of (a) the
      Adjusted Net Mortgage Rate of the Mortgage Loans over (b) the weighted average
      Note Rate for such Payment Date, and (z) the actual number of days in the
      immediately preceding Due Period divided by 360, over (II) the excess of the
      aggregate of all Basis Risk Shortfall Amounts over the amount calculated
      pursuant to clause (I) of the definition of Class C Distribution
      Amount.

     

    “Close
      of
      Business”: As used herein, with respect to any Business Day, 5:00 p.m. (New York
      time).

     

    “Closing
      Date”: April 6, 2006.

     

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

     

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

     

    “Collection
      Account”: The account or accounts created and maintained by the Servicer
      pursuant to Section 3.10(a) of the Sale and Servicing Agreement, which shall
      be
      entitled “Centex Home Equity Company, LLC, as Servicer for JPMorgan Chase Bank,
      N.A., as Indenture Trustee, in trust for the registered holders of Newcastle
      Mortgage Securities Trust 2006-1, Asset Backed Notes, Series 2006-1.” The
      Collection Account must be an Eligible Account.

     

    “Commission”:
      The Securities and Exchange Commission.

     

    “Compensating
      Interest”: As defined in Section 3.24 of the Sale and Servicing
      Agreement.

     

    “Corporate
      Trust Office”: With respect to the Indenture Trustee, Certificate Registrar,
      Certificate Paying Agent and Paying Agent, the principal corporate trust office
      of the Indenture Trustee and Note Registrar at which at any particular time
      its
      corporate trust business shall be administered, which office at the date of
      the
      execution of this instrument is located at 4 New York Plaza, 6th
      Floor,
      New York, New York 10004-2477, Attention: Worldwide Securities
      Services/Structured Finance Services: Newcastle Mortgage Securities Trust
      2006-1. With respect to the Owner Trustee, the principal corporate trust office
      of the Owner Trustee at which at any particular time its corporate trust
      business shall be administered, which office at the date of the execution of
      this Trust Agreement is located at Wilmington Trust Company, Rodney Square
      North, 1100 North Market Street, Wilmington, Delaware 19801, Attention:
      Newcastle Mortgage Securities Trust 2006-1.

     

    “Coupon
      Step Up Date”: The Payment Date following the Payment Date on which the
      aggregate Stated Principal Balance of the Mortgage Loans (after giving effect
      to
      scheduled payments of principal due during the related Due Period, to the extent
      received or advanced, and unscheduled collections of principal received during
      the related Prepayment Period) and REO Properties is equal to or less than
      10%
      of the Cut-off Date Principal Balance.

     

    “Custodian”:
      JPMorgan Chase Bank, N.A., as custodian of the Mortgage Files, or any successor
      thereto.

     

    “Cut-off
      Date”: With respect to each Original Mortgage Loan, on March 1,
      2006.

     

    “Cut-off
      Date Principal Balance”: With respect to any Mortgage Loan, the unpaid Stated
      Principal Balance thereof as of the Cut-off Date (or as of the applicable date
      of substitution with respect to a Qualified Substitute Mortgage Loan), after
      giving effect to scheduled payments due on or before the Cut-off Date, whether
      or not received.

     

    “Debt
      Service Reduction”: With respect to any Mortgage Loan, a reduction in the
      scheduled Monthly Payment for such Mortgage Loan by a court of competent
      jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
      constituting a Deficient Valuation or any reduction that results in a permanent
      forgiveness of principal.

     

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

     

    “Deferred
      Interest”: With respect to the Mezzanine Notes and any Payment Date, an amount
      equal to the sum of (a) the aggregate amount of interest accrued at the
      applicable Note Rate during the related Accrual Period on any Allocated Realized
      Loss Amount for such Class, (b) any amounts described in clause (a) for such
      Class for prior Payment Dates that remain unpaid, and (c) interest accrued
      for
      the Accrual Period related to such Payment Date on the amount in clause (b)
      at
      the Note Rate applicable to such Class.

     

    “Deficient
      Valuation”: With respect to any Mortgage Loan, a valuation of the related
      Mortgaged Property by a court of competent jurisdiction in an amount less than
      the then outstanding Stated Principal Balance of the Mortgage Loan, which
      valuation results from a proceeding initiated under the Bankruptcy
      Code.

     

    “Definitive
      Notes”: The meaning specified in Section 4.06 hereof.

     

    “Deleted
      Mortgage Loan”: A Mortgage Loan replaced or to be replaced with one or more
      Qualified Substitute Mortgage Loans.

     

    “Delinquency
      Percentage”: For any Payment Date, the percentage obtained by dividing (x) the
      aggregate Stated Principal Balance of Mortgage Loans that are Delinquent 60
      days
      or more (including any Mortgage Loan in bankruptcy and Delinquent 60 days or
      more), that are in foreclosure or that are REO Properties by (y) the aggregate
      Stated Principal Balance of the Mortgage Loans, in each case, as of the last
      day
      of the previous calendar month.

     

    “Delinquent”:
      A Mortgage Loan is “Delinquent” if any payment due thereon is not made by the
      Mortgagor by the close of business on the related Due Date. A Mortgage Loan
      is
“30 days Delinquent” if such payment has not been received by the close of
      business on the corresponding day of the month immediately succeeding the month
      in which such payment was due, or, if there is no such corresponding day (e.g.,
      as when a 30-day month follows a 31-day month in which a payment was due on
      the
      31st
      day of
      such month) then on the last day of such immediately succeeding month. Similarly
      for “60 days Delinquent,” “90 days Delinquent” and so on.

     

    “Depositor”:
      Financial Asset Securities Corp., a Delaware corporation, or its successor
      in
      interest.

     

    “Depository”
      or “Depository Agency”: The Depository Trust Company or a successor appointed by
      the Indenture Trustee. Any successor to the Depository shall be an organization
      registered as a “clearing agency” pursuant to Section 17A of the Exchange Act
      and the regulations of the Securities and Exchange Commission
      thereunder.

     

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

     

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

     

    “Directly
      Operate”: With respect to any REO Property, the furnishing or rendering of
      services to the tenants thereof, the management or operation of such REO
      Property, the holding of such REO Property primarily for sale to customers,
      the
      performance of any construction work thereon or any use of such REO Property
      in
      a trade or business conducted by the Issuer other than through an Independent
      Contractor; provided, however, that the Indenture Trustee (or the Servicer
      on
      behalf of the Indenture Trustee) shall not be considered to Directly Operate
      an
      REO Property solely because the Indenture Trustee (or the Servicer on behalf
      of
      the Indenture Trustee) establishes rental terms, chooses tenants, enters into
      or
      renews leases, deals with taxes and insurance, or makes decisions as to repairs
      or capital expenditures with respect to such REO Property

     

    “Due
      Date”: With respect to each Mortgage Loan and any Payment Date, the first day of
      the calendar month in which such Payment Date occurs on which the Monthly
      Payment for such Mortgage Loan was due (or, in the case of any Mortgage Loan
      under the terms of which the Monthly Payment for such Mortgage Loan was due
      on a
      day other than the first day of the calendar month in which such Payment Date
      occurs, the day during the related Due Period on which such Monthly Payment
      was
      due), exclusive of any days of grace.

     

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

     

    “Eligible
      Account”: Any of (i) an account or accounts maintained with a federal or state
      chartered depository institution or trust company the short-term unsecured
      debt
      obligations of which (or, in the case of a depository institution or trust
      company that is the principal subsidiary of a holding company, the short-term
      unsecured debt obligations of such holding company) are rated A-1 by S&P and
      P-1 by Moody’s (or comparable ratings if S&P, Moody’s and Fitch are not the
      Rating Agencies) at the time any amounts are held on deposit therein, (ii)
      an
      account or accounts the deposits in which are fully insured by the FDIC (to
      the
      limits established by such corporation), the uninsured deposits in which account
      are otherwise secured such that, as evidenced by an Opinion of Counsel delivered
      to the Indenture Trustee and to each Rating Agency, the Noteholders will have
      a
      claim with respect to the funds in such account or a perfected first priority
      security interest against such collateral (which shall be limited to Permitted
      Investments) securing such funds that is superior to claims of any other
      depositors or creditors of the depository institution with which such account
      is
      maintained, (iii) a trust account or accounts maintained with the trust
      department of a federal or state chartered depository institution, national
      banking association or trust company acting in its fiduciary capacity or (iv)
      an
      account otherwise acceptable to each Rating Agency without reduction or
      withdrawal of their then current ratings of the Notes as evidenced by a letter
      from each Rating Agency to the Indenture Trustee. Eligible Accounts may bear
      interest.

     

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

     

    “Escrow
      Account”: The account or accounts created and maintained pursuant to Section
      3.09 of the Sale and Servicing Agreement.

     

    “Escrow
      Payments”: The amounts constituting ground rents, taxes, assessments, water
      rates, fire and hazard insurance premiums and other payments required to be
      escrowed by the Mortgagor with the mortgagee pursuant to any Mortgage
      Loan.

     

    “Estate
      in Real Property”: A fee simple estate in a parcel of land.

     

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

     

    (i) a
      failure
      by the Issuer to pay the Monthly Interest Payable Amount on any of the Notes
      or
      the Principal Payment Amount on any Payment Date; or

     

    (ii) the
      failure by the Issuer on a respective Final Stated Maturity Date to reduce
      the
      Note Balance of any of the Notes to zero; or

     

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

     

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

     

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

     

    (vi) the
      Issuer becomes subject to federal income tax.

     

    “Excess
      Overcollateralized Amount”: With respect to the Floating Rate Notes and any
      Payment Date, the excess, if any, of (i) the Overcollateralized Amount for
      such
      Payment Date assuming that 100% of the Principal Remittance Amount is applied
      as
      a principal payment on such Payment Date over (ii) the Overcollateralization
      Target Amount for such Payment Date.

     

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

     

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

     

    “Extra
      Principal Payment Amount”: With respect to any Payment Date, the lesser of (x)
      the sum of (A) the Net Monthly Excess Cashflow for such Payment Date and (B)
      any
      amounts received under the Interest Rate Swap Agreement for this purpose and
      (y)
      the Overcollateralization Deficiency Amount for such Payment Date.

     

    “Fannie
      Mae”: Fannie Mae, formerly known as the Federal National Mortgage Association,
      or any successor thereto.

     

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

     

    “Final
      Stated Maturity Date”: With respect to each Class of Notes, the Payment Date in
      April 2036. 

     

    “Final
      Recovery Determination”: With respect to any defaulted Mortgage Loan or any REO
      Property (other than a Mortgage Loan or REO Property (i) repurchased by the
      Originator or purchased by the Servicer pursuant to or as contemplated by
      Section 2.03 or Section 3.16(c) of the Sale and Servicing Agreement or (ii)
      removed from the Trust pursuant to Section 8.07 hereof), a determination made
      by
      the Servicer that all Insurance Proceeds, Net Liquidation Proceeds and other
      payments or recoveries which the Servicer, in its reasonable good faith
      judgment, expects to be finally recoverable in respect thereof have been so
      recovered. The Servicer shall maintain records, prepared by a Servicing Officer,
      of each Final Recovery Determination made thereby.

     

    “Fixed-Rate
      Mortgage Loan”: A first or second lien Mortgage Loan which provides for a fixed
      Mortgage Rate payable with respect thereto. The Fixed-Rate Mortgage Loans are
      identified as such on the Mortgage Loan Schedule.

     

    “Fixed
      Swap Payment”: With respect to any Payment Date, a fixed amount equal to the
      product of (i) 4.985%, (ii) the related Notional Amount (as defined in the
      Interest Rate Swap Agreement), (iii) 250 and (iv) a fraction, the numerator
      of
      which is 30, and the denominator of which is 360.

     

    “Floating
      Rate Notes”: The Class A Notes and Mezzanine Notes.

     

    “Floating
      Swap Payment”: With respect to any Payment Date, a floating amount equal to the
      product of (i) Swap LIBOR, (ii) the related Notional Amount (as defined in
      the
      Interest Rate Swap Agreement), (iii) 250 and (iv) a fraction, the numerator
      of
      which is the actual number of days elapsed from and including the previous
      Floating Rate Payer Payment Date (as defined in the Interest Rate Swap
      Agreement) to but excluding the current Floating Rate Payer Payment Date, and
      the denominator of which is 360.

     

    “Form
      8-K
      Disclosure Information”: As defined in Section 4.02(a)(ii) of the Sale and
      Servicing Agreement.

     

    “Freddie
      Mac”: Freddie Mac, formerly known as the Federal Home Loan Mortgage Corporation,
      or any successor thereto.

     

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

     

    “Gross
      Margin”: With respect to each Adjustable-Rate Mortgage Loan, the fixed
      percentage set forth in the related Mortgage Note that is added to the Index
      on
      each Adjustment Date in accordance with the terms of the related Mortgage Note
      used to determine the Mortgage Rate for such Adjustable-Rate Mortgage
      Loan.

     

    “Highest
      Priority”: As of any date of determination, the Class of Mezzanine Notes then
      outstanding with a Note Balance greater than zero, with the highest priority
      for
      payments pursuant to Section 3.05 hereof, in the following order: Class M-1,
      Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8,
      Class M-9, Class M-10 and Class M-11 Notes.

     

    “Indemnified
      Parties”: The meaning specified in Section 7.02 of the Trust
      Agreement.

     

    “Indenture”:
      The indenture dated as of April 6, 2006, between the Issuer and the Indenture
      Trustee, relating to the Newcastle Mortgage Securities Trust 2006-1,
      Asset-Backed Notes, Series 2006-1.

     

    “Indenture
      Trustee”: JPMorgan Chase Bank, N.A., and its successors and assigns or any
      successor indenture trustee appointed pursuant to the terms of the
      Indenture.

     

    “Indenture
      Trustee Fee”: The
      amount payable to the Indenture Trustee on each Payment Date pursuant to Section
      6.07 hereof as compensation for all services rendered by it in the execution
      of
      the trust hereby created and in the exercise and performance of any of the
      powers and duties of the Indenture Trustee hereunder, which amount shall equal
      one-twelfth of the product of (i) the Indenture Trustee Fee Rate and (ii) the
      aggregate Stated Principal Balance of the Mortgage Loans as of the first day
      of
      the related Due Period; provided that the Indenture Trustee Fee shall not be
      less than $7,500 per annum.

     

    “Indenture
      Trustee Fee Rate”: 0.0050% per annum.

     

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

     

    “Independent
      Certificate”: A certificate or opinion to be delivered to the Indenture Trustee
      under the circumstances described in, and otherwise complying with, the
      applicable requirements of Section 10.01 hereof, made by an independent
      appraiser or other expert appointed by an Issuer Request, 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.

     

    “Independent
      Contractor”: Either (i) any Person (other than the Servicer) that would be an
“independent contractor” with respect to the Issuer within the meaning of
      Section 856(d)(3) of the Code if the Issuer were a real estate investment trust
      (except that the ownership tests set forth in that section shall be considered
      to be met by any Person that owns, directly or indirectly, 35% or more of any
      Class of Notes), so long as the Issuer does not receive or derive any income
      from such Person and provided that the relationship between such Person and
      the
      Issuer is at arm’s length, all within the meaning of Treasury Regulation Section
      1.856-4(b)(5), or (ii) any other Person (including the Servicer) if the
      Indenture Trustee has received an Opinion of Counsel to the effect that the
      taking of any action in respect of any REO Property by such Person, subject
      to
      any conditions therein specified, that is otherwise herein contemplated to
      be
      taken by an Independent Contractor will not cause such REO Property to cease
      to
      qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of
      the Code (determined without regard to the exception applicable for purposes
      of
      Section 860D(a) of the Code), or cause any income realized in respect of such
      REO Property to fail to qualify as Rents from Real Property.

     

    “Index”:
      With respect to each Adjustable-Rate Mortgage Loan and with respect to each
      related Adjustment Date, the index as specified in the related Mortgage
      Note.

     

    “Initial
      Note Balance”: As set forth in Section 2.02 hereof.

     

    “Insurance
      Proceeds”: Proceeds of any title policy, hazard policy or other insurance policy
      covering a Mortgage Loan to the extent such proceeds are received by the
      Servicer and are not to be applied to the restoration of the related Mortgaged
      Property or released to the Mortgagor in accordance with the procedures that
      the
      Servicer would follow in servicing mortgage loans held for its own account,
      subject to the terms and conditions of the related Mortgage Note and
      Mortgage.

     

    “Interest
      Determination Date”: With respect to the Floating Rate Notes and each Accrual
      Period, the second LIBOR Business Day preceding the commencement of such Accrual
      Period.

     

    “Interest
      Rate Swap Agreement”: The 1992 ISDA Master Agreement (Multicurrency-Cross
      Border) dated as of April 6, 2006 (together with the schedule thereto, the
      Master Agreement) between the Swap Provider and the Trust and a Novation
      Agreement (the “Novation Agreement”), dated as of April 6, 2006, among the Swap
      Provider, the Sponsor and the Trust with respect to a confirmation between
      the
      Swap Provider and the Sponsor dated March 16, 2006, which supplements and forms
      part of the Master Agreement.

     

    “Interest
      Remittance Amount”: With respect to any Payment Date, that portion of the
      Available Funds for such Payment Date allocable to interest received or advanced
      on the Mortgage Loans.

     

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

     

    “IRS”:
      The Internal Revenue Service.

     

    “Issuer”:
      Newcastle Mortgage Securities Trust 2006-1, a Delaware statutory trust, or
      its
      successor in interest.

     

    “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.

     

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

     

    “LIBOR”:
      With respect to each Accrual Period, the rate determined by the Indenture
      Trustee on the related Interest Determination Date on the basis of the London
      interbank offered rate for one-month United States dollar deposits, as such
      rate
      appears on the Telerate Page 3750, as of 11:00 a.m. (London time) on such
      Interest Determination Date. If such rate does not appear on Telerate Page
      3750,
      the rate for such Interest Determination Date will be determined on the basis
      of
      the offered rates of the Reference Banks for one-month United States dollar
      deposits, as of 11:00 a.m. (London time) on such Interest Determination Date.
      The Indenture Trustee will request the principal London office of each of the
      Reference Banks to provide a quotation of its rate. On such Interest
      Determination Date, LIBOR for the related Accrual Period will be established
      by
      the Indenture Trustee as follows:

     

    (1)  If
      on
      such Interest Determination Date two or more Reference Banks provide such
      offered quotations, LIBOR for the related Accrual Period shall be
      the      

    arithmetic
      mean of such offered quotations (rounded upwards if necessary to the nearest
      whole multiple of 1/16 of 1%); and

     

    (2)  If
      on
      such Interest Determination Date fewer than two Reference Banks provide such
      offered quotations, LIBOR for the related Accrual Period shall be 

    the
      higher of (i) LIBOR as determined on the previous Interest Determination Date
      and (ii) the Reserve Interest Rate.

     

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

     

    “Lien”:
      Any mortgage, deed of trust, pledge, conveyance, hypothecation, assignment,
      participation, deposit arrangement, encumbrance, lien (statutory or other),
      preference, priority right or interest or other security agreement or
      preferential arrangement of any kind or nature whatsoever, including, without
      limitation, any conditional sale or other title retention agreement, any
      financing lease having substantially the same economic effect as any of the
      foregoing and the filing of any financing statement under the UCC (other than
      any such financing statement filed for informational purposes only) or
      comparable law of any jurisdiction to evidence any of the foregoing; provided,
      however, that any assignment pursuant to Section 6.02 of the Sale and Servicing
      Agreement shall not be deemed to constitute a Lien.

     

    “Liquidated
      Mortgage Loan”: As to any Payment Date, any Mortgage Loan in respect of which
      the Servicer has determined, in its reasonable judgment, as of the end of the
      related Prepayment Period, that all Liquidation Proceeds which it expects to
      recover with respect to the liquidation of the Mortgage Loan or disposition
      of
      the related REO Property have been recovered.

     

    “Liquidation
      Event”: With respect to any Mortgage Loan, any of the following events: (i) such
      Mortgage Loan is paid in full; (ii) a Final Recovery Determination is made
      as to
      such Mortgage Loan; or (iii) such Mortgage Loan is removed from the Trust by
      reason of (A) its being purchased, sold or replaced pursuant to or as
      contemplated by Section 2.03 or Section 3.16(c) of the Sale and Servicing
      Agreement or (B) the redeeming of the Notes pursuant to Section 8.07 hereof.
      With respect to any REO Property, either of the following events: (i) a Final
      Recovery Determination is made as to such REO Property; or (ii) such REO
      Property is removed from the Trust by reason of its being sold or purchased
      pursuant to Section 3.23 of the Sale and Servicing Agreement or the redeeming
      of
      the Notes pursuant to Section 8.07 hereof.

     

    “Liquidation
      Proceeds”: The amount (other than amounts received in respect of the rental of
      any REO Property prior to REO Disposition) received by the Servicer in
      connection with (i) the taking of all or a part of a Mortgaged Property by
      exercise of the power of eminent domain or condemnation, (ii) the liquidation
      of
      a defaulted Mortgage Loan by means of a trustee’s sale, foreclosure sale or
      otherwise or (iii) the repurchase, substitution or sale of a Mortgage Loan
      or an
      REO Property pursuant to or as contemplated by Section 2.03, Section 3.16(c)
      or
      Section 3.23 of the Sale and Servicing Agreement or Section 8.07
      hereof.

     

    “Loan-to-Value
      Ratio”: As of any date and as to any Mortgage Loan, the fraction, expressed as a
      percentage, the numerator of which is the Stated Principal Balance of the
      Mortgage Loan and the denominator of which is the Value of the related Mortgaged
      Property. 

     

    “Lost
      Note Affidavit”: With respect to any Mortgage Loan as to which the original
      Mortgage Note has been permanently lost, misplaced or destroyed and has not
      been
      replaced, an affidavit from the Originator certifying that the original Mortgage
      Note has been lost, misplaced or destroyed (together with a copy of the related
      Mortgage Note) and indemnifying the Trust against any loss, cost or liability
      resulting from the failure to deliver the original Mortgage Note in the form
      of
      Exhibit E to the Sale and Servicing Agreement.

     

    “Majority
      Certificateholder”: A Holder of a 50.01% or greater Certificate Percentage
      Interest of the Certificates.

     

    “Master
      Agreement”: The Master Mortgage Loan Purchase and Servicing Agreement, dated
      February 28, 2006, among Harwood Street Funding II, LLC, the Originator and
      the
      Seller, together with the related confirmation dated March 1, 2006.

     

    “Maximum
      Mortgage Rate”: With respect to each Adjustable-Rate Mortgage Loan, the
      percentage set forth in the related Mortgage Note as the maximum Mortgage Rate
      thereunder.

     

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

     

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

     

    “Mezzanine
      Note”: Any Class M-1 Note, Class M-2 Note, Class M-3 Note, Class M-4 Note, Class
      M-5 Note, Class M-6 Note, Class M-7 Note, Class M-8 Note, Class M-9 Note, Class
      M-10 Note or Class M-11 Note.

     

    “MIN”:
      The Mortgage Identification Number for Mortgage Loans registered with MERS
      on
      the MERS® System.

     

    “Minimum
      Mortgage Rate”: With respect to each Adjustable-Rate Mortgage Loan, the
      percentage set forth in the related Mortgage Note as the minimum Mortgage Rate
      thereunder.

     

    “MOM
      Loan”: With respect to any Mortgage Loan, MERS acting as the mortgagee of such
      Mortgage Loan, solely as nominee for the originator of such Mortgage Loan and
      its successors and assigns, at the origination thereof.

     

    “Monthly
      Interest Payable Amount”: With respect to the Floating Rate Notes and any
      Payment Date, the amount of interest accrued during the related Accrual Period
      at the related Note Rate on the Note Balance of such Class immediately prior
      to
      such Payment Date, in each case, reduced by any Net Prepayment Interest
      Shortfalls and Relief Act Interest Shortfalls (allocated to such Note based
      on
      its respective entitlements to interest irrespective of any Net Prepayment
      Interest Shortfalls and Relief Act Interest Shortfalls for such Payment
      Date).

     

    “Monthly
      Payment”: With respect to any Mortgage Loan, the scheduled monthly payment of
      principal and interest on such Mortgage Loan which is payable by the related
      Mortgagor from time to time under the related Mortgage Note, determined: (a)
      after giving effect to (i) any Deficient Valuation and/or Debt Service Reduction
      with respect to such Mortgage Loan and, (ii) any modifications to a Mortgage
      Loan pursuant to Section 3.07 of the Sale and Servicing Agreement and (iii)
      any
      reduction in the amount of interest collectible from the related Mortgagor
      pursuant to the Relief Act; (b) without giving effect to any extension granted
      or agreed to by the Servicer pursuant to Section 3.07 of the Sale and Servicing
      Agreement and (c) on the assumption that all other amounts, if any, due under
      such Mortgage Loan are paid when due.

     

    “Moody’s”:
      Moody’s Investors Service, Inc. or its successor in interest.

     

    “Mortgage”:
      The mortgage, deed of trust or other instrument creating a first or second
      lien
      on, or first or second priority security interest in, a Mortgaged Property
      securing a Mortgage Note.

     

    “Mortgage
      File”: The mortgage documents listed in Section 2.01 or Section 2.03(d) of the
      Sale and Servicing Agreement pertaining to a particular Mortgage Loan and any
      additional documents required to be added to the Mortgage File pursuant to
      the
      Sale and Servicing Agreement.

     

    “Mortgage
      Loan”: Each mortgage loan transferred and assigned to the Trust and delivered to
      the Trust pursuant to Section 2.01 of the Sale and Servicing Agreement or
      Section 2.03(c) of the Sale and Servicing Agreement, as held from time to time
      as a part of the Trust, the Mortgage Loans so held being identified in the
      Mortgage Loan Schedule.

     

    “Mortgage
      Loan Schedule”: As of any date, the list of Mortgage Loans included in the Trust
      on such date, attached hereto as Exhibit B. The Mortgage Loan Schedule shall
      be
      prepared by the Depositor and shall set forth the following information with
      respect to each Mortgage Loan, as applicable:

     

    (i)  the
      Mortgage Loan identifying number;

     

    (ii)  [reserved];

     

    (iii)  the
      state
      and zip code of the Mortgaged Property;

     

    (iv)  a
      code
      indicating whether the Mortgaged Property was represented by the borrower,
      at
      the time of origination, as being owner-occupied;

     

    (v)  the
      type
      of Residential Dwelling constituting the Mortgaged Property;

     

    (vi)  the
      original months to maturity;

     

    (vii)  the
      stated remaining months to maturity from the Cut-off Date based on the original
      amortization schedule;

     

    (viii)  the
      Loan-to-Value Ratio at origination;

     

    (ix)  the
      Mortgage Rate in effect immediately following the Cut-off Date;

     

    (x)  the
      date
      on which the first Monthly Payment was due on the Mortgage Loan;

     

    (xi)  the
      stated maturity date;

     

    (xii)  the
      amount of the Monthly Payment at origination;

     

    (xiii)  the
      amount of the Monthly Payment due on the first Due Date after the Cut- off
      Date;

     

    (xiv)  the
      last
      Due Date on which a Monthly Payment was actually applied to the unpaid Stated
      Principal Balance;

     

    (xv)  the
      original principal balance of the Mortgage Loan;

     

    (xvi)  the
      Stated Principal Balance of the Mortgage Loan as of the Close of Business on
      the
      Cut-off Date;

     

    (xvii)  a
      code
      indicating the purpose of the Mortgage Loan (i.e., purchase financing, rate/term
      refinancing, cash-out refinancing);

     

    (xviii)  the
      Mortgage Rate at origination;

     

    (xix)  a
      code
      indicating the documentation program (i.e., full documentation, limited income
      verification, no income verification, alternative income
      verification);

     

    (xx)  the
      risk
      grade;

     

    (xxi)  the
      Value
      of the Mortgaged Property;

     

    (xxii)  the
      sale
      price of the Mortgaged Property, if applicable;

     

    (xxiii)  the
      actual unpaid Principal Balance of the Mortgage Loan as of the Cut-off
      Date;

     

    (xxiv)  the
      type
      and term of the related Prepayment Charge;

     

    (xxv)  with
      respect to any Adjustable-Rate Mortgage Loan, the rounding code, the Minimum
      Mortgage Rate, the Maximum Mortgage Rate, the Gross Margin, the next Adjustment
      Date and the Periodic Rate Cap; and

     

    (xxvi)  the
      program code.

     

    The
      Mortgage Loan Schedule shall set forth the following information, with respect
      to the Mortgage Loans as of the Cut-off Date: (1) the number of Mortgage Loans
      (separately identifying the number of Fixed-Rate Mortgage Loans and the number
      of Adjustable-Rate Mortgage Loans); (2) the current Stated Principal Balance
      of
      the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage
      Loans
      and (4) the weighted average remaining term to maturity of the Mortgage Loans.
      The Mortgage Loan Schedule shall be amended from time to time by the Seller
      in
      accordance with the provisions of the Sale and Servicing Agreement. With respect
      to any Qualified Substitute Mortgage Loan, Cut-off Date shall refer to the
      related Cut-off Date for such Mortgage Loan.

     

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

     

    “Mortgage
      Pool”: The pool of Mortgage Loans, identified on Exhibit B of the Sale and
      Servicing Agreement from time to time, and any REO Properties acquired in
      respect thereof.

     

    “Mortgage
      Rate”: With respect to each Fixed-Rate Mortgage Loan, the rate set forth in the
      related Mortgage Note. With respect to each Adjustable-Rate Mortgage Loan,
      the
      annual rate at which interest accrues on such Mortgage Loan from time to time
      in
      accordance with the provisions of the related Mortgage Note, which rate (A)
      as
      of any date of determination until the first Adjustment Date following the
      Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as the
      Mortgage Rate in effect immediately following the Cut-off Date and (B) as of
      any
      date of determination thereafter shall be the rate as adjusted on the most
      recent Adjustment Date, to equal the sum, rounded to the next highest or nearest
      0.125% (as provided in the Mortgage Note), of the Index, determined as set
      forth
      in the related Mortgage Note, plus the related Gross Margin subject to the
      limitations set forth in the related Mortgage Note. With respect to each
      Mortgage Loan that becomes an REO Property, as of any date of determination,
      the
      annual rate determined in accordance with the immediately preceding sentence
      as
      of the date such Mortgage Loan became an REO Property.

     

    “Mortgaged
      Property”: The underlying property securing a Mortgage Loan, including any REO
      Property, consisting of a fee simple estate in a parcel of real property
      improved by a Residential Dwelling.

     

    “Mortgagor”:
      The obligor on a Mortgage Note.

     

    “Net
      Liquidation Proceeds”: With respect to any Liquidated Mortgage Loan or any other
      disposition of related Mortgaged Property (including REO Property), the related
      Liquidation Proceeds and Insurance Proceeds net of Advances, Servicing Advances,
      Servicing Fees and any other accrued and unpaid servicing fees or ancillary
      income received and retained in connection with the liquidation of such Mortgage
      Loan or Mortgaged Property.

     

    “Net
      Monthly Excess Cashflow”: With respect to any Payment Date, the sum of (i) any
      Overcollateralization Release Amount for such Payment Date and (ii) the excess
      of (x) the Available Funds for such Payment Date over (y) the sum for such
      Payment Date of (A) the Monthly Interest Payable Amount for the Floating Rate
      Notes, (B) the Unpaid Interest Shortfall Amounts for the Floating Rate Notes
      and
      (C) the Principal Remittance Amount.

     

    “Net
      Mortgage Rate”: With respect to any Mortgage Loan (or the related REO Property)
      as of any date of determination, a per annum rate of interest equal to the
      then
      applicable Mortgage Rate for such Mortgage Loan minus the Servicing Fee
      Rate.

     

    “Net
      Prepayment Interest Shortfall”: With respect to any Payment Date, the excess, if
      any, of any Prepayment Interest Shortfalls for such date over the related
      Compensating Interest.

     

    “Net
      Swap
      Payment”: In the case of payments made by the Trust, the excess, if any, of (x)
      the Fixed Swap Payment over (y) the Floating Swap Payment and in the case of
      payments made by the Swap Provider, the excess, if any, of (x) the Floating
      Swap
      Payment over (y) the Fixed Swap Payment. In each case, the Net Swap Payment
      shall not be less than zero.

     

    “New
      Lease”: Any lease of REO Property entered into on behalf of the Trust, including
      any lease renewed or extended on behalf of the Trust if the Trust has the right
      to renegotiate the terms of such lease, which lease shall not be more than
      30
      days in length.

     

    “Nonrecoverable
      Advance”: Any Advance or Servicing Advance previously made or proposed to be
      made in respect of a Mortgage Loan or REO Property that, in the good faith
      business judgment of the Servicer, will not be ultimately recoverable from
      Late
      Collections, Insurance Proceeds, Liquidation Proceeds or condemnation proceeds
      on such Mortgage Loan or REO Property as provided herein.

     

    “Note”:
      Any one of the Asset Backed Notes, Series 2006-1, Class A-1, Class A-2, Class
      A-3, Class A-4, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
      M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 issued under
      the
      Indenture.

     

    “Note
      Balance”: With respect to any Floating Rate Note immediately prior to any
      Payment Date, an amount equal to the Initial Note Balance thereof plus any
      Subsequent Recoveries added to the Note Balance of such Note pursuant to Section
      3.05 hereof, reduced by (A) the sum of all amounts actually distributed in
      respect of principal of such Class and (B) Realized Losses allocated thereto
      on
      all prior Payment Dates.

     

    “Note
      Margin”: With respect to each Class of Floating Rate Notes, the margin set forth
      below:

     

     

    
      	 	 	
                                 
                Note Margin 

            
	
              Class

            	 	
              (1)
                (%)

            	 	
              (2)
                (%)

            
	
              A-1

            	 	
              0.070%

            	 	
              0.140%

            
	
              A-2

            	 	
              0.120%

            	 	
              0.240%

            
	
              A-3

            	 	
              0.180%

            	 	
              0.360%

            
	
              A-4

            	 	
              0.280%

            	 	
              0.560%

            
	
              M-1

            	 	
              0.350%

            	 	
              0.525%

            
	
              M-2

            	 	
              0.370%

            	 	
              0.555%

            
	
              M-3

            	 	
              0.390%

            	 	
              0.585%

            
	
              M-4

            	 	
              0.450%

            	 	
              0.675%

            
	
              M-5

            	 	
              0.480%

            	 	
              0.720%

            
	
              M-6

            	 	
              0.570%

            	 	
              0.855%

            
	
              M-7

            	 	
              1.150%

            	 	
              1.725%

            
	
              M-8

            	 	
              1.300%

            	 	
              1.950%

            
	
              M-9

            	 	
              2.200%

            	 	
              3.300%

            
	
              M-10

            	 	
              2.500%

            	 	
              3.750%

            
	
              M-11

            	 	
              2.500%

            	 	
              3.750%

            

    

     

    
      	 	
              _______________

            
	 	
              (1)

            	
              For
                the Accrual Period for each Payment Date on or prior to the Coupon
                Step Up
                Date.

            
	 	
              (2)

            	
              For
                the Accrual Period for each Payment Date
                thereafter.

            

    

     

    “Note
      Owner”: The Beneficial Owner of a Note.

     

    “Note
      Rate”: With respect to any Class of Floating Rate Notes and any Payment Date, a
      rate per annum equal to the least of (i) One-Month LIBOR plus the related Note
      Margin for such Payment Date, (ii) 11.50% per annum and (iii) the Available
      Funds Rate for such Payment Date.

     

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

     

    “Note
      Registrar”: The Indenture Trustee, in its capacity as Note Registrar, or any
      successor to the Indenture Trustee in such capacity.

     

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

     

    “Novation
      Agreement”: As defined in the definition of Interest Rate Swap
      Agreement.

     

    “Officers’
      Certificate”: A certificate signed by the Chairman of the Board, the Vice
      Chairman of the Board, the President or a vice president (however denominated),
      and by the Treasurer, the Secretary, or one of the assistant treasurers or
      assistant secretaries of the Servicer, the Originator or the Depositor, as
      applicable.

     

    “Opinion
      of Counsel”: A written opinion of counsel acceptable to the Indenture Trustee,
      in its reasonable discretion which counsel may be in-house counsel for the
      Servicer if acceptable to the Indenture Trustee and the Rating Agencies or
      counsel for the Depositor, as the case may be.

     

    “Optional
      Redemption Date”: The first Payment Date on which the Majority Certificateholder
      may opt to redeem the Notes pursuant to Section 8.07 hereof.

     

    “Original
      Mortgage Loan”: Any of the Mortgage Loans included in the Trust Fund as of the
      Closing Date. The aggregate principal balance of the Original Mortgage Loans
      as
      of the Cut-off Date is equal to $1,502,180,714.30.

     

    “Originator”:
      Centex Home Equity Company, LLC, or its successor in interest, in its capacity
      as originator of the Mortgage Loans.

     

    “Outstanding”:
      With respect to the Notes, as of the date of determination, all Notes
      theretofore executed, authenticated and delivered under this Indenture
      except:

     

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

     

    (ii) Notes
      in
      exchange for or in lieu of which other Notes have been executed, authenticated
      and delivered pursuant to the Indenture unless proof satisfactory to the
      Indenture Trustee is presented that any such Notes are held by a holder in
      due
      course;

     

    “Overcollateralization
      Deficiency Amount”: With respect to any Payment Date, the amount, if any, by
      which the Overcollateralization Target Amount exceeds the Overcollateralized
      Amount on such Payment Date (assuming that 100% of the Principal Remittance
      Amount is applied as a principal payment on such Payment Date).

     

    “Overcollateralization
      Floor”: With respect to the Floating Rate Notes, $7,510,903.57.

     

    “Overcollateralization
      Release Amount”: With respect to any Payment Date, the lesser of (x) the
      Principal Remittance Amount for such Payment Date and (y) the Excess
      Overcollateralized Amount.

     

    “Overcollateralization
      Target Amount”: With respect to any Payment Date, (i) prior to the Stepdown
      Date, 3.25% of the aggregate Stated Principal Balance of the Original Mortgage
      Loans as of the Cut-off Date, (ii) on or after the Stepdown Date provided a
      Trigger Event is not in effect, the greater of (A) 6.50% of the aggregate Stated
      Principal Balance of the Mortgage Loans as of the last day of the related Due
      Period (after giving effect to scheduled payments of principal due during the
      related Due Period, to the extent received or advanced, and unscheduled
      collections of principal received during the related Prepayment Period) and
      (B)
      the Overcollateralization Floor and (iii) on or after the Stepdown Date if
      a
      Trigger Event is in effect, the Overcollateralization Target Amount for the
      immediately preceding Payment Date. Notwithstanding the foregoing, on and after
      any Payment Date following the reduction of the aggregate Note Balance of the
      Floating Rate Notes to zero, the Overcollateralization Target Amount shall
      be
      zero. 

     

    “Overcollateralized
      Amount”: For any Payment Date, the amount equal to (i) the aggregate Stated
      Principal Balance of the Mortgage Loans as of the last day of the related Due
      Period (after giving effect to scheduled payments of principal due during the
      related Due Period, to the extent received or advanced, and unscheduled
      collections of principal received during the related Prepayment Period) minus
      (ii) the aggregate Note Balance of the Floating Rate Notes as of such Payment
      Date after giving effect to payments to be made on such Payment
      Date.

     

    “Owner
      Trust Estate”: The corpus of the Issuer created by the Trust Agreement which
      consists of items referred to in Section 3.01 of the Trust
      Agreement.

     

    “Owner
      Trustee”: Wilmington Trust Company, acting not in its individual capacity but
      solely as Owner Trustee, and its successors and assigns or any successor owner
      trustee appointed pursuant to the terms of the Trust Agreement.

     

    “Owner
      Trustee Fee”: The initial fee and the first year annual administration fee
      payable to the Owner Trustee on the Closing Date and with respect to each
      Payment Date beginning on the 13th
      Payment
      Date, one twelfth (1/12) of the Owner Trustee’s annual administration fee, which
      the Owner Trustee shall provide to the Servicer and the Indenture Trustee on
      the
      Closing Date.

     

    “Paying
      Agent”: Any paying agent or co-paying agent appointed pursuant to Section 3.03
      hereof, which initially shall be the Indenture Trustee.

     

    “Payment
      Account”: The trust account or accounts created and maintained by the Indenture
      Trustee pursuant to Section 3.01 hereof, which shall be entitled “Payment
      Account, JPMorgan Chase Bank, N.A., as Indenture Trustee, in trust for the
      registered holders of Newcastle Mortgage Securities Trust 2006-1, Asset-Backed
      Notes.” The Payment Account must be an Eligible Account.

     

    “Payment
      Date”: The 25th
      day of
      any month, or if such 25th
      day is
      not a Business Day, the Business Day immediately following such 25th
      day,
      commencing in April 2006.

     

    “Percentage
      Interest”: With respect to any Note, the percentage obtained by dividing the
      Note Balance of such Note by the aggregate Note Balances of all Notes of that
      Class. With respect to any Certificate, the percentage as stated on the face
      thereof.

     

    “Periodic
      Rate Cap”: With respect to each Adjustable-Rate Mortgage Loan and any Adjustment
      Date therefor, the fixed percentage set forth in the related Mortgage Note,
      which is the maximum amount by which the Mortgage Rate for such Mortgage Loan
      may increase or decrease (without regard to the Maximum Mortgage Rate or the
      Minimum Mortgage Rate) on such Adjustment Date from the Mortgage Rate in effect
      immediately prior to such Adjustment Date.

     

    “Permitted
      Investments”: Any one or more of the following obligations or securities
      acquired at a purchase price of not greater than par, regardless of whether
      issued or managed by the Depositor, the Servicer, the Indenture Trustee or
      any
      of their respective Affiliates or for which an Affiliate of the Indenture
      Trustee serves as an advisor:

     

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

     

    (2)  
      (A)
      demand and time deposits in, certificates of deposit of, bankers’ acceptances
      issued by or federal funds sold by any depository institution or trust company
      (including the Indenture Trustee or its agent acting in their respective
      commercial capacities) incorporated under the laws of the United States of
      America or any state thereof and subject to supervision and examination by
      federal and/or state authorities, so long as, at the time of such investment
      or
      contractual commitment providing for such investment, such depository
      institution or trust company (or, if the only Rating Agency is S&P, in the
      case of the principal depository institution in a depository institution holding
      company, debt obligations of the depository institution holding company) or
      its
      ultimate parent has a short-term uninsured debt rating in one of the two highest
      available ratings of Moody’s and the highest available rating category of Fitch
      and S&P and provided that each such investment has an original maturity of
      no more than 365 days; and provided further that, if the only Rating Agency
      is
      S&P and if the depository or trust company is a principal subsidiary of a
      bank holding company and the debt obligations of such subsidiary are not
      separately rated, the applicable rating shall be that of the bank holding
      company; and provided further that, if the original maturity of such short-term
      obligations of a domestic branch of a foreign depository institution or trust
      company shall exceed 30 days, the short-term rating of such institution shall
      be
      A-1+ in the case of S&P if S&P is the Rating Agency; and (B) any other
      demand or time deposit or deposit which is fully insured by the
      FDIC;

     

    (3)  repurchase
      obligations with a term not to exceed 30 days with respect to any security
      described in clause (i) above and entered into with a depository institution
      or
      trust company (acting as principal) rated F-1+ or higher by Fitch, P-1 by
      Moody’s and rated A-1+ or higher by S&P, provided, however, that collateral
      transferred pursuant to such repurchase obligation must be of the type described
      in clause (i) above and must (A) be valued daily at current market prices plus
      accrued interest, (B) pursuant to such valuation, be equal, at all times, to
      105% of the cash transferred by the Indenture Trustee in exchange for such
      collateral and (C) be delivered to the Indenture Trustee or, if the Indenture
      Trustee is supplying the collateral, an agent for the Indenture Trustee, in
      such
      a manner as to accomplish perfection of a security interest in the collateral
      by
      possession of certificated securities; provided, that, such repurchase
      obligations are accounted for by the Trust as secured loans to the repurchase
      counterparty in accordance with Financial Accounting Standard 140;

     

    (4)  securities
      bearing interest or sold at a discount that are issued by any corporation
      incorporated under the laws of the United States of America or any State thereof
      and that are rated by a Rating Agency in its highest long-term unsecured rating
      category at the time of such investment or contractual commitment providing
      for
      such investment;

     

    (5)  commercial
      paper (including both non-interest-bearing discount obligations and
      interest-bearing obligations payable on demand or on a specified date not more
      than 30 days after the date of acquisition thereof) that is rated by a Rating
      Agency in its highest short-term unsecured debt rating available at the time
      of
      such investment;

     

    (6)  units
      of
      money market funds, including those money market funds managed or advised by
      the
      Indenture Trustee or its Affiliates, that have been rated “AAA” by Fitch (if
      rated by Fitch), “Aaa” by Moody’s and “AAA” by S&P; and

     

    (7)  if
      previously confirmed in writing to the Indenture Trustee, any other demand,
      money market or time deposit, or any other obligation, security or investment,
      as may be acceptable to the Rating Agencies in writing as a permitted investment
      of funds backing securities having ratings equivalent to its highest initial
      rating of the Class A Notes;

     

    provided,
      that no instrument described hereunder shall evidence either the right to
      receive (a) only interest with respect to the obligations underlying such
      instrument or (b) both principal and interest payments derived from obligations
      underlying such instrument and the interest and principal payments with respect
      to such instrument provide a yield to maturity at par greater than 120% of
      the
      yield to maturity at par of the underlying obligations and provided, further,
      that the Trust shall not vote any such Permitted Investments unless such vote
      is
      on matters that are “protective rights” under United States Generally Accepted
      Accounting Principles.

     

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

     

    “Plan”:
      Any employee benefit plan or certain other retirement plans and arrangements,
      including individual retirement accounts and annuities, Keogh plans and bank
      collective investment funds and insurance company general or separate accounts
      in which such plans, accounts or arrangements are invested, that are subject
      to
      ERISA or Section 4975 of the Code.

     

    “Plan
      Assets”: Assets of a Plan as determined pursuant to the Department of Labor
      regulations promulgated at Section 2510.3-101.

     

    “Pool
      Balance”: As of any date of determination, the aggregate Stated Principal
      Balance of the Mortgage Loans in the Mortgage Pool as of such date.

     

    “Prepayment
      Assumption”: As set forth in the Prospectus Supplement.

     

    “Prepayment
      Charge”: With respect to any Mortgage Loan, the charges or premiums, if any, due
      in connection with a full or partial Principal Prepayment of such Mortgage
      Loan
      in accordance with the terms thereof.

     

    “Prepayment
      Interest Excess”: With respect to any Payment Date, for each Mortgage Loan that
      was the subject of a voluntary Principal Prepayment in full on the first day
      of
      the calendar month in which such Payment Date occurs, an amount equal to
      interest (to the extent received) at the applicable Net Mortgage Rate on the
      amount of such Principal Prepayment for the number of days commencing on the
      first day of the calendar month in which such Payment Date occurs and ending
      on
      the date on which such prepayment is so applied.

     

    “Prepayment
      Interest Shortfall”: With respect to any Payment Date, for each Mortgage Loan
      that was the subject of a Principal Prepayment in full during the portion of
      the
      related Prepayment Period occurring from the first day of the related Prepayment
      Period through the last day of the calendar month preceding the month in which
      such Payment Date occurs, an amount equal to interest on the amount of such
      Principal Prepayment for the number of days commencing on the date such
      Principal Prepayment was applied and ending on the last day of the calendar
      month preceding the month in which such Payment Date occurs.

     

    “Prepayment
      Period”: With respect to any Payment Date, the period commencing on the
      16th
      day of
      the month preceding the month in which such Payment Date falls (or, in the
      case
      of the first Payment Date, from March 1, 2006) and ending on the 15th
      day
      of
      the calendar month in which such Payment Date occurs.

     

    “Principal
      Balance”: As to any Mortgage Loan other than a Liquidated Mortgage Loan, and any
      day, the related Cut-off Date Principal Balance, minus all collections credited
      against the Cut-off Date Principal Balance of any such Mortgage Loan. For
      purposes of this definition, a Liquidated Mortgage Loan shall be deemed to
      have
      a Principal Balance equal to the Principal Balance of the related Mortgage
      Loan
      as of the final recovery of related Liquidation Proceeds and a Principal Balance
      of zero thereafter. As to any REO Property and any day, the Principal Balance
      of
      the related Mortgage Loan immediately prior to such Mortgage Loan becoming
      REO
      Property minus any REO Principal Amortization received with respect thereto
      on
      or prior to such day.

     

    “Principal
      Payment Amount”: With respect to any Payment Date, the sum of (i) the Basic
      Principal Payment Amount for such Payment Date and (ii) the Extra Principal
      Payment Amount for such Payment Date.

     

    “Principal
      Prepayment”: Any payment of principal made by the Mortgagor on a Mortgage Loan
      which is received in advance of its scheduled Due Date and which is not
      accompanied by an amount of interest representing the full amount of scheduled
      interest due on any Due Date in any month or months subsequent to the month
      of
      prepayment.

     

    “Principal
      Remittance Amount”: With respect to any Payment Date, that portion of Available
      Funds equal to the sum of (i) each scheduled payment of principal collected
      or
      advanced on the Mortgage Loans by the Servicer that was due during the related
      Due Period, (ii) the principal portion of all partial and full Principal
      Prepayments of the Mortgage Loans applied by the Servicer during the related
      Prepayment Period, (iii) the principal portion of all related Net Liquidation
      Proceeds, Insurance Proceeds and Subsequent Recoveries received during the
      related Prepayment Period, (iv) that portion of the Purchase Price, representing
      principal of any repurchased Mortgage Loan, deposited in the Collection Account
      during the related Prepayment Period, (v) the principal portion of any related
      Substitution Adjustments deposited in the Collection Account during the related
      Prepayment Period and (vi) on the Payment Date on which the Notes are to be
      redeemed pursuant to Section 8.07, that portion of the Redemption Price, in
      respect of principal.

     

    “Proceeding”:
      Any suit in equity, action at law or other judicial or administrative
      proceeding.

     

    “Prospectus
      Supplement”: That certain Prospectus Supplement dated April 4, 2006, relating to
      the public offering of the Floating Rate Notes.

     

    “Purchase
      Price”: With respect to any Mortgage Loan or REO Property to be purchased by the
      Seller or the Servicer pursuant to or as contemplated by Section 2.03 or Section
      3.16(c) of the Sale and Servicing Agreement, and as confirmed by an Officers’
Certificate from the party purchasing the Mortgage Loan to the Indenture
      Trustee, an amount equal to the sum of (i) 100% of the Stated Principal Balance
      thereof as of the date of purchase, (ii) in the case of (x) a Mortgage Loan,
      accrued interest on such Stated Principal Balance at the applicable Mortgage
      Rate in effect from time to time from the Due Date as to which interest was
      last
      covered by a payment by the Mortgagor or an Advance by the Servicer, which
      payment or Advance had as of the date of purchase been paid pursuant to 3.05
      hereof, through the end of the calendar month in which the purchase is to be
      effected, and (y) an REO Property, the sum of (1) accrued interest on such
      Stated Principal Balance at the applicable Mortgage Rate in effect from time
      to
      time from the Due Date as to which interest was last covered by a payment by
      the
      Mortgagor or an advance by the Servicer through the end of the calendar month
      immediately preceding the calendar month in which such REO Property was
      acquired, plus (2) REO Imputed Interest for such REO Property for each calendar
      month commencing with the calendar month in which such REO Property was acquired
      and ending with the calendar month in which such purchase is to be effected,
      net
      of the total of all net rental income, Insurance Proceeds, Net Liquidation
      Proceeds and Advances that as of the date of purchase had been paid as or to
      cover REO Imputed Interest pursuant to Section 3.05 hereof, (iii) any
      unreimbursed Servicing Advances and Advances and any unpaid Servicing Fees
      allocable to such Mortgage Loan or REO Property, (iv) any amounts previously
      withdrawn from the Collection Account in respect of such Mortgage Loan or REO
      Property pursuant to Section 3.23 of the Sale and Servicing Agreement and (v)
      in
      the case of a Mortgage Loan required to be purchased pursuant to Section 2.03
      of
      the Sale and Servicing Agreement, expenses reasonably incurred or to be incurred
      by the Servicer or the Indenture Trustee in respect of the breach or defect
      giving rise to the purchase obligation, including any costs and damages incurred
      by the Trust in connection with any violation by such loan of any predatory
      or
      abusive lending law. With respect to the Originator and any Mortgage Loan or
      REO
      Property to be purchased pursuant to or as contemplated by Section 2.03 of
      the
      Sale and Servicing Agreement, and as confirmed by an Officer’s Certificate to
      the Indenture Trustee, an amount equal to the amount set forth pursuant to
      the
      terms of the Master Agreement, and to the extent that the amount payable
      pursuant to the Master Agreement relates to a portion of the Mortgage Loan
      not
      conveyed pursuant to the Assignment Agreement (i.e., collections in respect
      of
      interest and principal due on or before the Cut-off Date), such amount shall
      be
      payable by the Originator to the Assignor in accordance with the Master
      Agreement and collections of interest accrued prior to the Cut-off
      Date.

     

    “Qualified
      Insurer”: Any insurance company acceptable to Fannie Mae.

     

    
      “Qualified
        Substitute Mortgage Loan”: With respect to the Seller or the Originator, a
        mortgage loan substituted for a Deleted Mortgage Loan pursuant to the terms
        of
        the Sale and Servicing Agreement which must, on the date of such substitution,
        (i) have an outstanding Stated Principal Balance (or in the case of a
        substitution of more than one mortgage loan for a Deleted Mortgage Loan,
        an
        aggregate Stated Principal Balance), after application of all scheduled payments
        of principal and interest due during or prior to the month of substitution,
        not
        in excess of, and not more than 5% less than, the outstanding Stated Principal
        Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month
        during which the substitution occurs, (ii) have a Mortgage Rate not less
        than
        (and not more than one percentage point in excess of) the Mortgage Rate of
        the
        Deleted Mortgage Loan, (iii) have a Net Mortgage Rate equal to the Net Mortgage
        Rate of the Deleted Mortgage Loan, (iv) if the Qualified Substitute Mortgage
        Loan is an Adjustable-Rate Mortgage Loan, have a Maximum Mortgage Rate not
        less
        than the Maximum Mortgage Rate on the Deleted Mortgage Loan, (v) if the
        Qualified Substitute Mortgage Loan is an Adjustable-Rate Mortgage Loan, have
        a
        Minimum Mortgage Rate not less than the Minimum Mortgage Rate of the Deleted
        Mortgage Loan, (vi) if the Qualified Substitute Mortgage Loan is an
        Adjustable-Rate Mortgage Loan, have a Gross Margin equal to or greater than
        the
        Gross Margin of the Deleted Mortgage Loan, (vii) if the Qualified Substitute
        Mortgage Loan is an Adjustable-Rate Mortgage Loan, have a next Adjustment
        Date
        not more than two months later than the next Adjustment Date on the Deleted
        Mortgage Loan, (viii) have a remaining term to maturity not greater than
        (and
        not more than one year less than) that of the Deleted Mortgage Loan, (ix)
        have a
        Loan-to-Value Ratio as of the date of substitution equal to or lower than
        the
        Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (x) have
        a
        risk grading determined by the Originator at least equal to the risk grading
        assigned on the Deleted Mortgage Loan, (xi) have been underwritten or
        reunderwritten by the Originator in accordance with the same underwriting
        criteria and guidelines as the Deleted Mortgage Loan, (xii) have a credit
        score
        not lower than that of the Deleted Mortgage Loan, (xiii) have
        the
        same Due Date as the Due Date on the Deleted Mortgage Loan
        and
        (xiv) conform to each representation and warranty assigned to the Depositor
        pursuant to the Assignment Agreement applicable to the Deleted Mortgage Loan.
        In
        the event that one or more mortgage loans are substituted for one or more
        Deleted Mortgage Loans, the amounts described in clause (i) hereof shall
        be
        determined on the basis of aggregate Stated Principal Balance, the Mortgage
        Rates described in clauses (ii) through (vi) hereof shall be satisfied for
        each
        such mortgage loan, the risk gradings described in clause (ix) hereof shall
        be
        satisfied as to each such mortgage loan, the terms described in clause (vii)
        hereof shall be determined on the basis of weighted average remaining term
        to
        maturity (provided that no such mortgage loan may have a remaining term to
        maturity longer than the Deleted Mortgage Loan), the Loan-to-Value Ratios
        described in clause (viii) hereof shall be satisfied as to each such mortgage
        loan and, except to the extent otherwise provided in this sentence, the
        representations and warranties described in clause (xiii) hereof must be
        satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate,
        as
        the case may be.

    

     

    “Rating
      Agency or Rating Agencies”: Moody’s and S&P or their successors. If such
      agencies or their successors are no longer in existence, “Rating Agencies” shall
      be such nationally recognized statistical rating agencies, or other comparable
      Persons, designated by the Depositor, notice of which designation shall be
      given
      to the Indenture Trustee and Servicer.

     

    “Realized
      Loss”: With respect to any Liquidated Mortgage Loan, the amount of loss realized
      equal to the portion of the Stated Principal Balance remaining unpaid after
      application of all Net Liquidation Proceeds in respect of such Mortgage Loan.
      If
      the Servicer receives Subsequent Recoveries with respect to any Mortgage Loan,
      the amount of the Realized Loss with respect to that Mortgage Loan will be
      reduced to the extent such recoveries are applied to principal payments on
      any
      Payment Date.

     

    “Record
      Date”: With respect to each Payment Date and any Floating Rate Notes that are
      Book-Entry Notes, the Business Day immediately preceding such Payment Date.
      With
      respect to each Payment Date and any Definitive Notes, the last Business Day
      of
      the month immediately preceding the month in which such Payment Date
      occurs.

     

    “Redemption
      Price”: As defined in Section 8.07 hereof.

     

    “Reference
      Banks”: Those banks (i) with an established place of business in London,
      England, (ii) not controlling, under the control of or under common control
      with
      the Originator or the Servicer or any Affiliate thereof and (iii) which have
      been designated as such by the Indenture Trustee after consultation with the
      Depositor and the Majority Certificateholder; provided, however, that if fewer
      than two of such banks provide a LIBOR rate, then any leading banks selected
      by
      the Indenture Trustee which are engaged in transactions in United States dollar
      deposits in the international Eurocurrency market.

     

    “Refinanced
      Mortgage Loan”: A Mortgage Loan the proceeds of which were not used to purchase
      the related Mortgaged Property.

     

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

     

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

     

    “REIT”:
      Real Estate Investment Trust.

     

    “Relief
      Act”: The Servicemembers Civil Relief Act, as amended, or any similar state or
      local laws providing for similar relief.

     

    “Relief
      Act Interest Shortfall”: With respect to any Payment Date, for any Mortgage Loan
      with respect to which there has been a reduction in the amount of interest
      collectible thereon for the most recently ended Due Period as a result of the
      application of the Relief Act, the amount by which (i) interest collectible
      on
      such Mortgage Loan during such Due Period is less than (ii) one month’s interest
      on the Stated Principal Balance of such Mortgage Loan at the Mortgage Rate
      for
      such Mortgage Loan before giving effect to the application of the Relief
      Act.

     

    “Remittance
      Report”: A report prepared by the Servicer and delivered to the Indenture
      Trustee pursuant to Section 4.01 of the Sale and Servicing
      Agreement.

     

    “Rents
      from Real Property”: With respect to any REO Property, gross income of the
      character described in Section 856(d) of the Code as being included in the
      term
“rents from real property.”

     

    “REO
      Account”: The account or accounts maintained, or caused to be maintained, by the
      Servicer in respect of an REO Property pursuant to Section 3.23 of the Sale
      and
      Servicing Agreement.

     

    “REO
      Disposition”: The sale or other disposition of an REO Property on behalf of the
      Trust.

     

    “REO
      Imputed Interest”: As to any REO Property, for any calendar month during which
      such REO Property was at any time part of the Trust, one month’s interest at the
      applicable Net Mortgage Rate on the Stated Principal Balance of such REO
      Property (or, in the case of the first such calendar month, of the related
      Mortgage Loan, if appropriate) as of the close of business on the Payment Date
      in such calendar month.

     

    “REO
      Principal Amortization”: With respect to any REO Property, for any calendar
      month, the excess, if any, of (a) the aggregate of all amounts received in
      respect of such REO Property during such calendar month, whether in the form
      of
      rental income, sale proceeds (including, without limitation, that portion of
      the
      proceeds paid in connection with a purchase of all of the Notes pursuant to
      Section 8.07 hereof that is allocable to such REO Property) or otherwise, net
      of
      any portion of such amounts (i) payable pursuant to Section 3.23(c) of the
      Sale
      and Servicing Agreement in respect of the proper operation, management and
      maintenance of such REO Property or (ii) payable or reimbursable to the Servicer
      pursuant to Section 3.23(d) of the Sale and Servicing Agreement for unpaid
      Servicing Fees in respect of the related Mortgage Loan and unreimbursed
      Servicing Advances and Advances in respect of such REO Property or the related
      Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO Property
      for such calendar month.

     

    “REO
      Property”: A Mortgaged Property acquired by the Servicer on behalf of the Trust
      through foreclosure or deed-in-lieu of foreclosure, as described in Section
      3.23
      of the Sale and Servicing Agreement.

     

    “Reportable
      Event”: As defined in Section 4.02(a)(ii) of the Sale and Servicing
      Agreement.

     

    “Request
      for Release”: A release signed by a Servicing Officer, in the form of Exhibit C
      attached to the Sale and Servicing Agreement.

     

    “Reserve
      Interest Rate”: With respect to any Interest Determination Date, the rate per
      annum that the Indenture Trustee determines to be either (i) the arithmetic
      mean
      (rounded upwards if necessary to the nearest whole multiple of 1/16 of 1%)
      of
      the one-month United States dollar lending rates which banks in The City of
      New
      York selected by the Sponsor are quoting on the relevant Interest Determination
      Date to the principal London offices of leading banks in the London interbank
      market or (ii) in the event that the Indenture Trustee can determine no such
      arithmetic mean, in the case of any Interest Determination Date after the
      initial Interest Determination Date, the lowest one-month United States dollar
      lending rate which such New York banks selected by the Sponsor are quoting
      on
      such Interest Determination Date to leading European banks.

     

    “Residential
      Dwelling”: Any one of the following: (i) an attached, detached or semi-detached
      one-family dwelling, (ii) an attached, detached or semi-detached two-to
      four-family dwelling, (iii) a one-family dwelling unit in a Fannie Mae eligible
      condominium project, (iv) an attached, detached or semi-detached one-family
      dwelling in a planned unit development, none of which is a co-operative, mobile
      home (as defined in 42 United States Code, Section 5402(6)) or manufactured
      home (other than a manufactured home which is considered to be real property
      under the laws of state in which such property is located).

     

    “Responsible
      Officer”: When used with respect to the Indenture Trustee or the Owner Trustee,
      any vice president, any assistant vice president, the Secretary, any assistant
      secretary, the Treasurer, any assistant treasurer, the Cashier, any assistant
      cashier, any trust officer or assistant trust officer, the Controller and any
      assistant controller, in each case, with direct responsibility for the
      transactions contemplated hereby and, with respect to a particular matter,
      to
      whom such matter is referred because of such officer’s knowledge of and
      familiarity with the particular subject.

     

    “S&P”:
      Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
      Inc., or its successor in interest.

     

    “Sale
      and
      Servicing Agreement”: The Sale and Servicing Agreement dated as of April 6,
      2006, among the Depositor, the Servicer, the Issuer and the Indenture
      Trustee.

     

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

     

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

     

    “Seller”:
      NIC WL LLC, and its successors and assigns, in its capacity as seller under
      the
      Assignment and Recognition Agreement.

     

    “Senior
      Credit Enhancement Percentage”: For any Payment Date, the percentage equivalent
      of a fraction, the numerator of which is the sum of (x) the aggregate Note
      Balance of the Mezzanine Notes and (y) the Overcollateralized Amount and the
      denominator of which is the aggregate Stated Principal Balance of the Mortgage
      Loans, calculated prior to taking into account payments of principal on the
      Mortgage Loans and payment of the Principal Payment Amount to the Holders of
      the
      Notes then entitled to payments of principal on such Payment Date.

     

    “Senior
      Principal Payment Amount”: With respect to any Payment Date, the excess of (x)
      the aggregate Note Balance of the Class A Notes immediately prior to such
      Payment Date over (y) the lesser of (A) the product of (i) 57.10% and (ii)
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the last day
      of
      the related Due Period (after giving effect to scheduled payments of principal
      due during the related Due Period, to the extent received or advanced, and
      unscheduled collections of principal received during the related Prepayment
      Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans
      as
      of the last day of the related Due Period (after giving effect to scheduled
      payments of principal due during the related Due Period, to the extent received
      or advanced, and unscheduled collections of principal received during the
      related Prepayment Period) minus the Overcollateralization Floor.

     

    “Servicer”:
      Centex Home Equity Company, LLC, or any successor servicer appointed as provided
      in the Sale and Servicing Agreement, in its capacity as Servicer under the
      Sale
      and Servicing Agreement.

     

    “Servicer
      Event of Termination”: One or more of the events described in Section 6.01 of
      the Sale and Servicing Agreement.

     

    “Servicer
      Remittance Date”: With respect to any Payment Date, the 18th
      day of
      the calendar month in which the Payment Date occurs or, if such 18th
      day is
      not a Business Day, the Business Day preceding such 18th
      day.

     

    “Servicing
      Advance Reimbursement Amount”: As defined in Section 3.29 of the Sale and
      Servicing Agreement.

     

    “Servicing
      Advances”: The reasonable “out-of-pocket” costs and expenses incurred by the
      Servicer in connection with a default, delinquency or other unanticipated event
      by the Servicer in the performance of its servicing obligations, including,
      but
      not limited to, the cost of (i) the preservation, restoration and protection
      of
      a Mortgaged Property, (ii) any enforcement or judicial proceedings, including
      but not limited to foreclosures, in respect of a particular Mortgage Loan,
      (iii)
      the management (including reasonable fees in connection therewith) and
      liquidation of any REO Property and (iv) the performance of its obligations
      under Section 3.01, Section 3.09, Section 3.14, Section 3.16 and Section 3.23
      of
      the Sale and Servicing Agreement. The Servicer shall not be required to make
      any
      Nonrecoverable Advances.

     

    “Servicing
      Fee”: With respect to each Mortgage Loan and for any calendar month, an amount
      equal to the Servicing Fee Rate accrued for such month (or in the event of
      any
      Principal Prepayment in full made by the Mortgagor during such month, the
      Servicing Fee Rate accrued for the number of days covered by the payment of
      interest accompanying the Principal Prepayment in full), on the same principal
      amount on which interest on such Mortgage Loan accrues for such month. A portion
      of such Servicing Fee may be retained by any Sub-Servicer as its servicing
      compensation.

     

    “Servicing
      Fee Rate”: 0.50% per annum.

     

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

     

    “Servicing
      Standard”: Shall mean the standards set forth in Section 3.01 of the Sale and
      Servicing Agreement.

     

    “Servicing
      Transfer Costs”: Shall mean all reasonable costs and expenses incurred by the
      Indenture Trustee in connection with the transfer of servicing from a
      predecessor servicer, including, without limitation, any reasonable costs or
      expenses associated with the complete transfer of all servicing data and the
      completion, correction or manipulation of such servicing data as may be required
      by the Indenture Trustee to correct any errors or insufficiencies in the
      servicing data or otherwise to enable the Indenture Trustee (or any successor
      servicer appointed pursuant to Section 6.02 of the Sale and Servicing Agreement)
      to service the Mortgage Loans properly and effectively and any fees associated
      with MERS.

     

    “Sponsor”:
      Newcastle Investment Corp., a Maryland corporation.

     

    “Stated
      Principal Balance”: With respect to any Mortgage Loan: (a) as of any date of
      determination up to but not including the Payment Date on which the proceeds,
      if
      any, of a Liquidation Event with respect to such Mortgage Loan would be paid,
      the outstanding principal balance of such Mortgage Loan as of the Cut-off Date
      as shown in the Mortgage Loan Schedule, minus the sum of (i) the principal
      portion of each Monthly Payment due on a Due Date subsequent to the Cut-off
      Date
      to the extent received from the Mortgagor or advanced by the Servicer and paid
      pursuant to Section 3.05 hereof on or before such date of determination, (ii)
      all Principal Prepayments received after the Cut-off Date to the extent paid
      pursuant to Section 3.05 hereof on or before such date of determination, (iii)
      all Liquidation Proceeds and Insurance Proceeds to the extent paid pursuant
      to
      Section 3.05 hereof on or before such date of determination, and (iv) any
      Realized Loss incurred with respect thereto as a result of a Deficient Valuation
      made during or prior to the Due Period for the most recent Payment Date
      coinciding with or preceding such date of determination; and (b) as of any
      date
      of determination coinciding with or subsequent to the Payment Date on which
      the
      proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan
      would be paid, zero. With respect to any REO Property: (a) as of any date of
      determination up to but not including the Payment Date on which the proceeds,
      if
      any, of a Liquidation Event with respect to such REO Property would be paid,
      an
      amount (not less than zero) equal to the Stated Principal Balance of the related
      Mortgage Loan as of the date on which such REO Property was acquired on behalf
      of the Trust, minus the aggregate amount of REO Principal Amortization in
      respect of such REO Property for all previously ended calendar months, to the
      extent paid pursuant to Section 3.05 hereof on or before such date of
      determination; and (b) as of any date of determination coinciding with or
      subsequent to the Payment Date on which the proceeds, if any, of a Liquidation
      Event with respect to such REO Property would be paid, zero.

     

    “Statutory
      Trust Statute”: Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code §§3801
      et seq., as the same may be amended from time to time.

     

    “Stepdown
      Date”: The earlier to occur of (i) the Payment Date on which the aggregate Note
      Balance of the Class A Notes has been reduced to zero and (ii) the later to
      occur of (a) the Payment Date occurring in April 2009 and (b) the first Payment
      Date on which the Senior Credit Enhancement Percentage (calculated for this
      purpose only after taking into account payments of principal on the Mortgage
      Loans but prior to any payment of the Principal Payment Amount on the Notes
      then
      entitled to payments of principal on such Payment Date) is equal to or greater
      than 42.90%.

     

    “Sub-Servicer”:
      Any Person with which the Servicer has entered into a Sub-Servicing Agreement
      and which meets the qualifications of a Sub-Servicer pursuant to Section 3.02
      of
      the Sale and Servicing Agreement.

     

    “Sub-Servicing
      Account”: An account established by a Sub-Servicer which meets the requirements
      set forth in Section 3.08 of the Sale and Servicing Agreement and is otherwise
      acceptable to the Servicer.

     

    “Sub-Servicing
      Agreement”: The written contract between the Servicer and a Sub-Servicer
      relating to servicing and administration of certain Mortgage Loans as provided
      in Section 3.02 of the Sale and Servicing Agreement.

     

    “Subsequent
      Recoveries”: As of any Payment Date, unanticipated amounts received by the
      Servicer (net of any related expenses permitted to be reimbursed pursuant to
      Section 3.11 of the Sale and Servicing Agreement) specifically related to a
      Mortgage Loan that was the subject of a liquidation or an REO Disposition prior
      to the related Prepayment Period that resulted in a Realized Loss.

     

    “Substitution
      Adjustment”: As defined in Section 2.03(c) of the Sale and Servicing
      Agreement.

     

    “Swap
      Account”: The account or accounts created and maintained pursuant to Section
      4.03 of the Sale and Servicing Agreement. The Swap Account must be an Eligible
      Account.

     

    “Swap
      LIBOR”: A per annum rate equal to the floating rate payable by the Swap Provider
      under the Interest Rate Swap Agreement.

     

    “Swap
      Provider”: The Royal Bank of Scotland plc.

     

    “Swap
      Provider Trigger Event”: A Swap Termination Payment that is triggered upon: (i)
      an Event of Default under the Interest Rate Swap Agreement with respect to
      which
      the Swap Provider is a Defaulting Party (as defined in the Interest Rate Swap
      Agreement), (ii) a Termination Event (as defined in the Interest Rate Swap
      Agreement) with respect to which the Swap Provider is the sole Affected Party
      (as defined in the Interest Rate Swap Agreement) or (iii) an Additional
      Termination Event (as defined in the Interest Rate Swap Agreement) with respect
      to which the Swap Provider is the sole Affected Party.

     

    “Swap
      Termination Payment”: The payment due to either party under the Interest Rate
      Swap Agreement upon the early termination of the Interest Rate Swap
      Agreement.

     

    “Trigger
      Event”: A Trigger Event is in effect with respect to any Payment Date on or
      after the Stepdown Date if:

     

    (a) the
      Delinquency Percentage exceeds 37.30% of the Senior Credit Enhancement
      Percentage; or

     

    (b) the
      aggregate amount of Realized Losses incurred since the Cut-off Date through
      the
      last day of the related Due Period (reduced by the aggregate amount of
      Subsequent Recoveries received from the Cut-off Date through the last day of
      the
      related Due Period) divided by the aggregate Stated Principal Balance of the
      Mortgage Loans as of the Cut-off Date (the “Realized Loss Percentage”) exceeds
      the applicable percentages set forth below with respect to such Payment
      Date:

     

    
      	
              Payment
                Date Occurring In

            	
              Percentage

            
	 	 
	
              April
                2008 through March 2009

            	
              1.45%
                for the first month, plus an additional 1/12th
                of
                1.80% for each month thereafter 

            
	
              April
                2009 through March 2010

            	
              3.25%
                for the first month, plus an additional 1/12th
                of
                1.95% for each month thereafter 

            
	
              April
                2010 through March 2011

            	
              5.20%
                for the first month, plus an additional 1/12th
                of
                1.50% for each month thereafter 

            
	
              April
                2011 through March 2012

            	
              6.70%
                for the first month, plus an additional 1/12th
                of
                0.90% for each month thereafter 

            
	
              April
                2012 and thereafter

            	
              7.60%
                for each month

            

    

    

    “Trust”:
      The Newcastle Mortgage Securities Trust 2006-1 to be created pursuant to the
      Trust Agreement.

     

    “Trust
      Agreement”: The Trust Agreement, dated April 4, 2006, between the Owner Trustee
      and the Depositor together with the Amended and Restated Trust Agreement dated
      as of April 6, 2006, among the Owner Trustee, the Depositor and JPMorgan Chase
      Bank, N.A., as Certificate Registrar and Certificate Paying Agent, relating
      to
      the Trust.

     

    “Trust
      Estate”: The meaning specified in the Granting Clause of the
      Indenture.

     

    “Trust
      Indenture Act” or “TIA”: The Trust Indenture Act of 1939, as amended from time
      to time, as in effect on any relevant date.

     

    “UCC”:
      The Uniform Commercial Code, as amended from time to time, as in effect in
      any
      specified jurisdiction.

     

    “Underwriter”:
      Greenwich Capital Markets, Inc., or its successors.

     

    “Uninsured
      Cause”: Any cause of damage to a Mortgaged Property such that the complete
      restoration of such property is not fully reimbursable by the hazard insurance
      policies required to be maintained pursuant to Section 3.14 of the Sale and
      Servicing Agreement.

     

    “Unpaid
      Interest Shortfall Amount”: With respect to the Floating Rate Notes and (i) the
      first Payment Date, zero, and (ii) any Payment Date after the first Payment
      Date, the amount, if any, by which (a) the sum of (1) the Monthly Interest
      Payable Amount for such Class for the immediately preceding Payment Date and
      (2)
      the outstanding Unpaid Interest Shortfall Amount, if any, for such Class for
      such preceding Payment Date exceeds (b) the aggregate amount distributed on
      such
      Class in respect of interest pursuant to clause (a) of this definition on such
      preceding Payment Date, plus interest on the amount of interest due but not
      paid
      on the Notes of such Class on such preceding Payment Date, to the extent
      permitted by law, at the Note Rate for such Class for the related Accrual
      Period.

     

    “Value”:
      With respect to any Mortgaged Property, the lesser of (i) the lesser of (a)
      the
      value thereof as determined by an appraisal made for the Originator of the
      Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser
      who met the minimum requirements of Fannie Mae and Freddie Mac and (b) the
      value
      thereof as determined by a review appraisal conducted by the Originator in
      accordance with the Originator’s underwriting guidelines, and (ii) the purchase
      price paid for the related Mortgaged Property by the Mortgagor with the proceeds
      of the Mortgage Loan.

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