Document:

EXECUTION

    
      

      

    

    

     

    HSI
      ASSET
      SECURITIZATION CORPORATION,

    Depositor,

     

    WELLS
      FARGO BANK, N.A.,

    Master
      Servicer, Securities Administrator and Custodian,

     

    DEUTSCHE
      BANK NATIONAL TRUST COMPANY,

    Trustee

     

    and

     

    OFFICETIGER
      GLOBAL REAL ESTATE SERVICES INC.,

    Credit
      Risk Manager

     

     

    POOLING
      AND SERVICING AGREEMENT

     

    Dated
      as
      of May 1, 2007

     

    HSI
      ASSET
      SECURITIZATION CORPORATION TRUST 2007-NC1

     

    MORTGAGE
      PASS-THROUGH CERTIFICATES,

    SERIES 2007-NC1

     

    
      

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    TABLE
      OF
      CONTENTS

     

    Page

     

    
      	
              ARTICLE
                I

            
	 
	
              DEFINITIONS

            
	 
	
              ARTICLE
                II

            
	 
	
              CONVEYANCE
                OF MORTGAGE LOANS;

            
	
              REPRESENTATIONS
                AND WARRANTIES

            
	 	 	 
	
              Section
                2.01

            	
              Conveyance
                of Mortgage Loans

            	
              45

            
	
              Section
                2.02

            	
              Acceptance
                by the Custodian of the Mortgage Loans

            	
              48

            
	
              Section
                2.03

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

            	
              48

            
	
              Section
                2.04

            	
              Execution
                and Delivery of Certificates

            	
              50

            
	
              Section
                2.05

            	
              REMIC
                Matters

            	
              50

            
	
              Section
                2.06

            	
              Representations
                and Warranties of the Depositor

            	
              50

            
	 
	
              ARTICLE
                III

            
	 
	
              ADMINISTRATION
                AND SERVICING

            
	
              OF
                MORTGAGE LOANS

            
	 	 	 
	
              Section
                3.01

            	
              Establishment
                of Certain Accounts

            	
              51

            
	
              Section
                3.02

            	
              Investment
                of Funds in the Distribution Account

            	
              53

            
	
              Section
                3.03

            	
              Report
                on Assessment of Compliance with Relevant Servicing
                Criteria.

            	
              54

            
	
              Section
                3.04

            	
              Report
                on Attestation of Compliance with Relevant Servicing
                Criteria.

            	
              55

            
	
              Section
                3.05

            	
              Annual
                Officer’s Certificates.

            	
              55

            
	
              Section
                3.06

            	
              Indemnification.

            	
              56

            
	
              Section
                3.07

            	
              Advances

            	
              57

            
	 
	
              ARTICLE
                IV

            
	 
	
              DISTRIBUTIONS

            
	 	 	 
	
              Section
                4.01

            	
              The
                Distribution Account

            	
              58

            
	
              Section
                4.02

            	
              Priorities
                of Distribution

            	
              59

            
	
              Section
                4.03

            	
              Monthly
                Statements to Certificateholders

            	
              63

            
	
              Section
                4.04

            	
              Certain
                Matters Relating to the Determination of LIBOR

            	
              66

            
	
              Section
                4.05

            	
              Allocation
                of Applied Realized Loss Amounts

            	
              66

            
	
              Section
                4.06

            	
              Supplemental
                Interest Trust.

            	
              67

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              Section
                4.07

            	
              Rights
                of the Swap Counterparty.

            	
              69

            
	
              Section
                4.08

            	
              Termination
                Receipts.

            	
              69

            
	 
	
              ARTICLE
                V

            
	 
	
              THE
                CERTIFICATES

            
	 	 	 
	
              Section
                5.01

            	
              The
                Certificates

            	
              71

            
	
              Section
                5.02

            	
              Certificate
                Register; Registration of Transfer and Exchange of
                Certificates

            	
              72

            
	
              Section
                5.03

            	
              Mutilated,
                Destroyed, Lost or Stolen Certificates

            	
              78

            
	
              Section
                5.04

            	
              Persons
                Deemed Owners

            	
              78

            
	
              Section
                5.05

            	
              Access
                to List of Certificateholders’ Names and Addresses

            	
              78

            
	
              Section
                5.06

            	
              Maintenance
                of Office or Agency

            	
              79

            
	 
	
              ARTICLE
                VI

            
	 
	
              THE
                DEPOSITOR

            
	 	 	 
	
              Section
                6.01

            	
              Liabilities
                of the Depositor

            	
              79

            
	
              Section
                6.02

            	
              Merger
                or Consolidation of the Depositor

            	
              79

            
	
              Section
                6.03

            	
              Limitation
                on Liability of the Depositor and Others.

            	
              79

            
	 
	
              ARTICLE
                VII

            
	 
	
              DEFAULT

            
	 	 	 
	
              Section
                7.01

            	
              Master
                Servicer to Act; Appointment of Successor

            	
              80

            
	
              Section
                7.02

            	
              Notification
                to Certificateholders

            	
              82

            
	 
	
              ARTICLE
                VIII

            
	 
	
              CONCERNING
                THE TRUSTEE

            
	 	 	 
	
              Section
                8.01

            	
              Duties
                of the Trustee

            	
              83

            
	
              Section
                8.02

            	
              Certain
                Matters Affecting the Trustee

            	
              83

            
	
              Section
                8.03

            	
              Trustee
                Not Liable for Certificates or Mortgage Loans

            	
              85

            
	
              Section
                8.04

            	
              Trustee
                May Own Certificates

            	
              85

            
	
              Section
                8.05

            	
              Trustee’s
                Fees Indemnification and Expenses

            	
              85

            
	
              Section
                8.06

            	
              Eligibility
                Requirements for the Trustee

            	
              87

            
	
              Section
                8.07

            	
              Resignation
                and Removal of the Trustee

            	
              87

            
	
              Section
                8.08

            	
              Successor
                Trustee

            	
              88

            
	
              Section
                8.09

            	
              Merger
                or Consolidation of the Trustee

            	
              88

            
	
              Section
                8.10

            	
              Appointment
                of Co-Trustee or Separate Trustee

            	
              88

            
	
              Section
                8.11

            	
              Tax
                Matters

            	
              90

            
	
              Section
                8.12

            	
              Commission
                Reporting

            	
              94

            

    

     

    
      
         

      

      
        -ii-

        
          

        

      

      
         

      

    

     

    
      	
              Section
                8.13

            	
              Tax
                Classification of the Excess Reserve Fund Account and the Supplemental
                Interest Trust

            	
              101

            
	 
	
              ARTICLE
                IX

            
	 
	
              ADMINISTRATION
                OF THE MORTGAGE LOANS

            
	
              BY
                THE MASTER SERVICER

            
	 	 	 
	
              Section
                9.01

            	
              Duties
                of the Master Servicer; Enforcement of Servicer’s
                Obligations.

            	
              101

            
	
              Section
                9.02

            	
              [Reserved]

            	
              102

            
	
              Section
                9.03

            	
              [Reserved]

            	
              102

            
	
              Section
                9.04

            	
              Maintenance
                of Fidelity Bond and Errors and Omissions Insurance.

            	
              102

            
	
              Section
                9.05

            	
              Representations
                and Warranties of the Master Servicer

            	
              103

            
	
              Section
                9.06

            	
              Master
                Servicer Events of Default

            	
              104

            
	
              Section
                9.07

            	
              Waiver
                of Default.

            	
              106

            
	
              Section
                9.08

            	
              Successor
                to the Master Servicer.

            	
              106

            
	
              Section
                9.09

            	
              [Reserved].

            	
              107

            
	
              Section
                9.10

            	
              Merger
                or Consolidation.

            	
              107

            
	
              Section
                9.11

            	
              Resignation
                of the Master Servicer.

            	
              107

            
	
              Section
                9.12

            	
              Assignment
                or Delegation of Duties by the Master Servicer.

            	
              108

            
	
              Section
                9.13

            	
              Limitation
                on Liability of the Master Servicer.

            	
              108

            
	
              Section
                9.14

            	
              Indemnification;
                Third Party Claims.

            	
              109

            
	
              Section
                9.15

            	
              Duties
                of the Credit Risk Manager.

            	
              109

            
	
              Section
                9.16

            	
              Limitation
                Upon Liability of the Credit Risk Manager.

            	
              110

            
	
              Section
                9.17

            	
              Removal
                and Resignation of Credit Risk Manager.

            	
              111

            
	 
	
              ARTICLE
                X

            
	 
	
              CONCERNING
                THE SECURITIES ADMINISTRATOR

            
	 	 	 
	
              Section
                10.01

            	
              Duties
                of Securities Administrator.

            	
              111

            
	
              Section
                10.02

            	
              Certain
                Matters Affecting the Securities Administrator.

            	
              112

            
	
              Section
                10.03

            	
              Securities
                Administrator Not Liable for Certificates or Mortgage
                Loans.

            	
              114

            
	
              Section
                10.04

            	
              Securities
                Administrator May Own Certificates.

            	
              114

            
	
              Section
                10.05

            	
              Securities
                Administrator’s Fees and Expenses.

            	
              114

            
	
              Section
                10.06

            	
              Eligibility
                Requirements for Securities Administrator.

            	
              115

            
	
              Section
                10.07

            	
              Resignation
                and Removal of Securities Administrator.

            	
              116

            
	
              Section
                10.08

            	
              Successor
                Securities Administrator.

            	
              117

            
	
              Section
                10.09

            	
              Merger
                or Consolidation of Securities Administrator.

            	
              117

            
	
              Section
                10.10

            	
              Assignment
                or Delegation of Duties by the Securities Administrator.

            	
              117

            
	 
	
              ARTICLE
                XI

            
	 
	
              TERMINATION

            
	 	 	 
	
              Section
                11.01

            	
              Termination
                upon Liquidation or Purchase of the Mortgage Loans

            	
              118

            

    

     

    
      
         

      

      
        -iii-

        
          

        

      

      
         

      

    

     

    
      	
              Section
                11.02

            	
              Final
                Distribution on the Certificates

            	
              119

            
	
              Section
                11.03

            	
              Additional
                Termination Requirements

            	
              120

            
	 
	
              ARTICLE
                XII

            
	 
	
              MISCELLANEOUS
                PROVISIONS

            
	 	 	 
	
              Section
                12.01

            	
              Amendment

            	
              120

            
	
              Section
                12.02

            	
              Recordation
                of Agreement; Counterparts

            	
              123

            
	
              Section
                12.03

            	
              Governing
                Law

            	
              123

            
	
              Section
                12.04

            	
              Intention
                of Parties

            	
              123

            
	
              Section
                12.05

            	
              Notices

            	
              124

            
	
              Section
                12.06

            	
              Severability
                of Provisions

            	
              125

            
	
              Section
                12.07

            	
              Limitation
                on Rights of Certificateholders

            	
              125

            
	
              Section
                12.08

            	
              Certificates
                Nonassessable and Fully Paid

            	
              126

            
	
              Section
                12.09

            	
              Rule of
                Construction

            	
              126

            
	
              Section
                12.10

            	
              Waiver
                of Jury Trial

            	
              126

            

    

    
      
         

      

      
        -iv-

        
          

        

      

      
         

      

    

     

    SCHEDULES

    
      	 	 
	Schedule I 	Mortgage
              Loan
              Schedule
	 	 
	
              EXHIBITS

            	 
	 	 
	
              Exhibit A

            	
              Form
                of Class A and Class M Certificates

            
	
              Exhibit B

            	
              Form
                of Class P Certificate

            
	
              Exhibit C

            	
              Form
                of Class R Certificate

            
	
              Exhibit D

            	
              Form
                of Class X Certificate

            
	
              Exhibit E

            	
              Form
                of Initial Certification of Custodian

            
	
              Exhibit F

            	
              Form
                of Document Certification and Exception Report of
                Custodian

            
	
              Exhibit G

            	
              Form
                of Residual Transfer Affidavit

            
	
              Exhibit H

            	
              Form
                of Transferor Certificate

            
	
              Exhibit I-A

            	
              Form
                of Rule 144A Investment Letter

            
	
              Exhibit
                I-B

            	
              Form
                of Regulation S Investment Letter

            
	
              Exhibit J

            	
              Form
                of Request for Release

            
	
              Exhibit K

            	
              Contents
                for Each Mortgage File

            
	
              Exhibit L

            	
              Form
                of Sarbanes-Oxley Certification to be Provided by Master Servicer
                (or
                other Certification Party) signing Form 10-K

            
	
              Exhibit M

            	
              List
                of Servicing Agreements

            
	
              Exhibit
                N-1

            	
              Form
                of Back-Up Sarbanes-Oxley Certification

            
	
              Exhibit
                N-2

            	
              [Reserved]

            
	
              Exhibit
                N-3

            	
              [Reserved]

            
	
              Exhibit
                O

            	
              Form
                of Swap Agreement

            
	
              Exhibit
                P 

            	
              Form
                of Cap Agreement

            
	
              Exhibit
                Q

            	
              Form
                of Amended And Restated Master Mortgage Loan Purchase and Interim
                Servicing Agreement

            
	
              Exhibit
                R

            	
              [Reserved]

            
	
              Exhibit
                S

            	
              Servicing
                Criteria Matrix

            
	
              Exhibit
                T

            	
              Transaction
                Parties

            
	
              Exhibit
                U

            	
              Form
                of Annual Compliance Certificate

            
	
              Exhibit
                V

            	
              Additional
                Form 10-D Disclosure

            
	
              Exhibit
                W

            	
              Additional
                Form 10-K Disclosure

            
	
              Exhibit
                X

            	
              Form
                8-K Disclosure Information

            
	
              Exhibit
                Y

            	
              Additional
                Disclosure Notification

            

    

     

    
      
         

      

      
        -v-

        
          

        

      

      
         

      

    

    

    THIS
      POOLING AND SERVICING AGREEMENT, dated as of May 1, 2007, among HSI ASSET
      SECURITIZATION CORPORATION, as depositor (the “Depositor”),
      WELLS
      FARGO BANK, N.A., a national banking association, as master servicer (in such
      capacity, the “Master
      Servicer”),
      as
      securities administrator (in such capacity, the “Securities
      Administrator”)
      and as
      custodian (in such capacity, “the Custodian”),
      OFFICETIGER GLOBAL REAL ESTATE SERVICES INC., as credit risk manager (the
“Credit
      Risk Manager”),
      and
      DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking association, as trustee
      (the “Trustee”).

     

    WITNESSETH:

     

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

     

    PRELIMINARY
      STATEMENT

    The
      Securities Administrator on behalf of the Trust Fund (exclusive of (i) the
      Swap
      Agreement, (ii) the Cap Agreement, (iii) the right to receive and the obligation
      to pay Basis Risk Carryover Amounts, (iv) the Excess Reserve Fund Account,
      (v)
      the Supplemental Interest Trust and the Supplemental Interest Trust Account,
      and
      (vi) the obligations to pay Class I Shortfalls (collectively, the “Excluded
      Trust Assets”))
      shall
      elect that the Trust Fund be treated for federal income tax purposes as
      comprising three real estate mortgage investment conduits under Section 860D
      of
      the Code (each a “REMIC”
or,
      in
      the alternative, “REMIC 1,” REMIC 2” and “REMIC 3,” REMIC 3 also being referred
      to herein as the “Upper
      Tier REMIC.”)
      Any
      inconsistencies or ambiguities in this Agreement or in the administration of
      this Agreement shall be resolved in a manner that preserves the validity of
      such
      REMIC election. 

     

    Each
      Certificate, other than the Class R Certificates, represents ownership of a
      regular interest in the Upper Tier REMIC for purposes of the REMIC Provisions.
      In addition, each Certificate, other than the Class R, Class X and Class P
      Certificates, represents (i) the right to receive payments with respect to
      any
      Basis Risk Carryover Amounts and (ii) the obligation to pay Class I Shortfalls.
      The Class R Certificate represents ownership of the sole Class of residual
      interest in each of REMIC 1, REMIC 2 and the Upper Tier REMIC for purposes
      of
      the REMIC Provisions.

     

    The
      Upper Tier REMIC shall hold as its assets the uncertificated Lower Tier
      Interests in REMIC 2, other than the Class LT2-R interest, and each such Lower
      Tier Interest is hereby designated as a regular interest in REMIC 2 for purposes
      of the REMIC Provisions. REMIC 2 shall hold as its assets the uncertificated
      Lower Tier Interests in REMIC 1, other than the Class LT1-R interest, and each
      such Lower Tier Interest is hereby designated as a regular interest in REMIC
      1.
      REMIC 1 shall hold as its assets the property of the Trust Fund other than
      the
      Lower Tier Interests in REMIC 1 and REMIC 2 and the Excluded Trust
      Assets.

    REMIC
      1:

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
      following table sets forth the designations, principal balances and interest
      rates for each interest in REMIC 1, each of which (other than the Class LT1-R
      Lower Tier Interest) is hereby designated as a regular interest in REMIC 1
      (the
“REMIC 1 Regular Interests”):

     

    
      	
              Class
                Designation

            	
              Initial
                Principal

              Balance

            	
               

              Interest
                Rate

            
	
              LT1-A

            	
              (5)

            	
              (1)

            
	
              LT1-F1

            	
              $
                17,884,093.50 

            	
              (2)

            
	
              LT1-V1

            	
              $
                17,884,093.50 

            	
              (3)

            
	
              LT1-F2

            	
              $
                18,895,270.50 

            	
              (2)

            
	
              LT1-V2

            	
              $
                18,895,270.50 

            	
              (3)

            
	
              LT1-F3

            	
              $
                18,026,659.00 

            	
              (2)

            
	
              LT1-V3

            	
              $
                18,026,659.00 

            	
              (3)

            
	
              LT1-F4

            	
              $
                17,159,828.50 

            	
              (2)

            
	
              LT1-V4

            	
              $
                17,159,828.50 

            	
              (3)

            
	
              LT1-F5

            	
              $
                16,334,718.00 

            	
              (2)

            
	
              LT1-V5

            	
              $
                16,334,718.00 

            	
              (3)

            
	
              LT1-F6

            	
              $
                15,549,317.50 

            	
              (2)

            
	
              LT1-V6

            	
              $
                15,549,317.50 

            	
              (3)

            
	
              LT1-F7

            	
              $
                14,801,714.00 

            	
              (2)

            
	
              LT1-V7

            	
              $
                14,801,714.00 

            	
              (3)

            
	
              LT1-F8

            	
              $
                14,090,087.00 

            	
              (2)

            
	
              LT1-V8

            	
              $
                14,090,087.00 

            	
              (3)

            
	
              LT1-F9

            	
              $
                13,412,704.50 

            	
              (2)

            
	
              LT1-V9

            	
              $
                13,412,704.50 

            	
              (3)

            
	
              LT1-F10

            	
              $
                12,767,916.00 

            	
              (2)

            
	
              LT1-V10

            	
              $
                12,767,916.00 

            	
              (3)

            
	
              LT1-F11

            	
              $
                12,161,578.00 

            	
              (2)

            
	
              LT1-V11

            	
              $
                12,161,578.00 

            	
              (3)

            
	
              LT1-F12

            	
              $
                11,788,273.00 

            	
              (2)

            
	
              LT1-V12

            	
              $
                11,788,273.00 

            	
              (3)

            
	
              LT1-F13

            	
              $
                21,215,900.00 

            	
              (2)

            
	
              LT1-V13

            	
              $
                21,215,900.00 

            	
              (3)

            
	
              LT1-F14

            	
              $
                19,145,782.00 

            	
              (2)

            
	
              LT1-V14

            	
              $
                19,145,782.00 

            	
              (3)

            
	
              LT1-F15

            	
              $
                17,202,283.00 

            	
              (2)

            
	
              LT1-V15

            	
              $
                17,202,283.00 

            	
              (3)

            
	
              LT1-F16

            	
              $
                15,474,947.00 

            	
              (2)

            
	
              LT1-V16

            	
              $
                15,474,947.00 

            	
              (3)

            
	
              LT1-F17

            	
              $
                13,836,716.00 

            	
              (2)

            
	
              LT1-V17

            	
              $
                13,836,716.00 

            	
              (3)

            
	
              LT1-F18

            	
              $
                7,928,347.00 

            	
              (2)

            
	
              LT1-V18

            	
              $
                7,928,347.00 

            	
              (3)

            
	
              LT1-F19

            	
              $
                7,442,993.50 

            	
              (2)

            

    

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    
      	
              Class
                Designation

            	
              Initial
                Principal 

              Balance

            	
               

              Interest
                Rate

            
	
              LT1-V19

            	
              $
                7,442,993.50 

            	
              (3)

            
	
              LT1-F20

            	
              $
                7,563,704.00 

            	
              (2)

            
	
              LT1-V20

            	
              $
                7,563,704.00 

            	
              (3)

            
	
              LT1-F21

            	
              $
                7,143,774.00 

            	
              (2)

            
	
              LT1-V21

            	
              $
                7,143,774.00 

            	
              (3)

            
	
              LT1-F22

            	
              $
                6,725,906.50 

            	
              (2)

            
	
              LT1-V22

            	
              $
                6,725,906.50 

            	
              (3)

            
	
              LT1-F23

            	
              $
                6,294,153.50 

            	
              (2)

            
	
              LT1-V23

            	
              $
                6,294,153.50 

            	
              (3)

            
	
              LT1-F24

            	
              $
                5,892,645.00 

            	
              (2)

            
	
              LT1-V24

            	
              $
                5,892,645.00 

            	
              (3)

            
	
              LT1-F25

            	
              $
                5,519,037.50 

            	
              (2)

            
	
              LT1-V25

            	
              $
                5,519,037.50 

            	
              (3)

            
	
              LT1-F26

            	
              $
                5,170,424.50 

            	
              (2)

            
	
              LT1-V26

            	
              $
                5,170,424.50 

            	
              (3)

            
	
              LT1-F27

            	
              $
                4,652,550.50 

            	
              (2)

            
	
              LT1-V27

            	
              $
                4,652,550.50 

            	
              (3)

            
	
              LT1-F28

            	
              $
                4,360,430.50 

            	
              (2)

            
	
              LT1-V28

            	
              $
                4,360,430.50 

            	
              (3)

            
	
              LT1-F29

            	
              $
                4,097,192.50 

            	
              (2)

            
	
              LT1-V29

            	
              $
                4,097,192.50 

            	
              (3)

            
	
              LT1-F30

            	
              $
                3,865,125.00 

            	
              (2)

            
	
              LT1-V30

            	
              $
                3,865,125.00 

            	
              (3)

            
	
              LT1-F31

            	
              $
                3,646,384.00 

            	
              (2)

            
	
              LT1-V31

            	
              $
                3,646,384.00 

            	
              (3)

            
	
              LT1-F32

            	
              $
                3,439,931.00 

            	
              (2)

            
	
              LT1-V32

            	
              $
                3,439,931.00 

            	
              (3)

            
	
              LT1-F33

            	
              $
                3,245,590.00 

            	
              (2)

            
	
              LT1-V33

            	
              $
                3,245,590.00 

            	
              (3)

            
	
              LT1-F34

            	
              $
                3,062,394.00 

            	
              (2)

            
	
              LT1-V34

            	
              $
                3,062,394.00 

            	
              (3)

            
	
              LT1-F35

            	
              $
                2,889,691.50 

            	
              (2)

            
	
              LT1-V35

            	
              $
                2,889,691.50 

            	
              (3)

            
	
              LT1-F36

            	
              $
                49,302,542.00 

            	
              (2)

            
	
              LT1-V36

            	
              $
                49,302,542.00 

            	
              (3)

            
	
              LT1-R

            	
              (4)

            	
              (4)

            

    

    ___________________________

     

    
      	 	
              (1)

            	
              For
                any Distribution Date (and the related Interest Accrual Period) the
                interest rate for the Class LT1-A Interest shall be the Net WAC Rate.
                

            

    

     

    
      	 	
              (2)

            	
              For
                any Distribution Date (and the related Interest Accrual Period) the
                interest rate for each of these Lower Tier Interests shall be the
                lesser
                of (i) 10.30% and (ii) the product of (a) the Net WAC Rate and (b)
                2.

            

    

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    
      	 	
              (3)

            	
              For
                any Distribution Date (and the related Interest Accrual Period) the
                interest rate for each of these Lower Tier Interests shall be the
                excess,
                if any, of (i) the product of (a) the Net WAC Rate and (b) 2, over
                (ii)
                10.30%.

            

    

     

    
      	 	
              (4)

            	
              The
                Class LT1-R interest shall not have a principal amount and shall
                not bear
                interest. The Class LT1-R interest is hereby designated as the sole
                class
                of residual interest in REMIC 1.

            

    

     

    (5)
      This
      interest shall have an initial principal balance equal to the excess of the
      aggregate stated Principal Balance of the Mortgage Loans as of the Cut-off
      Date
      over the aggregate initial principal balance of each remaining interest in
      REMIC
      1. 

     

    On
      each
      Distribution Date, the Securities Administrator shall first pay or charge as
      an
      expense of REMIC 1 all expenses of the Trust Fund for such Distribution Date,
      other than any Net Swap Payment or Swap Termination Payment required to be
      made
      from the Trust Fund.

     

    On
      each
      Distribution Date the Securities Administrator shall distribute the Interest
      Remittance Amount (net of expenses described in the preceding paragraph) with
      respect to each of the Lower Tier Interests in REMIC 1 based on the
      above-described interest rates.

     

    On
      each
      Distribution Date, the Securities Administrator shall distribute the Principal
      Remittance Amount with respect to the Lower Tier Interests in REMIC 1, first
      to
      the Class LT1-A Interest until its principal balance is reduced to zero, and
      then sequentially, to the other Lower Tier Interests in REMIC 1 in ascending
      order of their numerical class designation, and, with respect to each pair
      of
      classes having the same numerical designation, in equal amounts to each such
      class, until the principal balance of each such class is reduced to zero. All
      losses on the Mortgage Loans shall be allocated among the Lower Tier Interests
      in REMIC 1 in the same manner that principal distributions are
      allocated.

     

    On
      each
      Distribution Date, the Securities Administrator shall distribute the Prepayment
      Charges collected during the preceding Prepayment Period to the Class LT1-F36
      and Class LT1-V36 Lower Tier Interests, respectively.

     

    REMIC
      2:

     

    The
      following table sets forth the designations, principal balances and interest
      rates for each interest in REMIC 2, each of which (other than the Class LT2-R
      interest) is hereby designated as a regular interest in REMIC 2 (the “REMIC 2
      Regular Interests”):

     

    
      	
              REMIC
                2

              Lower
                Tier 

              Class
                Designation

            	 	
              REMIC
                2

              Lower
                Tier

              Interest
                Rate

            	 	
              Initial
                Class 

              Principal
                Amount

            	 	
              Corresponding
                Class of

              Certificate(s)

            
	
              Class
                LT2-A-1

            	 	
              (1)

            	 	
              (4)

            	 	
              A-1

            
	
              Class
                LT2-A-2

            	 	
              (1)

            	 	
              (4)

            	 	
              A-2

            
	
              Class
                LT2-A-3

            	 	
              (1)

            	 	
              (4)

            	 	
              A-3

            
	
              Class
                LT2-A-4

            	 	
              (1)

            	 	
              (4)

            	 	
              A-4

            
	
              Class
                LT2-M1

            	 	
              (1)

            	 	
              (4)

            	 	
              M-1

            
	
              Class
                LT2-M2

            	 	
              (1)

            	 	
              (4)

            	 	
              M-2

            
	
              Class
                LT2-M3

            	 	
              (1)

            	 	
              (4)

            	 	
              M-3

            
	
              Class
                LT2-M4

            	 	
              (1)

            	 	
              (4)

            	 	
              M-4

            

    

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    
      	
              Class
                LT2-M5

            	 	
              (1)

            	 	
              (4)

            	 	
              M-5

            
	
              Class
                LT2-M6

            	 	
              (1)

            	 	
              (4)

            	 	
              M-6

            
	
              Class
                LT2-M7

            	 	
              (1)

            	 	
              (4)

            	 	
              M-7

            
	
              Class
                LT2-M8

            	 	
              (1)

            	 	
              (4)

            	 	
              M-8

            
	
              Class
                LT2-M9

            	 	
              (1)

            	 	
              (4)

            	 	
              M-9

            
	
              Class
                LT2-M10

            	 	
              (1)

            	 	
              (4)

            	 	
              M-10

            
	
              Class
                LT2-Q

            	 	
              (1)

            	 	
              (5)

            	 	
              N/A

            
	
              Class
                LT2-IO

            	 	
              (2)

            	 	
              (2)

            	 	
              N/A

            
	
              Class
                LT2-R

            	 	
              (3)

            	 	
              (3)

            	 	
              R

            

    

    ___________________________

    
      	 	
              (1)

            	
              For
                any Distribution Date (and the related Interest Accrual Period) the
                interest rate for each of these Lower Tier Interests in REMIC 2 is
                a per
                annum rate equal to the weighted average of the interest rates on
                the
                Lower Tier Interests in REMIC 1 for such Distribution Date; provided,
                however,
                that for any Distribution Date on which the Class LT2-IO Interest
                is
                entitled to a portion of the interest accruals on a Lower Tier Interest
                in
                REMIC 1 having an “F” in its class designation, as described in footnote
                two below, such weighted average shall be computed by first subjecting
                the
                rate on such Lower Tier Interest in REMIC 1 to a cap equal to Swap
                LIBOR
                for such Distribution Date.

            

    

     

    
      	 	
              (2)

            	
              The
                Class LT2-IO is an interest only class that does not have a principal
                balance. For only those Distribution Dates listed in the first column
                in
                the table below, the Class LT2-IO shall be entitled to interest accrued
                on
                the Lower Tier Interest in REMIC 1 listed in second column in the
                table
                below at a per annum rate equal to the excess, if any, of (i) the
                interest
                rate for such Lower Tier Interest in REMIC 1 for such Distribution
                Date
                over (ii) Swap LIBOR for such Distribution
                Date.

            

    

     

    
      	
              Distribution
                Dates

            	 	
              REMIC
                

              1
                Class Designation

            
	
              7

            	 	
              Class
                LT1-F1

            
	
              7-8

            	 	
              Class
                LT1-F2

            
	
              7-9

            	 	
              Class
                LT1-F3

            
	
              7-10

            	 	
              Class
                LT1-F4

            
	
              7-11

            	 	
              Class
                LT1-F5

            
	
              7-12

            	 	
              Class
                LT1-F6

            
	
              7-13

            	 	
              Class
                LT1-F7

            
	
              7-14

            	 	
              Class
                LT1-F8

            
	
              7-15

            	 	
              Class
                LT1-F9

            
	
              7-16

            	 	
              Class
                LT1-F10

            
	
              7-17

            	 	
              Class
                LT1-F11

            
	
              7-18

            	 	
              Class
                LT1-F12

            
	
              7-19

            	 	
              Class
                LT1-F13

            
	
              7-20

            	 	
              Class
                LT1-F14

            
	
              7-21

            	 	
              Class
                LT1-F15

            
	
              7-22

            	 	
              Class
                LT1-F16

            
	
              7-23

            	 	
              Class
                LT1-F17

            
	
              7-24

            	 	
              Class
                LT1-F18

            
	
              7-25

            	 	
              Class
                LT1-F19

            
	
              7-26

            	 	
              Class
                LT1-F20

            
	
              7-27

            	 	
              Class
                LT1-F21

            
	
              7-28

            	 	
              Class
                LT1-F22

            
	
              7-29

            	 	
              Class
                LT1-F23

            
	
              7-30

            	 	
              Class
                LT1-F24

            
	
              7-31

            	 	
              Class
                LT1-F25

            
	
              7-32

            	 	
              Class
                LT1-F26

            
	
              7-33

            	 	
              Class
                LT1-F27

            
	
              7-34

            	 	
              Class
                LT1-F28

            
	
              7-35

            	 	
              Class
                LT1-F29

            

    

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    
      	
              7-36

            	 	
              Class
                LT1-F30

            
	
              7-37

            	 	
              Class
                LT1-F31

            
	
              7-38

            	 	
              Class
                LT1-F32

            
	
              7-39

            	 	
              Class
                LT1-F33

            
	
              7-40

            	 	
              Class
                LT1-F34

            
	
              7-41

            	 	
              Class
                LT1-F35

            
	
              7-42

            	 	
              Class
                LT1-F36

            

    

     

    
      	 	
              (3)

            	
              The
                Class LT2-R interest is the sole class of residual interests in REMIC
                2.
                It does not have an interest rate or a principal balance.
                

            

    

     

    
      	 	
              (4)

            	
              This
                Lower Tier Interest shall have an initial class principal amount
                equal to
                one-half of the initial Class Principal Amount of its Corresponding
                Class
                of Certificates.

            

    

     

    
      	 	
              (5)

            	
              This
                Lower Tier Interest shall have an initial class principal amount
                equal to
                the excess of (i) the Pool Stated Principal Balance as of the Cut-off
                Date, over (ii) the aggregate initial Class Principal Amount of each
                other
                regular interest in REMIC 2 (other than any interest-only Lower Tier
                Interest).

            

    

     

    On
      each
      Distribution Date, interest shall be distributed on the Lower Tier Interests
      in
      REMIC 2 based on the above-described interest rates; provided,
      however,
      that
      interest that accrues on the Class LT2-Q Interest shall be deferred in an amount
      equal to one-half of the increase, if any, in the Overcollateralization Amount
      for such Distribution Date. Any interest so deferred shall itself bear interest
      at the interest rate for the Class LT2-Q Interest. An amount equal to the
      interest so deferred shall be distributed as additional principal on the other
      Lower Tier Interests in REMIC 2 having a principal balance in the manner
      described under priority (a) below.

     

    On
      each
      Distribution Date principal shall be distributed, and Realized Losses shall
      be
      allocated, among the Lower Tier Interests in REMIC 2 in the following order
      of
      priority:

     

    (a) First,
      to
      the Class LT2-A-1, Class LT2-A-2, Class LT2-A-3, Class LT2-A-4,
      Class LT2-M1, Class LT2-M2, Class LT2-M3, Class LT2-M4, Class LT2-M5, Class
      LT2-M6, Class LT2-M7, Class LT2-M8, Class LT2-M9, and Class LT2-M10 Interests
      until the principal balance of each such Lower Tier Interest equals one-half
      of
      the Class Principal Amount of the Corresponding Class of Certificates
      immediately after such Distribution Date; and

     

    (b) Second,
      to the Class LT2-Q Interests, any remaining amounts.

     

    On
      each
      Distribution Date, the Securities Administrator shall be deemed to have
      distributed the Prepayment Charges passed through with respect to the Class
      LT1-F36 and Class LT1-V36 Lower Tier Interests in REMIC 1 on such Distribution
      Date to the Class LT2-Q Interest.

     

    Upper
      Tier REMIC

     

    The
      Upper
      Tier REMIC shall issue the following Classes of Upper Tier REMIC Regular
      Interests and each such interest, other than the Class R Interest, is hereby
      designated as a regular interest in the Upper Tier REMIC.

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    Upper
      Tier REMIC

     

    
      	
              Upper
                Tier REMIC 

              Class Designation

            	
              Upper
                Tier REMIC Interest Rate and Corresponding

              Class Interest
                Rate

            	
              Initial
                Upper Tier REMIC Principal Amount and Corresponding
                Class

              Certificate
                Balance

            	
              Corresponding

              Class of
                Certificates

            
	
              Class A-1

            	
              (1)

            	
              $495,395,000.00

            	
              Class A-1

            
	
              Class A-2

            	
              (2)

            	
              $81,189,000.00

            	
              Class A-2

            
	
              Class A-3

            	
              (3)

            	
              $152,344,000.00

            	
              Class A-3

            
	
              Class A-4

            	
              (4)

            	
              $27,032,000.00

            	
              Class A-4

            
	
              Class M-1

            	
              (5)

            	
              $44,347,000.00

            	
              Class M-1

            
	
              Class M-2

            	
              (5)

            	
              $41,253,000.00

            	
              Class M-2

            
	
              Class M-3

            	
              (5)

            	
              $25,267,000.00

            	
              Class M-3

            
	
              Class M-4

            	
              (5)

            	
              $23,205,000.00

            	
              Class M-4

            
	
              Class M-5

            	
              (5)

            	
              $21,142,000.00

            	
              Class M-5

            
	
              Class M-6

            	
              (5)

            	
              $18,564,000.00

            	
              Class M-6

            
	
              Class M-7

            	
              (5)

            	
              $18,048,000.00

            	
              Class M-7

            
	
              Class M-8

            	
              (5)

            	
              $14,439,000.00

            	
              Class M-8

            
	
              Class M-9

            	
              (5)

            	
              $14,438,000.00

            	
              Class M-9

            
	
              Class M-10

            	
              (5)

            	
              $14,954,000.00

            	
              Class M-10

            
	
              Class X

            	
              (6)

            	
              (6)

            	
              Class X

            
	
              Class R

            	
              (7)

            	
              (7)

            	
              Class R

            
	
              Class P

            	
              (8)

            	
              (8)

            	
              Class
                P

            
	 	 	 	 

    

     

    
      	
              (1)

            	
              The
                Class A-1 Interest will bear interest during each Interest Accrual
                Period
                at a per annum rate equal to (a) on or prior to the Optional
                Termination Date, the lesser of (i) LIBOR plus the applicable
                Interest Margin and (ii) the Available Funds Cap or (b) after
                the Optional Termination Date, the lesser of (i) LIBOR plus the
                applicable Interest Margin and (ii) the Available Funds Cap. For
                purposes of the REMIC Provisions, the reference to “Available Funds Cap”
                in clause (ii) of the preceding sentence shall be deemed a reference
                to
                the REMIC 2 Net Funds Cap; therefore, on any Distribution Date on
                which
                the Interest Rate for the Class A-1 Certificates exceeds the REMIC
                2 Net
                Funds Cap, interest accruals based on such excess shall be treated
                as
                having been paid from the Excess Reserve Fund Account or the Supplemental
                Interest Trust, as applicable; on any Distribution Date on which
                the
                Interest Rate on the Class A-1 Certificates is based on the Available
                Funds Cap, the amount of interest that would have accrued on the
                Class A-1
                Certificates if the REMIC 2 Net Funds Cap were substituted for the
                Available Funds Cap shall be treated as having been paid by the Class
                A-1
                Certificateholders to the Supplemental Interest Trust, all pursuant
                to and
                as further provided in Section 8.11
                hereof.

            

    

     

    
      	
              (2)

            	
              The
                Class A-2 Interest will bear interest during each Interest Accrual
                Period
                at a per annum rate equal to (a) on or prior to the Optional
                Termination Date, the lesser of (i) LIBOR plus the applicable
                Interest Margin and (ii) the Available Funds Cap or (b) after
                the Optional Termination Date, the lesser of (i) LIBOR plus the
                applicable Interest Margin and (ii) the Available Funds Cap. For
                purposes of the REMIC Provisions, the reference to “Available Funds Cap”
                in clause (ii) of the preceding sentence shall be deemed a reference
                to
                the REMIC 2 Net Funds Cap; therefore, on any Distribution Date on
                which
                the Interest Rate for the Class A-2 Certificates exceeds the REMIC
                2 Net
                Funds Cap, interest accruals based on such excess shall be treated
                as
                having been paid from the Excess Reserve Fund Account or the Supplemental
                Interest Trust, as applicable; on any Distribution Date on which
                the
                Interest Rate on the Class A-2 Certificates is based on the Available
                Funds Cap, the amount of interest that would have accrued on the
                Class A-2
                Certificates if the REMIC 2 Net Funds Cap were substituted for the
                Available Funds Cap shall be treated as having been paid by the Class
                A-2
                Certificateholders to the Supplemental Interest Trust, all pursuant
                to and
                as further provided in Section 8.11
                hereof.

            

    

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

     

    
      	
              (3)

            	
              The
                Class A-3 Interest will bear interest during each Interest Accrual
                Period
                at a per annum rate equal to (a) on or prior to the Optional
                Termination Date, the lesser of (i) LIBOR plus the applicable
                Interest Margin and (ii) the Available Funds Cap or (b) after
                the Optional Termination Date, the lesser of (i) LIBOR plus the
                applicable Interest Margin and (ii) the Available Funds Cap. For
                purposes of the REMIC Provisions, the reference to “Available Funds Cap”
                in clause (ii) of the preceding sentence shall be deemed a reference
                to
                the REMIC 2 Net Funds Cap; therefore, on any Distribution Date on
                which
                the Interest Rate for the Class A-3 Certificates exceeds the REMIC
                2 Net
                Funds Cap, interest accruals based on such excess shall be treated
                as
                having been paid from the Excess Reserve Fund Account or the Supplemental
                Interest Trust, as applicable; on any Distribution Date on which
                the
                Interest Rate on the Class A-3 Certificates is based on the Available
                Funds Cap, the amount of interest that would have accrued on the
                Class A-3
                Certificates if the REMIC 2 Net Funds Cap were substituted for the
                Available Funds Cap shall be treated as having been paid by the Class
                A-3
                Certificateholders to the Supplemental Interest Trust, all pursuant
                to and
                as further provided in Section 8.11
                hereof.

            

    

     

    
      	
              (4)

            	
              The
                Class A-4 Interest will bear interest during each Interest Accrual
                Period
                at a per annum rate equal to (a) on or prior to the Optional
                Termination Date, the lesser of (i) LIBOR plus the applicable
                Interest Margin and (ii) the Available Funds Cap or (b) after
                the Optional Termination Date, the lesser of (i) LIBOR plus the
                applicable Interest Margin and (ii) the Available Funds Cap. For
                purposes of the REMIC Provisions, the reference to “Available Funds Cap”
                in clause (ii) of the preceding sentence shall be deemed a reference
                to
                the REMIC 2 Net Funds Cap; therefore, on any Distribution Date on
                which
                the Interest Rate for the Class A-4 Certificates exceeds the REMIC
                2 Net
                Funds Cap, interest accruals based on such excess shall be treated
                as
                having been paid from the Excess Reserve Fund Account or the Supplemental
                Interest Trust, as applicable; on any Distribution Date on which
                the
                Interest Rate on the Class A-4 Certificates is based on the Available
                Funds Cap, the amount of interest that would have accrued on the
                Class A-4
                Certificates if the REMIC 2 Net Funds Cap were substituted for the
                Available Funds Cap shall be treated as having been paid by the Class
                A-4
                Certificateholders to the Supplemental Interest Trust, all pursuant
                to and
                as further provided in Section 8.11
                hereof.

            

    

     

    
      	
              (5)

            	
              The
                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 and Class M-10 Interests will bear interest during
                each Interest Accrual Period at a per annum rate equal to (a) on or
                prior to the Optional Termination Date, the lesser of (i) LIBOR plus
                the applicable Interest Margin and (ii) the Available Funds Cap or
                (b) after the Optional Termination Date, the lesser of (i) LIBOR
                plus the applicable Interest Margin and (ii) the Available Funds Cap.
                For purposes of the REMIC Provisions, the reference to Available
                Funds Cap
                in clause (ii) of the preceding sentence shall be deemed to be a
                reference
                to the REMIC 2 Net Funds Cap; therefore, on any Distribution Date
                on which
                the Interest Rate for the Class M-1, M-2, M-3, M-4, M-5, M-6, M-7,
                M-8,
                M-9 and M-10 Certificates, as applicable, exceeds the REMIC 2 Net
                Funds
                Cap, interest accruals based on such excess shall be treated as having
                been paid from the Excess Reserve Fund Account or the Supplemental
                Interest Trust, as applicable; on any Distribution Date on which
                the
                Interest Rate on the Class M-1, M-2, M-3, M-4, M-5, M-6, M-7, M-8,
                M-9 and
                M-10 Certificates, as applicable, is based on the Available Funds
                Cap, the
                amount of interest that would have accrued on each such Class of
                Certificates if the REMIC 2 Net Funds Cap were substituted for the
                Available Funds Cap shall be treated as having been paid by the Class
                M-1,
                M-2, M-3, M-4, M-5, M-6, M-7, M-8, M-9 and M-10 Certificateholders,
                as
                applicable, to the Supplemental Interest Trust, all pursuant to and
                as
                further provided in Section 8.11 hereof.

            

    

     

    
      	
              (6)

            	
              For
                purposes of the REMIC Provisions, the Class X Certificate shall reflect
                beneficial ownership of the Class X Interest in the Upper Tier REMIC.
                The
                Class X Interest shall have an initial principal balance of $39,706,423.19
                (initial overcollateralization of $39,706,523.19 less $100.00 attributable
                to the Class P Principal Amount), and the right to receive distributions
                of such amount represents a regular interest in the Upper Tier REMIC.
                The
                Class X Interest shall also comprise two notional components, each
                of
                which represents a regular interest in the Upper Tier REMIC. The
                first
                such component has a notional balance that will at all times equal
                the
                aggregate of the principal amount of the Lower Tier Interests in
                REMIC 2,
                and, for each Distribution Date (and the related Interest Accrual
                Period)
                this notional component shall bear interest at a per annum rate equal
                to
                the excess, if any, of (i) (a) the weighted average of the interest
                rates
                on the Lower Tier Interests in REMIC 2 (other than any interest-only
                regular interest) minus (b) the Credit Risk Manager’s Fee over (ii) the
                Adjusted Lower Tier WAC. The second notional component represents
                the
                right to receive all distributions in respect of the Class LT2-IO
                interest
                in REMIC 2 (the “LT3-I” interest). In addition, for purposes of the REMIC
                Provisions, the Class X Certificate shall represent beneficial ownership
                of (i) the Excess Reserve Fund Account; (ii) the Supplemental Interest
                Trust, including the Swap Agreement, Swap Account, Cap Agreement,
                and Cap
                Account, and (iii) an interest in the notional principal contracts
                described in Section 8.11
                hereof.

            

    

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

     

    
      	
              (7)

            	
              The
                Class R Interest is the sole Class of residual interest in the Upper
                Tier REMIC. The Class R Interest is issued without a principal amount
                does not bear a stated Interest Rate. The Class R Certificate will
                be
                issued as a single certificate evidencing the initial Percentage
                Interest
                of such Class, and shall represent ownership of each of the Class
                R, Class
                LT1-R and Class LT2-R Interests.

            

    

     

    
      	
              (8)

            	
              The
                Class P Certificate shall not bear interest at a stated Interest
                Rate.
                Prepayment Charges paid with respect to the Mortgage Loans shall
                be paid
                to the Class P Certificateholders as provided in Section 4.02(b).
                For
                purposes of the REMIC Provisions, the Class P Certificate shall represent
                a regular interest in the Upper Tier REMIC. The Class P Certificate
                will
                have a Class P Principal Amount of
                $100.

            

    

     

    The
      minimum denomination for each Class of Certificates, other than the
      Class P, Class R and the Class X Certificates, will be $25,000 of
      Certificate Balance ($100,000 with respect to initial investors resident in
      a
      Member State of the European Economic Area subject to the EU Prospectus
      Directive 2003/71/EC) with integral multiples of $1 in excess thereof, except
      that one Certificate in each Class may be issued in a different amount. The
      minimum denomination for each of the Class P and Class X Certificates
      will be a 10.00% Percentage Interest in such Class, and the minimum denomination
      for the Class R Certificates shall be 100% Percentage Interest in such
      Class.

     

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

     

    
      	
              Book-Entry
                Certificates

            	
              All
                Classes of Certificates other than the Physical
                Certificates.

            

    

     

    
      	
              Class A
                Certificates

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

            

    

     

    
      	
              Class M
                Certificates

            	
              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 and
                Class M-10 Certificates.

            

    

     

    ERISA-Restricted

    
      	
            	
              Certificates

            	
              Any
                Class P, Class X and Class R Certificates and any Certificate with
                a
                rating which falls below the lowest applicable permitted rating under
                the
                Underwriters’ Exemption.

            

    

     

    ERISA-Restricted

    
      	
            	
              Trust
                Certificates

            	
              Any
                Offered Certificate prior to the termination of the Cap Agreement
                and the
                Swap Agreement.

            

    

     

    
      	
              LIBOR
                Certificates

            	
              Collectively,
                the Class A Certificates and the Class M
                Certificates.

            

    

     

    
      	
              Non-Delay
                Certificates

            	
              The
                Class A Certificates, the Class M Certificates and the Class X
                Certificates.

            

    

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

     

    
      	
              Offered
                Certificates

            	
              All
                Classes of Certificates other than the Private
                Certificates.

            

    

     

    
      	
              Physical
                Certificates

            	
              Class P,
                Class X and Class R
                Certificates.

            

    

     

    
      	
              Private
                Certificates

            	
              Class
                M-10, Class P, Class X and Class R
                Certificates.

            

    

     

    
      	
              Rating
                Agencies

            	
              Fitch,
                Moody’s and Standard &
Poor’s.

            

    

     

    
      	
              Regular
                Certificates

            	
              All
                Classes of Certificates other than the Class R
                Certificates.

            

    

     

    
      	
              Residual
                Certificates

            	
              Class R
                Certificates.

            

    

     

    ARTICLE
      I

     

    DEFINITIONS

     

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

     

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

     

    Account:
      Any of
      the Collection Accounts, the Distribution Account and any Escrow Account, with
      respect to the Supplemental Interest Trust, the Excess Reserve Fund Account
      and
      the Supplemental Interest Trust Account. Each Account shall be an Eligible
      Account.

     

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

     

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

     

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

     

    Additional
      Termination Event:
      As
      defined in the Cap Agreement or the Swap Agreement, as applicable.

     

    Adjustable
      Rate Mortgage Loan:
      A
      Mortgage Loan which provides for the adjustment of the Mortgage Rate payable
      in
      respect thereto.

     

    Adjusted
      Lower Tier WAC:
      For any
      Distribution Date (and the related Interest Accrual Period), an amount equal
      to
      (i) two, multiplied by (ii) the weighted average of the interest rates for
      such
      Distribution Date for the Class LT2-A-1, LT2-A-2, LT2-A-3, LT2-A-4, LT2-M-1,
      LT2-M-2, LT2-M-3, LT2-M-4, LT2-M-5, LT2-M-6, LT2-M-7, LT2-M-8, LT2-M-9, LT2-M-10
      and LT2-Q Interests, weighted in proportion to their Class Certificate Balances
      as of the beginning of the related Interest Accrual Period and computed by
      subjecting the rate on the Class LT2-Q Interest to a cap of 0.00%, and by
      subjecting the rate on each of the Class LT2-A-1, LT2-A-2, LT2-A-3, LT2-A-4,
      LT2-M-1, LT2-M-2, LT2-M-3, LT2-M-4, LT2-M-5, LT2-M-6, LT2-M-7, LT2-M-8, LT2-M-9
      and LT2-M-10 Interests to a cap that corresponds to the Interest Rate
      (determined by substituting the REMIC 2 Net Funds Cap for the Available Funds
      Cap) for the Corresponding Class of Certificates; provided,
      however,
      that
      for each Class of LIBOR Certificates, the Certificate Interest Rate shall be
      multiplied by the quotient of (a) the actual number of days in the Interest
      Accrual Period, divided by (b) 30. 

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

     

    Advance:
      Any
      P&I Advance or Servicing Advance.

     

    Affected
      Party:
      As
      defined in the Swap Agreement.

     

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

     

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

     

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

     

    Applied
      Realized Loss Amount:
      With
      respect to any Distribution Date, the amount, if any, by which the aggregate
      Class Certificate Balance of the LIBOR Certificates after distributions of
      principal on such Certificates on such Distribution Date exceeds the aggregate
      Stated Principal Balance of the Mortgage Loans for such Distribution
      Date.

     

    Appraised
      Value:
      The
      value set forth in an appraisal made in connection with the origination of
      the
      related Mortgage Loan as the value of the Mortgaged Property.

     

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

     

    Available
      Funds:
      With
      respect to any Distribution Date and the Mortgage Loans to the extent received
      by the Master Servicer (x) the sum of (i) all scheduled installments
      of interest (net of the related Expense Fees) and principal due on the Due
      Date
      on such Mortgage Loans in the related Due Period and received by the Servicers
      on or prior to the related Determination Date, together with any
      P&I Advances in respect thereof; (ii) all Condemnation Proceeds,
      Insurance Proceeds, Liquidation Proceeds and Subsequent Recoveries received
      by
      the Servicers during the related Prepayment Period (in each case, net of
      unreimbursed expenses incurred in connection with a liquidation or foreclosure
      and unreimbursed Advances, if any); (iii) all partial or full prepayments
      on the Mortgage Loans received by the Servicers during the related Prepayment
      Period together with all Compensating Interest paid by the Servicers in
      connection therewith (excluding any Prepayment Charges); (iv) all
      Substitution Adjustment Amounts with respect to the substitutions of Mortgage
      Loans that occur on or prior to the related Determination Date; (v) all
      amounts received with respect to such Distribution Date as the Repurchase Price
      in respect of a Mortgage Loan repurchased by the Sponsor on or prior to the
      related Determination Date; and (vi) the proceeds with respect to the
      termination of the Trust Fund pursuant to clause (a) of
      Section 11.01; reduced by (y) amounts in reimbursement for Advances
      previously made with respect to the Mortgage Loans and other amounts as to
      which
      a Servicer, the Depositor, the Master Servicer, the Securities Administrator,
      the Credit Risk Manager or the Trustee are entitled to be paid or reimbursed
      pursuant to the Servicing Agreements or this Agreement.

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

     

    Available
      Funds Cap:
      With
      respect to the Mortgage Loans as of any Distribution Date, the per annum rate
      (subject to adjustment based on the actual number of days elapsed in the related
      Interest Accrual Period) equal to (x) the weighted average of the Expense
      Adjusted Mortgage Rate for each Mortgage Loan then in effect at the beginning
      of
      the related Due Period (not including for this purpose any Mortgage Loans for
      which Principal Prepayments in Full have been received and distributed in the
      month prior to that Distribution Date) minus
      (y) a
      percentage equal to the product of (i) a fraction, the numerator of which is
      equal to the portion of the Net Derivative Payment or Swap Termination Payment
      (other than a Swap Termination Payment resulting from a Derivative Counterparty
      Trigger Event) made to the Swap Counterparty with respect to such Due Period,
      and the denominator of which is equal to the aggregate Stated Principal Balance
      of the Mortgage Loans as of the beginning of the related Due Period and (ii)
      12.

     

    Back-up
      Sarbanes-Oxley Certification:
      As
      defined in Section 3.05.

     

    Basic
      Principal Payment Amount:
      With
      respect to any Distribution Date, the excess of (i) the Principal
      Remittance Amount for such Distribution Date over (ii) the Excess
      Overcollateralization Amount, if any, for such Distribution Date.

     

    Basis
      Risk Carryover Amount:
      With
      respect to each Class of LIBOR Certificates, as of any Distribution Date,
      the sum of (A) if on such Distribution Date the Interest Rate for any
      Class of LIBOR Certificates is based upon the Available Funds Cap, the
      excess of (i) the amount of interest such Class of Certificates would
      otherwise be entitled to receive on such Distribution Date had such Interest
      Rate been calculated as the sum of LIBOR and the applicable Interest Margin
      on
      such Class of Certificates for such Distribution Date, over (ii) the
      amount of interest payable on such Class of Certificates based on the
      Available Funds Cap for such Distribution Date and (B) the portion of any
      such excess described in clause (A) for such Class of Certificates
      from all previous Distribution Dates not previously paid, together with interest
      thereon at a rate equal the applicable Interest Rate for each such Class of
      Certificates for such Distribution Date.

     

    Basis
      Risk Payment:
      For any
      Distribution Date, an amount equal to the lesser of (i) the aggregate of
      the Basis Risk Carryover Amounts of the LIBOR Certificates for such Distribution
      Date and (ii) the Class X Distributable Amount (prior to any reduction
      for Basis Risk Payments).

     

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

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

     

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

     

    Cap
      Account:
      The
      sub-account of the Supplemental Interest Trust Account created pursuant to
      Section 4.06(a).

     

    Cap
      Agreement:
      The
      interest rate cap agreement entered into by the Supplemental Interest Trust
      and
      the Cap Counterparty, dated June 5, 2007, which agreement provides for the
      monthly payment specified to the Supplemental Interest Trust Trustee (for the
      benefit of Certificateholders) commencing with the Distribution Date in July
      2007 and ending on the Distribution Date in June 2014, by the Cap Counterparty,
      but subject to the conditions set forth therein, together with any schedule,
      confirmations or other agreements relating thereto, attached as Exhibit
      P.

     

    Cap
      Amount:
      With
      respect to each Distribution Date, the amount of any Cap Payment deposited
      into
      the Cap Account.

     

    Cap
      Counterparty:
      The
      counterparty to the Supplemental Interest Trust under the Cap Agreement, and
      any
      successor in interest or its assigns. Initially, the Cap Counterparty shall
      be
      ABN AMRO Bank, N.V.

     

    Cap
      Payment:
      With
      respect to each Distribution Date, any payment required to be made by the Cap
      Counterparty to the Supplemental Interest Trust pursuant to the terms of the
      Cap
      Agreement.

     

    Cap
      Payment Date:
      For as
      long as the Cap Agreement is in effect or any amounts remain unpaid thereunder,
      the Business Day immediately preceding each Distribution Date.

     

    Cap
      Replacement Receipts:
      As
      defined in Section 4.08(b)(i).

     

    Cap
      Replacement Receipts Account:
      As
      defined in Section 4.08(b)(i).

    

    Cap
      Termination Payment:
      Upon
      the designation of an “Early Termination Date” as defined in the Cap Agreement,
      the payment required to be made by the Cap Counterparty to the Supplemental
      Interest Trust pursuant to the terms of the Cap Agreement and any unpaid amounts
      due on previous Cap Payment Dates and accrued interest thereon as provided
      in
      the Cap Agreement, as calculated by the Cap Counterparty and furnished to the
      Securities Administrator.

     

    Cap
      Termination Receipts:
      As
      defined in Section 4.08(b)(i).

     

    Cap
      Termination Receipts Account:
      As
      defined in Section 4.08(b)(i).

     

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

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

     

    Certificate
      Balance:
      With
      respect to any Certificate, other than a Class X, Class P or
      Class R Certificate, at any date, the maximum dollar amount of principal to
      which the Holder thereof is then entitled hereunder, such amount being equal
      to
      the Denomination thereof minus all distributions of principal previously made
      with respect thereto and in the case of any Class M Certificates, reduced by
      any
      Applied Realized Loss Amounts allocated to such Class of Certificates
      pursuant to Section 4.05; provided,
      however,
      that
      immediately following the Distribution Date on which a Subsequent Recovery
      is
      distributed, the Class Certificate Balances of any Class or Classes of
      Certificates that have been previously reduced by Applied Realized Loss Amounts
      will be increased, in order of seniority, by the amount of any Subsequent
      Recovery distributed on such Distribution Date (up to the amount of Unpaid
      Realized Loss Amount for such Class or Classes for such Distribution Date).
      The Class P Certificates are issued with an initial Class P Principal
      Amount of $100. The Class X and Class R Certificates have no
      Certificate Balance. 

     

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

     

    Certificate
      Register:
      The
      register maintained pursuant to Section 5.02.

     

    Certificateholder
      or
Holder:
      The
      person in whose name a Certificate is registered in the Certificate Register,
      except that, solely for the purpose of giving any consent pursuant to this
      Agreement, any Certificate registered in the name of the Depositor or any
      Affiliate of the Depositor shall be deemed not to be Outstanding and the
      Percentage Interest evidenced thereby shall not be taken into account in
      determining whether the requisite amount of Percentage Interests necessary
      to
      effect such consent has been obtained; provided,
      however,
      that if
      any such Person (including the Depositor) owns 100.00% of the Percentage
      Interests evidenced by a Class of Certificates, such Certificates shall be
      deemed to be Outstanding for purposes of any provision hereof that requires
      the
      consent of the Holders of Certificates of a particular Class as a condition
      to the taking of any action hereunder. The Securities Administrator is entitled
      to rely conclusively on a certification of the Depositor or any Affiliate of
      the
      Depositor in determining which Certificates are registered in the name of an
      Affiliate of the Depositor.

     

    Certification
      Parties:
      As
      defined in Section 3.05.

     

    Certifying
      Person:
      As
      defined in Section 3.05.

     

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

     

    Class A-1
      Certificates:
      All
      Certificates bearing the Class designation of “Class A-1”.

     

    Class A-2
      Certificates:
      All
      Certificates bearing the Class designation of “Class A-2”.

     

    Class A-3
      Certificates:
      All
      Certificates bearing the Class designation of “Class A-3”.

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

     

    Class A-4
      Certificates:
      All
      Certificates bearing the Class designation of “Class A-4”.

     

    Class A
      Certificates:
      As
      specified in the Preliminary Statement.

     

    Class Certificate
      Balance:
      With
      respect to any Class of LIBOR Certificates and as to any date of determination,
      the aggregate of the Certificate Balances of all Certificates of such
      Class as of such date. With respect to the Class X, Class P and Class R
      Certificates, zero. With respect to any Lower Tier Interest and as to any date
      of determination, the initial Class Principal Balance as shown or described
      in
      the table set forth in the Preliminary Statement to this Agreement for the
      issuing REMIC, as reduced by any principal distributed with respect to such
      Lower Tier Interest and Realized Losses allocated to such Lower Tier
      Interest.

     

    Class
      I Shortfalls: As
      defined in Section 8.11 hereof. For
      purposes of clarity, the Class I Shortfall for any Distribution Date shall
      equal
      the amount payable to the Derivative Counterparty on such Distribution Date
      in
      excess of the amount payable with respect to the Class LT3-I interest in the
      Upper Tier REMIC on such Distribution Date, all as further provided in Section
      8.11 hereof.
      

     

    Class M
      Certificates:
      As
      specified in the Preliminary Statement.

     

    Class M
      Principal Payment Amount:
      With
      respect to any Distribution Date and any Class of Class M
      Certificates, the lesser of (i) the excess of (a) the Principal
      Payment Amount over (b) the aggregate amount distributed on that
      Distribution Date as principal to all Classes of Certificates more senior than
      that Class of Class M Certificates and (ii) the excess of (a) the sum
      of the aggregate Class Certificate Balances of all Class of
      Certificates more senior than that Class of Class M Certificates
      (after giving effect to all amounts distributed on that Distribution Date to
      those Classes of more senior certificates and the Class Certificate Balance
      of that Class of Class M Certificates immediately prior to that
      Distribution Date over (b) the lesser of:

     

    (x) the
      percentage set forth in the table below for the applicable Class of
      Class M Certificates multiplied by the aggregate Stated Principal Balance
      of the Mortgage Loans for that Distribution Date:

    

    
      	
              Class

            	 	
              Percentage

            
	
              M-1

            	 	
              55.20%

            
	
              M-2

            	 	
              63.20%

            
	
              M-3

            	 	
              68.10%

            
	
              M-4

            	 	
              72.60%

            
	
              M-5

            	 	
              76.70%

            
	
              M-6

            	 	
              80.30%

            
	
              M-7

            	 	
              83.80%

            
	
              M-8

            	 	
              86.60%

            
	
              M-9

            	 	
              89.40%

            
	
              M-10

            	 	
              92.30%

            

    

     

    

    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

     

    and

     

    (y) the
      excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
      for that Distribution Date over 0.50% of the aggregate Stated Principal Balance
      of the Mortgage Loans as of the Cut-off Date, until the Class Certificate
      Balance of that Class of Class M Certificates has been reduced to
      zero.

     

    Class M-1
      Certificates:
      All
      Certificates bearing the Class designation of “Class M-1”.

     

    Class M-2
      Certificates:
      All
      Certificates bearing the Class designation of “Class M-2”.

     

    Class M-3
      Certificates:
      All
      Certificates bearing the Class designation of “Class M-3”.

     

    Class M-4
      Certificates:
      All
      Certificates bearing the Class designation of “Class M-4”.

     

    Class M-5
      Certificates:
      All
      Certificates bearing the Class designation of “Class M-5”.

     

    Class M-6
      Certificates:
      All
      Certificates bearing the Class designation of “Class M-6”.

     

    Class M-7
      Certificates:
      All
      Certificates bearing the Class designation of “Class M-7”.

     

    Class M-8
      Certificates:
      All
      Certificates bearing the Class designation of “Class M-8”.

     

    Class M-9
      Certificates:
      All
      Certificates bearing the Class designation of “Class M-9”.

     

    Class M-10
      Certificates:
      All
      Certificates bearing the Class designation of “Class M-10”.

     

    Class Notional
      Balance:
      Not
      applicable.

     

    Class P
      Certificates:
      All
      Certificates bearing the Class designation of “Class P”.

     

    Class P
      Principal Amount:
      As of
      the Closing Date, $100.00.

     

    Class R
      Certificates:
      All
      Certificates bearing the Class designation of “Class R”.

     

    Class X
      Certificates:
      All
      Certificates bearing the Class designation of “Class X”.

    
      
         

      

      
        -16-

        
          

        

      

      
         

      

    

     

    Class
      X Distributable Amount:
      With
      respect to any Distribution Date, the amount of interest that has accrued on
      the
      Class X Notional Balance, as described in the Preliminary Statement, but that
      has not been distributed prior to such date. In addition, such amount shall
      include the initial Overcollateralization Amount of $39,706,523.19 less $100
      (which $100 shall be allocated to the Class P Certificates) to the extent such
      amount has not been distributed on an earlier Distribution Date as part of
      the
      Overcollateralization Reduction Amount.

     

    Class
      X Notional Balance:
      With respect to
      any Distribution Date (and the related Interest Accrual Period) the aggregate
      principal balance of the regular interests in REMIC 2 as specified in the
      Preliminary Statement hereto.

     

    Closing
      Date:
      June 5,
      2007.

     

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

     

    Collateral
      Account:
      The
      account maintained by the Supplemental Interest Trust Trustee in accordance
      with
      the provisions of Section 4.06(b).

     

    Collection
      Account:
      With
      respect to each Servicer, the account defined as a “Custodial Account” in the
      related Servicing Agreement

    

    Commission:
      The
      United States Securities and Exchange Commission.

     

     

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

     

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

     

    Corporate
      Trust Office:
      With
      respect to the Securities Administrator, (i) for transfer, presentation or
      surrender of Certificates, the office at Wells Fargo Center, Sixth Street and
      Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust
      Services -HASCO 2007-NC1, and (ii) for all other purposes, 9062 Old Annapolis
      Road, Columbia, Maryland 21045, Attention: Client Manager - HASCO 2007-NC1
      or at
      such other address as the Securities Administrator may designate from time
      to
      time by notice to the Certificateholders, the Depositor, the Master Servicer
      and
      the Trustee. With respect to the Trustee, the designated office of the Trustee
      in the State of California at which any particular time its corporate trust
      business with respect to this Agreement is administered, which office at the
      date of the execution of this Agreement is located at 1761 East St. Andrew
      Place, Santa Ana, California 92705-4934, Attention: Trust Administration -
      HB07C1, facsimile number (714) 247-6329, and its telephone number is (714)
      247-6000 and which is also the address to which notices to and correspondence
      with the Trustee under this Agreement should be directed. 

    
      
         

      

      
        -17-

        
          

        

      

      
         

      

    

     

    Corresponding
      Class:
      As set
      forth in first table under the heading REMIC 2 and in the first table under
      the
      heading Upper Tier REMIC in the Preliminary Statement.

     

    Countrywide
      Servicing:
      Countywide Home Loans Servicing LP.

     

    Credit
      Enhancement Percentage:
      With
      respect to any Distribution Date, the percentage obtained by dividing
      (x) the sum of (i) the aggregate Class Certificate Balance of the
      Class M Certificates and (ii) the Overcollateralization Amount
      (assuming the Overcollateralization Amount is not less than zero and in each
      case after taking into account the distributions of principal for such
      Distribution Date assuming no Trigger Event has occurred) by (y) the
      aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
      Date.

     

    Credit
      Risk Manager:
      OfficeTiger Global Real Estate Services Inc., and its successors and assigns.
      

     

    Credit
      Risk Management Agreement:
      Each of
      the loan performance management agreements, dated as of the Closing Date,
      entered into by (i) Wells Fargo Bank, N.A., as Servicer, and the Credit Risk
      Manager, and (ii) the Master Servicer and the Credit Risk Manager.

     

    Credit
      Risk Manager’s Fee:
      With
      respect to any Distribution Date and each Mortgage Loan, an amount equal to
      the
      product of (a) one twelfth, (b) the Credit Risk Manager’s Fee Rate and (c) the
      Stated Principal Balance of such Mortgage Loan as of the first day of the
      related Due Period; provided, however, that such amount shall not be less than
      $1,500.00 on each Distribution Date.

     

    Credit
      Risk Manager’s Fee Rate:
      0.014% per
      annum.

     

    Credit
      Support Annex:
      The
      credit support annex to the Swap Agreement and the Cap Agreement dated as of
      June 5, 2007, between the Supplemental Interest Trust Trustee, on behalf of
      the
      Supplemental Interest Trust, the Swap Counterparty and Cap
      Counterparty.

     

    Cumulative
      Loss Percentage:
      With
      respect to any Distribution Date, the percentage equivalent of a fraction,
      the
      numerator of which is the aggregate amount of Realized Losses incurred from
      the
      Cut-off Date to the last day of the calendar month preceding the month in which
      such Distribution Date occurs and the denominator of which is the Cut-off Date
      Pool Principal Balance of the Mortgage Loans.

     

    Cumulative
      Loss Trigger Event:
      If,
      with respect to any Distribution Date, the quotient (expressed as a
      percentage) of (x) the aggregate amount of Realized Losses incurred since
      the Cut-off Date through the last day of the related Prepayment Period, divided
      by (y) the Cut-off Date Pool Principal Balance, exceeds the applicable loss
      percentages set forth below with respect to such Distribution
      Date:

    
      
         

      

      
        -18-

        
          

        

      

      
         

      

    

     

    
      	
              Distribution
                Date Occurring In:

            	 	
              Loss
                Percentage:

            
	
              June
                2009 through May 2010 

            	 	
              1.80%
                for the first month, plus an additional 1/12th of 2.25% for each
                month
                thereafter 

            
	
              June
                2010 through May 2011 

            	 	
              4.05%
                for the first month, plus an additional 1/12th of 2.30% for each
                month
                thereafter 

            
	
              June
                2011 through May 2012

            	 	
              6.35%
                for the first month, plus an additional 1/12th of 1.85% for each
                month
                thereafter 

            
	
              June
                2012 through May 2013

            	 	
              8.20%
                for the first month, plus an additional 1/12th of 0.95% for each
                month
                thereafter 

            
	
              June
                2013 through May 2014

            	 	
              9.15%
                for the first month, plus an additional 1/12th of 0.05% for each
                month
                thereafter 

            
	
              June
                2014 and thereafter

            	 	
              9.20%
                

            

    

     

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

     

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

     

    Cut-off
      Date:
      May 1,
      2007.

     

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

     

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

     

    Data
      Tape Information:
      With
      respect to each Mortgage Loan, the same information (provided as of the Cut-off
      Date) included in the data fields specified under the definition of “Mortgage
      Loan Schedule” in the Master MLPISA, with such additions and modifications as
      agreed upon by the Mortgage Loan Seller and the Depositor. A copy of the Master
      MLPISA is attached at Exhibit Q hereto.

     

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

     

    Defaulting
      Party:
      As
      defined in the Swap Agreement or Cap Agreement, as applicable.

     

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

    
      
         

      

      
        -19-

        
          

        

      

      
         

      

    

     

    Definitive
      Certificates:
      Any
      Certificate evidenced by a Physical Certificate and any Certificate issued
      in
      lieu of a Book-Entry Certificate pursuant to Section 5.02(e).

     

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

     

    Delinquency
      Rate:
      For any
      calendar month, a fraction, expressed as a percentage, the numerator of which
      is
      the aggregate Stated Principal Balance of 60+ Day Delinquent Mortgage Loans
      (including Mortgage Loans that have been modified within the last 12 months)
      as
      of the close of business on the last day of such month (not including those
      Mortgage Loans that are liquidated as of the end of the related Prepayment
      Period), and the denominator of which is the aggregate Stated Principal Balance
      of the Mortgage Loans as of the close of business on the last day of such month
      (not including those Mortgage Loans that are liquidated as of the end of the
      related Prepayment Period).

     

    Delinquency
      Trigger Event:
      With
      respect to any Distribution Date on or after the Stepdown Date, the
      circumstances in which the Rolling Three Month Delinquency Rate as of the last
      day of the immediately preceding calendar month exceeds the applicable
      percentages of the Credit Enhancement Percentage for the prior Distribution
      Date
      (for the purpose of this definition, the Credit Enhancement Percentage for
      each
      class of the Class M Certificates will be calculated by dividing (x) the sum
      of
      (i) the aggregate Class Certificate Balance of the Class M Certificates with
      a
      lower payment priority than that Class and (ii) the Overcollateralization Amount
      (in each case after taking into account distributions of principal for that
      Distribution Date) by (y) the aggregate Stated Principal Balance of the Mortgage
      Loans for that Distribution Date) as
      set
      forth below for the most senior Class of LIBOR Certificates then
      outstanding:

    

    
      	
              Class

            	 	
              Percentage

            
	
              A

            	 	
              25.65%

            
	
              M-1

            	 	
              30.57%

            
	
              M-2

            	 	
              37.22%

            
	
              M-3

            	 	
              42.94%

            
	
              M-4

            	 	
              49.99%

            
	
              M-5

            	 	
              58.79%

            
	
              M-6

            	 	
              69.53%

            
	
              M-7

            	 	
              84.55%

            
	
              M-8

            	 	
              102.22%

            
	
              M-9

            	 	
              129.22%

            
	
              M-10

            	 	
              177.88%

            

    

     

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

    
      
         

      

      
        -20-

        
          

        

      

      
         

      

    

     

    Depositor:
      HSI
      Asset Securitization Corporation, a Delaware corporation, and its successors
      in
      interest.

     

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

     

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

     

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

     

    Derivative
      Agreement:
      The
      Swap Agreement and the Cap Agreement.

     

    Derivative
      Counterparty:
      Collectively, the Cap Counterparty and the Swap Counterparty.

     

    Derivative
      Payment Date:
      For so
      long as either the Cap Agreement or the Swap Agreement is in effect, the
      Business Day preceding each Distribution Date.

     

    Determination
      Date:
      means,
      for each Remittance Date (i) with respect to Wells Fargo, as Servicer, the
      business day immediately preceding such Remittance Date, and (ii) with respect
      to Countrywide Servicing, the 15th
      day of
      the calendar month in which such Remittance Date occurs, or if that day is
      not a
      business day, the immediately succeeding business day.

     

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

     

    Distribution
      Account:
      The
      separate Eligible Account created and maintained by the Securities Administrator
      pursuant to Section 3.01(c) in the name of the Securities Administrator as
      paying agent for the benefit of the Trustee and the Certificateholders and
      designated “Wells Fargo Bank, N.A. as securities administrator in trust for
      registered holders of HSI Asset Securitization Corporation Trust 2007-NC1
      Mortgage Pass-Through Certificates, Series 2007-NC1”. Funds in the
      Distribution Account shall be held in trust for the Certificateholders for
      the
      uses and purposes set forth in this Agreement.

    
      
         

      

      
        -21-

        
          

        

      

      
         

      

    

     

    Distribution
      Account Deposit Date:
      As to
      any Distribution Date, 12:00 noon New York City time on the third Business
      Day
      immediately preceding such Distribution Date.

     

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

     

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

     

    Due
      Date:
      The day
      of the month on which the Scheduled Payment is due on a Mortgage Loan, exclusive
      of any days of grace.

     

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

     

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

     

    Eligible
      Account:
      Either
      (i) an account maintained with a federal or state-chartered depository
      institution or trust company that complies with the definition of Eligible
      Institution, (ii) an account maintained with the corporate trust department
      of a
      federal depository institution or state-chartered depository institution subject
      to regulations regarding fiduciary funds on deposit similar to Title 12 of
      the
      U.S. Code of Federal Regulation Section 9.10(b), which, in either case, has
      corporate trust powers and is acting in its fiduciary capacity or (iii) any
      other account acceptable to each Rating Agency. Eligible Accounts may bear
      interest, and may include, if otherwise qualified under this definition,
      accounts maintained with the Securities Administrator.

     

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

     

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

     

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

    
      
         

      

      
        -22-

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

    Excess
      Overcollateralization Amount:
      With
      respect to any Distribution Date, the excess, if any, of (a) the
      Overcollateralization Amount (for purposes of this calculation only, assuming
      100% of the Principal Remittance Amount is applied as a principal payment to
      the
      LIBOR Certificates on such Distribution Date, but before giving effect to any
      other distributions on the LIBOR Certificates in reduction of their respective
      Class Certificate Balances on such Distribution Date) on such Distribution
      Date
      over (b) the Overcollateralization Target Amount for such Distribution
      Date.

     

    Excess
      Reserve Fund Account:
      The
      separate Eligible Account created and maintained by the Securities Administrator
      under the Supplemental Interest Trust pursuant to Sections 3.01(a) and
      3.01(b) in the name of the Securities Administrator as paying agent for the
      benefit of the LIBOR Certificateholders and the Class X Certificateholders
      and
      designated “Wells Fargo Bank, N.A. as securities administrator in trust for
      registered holders of HSI Asset Securitization Corporation Trust 2007-NC1,
      Mortgage Pass-Through Certificates, Series 2007-NC1”. Funds in the Excess
      Reserve Fund Account shall be held in trust for such Certificateholders for
      the
      uses and purposes set forth in this Agreement. Amounts on deposit in the Excess
      Reserve Fund Account shall not be invested. The Excess Reserve Fund Account
      shall be considered part of the Supplemental Interest Trust but not part of
      any
      REMIC.

     

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

     

    Excluded
      Trust Assets:
      As
      defined in the Preliminary Statement.

     

    Expense
      Adjusted Mortgage Rate:
      With
      respect to any Distribution Date and as to each Mortgage Loan, the per annum
      rate equal to the Mortgage Rate as of the first day of the related Due Period
      less the Expense Fee Rate.

     

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

     

    Expense
      Fee Rate:
      As to
      each Mortgage Loan, a per annum rate equal to the Servicing Fee
      Rate.

    
      
         

      

      
        -23-

        
          

        

      

      
         

      

    

     

    Extra
      Principal Payment Amount:
      As of
      any Distribution Date, the lesser of (x) the related Total Monthly Excess Spread
      for such Distribution Date and (y) the related Overcollateralization
      Deficiency for such Distribution Date. 

     

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

     

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

     

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

     

    Final
      Scheduled Distribution Date:
      The
      Final Scheduled Distribution Date for each Class of Certificates is the
      Distribution Date occurring in April 2037.

     

    Fitch:
      Fitch,
      Inc., or any successor thereto. If Fitch is designated as a Rating Agency in
      the
      Preliminary Statement, for purposes of Section 12.05 the address for
      notices to Fitch shall be Fitch, Inc., One State Street Plaza, New York, New
      York 10004, Attention: MBS Monitoring - HASCO (HSI Asset Securitization
      Corporation Trust 2007-NC1), or such other address as Fitch may hereafter
      furnish to the Depositor and the Securities Administrator.

     

    Fixed
      Rate Mortgage Loan:
      A
      Mortgage Loan with respect to which the Mortgage Rate set forth in the Mortgage
      Note is fixed for the term of such Mortgage Loan.

     

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

     

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

     

    Gross
      Margin:
      With
      respect to each Adjustable Rate Mortgage Loan, the fixed percentage amount
      set
      forth in the related Mortgage Note to be added to the Index to determine the
      Mortgage Rate.

     

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

    
      
         

      

      
        -24-

        
          

        

      

      
         

      

    

     

    Index:
      As to
      each Adjustable Rate Mortgage Loan, the six-month LIBOR index, from time to
      time
      in effect for the adjustment of the Mortgage Rate as set forth in the related
      Mortgage Note.

     

    Initial
      Certification:
      As
      defined in Section 2.02.

     

    Initial
      Sale Date:
      The
      date the Mortgage Loan was purchased by the Sponsor from the Mortgage Loan
      Seller under the Master MLPISA.

     

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

     

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

     

    Interest
      Accrual Period:
      With
      respect to each Class of LIBOR Certificates and any Distribution Date, the
      period commencing on the Distribution Date occurring in the month preceding
      the
      month in which the current Distribution Date occurs and ending on the day
      immediately preceding the current Distribution Date (or, in the case of the
      first Distribution Date, the period from and including the Closing Date to
      but
      excluding such first Distribution Date). For purposes of computing interest
      accruals on each Class of LIBOR Certificates, each Interest Accrual Period
      has the actual number of days in such month and each year is assumed to have
      360 days. With respect to each Class of Lower Tier Interests and any
      Distribution Date, the calendar month immediately preceding the month in which
      such Distribution Date occurs. 

     

    Interest
      Carry Forward Amount:
      As of
      any Distribution Date and any Class of LIBOR Certificates, the sum of, if
      applicable, (i) the portion of the Interest Payment Amount from Distribution
      Dates prior to the current Distribution Date remaining unpaid immediately prior
      to the current Distribution Date (excluding any Basis Risk Carryover Amount
      with
      respect to such Class), and (ii) interest on the amount in clause (i) above
      at
      the applicable Interest Rate (to the extent permitted by applicable
      law).

     

    Interest
      Margin:
      Except
      as set forth in the following sentence, with respect to each Class of LIBOR
      Certificates, the following percentages: Class A-1 Certificates, 0.100%;
      Class A-2 Certificates, 0.140%; Class A-3 Certificates, 0.180%;
      Class A-4 Certificates, 0.280%; Class M-1 Certificates, 0.280%;
      Class M-2 Certificates, 0.310%; Class M-3 Certificates, 0.350%;
      Class M-4 Certificates, 0.600%; Class M-5 Certificates, 0.700%;
      Class M-6 Certificates, 1.000%, Class M-7 Certificates, 1.650%,
      Class M-8 Certificates, 2.000%, Class M-9 Certificates, 2.000% and
      Class M-10 Certificates, 1.750%. On the first Distribution Date after the
      Optional Termination Date, the Interest Margins shall increase to the following
      percentages: Class A-1 Certificates, 0.200%; Class A-2 Certificates,
      0.280%; Class A-3 Certificates, 0.360%; Class A-4 Certificates,
      0.560%; Class M-1 Certificates, 0.420%; Class M-2 Certificates,
      0.465%; Class M-3 Certificates, 0.525%; Class M-4 Certificates,
      0.900%; Class M-5 Certificates, 1.050%; Class M-6 Certificates,
      1.500%, Class M-7 Certificates, 2.475%, Class M-8 Certificates,
      3.000%, Class M-9 Certificates, 3.000% and Class M-10 Certificates,
      2.625%.

    
      
         

      

      
        -25-

        
          

        

      

      
         

      

    

     

    Interest
      Payment Amount:
      With
      respect to any Distribution Date for each Class of LIBOR Certificates, the
      amount of interest accrued during the related Interest Accrual Period at the
      applicable Interest Rate on the related Class Certificate Balance
      immediately prior to such Distribution Date, as reduced by such Class’s share of
      Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls for such
      Distribution Date allocated to such Class pursuant to
      Section 4.02.

     

    Interest
      Rate:
      For
      each Class of LIBOR Certificates, each Class of Upper Tier REMIC Regular
      Interest and each class of Lower Tier Interest, the per annum rate set forth
      or
      calculated in the manner described in the Preliminary Statement.

     

    Interest
      Remittance Amount:
      With
      respect to any Distribution Date, that portion of Available Funds attributable
      to interest.

     

    Investor:
      With
      respect to each MERS Designated Mortgage Loan, the Person named on the MERS
      System as the investor pursuant to the MERS Procedures Manual.

     

    IRS:
      The
      Internal Revenue Service.

     

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

     

    LIBOR:
      With
      respect to any Interest Accrual Period for the LIBOR Certificates, the rate
      determined by the Securities Administrator on the related LIBOR Determination
      Date on the basis of the offered rate for one-month U.S. dollar deposits as
      such
      rate appears on Reuters screen “LIBOR01” as of 11:00 a.m. (London time) on
      such date; provided,
      that if
      such rate does not appear on Reuters screen “LIBOR01”, the rate for such date
      will be determined on the basis of the rates at which one-month U.S. dollar
      deposits are offered by the Reference Banks at approximately 11:00 a.m.
      (London time) on such date to prime banks in the London interbank market. In
      such event, the Securities Administrator shall request the principal London
      office of each of the Reference Banks to provide a quotation of its rate. If
      at
      least two such quotations are provided, the rate for that date will be the
      arithmetic mean of the quotations (rounded upwards if necessary to the nearest
      whole multiple of 1/16%). If fewer than two quotations are provided as
      requested, the rate for that date will be the arithmetic mean of the rates
      quoted by major banks in New York City, selected by the Securities Administrator
      (after consultation with the Depositor), at approximately 11:00 a.m. (New York
      City time) on such date for one-month U.S. dollar loans to leading European
      banks.

     

    LIBOR
      Certificates:
      As
      specified in the Preliminary Statement.

    
      
         

      

      
        -26-

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

    Loan-to-Value
      Ratio
      or
LTV:
      As of
      any date and as to any Mortgage Loan, the ratio (expressed as a
      percentage) of the outstanding principal balance of the Mortgage Loan to
      (a) in the case of a purchase, the lesser of (i) the sale price of the
      Mortgaged Property and (ii) its appraised value at the time of sale or
      (b) in the case of a refinancing or modification, the appraised value of
      the Mortgaged Property at the time of the refinancing or
      modification.

     

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

     

    Lower
      Tier Interest:
      An
      interest in any REMIC formed hereby other than the Upper Tier
      REMIC.

     

    Master
      Agreement:
      The
      ISDA Master Agreement, dated June 5, 2007, entered into between the Supplemental
      Interest Trust and the Derivative Counterparty.

     

    Master
      MLPISA:
      The
      Amended and Restated Master Mortgage Loan Purchase and Interim Servicing
      Agreement, among the Mortgage Loan Seller, New Century Mortgage Corporation,
      as
      interim servicer, and the Sponsor, as initial purchaser, dated as of March
      1,
      2006 (for first and second lien, fixed and adjustable rate mortgage
      loans).

     

    Master
      Servicer:
      Wells
      Fargo and any successors in interest, and if a successor master servicer is
      appointed hereunder, such successor.

     

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

     

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

     

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

     

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

    
      
         

      

      
        -27-

        
          

        

      

      
         

      

    

     

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

     

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

     

    MIN:
      The
      Mortgage Identification Number of Mortgage Loans registered with MERS on the
      MERS® System.

     

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

     

    Moody’s:
      Moody’s
      Investors Service, Inc. If Moody’s is designated as a Rating Agency in the
      Preliminary Statement, for purposes of Section 12.05 the address for
      notices to Moody’s shall be Moody’s Investors Service, Inc., 99 Church Street,
      New York, New York 10007, Attention: Residential Mortgage Pass-Through Group,
      HASCO (HSI Asset Securitization Corporation Trust Series 2007-NC1), or such
      other address as Moody’s may hereafter furnish to the Depositor and the
      Securities Administrator.

     

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

     

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

     

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

     

    Mortgage
      Loan Seller:
      NC
      Capital Corporation, which sold Mortgage Loans to the Sponsor pursuant to the
      Master MLPISA.

     

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

     

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

     

    Mortgage
      Rate:
      The
      annual rate of interest borne on a Mortgage Note, which shall be adjusted from
      time to time.

    
      
         

      

      
        -28-

        
          

        

      

      
         

      

    

     

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

     

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

     

    Net
      Derivative Payment:
      The net
      payment required to be made on the Derivative Payment Date either by (a) the
      Supplemental Interest Trust to the Derivative Counterparty, to the extent that
      the fixed amount payable by the Supplemental Interest Trust under the terms
      of
      the Swap Agreement exceeds the aggregate amount of the corresponding floating
      amount payable by the Derivative Counterparty under the terms of the Swap
      Agreement and any amounts payable by the Derivative Counterparty under the
      Cap
      Agreement, or (b) the Derivative Counterparty to the Supplemental Interest
      Trust, to the extent that the aggregate amount of the floating amount payable
      by
      the Derivative Counterparty under the terms of the Swap Agreement and any such
      amount payable by the Derivative Counterparty under the Cap Agreement exceeds
      the corresponding fixed amount payable by the Supplemental Interest Trust under
      the terms of the Swap Agreement, plus in the case of a payment made under either
      clause (a) or clause (b) any unpaid amounts due under such clause from previous
      Derivative Payment Dates, and accrued interest thereon as provided in the
      applicable Derivative Agreement, as calculated by the Derivative Counterparty
      and furnished to the Supplemental Interest Trust Trustee. Any Swap Termination
      Payment or Cap Termination Payment will be made exclusive of the Net Derivative
      Payment required to be made by the Derivative Counterparty or Supplemental
      Interest Trust, as applicable, under the Swap Agreement or the Cap
      Agreement.

     

    Net
      Monthly Excess Cash Flow:
      For any
      Distribution Date, the amount of interest and principal remaining for
      distribution pursuant to subsection 4.02(a)(iii) (before giving effect to
      distributions pursuant to such subsection).

     

    Net
      Prepayment Interest Shortfall:
      For any
      Distribution Date, the amount by which the sum of the Prepayment Interest
      Shortfalls for such Distribution Date exceeds the sum of Compensating Interest
      payments made with respect to such Distribution Date.

     

    Net
      Swap Payment:
      With
      respect to each Swap Payment Date, the net payment (not including any Swap
      Termination Payment) required to be made pursuant to the terms of the Swap
      Agreement plus any unpaid amounts due on previous Swap Payment Dates and accrued
      interest thereon as provided in the Swap Agreement, as calculated by the Swap
      Counterparty and furnished to the Securities Administrator.

     

    Net
      WAC Rate:
      With
      respect to any Distribution Date (and the related Interest Accrual Period),
      a
      per annum rate equal to the weighted average of the Expense Adjusted Mortgage
      Rates of the Mortgage Loans as of the first day of the related Due Period (not
      including for this purpose Mortgage Loans for which Principal Prepayments in
      Full have been received and distributed in the month prior to that Distribution
      Date).

     

    NIM
      Issuer:
      The
      entity established as the issuer of the NIM Securities.

     

    NIM
      Securities:
      Any
      debt securities secured or otherwise backed by some or all of the Class X
      and Class P Certificates that are rated by any Rating
      Agency.

    
      
         

      

      
        -29-

        
          

        

      

      
         

      

    

     

    NIM
      Trustee:
      The
      indenture trustee for the NIM Securities.

     

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

     

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

     

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

     

    Nonrecoverable
      P&I Advance:
      Any
      P&I Advance previously made or proposed to be made in respect of a Mortgage
      Loan or REO Property that, in the good faith business judgment (taking into
      account Accepted Servicing Practices) of the related Servicer, the Master
      Servicer, as successor servicer, or any successor master servicer including
      the
      Trustee, as applicable, will not or, in the case of a proposed P&I Advance,
      would not be ultimately recoverable from related Late Collections on such
      Mortgage Loan or REO Property as provided herein.

     

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

     

    Notice
      of Final Distribution:
      The
      notice to be provided by the Securities Administrator pursuant to
      Section 11.02 to the effect that final distribution on any of the
      Certificates shall be made only upon presentation and surrender
      thereof.

     

    Offered
      Certificates:
      As
      specified in the Preliminary Statement.

     

    Offering
      Documents:
      The
      Prospectus and the Private Placement Memorandum.

     

    Officer’s
      Certificate:
      A
      certificate signed by an officer of a Servicer or the Master Servicer, as
      applicable, with responsibility for the servicing of the Mortgage
      Loans.

     

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

     

    Option
      to Purchase:
      With
      respect to any Optional Termination Date, the right of the Master Servicer
      at
      its own option to purchase the Mortgage Loans.

     

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

     

    Originator:
      New
      Century Mortgage Corporation and its successors in interest, as originator
      of
      the Mortgage Loans.

    
      
         

      

      
        -30-

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

     

    Overcollateralization
      Amount:
      As of
      any Distribution Date, the excess, if any, of (a) the aggregate Stated
      Principal Balance of the Mortgage Loans for such Distribution Date over
      (b) the aggregate of the Class Certificate Balances of the LIBOR
      Certificates as of such Distribution Date (after giving effect to all payments
      of principal to such Certificates on such Distribution Date).

     

    Overcollateralization
      Deficiency:
      With
      respect to any Distribution Date, the excess, if any, of (a) the
      Overcollateralization Target Amount applicable to such Distribution Date over
      (b) the Overcollateralization Amount (for purposes of this calculation
      only, assuming 100% of the Principal Remittance Amount is applied as a principal
      payment to the LIBOR Certificates on such Distribution Date, but before giving
      effect to any other distributions on the LIBOR Certificates in reduction of
      their respective Class Certificate Balances on such Distribution Date)
      applicable to such Distribution Date.

     

    Overcollateralization
      Reduction Amount:
      With
      respect to any Distribution Date, an amount equal to the lesser of (a) the
      Excess Overcollateralization Amount and (b) the Net Monthly Excess Cash
      Flow.

     

    Overcollateralization
      Target Amount:
      Prior
      to the Stepdown Date, an amount equal to 3.85% of the aggregate Stated Principal
      Balance of the Mortgage Loans as of the Cut-off Date. On and after the Stepdown
      Date provided a Trigger Event is not in effect, an amount equal to the greater
      of (i) 7.70% of the aggregate Stated Principal Balance of the Mortgage Loans
      as
      of the last day of the related Due Period and (ii) 0.50% of the aggregate Stated
      Principal Balance of the Mortgage Loans as of the Cut-off Date; provided,
      however,
      that
      if, on any Distribution Date a Trigger Event exists, the Overcollateralization
      Target Amount shall not be reduced to the applicable percentage of then current
      aggregate Stated Principal Balance of the Mortgage Loans until the Distribution
      Date on which a Trigger Event no longer exists but rather shall remain the
      Overcollateralization Target Amount as determined for the immediately preceding
      Distribution Date. When the Class Certificate Balance of each Class of
      LIBOR Certificates has been reduced to zero, the Overcollateralization Target
      Amount will thereafter equal zero.

    
      
         

      

      
        -31-

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
        -32-

        
          

        

      

      
         

      

    

     

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

     

    (vii) if
      previously confirmed in writing to the Securities Administrator, any other
      demand, money market or time deposit, or any other obligation, security or
      investment, as may be acceptable to each of the Rating Agencies as a permitted
      investment of funds backing “Aaa” or “AAA” rated securities;

     

    provided,
      however,
      that no
      instrument described hereunder shall evidence either the right to receive
      (a) only interest with respect to the obligations underlying such
      instrument or (b) both principal and interest payments derived from
      obligations underlying such instrument and the interest and principal payments
      with respect to such instrument provide a yield to maturity at par greater
      than
      120.00% of the yield to maturity at par of the underlying
      obligations.

     

    Permitted
      Transferee:
      Any
      Person other than (i) the United States, any State or political subdivision
      thereof, or any agency or instrumentality of any of the foregoing, (ii) a
      foreign government, international organization or any agency or instrumentality
      of either of the foregoing, (iii) an organization (except certain farmers’
cooperatives described in Section 521 of the Code) which is exempt from tax
      imposed by Chapter 1 of the Code (including the tax imposed by Section 511
      of the Code on unrelated business taxable income) on any excess inclusions
      (as
      defined in Section 860E(c)(1) of the Code) with respect to any Residual
      Certificate, (iv) rural electric and telephone cooperatives described in
      Section 1381(a)(2)(C) of the Code, (v) a Person that is a Disqualified
      Non-U.S. Person or a U.S. Person with respect to whom income from a Residual
      Certificate is attributable to a foreign permanent establishment or fixed base,
      within the meaning of an applicable income tax treaty, of such Person or any
      other U.S. Person, (vi) an “electing large partnership” within the meaning
      of Section 775 of the Code and (vii) any other Person so designated by
      the Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
      Interest in a Residual Certificate to such Person may cause any REMIC formed
      hereby to fail to qualify as a REMIC at any time that the Certificates are
      outstanding. The terms “United States”, “State” and “international organization”
shall have the meanings set forth in Section 7701 of the Code or successor
      provisions. A corporation will not be treated as an instrumentality of the
      United States or of any State or political subdivision thereof for these
      purposes if all of its activities are subject to tax and, with the exception
      of
      Freddie Mac, a majority of its board of directors is not selected by such
      government unit.

     

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

     

    Physical
      Certificates:
      As
      specified in the Preliminary Statement.

    
      
         

      

      
        -33-

        
          

        

      

      
         

      

    

     

    Pool
      Stated Principal Balance:
      As to
      any Distribution Date, the aggregate of the Stated Principal Balances of the
      Mortgage Loans for such Distribution Date that were Outstanding Mortgage Loans
      on the Due Date in the related Due Period.

     

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

     

    Prepayment
      Interest Excess:
      With
      respect to each Servicer, as applicable, the meaning assigned to such term
      in
      the related Servicing Agreement

     

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

     

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

     

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

     

    Principal
      Payment Amount:
      For any
      Distribution Date, the sum of (i) the Basic Principal Payment Amount for
      such Distribution Date and (ii) the Extra Principal Payment Amount for such
      Distribution Date.

     

    Principal
      Prepayment:
      Any
      full or partial payment or other recovery of principal on a Mortgage Loan
      (including upon liquidation of a Mortgage Loan) that is received in advance
      of
      its scheduled Due Date, excluding any Prepayment Charge thereon, and that is
      not
      accompanied by an amount of interest representing scheduled interest due on
      any
      date or dates in any month or months subsequent to the month of prepayment.
      

     

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

     

    Principal
      Remittance Amount:
      With
      respect to any Distribution Date, the amount equal to the sum of the following
      amounts (without duplication) with respect to the related Due Period:
      (i) each scheduled payment of principal on a Mortgage Loan due during such
      Due Period and received by the Servicers on or prior to the related
      Determination Date or advanced by the Servicers for the related Remittance
      Date,
      (ii) all Principal Prepayments received during the related Prepayment
      Period; (iii) all net Liquidation Proceeds, Condemnation Proceeds and
      Insurance Proceeds on the Mortgage Loans allocable to principal, and all
      Subsequent Recoveries, actually collected by the Servicers during the related
      Prepayment Period; (iv) the portion of the Repurchase Price allocable to
      principal with respect to each Mortgage Loan repurchased by the Sponsor that
      was
      repurchased on or prior to the related Determination Date; (v) all
      Substitution Adjustment Amounts allocable to principal with respect to the
      substitutions of Mortgage Loans that occur on or prior to the related
      Determination Date; and (vi) the allocable portion of the proceeds received
      with respect to the termination of the Trust Fund pursuant to
      clause (a) of Section 11.01 (to the extent such proceeds relate
      to principal).

    
      
         

      

      
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    Private
      Certificates:
      As
      specified in the Preliminary Statement.

     

    Private
      Placement Memorandum:
      The
      Private Placement Memorandum, dated June 4, 2007, relating to the offering
      of
      the Class M-10 Certificates.

     

    Prospectus:
      The
      Prospectus, dated April 27, 2007, as supplemented by the Prospectus
      Supplement.

     

    Prospectus
      Supplement:
      The
      Prospectus Supplement, dated June 4, 2007, relating to the Offered
      Certificates.

     

    PTCE:
      As
      defined in Section 5.02(b).

     

    Purchase
      Agreement:
      The
      Mortgage Loan Purchase Agreement, dated as of May 1, 2007, between the Depositor
      and the Sponsor.

     

    Rating
      Agency:
      Each of
      the Rating Agencies specified in the Preliminary Statement. If such organization
      or a successor is no longer in existence, “Rating Agency” shall be such
      nationally recognized statistical rating organization, or other comparable
      Person, as is designated by the Depositor, notice of which designation shall
      be
      given to the Trustee and the Securities Administrator. References herein to
      a
      given rating or rating category of a Rating Agency shall mean such rating
      category without giving effect to any modifiers. For purposes of
      Section 12.05, the addresses for notices to each Rating Agency shall be the
      address specified therefor in the definition corresponding to the name of such
      Rating Agency, or such other address as either such Rating Agency may hereafter
      furnish to the Depositor and the Securities Administrator.

     

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

     

    Record
      Date:
      With
      respect to any Distribution Date and any Certificate (other than a Certificate
      issued in definitive form), the close of business on the Business Day
      immediately preceding such Distribution Date; provided,
      however,
      that,
      for any Certificate issued in definitive form, the Record Date shall be the
      close of business on the last Business Day of the month preceding the month
      in
      which such applicable Distribution Date occurs (or, in the case of the first
      Distribution Date, the Closing Date).

     

    Reference
      Bank:
      As
      defined in Section 4.04.

     

    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 - 1,631 (Jan. 7, 2005)) or by the staff of the
      Commission, or as may be provided by the Commission or its staff from time
      to
      time.

    
      
         

      

      
        -35-

        
          

        

      

      
         

      

    

     

    Regulation
      S:
      Regulation S promulgated under the Securities Act or any successor provision
      thereto, in each case as the same may be amended from time to time; and all
      references to any rule, section or subsection of, or definition or term
      contained in, Regulation S means such rule, section, subsection, definition
      or
      term, as the case may be, or any successor thereto, in each case as the same
      may
      be amended from time to time.

     

    Regulation
      S Investment Letter:
      As
      defined in Section 5.02(b).

     

    Regular
      Certificates:
      As
      specified in the Preliminary Statement.

     

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

     

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

     

    REMIC:
      Each
      pool of assets in the Trust Fund designated as a REMIC pursuant to the
      Preliminary Statement.

     

    REMIC
      1:
      As
      described in the Preliminary Statement.

     

    REMIC
      2:
      As
      described in the Preliminary Statement.

     

    REMIC
      2 Net Funds Cap:
      For any
      Distribution Date (and the related Interest Accrual Period) and any Class of
      Certificates, an amount equal to (i) the weighted average of the interest rates
      on the Lower Tier Interests in REMIC 2 (other than any interest-only regular
      interest), weighted in proportion to their Class Certificate Balances as of
      the
      beginning of the related Interest Accrual Period, multiplied, in the case of
      a
      LIBOR Certificate, by (ii) the quotient of (a) 30, divided by (b) the actual
      number of days in the Interest Accrual Period.

     

    REMIC
      3:
      As
      described in the Preliminary Statement.

     

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

    
      
         

      

      
        -36-

        
          

        

      

      
         

      

    

     

    Remittance
      Date:
      To the
      extent provided in the related Servicing Agreement, (i) with respect to Wells
      Fargo, as Servicer, the 18th
      calendar
      day of any month, or if such 18th
      day is
      not a Business Day, the first Business Day immediately following, and (ii)
      with
      respect to Countrywide Servicing, the 21st
      day of
      any month, or if such 21st
      day is
      not a Business Day, the first Business Day immediately preceding.

     

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

     

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

     

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

     

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

     

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

     

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

     

    Residual
      Certificates:
      As
      specified in the Preliminary Statement.

     

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

     

    Rolling
      Three Month Delinquency Rate:
      With
      respect to any Distribution Date, the average of the Delinquency Rates for
      each
      of the three (or one or two, in the case of the first and second Distribution
      Dates) immediately preceding calendar months.

     

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

    
      
         

      

      
        -37-

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

    Securities
      Administrator:
      Wells
      Fargo and any successors in interest, and if a successor securities
      administrator is appointed hereunder, such successor. 

     

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

     

    Senior
      Interest Payment Amount:
      With
      respect to any Distribution Date and any Class of Class A
      Certificates, the sum of the Interest Payment Amount and the Interest Carry
      Forward Amount, if any, for that Distribution Date for that Class.

     

    Senior
      Principal Payment Amount:
      With
      respect to any Distribution Date, the lesser of (i) the Principal Payment Amount
      for that Distribution Date and (ii) the excess of (a) the aggregate
      Class Certificate Balance of the Class A Certificates immediately prior to
      that Distribution Date over (b) the lesser of (x) 46.60% of the aggregate
      Stated Principal Balance of the Mortgage Loans for that Distribution Date and
      (y) the excess, if any, of the aggregate Stated Principal Balance of the
      Mortgage Loans for that Distribution Date over 0.50% of the aggregate State
      Principal Balance of the Mortgage Loans as of the Cut-off Date.

     

    Servicer:
      Each of
      Wells Fargo and Countrywide Servicing, and any successors in
      interest.

    
      
         

      

      
        -38-

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

     

    Servicing
      Fee Rate:
      With
      respect to each Mortgage Loan, the rate specified in the related Servicing
      Agreement.

     

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

     

    Servicing
      Function Participant:
      Any
      Sub-Servicer or Subcontractor of a Servicer, the Master Servicer, the Custodian
      or the Securities Administrator, respectively.

     

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

     

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

     

    60+
      Day Delinquent Mortgage Loan:
      Each
      Mortgage Loan with respect to which any portion of a Scheduled Payment is,
      as of
      the last day of the prior Due Period, two months or more past due (including
      any
      such Mortgage Loan in foreclosure, any such Mortgage Loan related to REO
      Property, any such Mortgage Loan where the related Mortgagor has filed for
      bankruptcy), without giving effect to any grace period.

    
      
         

      

      
        -39-

        
          

        

      

      
         

      

    

     

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

     

    Standard &
      Poor’s:
      Standard & Poor’s Ratings Services, a division of The McGraw-Hill
      Companies, Inc. If Standard & Poor’s is designated as a Rating Agency
      in the Preliminary Statement, for purposes of Section 12.05 the address for
      notices to Standard & Poor’s shall be Standard & Poor’s, 55
      Water Street, New York, New York 10041, Attention: Residential Mortgage
      Surveillance Group - HASCO (HSI Asset Securitization Corporation Trust,
      Series 2007-NC1), or such other address as Standard & Poor’s may
      hereafter furnish to the Depositor and the Securities
      Administrator.

     

    Standard &
      Poor’s Glossary:
      The
      Standard & Poor’s LEVELS® Glossary, as may be in effect from time to
      time.

     

    Startup
      Day:
      The
      Closing Date.

     

    Stated
      Principal Balance:
      As to
      each Mortgage Loan and as of any date of determination, (i) the principal
      balance of the Mortgage Loan at the Cut-off Date after giving effect to payments
      of principal due on or before such date (whether or not received), minus
      (ii) all amounts previously remitted to the Securities Administrator with
      respect to the related Mortgage Loan representing payments or recoveries of
      principal including advances in respect of scheduled payments of principal.
      For
      purposes of any Distribution Date, the Stated Principal Balance of any Mortgage
      Loan will give effect to any scheduled payments of principal received by the
      related Servicer on or prior to the related Determination Date or advanced
      by
      the related Servicer for the related Remittance Date and any unscheduled
      principal payments and other unscheduled principal collections received during
      the related Prepayment Period, and the Stated Principal Balance of any Mortgage
      Loan that has prepaid in full or has become a Liquidated Mortgage Loan during
      the related Prepayment Period shall be zero.

     

    Stepdown
      Date:
      The
      earlier to occur of (i) the first Distribution Date following the Distribution
      Date on which the aggregate Class Certificate Balances of the Class A
      Certificates have been reduced to zero and (ii) the later to occur of (a) the
      Distribution Date in June 2010 and (b) the first Distribution Date on which
      the
      Credit Enhancement Percentage for the Class A Certificates (calculated for
      this
      purpose only after taking into account payments of principal applied to reduce
      the Stated Principal Balance of the Mortgage Loans for that Distribution Date
      but prior to any applications of Principal Payment Amount to the Certificates
      on
      that Distribution Date) is greater than or equal to 53.40%.

     

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

    
      
         

      

      
        -40-

        
          

        

      

      
         

      

    

     

    Subsequent
      Recovery:
      With
      respect to any Mortgage Loan or related Mortgaged Property that became a
      Liquidated Mortgage Loan or was otherwise disposed of, all amounts received
      in
      respect of such Liquidated Mortgage Loan after an Applied Realized Loss Amount
      related to such Mortgage Loan or Mortgaged Property is allocated to reduce
      the
      Class Certificate Balance of any Class of Class M Certificates.
      Any Subsequent Recovery that is received during a Prepayment Period will be
      included as part of the Principal Remittance Amount for the related Distribution
      Date.

     

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

     

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

     

    Substitution
      Adjustment Amount:  As
      defined in Section 2.03.

     

    Supplemental
      Interest Trust:
      The
      corpus of a trust created pursuant to Section 4.06 of this Agreement and
      designated as the “Supplemental Interest Trust,” consisting of the Swap
      Agreement, the Supplemental Interest Trust Account, the Swap Account, the Excess
      Reserve Fund Account, the Cap Agreement, the Cap Account, the Collateral
      Account, the right to receive the Class X Distributable Amount as provided
      in
      Section 4.02(a)(iii)(I), the Class LT3-I Interest in REMIC 3 and the right
      to
      receive Class I Shortfalls. 

     

    Supplemental
      Interest Trust Account:
      The
      Account created pursuant to Section 4.06(a).

     

    Supplemental
      Interest Trust Trustee:
      The
      trustee of the Supplemental Interest Trust appointed pursuant to Section
      4.06(a), which is initially Wells Fargo.

     

    Swap
      Account:
      The
      sub-account of the Supplemental Interest Trust Account created pursuant to
      Section 4.06(a).

     

    Swap
      Agreement:
      The
      interest rate swap agreement entered into by the Supplemental Interest Trust
      and
      the Swap Counterparty, dated June 5, 2007, which agreement provides for, among
      other things, a Net Swap Payment to be paid pursuant to the conditions provided
      therein, commencing with the Distribution Date in December 2007 and ending
      on
      the Distribution Date in November 2010, together with any schedules,
      confirmations or other agreements relating thereto, attached hereto as Exhibit
      O.

    
      
         

      

      
        -41-

        
          

        

      

      
         

      

    

     

    Swap
      Amount:
      With
      respect to each Distribution Date and the related Swap Payment Date, the sum
      of
      any Net Swap Payment and any Swap Termination Payment deposited in the Swap
      Account.

     

    Swap
      Counterparty:
      The
      counterparty to the Supplemental Interest Trust under the Swap Agreement, and
      any successor in interest or assigns. Initially, the Swap Counterparty shall
      be
      ABN AMRO Bank, N.V.

     

    Swap
      Counterparty Trigger Event:
      A Swap
      Counterparty Trigger Event shall have occurred if any of a Swap Default with
      respect to which the Swap Counterparty is a Defaulting Party, a Termination
      Event (other than a “Tax Event” or “Illegality” as such terms are defined in the
      Master Agreement) with respect to which the Swap Counterparty is the sole
      Affected Party or an Additional Termination Event with respect to which the
      Swap
      Counterparty is the sole Affected Party has occurred.

     

    Swap
      Default:
      Any of
      the circumstances constituting an “Event of Default” under the Swap
      Agreement.

     

    Swap
      LIBOR:
      With
      respect to any Distribution Date (and the Accrual Period relating to such
      Distribution Date), the product of (i) the Floating Rate Option (as defined
      in
      the Swap Agreement) for the related Swap Payment Date, (ii) two, and (iii)
      the
      quotient of (a) the actual number of days in the Accrual Period for the LIBOR
      Certificates and (b) 30, as calculated by the Swap Counterparty and furnished
      to
      the Securities Administrator.

     

    Swap
      Payment Date:
      For so
      long as the Swap Agreement is in effect or any amounts remain unpaid thereunder,
      the Business Day immediately preceding each Distribution Date.

     

    Swap
      Replacement Receipts:
      As
      defined in Section 4.08(a)(i).

     

    Swap
      Replacement Receipts Account:
      As
      defined in Section 4.08(a)(i).

     

    Swap
      Termination Payment:
      Upon
      the designation of an “Early Termination Date” as defined in the Swap Agreement,
      the payment required to be made by the Supplemental Interest Trust to the Swap
      Counterparty, or by the Swap Counterparty to the Supplemental Interest Trust,
      as
      applicable, pursuant to the terms of the Swap Agreement, and any unpaid amounts
      due on previous Distribution Dates and accrued interest thereon as provided
      in
      the Swap Agreement, as calculated by the Swap Counterparty and furnished to
      the
      Securities Administrator.

     

    Swap
      Termination Receipts:
      As
      defined in Section 4.08(a)(i).

     

    Swap
      Termination Receipts Account:
      As
      defined in Section 4.08(a)(i).

    
      
         

      

      
        -42-

        
          

        

      

      
         

      

    

     

    Tax
      Matters Person:
      The Holder of the Class R Certificates designated as “tax matters person” of
      each REMIC created hereunder in the manner provided under Treasury Regulations
      Section 1.860F-4(d) and Treasury Regulations Section
      301.6231(a)(7)-1.

     

    Termination
      Event:
      The
      occurrence of a termination event under the termination provision of the Cap
      Agreement or Swap Agreement, as applicable.

     

    Termination
      Price:
      As
      defined in Section 11.01.

     

    Total
      Monthly Excess Spread:
      As to
      any Distribution Date, an amount equal to the excess, if any, of (i) the
      interest on the Mortgage Loans (other than Prepayment Interest Excesses)
      received by the Servicers on or prior to the related Determination Date or
      advanced by the Servicers for the related Remittance Date (net of Expense Fees)
      over (ii) the sum of the amounts payable to the Certificates pursuant to
      Section 4.02(a)(i)(A) through (C) on such Distribution Date.

     

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

     

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

     

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

     

    Trigger
      Event:
      Either
      a Cumulative Loss Trigger Event or a Delinquency Trigger Event.

     

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

     

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

     

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

     

    Underwriters’
      Exemption:
      Any
      exemption listed under footnote 1 of, and amended by, Prohibited Transaction
      Exemption 96-84, 61 Fed. Reg. 58234 (1996), as amended by PTE 97-34,
      62 Fed. Reg. 39021 (1997), PTE 2000-58, 65 Fed. Reg. 67765 (2000), PTE
      2002-41, 67 Fed. Reg. 54487 (2002) and PTE 2007-5, 72Fed. Reg. 13130
      (2007), or any successor exemption.

    
      
         

      

      
        -43-

        
          

        

      

      
         

      

    

     

    Unpaid
      Realized Loss Amount:
      With
      respect to any Class of Class M Certificates and as to any
      Distribution Date, is the excess of (i) Applied Realized Loss Amounts with
      respect to such Class over (ii) the sum of (a) all distributions
      in reduction of such Applied Realized Loss Amounts on all previous Distribution
      Dates, and (b) the amount by which the Class Certificate Balance of
      such Class has been increased due to the distribution of any Subsequent
      Recoveries on all previous Distribution Dates. Any amounts distributed to a
      Class of Class M Certificates in respect of any Unpaid Realized Loss
      Amount will not be applied to reduce the Class Certificate Balance of such
      Class.

     

    Upper
      Tier REMIC:
      As
      described in the Preliminary Statement.

     

    Upper
      Tier REMIC Regular Interest:
      As
      described in the Preliminary Statement.

     

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

     

    Voting
      Rights:
      The
      portion of the voting rights of all of the Certificates which is allocated
      to
      any Certificate. As of any date of determination, 1.00% of all Voting Rights
      shall be allocated to each of the Class X, Class P and Class R
      Certificates, if any (such Voting Rights to be allocated among the holders
      of
      Certificates of each such Class in accordance with their respective
      Percentage Interests) and the remaining Voting Rights shall be allocated among
      Holders of the remaining Classes of Certificates in proportion to the
      Certificate Balances of their respective Certificates on such date.

     

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

     

    ARTICLE
      II

     

    CONVEYANCE
      OF MORTGAGE LOANS;

    REPRESENTATIONS
      AND WARRANTIES

     

    Section
      2.01 Conveyance
      of Mortgage Loans

     

    .
      (a) The Depositor, concurrently with the execution and delivery hereof,
      hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee
      for the benefit of the Certificateholders, without recourse, all the right,
      title and interest of the Depositor in and to the Trust Fund including all
      interest and principal received on or with respect to the Mortgage Loans on
      or
      after the Cut-off Date (other than Scheduled Payments due on the Mortgage Loans
      on or before the Cut-off Date).

    
      
         

      

      
        -44-

        
          

        

      

      
         

      

    

     

    Concurrently
      with the execution of this Agreement, the Derivative Agreements shall be
      delivered to the Securities Administrator. In connection therewith, the
      Depositor hereby directs the Securities Administrator (solely in its capacity
      as
      Supplemental Interest Trust Trustee) and the Securities Administrator is hereby
      authorized to execute and deliver each of the Derivative Agreements on behalf
      of
      the Supplemental Interest Trust, for the benefit of Certificateholders. The
      Depositor, the Sponsor, the Master Servicer, the Credit Risk Manager and the
      Certificateholders (by their acceptance of such Certificates) acknowledge and
      agree that the Securities Administrator is executing and delivering the
      Derivative Agreements solely in its capacity as Supplemental Interest Trust
      Trustee and not in its individual capacity. The Securities Administrator shall
      have no duty or responsibility to enter into any other interest rate swap
      agreement upon the expiration or termination of the Swap Agreement or interest
      rate cap agreement upon the termination of the Cap Agreement unless so directed
      by the Depositor.

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

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

     

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

     

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

     

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

     

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

    
      
         

      

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

     

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

     

    Assignments
      of Mortgage shall not be required to be completed and submitted for recording
      with respect to any Mortgage Loan if the Trustee and each Rating Agency have
      received an Opinion of Counsel from the Depositor, satisfactory in form and
      substance to the Trustee and each Rating Agency to the effect that the
      recordation of such Assignments of Mortgage in any specific jurisdiction is
      not
      necessary to protect the Trust Fund’s interest in the related Mortgage Note. If
      the Assignment of Mortgage is to be recorded, the Mortgage shall be assigned
      by
      the Mortgage Loan Seller to “Deutsche Bank National Trust Company, as trustee
      under the Pooling and Servicing Agreement dated as of May 1, 2007, for HSI
      Asset
      Securitization Corporation Trust 2007-NC1”.

     

    (c) The
      Depositor does hereby establish, pursuant to the further provisions of this
      Agreement and the laws of the State of New York, an express trust (the
“Trust”)
      to be
      known, for convenience, as “HSI Asset Securitization Corporation Trust 2007-NC1”
and Deutsche Bank National Trust Company is hereby appointed as Trustee and
      Wells Fargo Bank, N.A. is appointed as Securities Administrator in accordance
      with the provisions of this Agreement. The parties hereto acknowledge and agree
      that it is the policy and intention of the Trust to acquire only Mortgage Loans
      meeting the requirements set forth in the Master MLPISA and in the Purchase
      Agreement.

     

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

     

    Section
      2.02 Acceptance
      by the Custodian of the Mortgage Loans.
      The
      Custodian shall acknowledge, on the Closing Date, receipt by the Custodian
      of
      the documents identified in the Initial Certification in the form annexed hereto
      as Exhibit E (“Initial
      Certification”),
      and
      declares that it holds and will hold such documents and the other documents
      delivered to it pursuant to Section 2.01, and that it holds or will hold
      such other assets as are included in the Trust Fund, in trust for the exclusive
      use and benefit of all present and future Certificateholders. The Custodian
      shall maintain possession of the related Mortgage Notes in the States of
      Minnesota, California, and Utah unless otherwise permitted by the Rating
      Agencies.

    
      
         

      

      
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    In
      connection with the Closing Date, the Custodian shall be required to deliver
      via
      facsimile (with original to follow the next Business Day) to the Depositor,
      the
      Securities Administrator, the Trustee and the Servicers an Initial Certification
      prior to the Closing Date, or, as the Depositor agrees on the Closing Date,
      certifying receipt of a Mortgage Note and Assignment of Mortgage for each
      Mortgage Loan. The Custodian shall not be responsible to verify the validity,
      sufficiency or genuineness of any document in any Custodian File.

     

    Within
      90 days of the Closing Date, the Custodian shall ascertain that all
      documents identified in the Document Certification and Exception Report in
      the
      form attached hereto as Exhibit F are in its possession, and shall deliver
      to the Depositor, the Securities Administrator, the Trustee and the Servicers,
      a
      Document Certification and Exception Report, in the form annexed hereto as
      Exhibit F, to the effect that, as to each Mortgage Loan listed in the
      Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
      Mortgage Loan specifically identified in such certification as an exception
      and
      not covered by such certification): (i) all documents identified in the
      Document Certification and Exception Report and required to be reviewed by
      it
      are in its possession; (ii) such documents have been reviewed by it and
      appear regular on their face and relate to such Mortgage Loan; (iii) based
      on its examination and only as to the foregoing documents, the Mortgage Loan
      identifying number, the state and five-digit ZIP code of the Mortgaged Property
      and the original principal balance of the Mortgage Loan is correct; and
      (iv) each Mortgage Note has been endorsed as provided in Section 2.01
      of this Agreement. Neither the Trustee nor the Custodian shall be responsible
      to
      verify the validity, sufficiency or genuineness of any document in any Custodial
      File.

     

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

     

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

     

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

     

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

    
      
         

      

      
        -48-

        
          

        

      

      
         

      

    

     

    (c) Upon
      receipt of a Request for Release substantially in the form of Exhibit J
      hereto, the Custodian shall release the related Custodial File held for the
      benefit of the Certificateholders to the Sponsor, as directed by the applicable
      Servicer, and the Trustee shall execute and deliver at such Person’s direction
      such instruments of transfer or assignment prepared by such Person, in each
      case
      without recourse, as shall be necessary to transfer title from the Trustee.
      In
      accordance with Section 12.05(a), the Securities Administrator shall
      promptly notify each Rating Agency of a purchase of a Mortgage Loan pursuant
      to
      this Section 2.03 or pursuant to the Master MLPISA.

     

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

     

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

     

    Section
      2.04 Execution
      and Delivery of Certificates.
      The
      Trustee acknowledges the transfer and assignment to it of the Trust Fund and,
      concurrently with such transfer and assignment, the Securities Administrator
      has
      executed and delivered to, or upon the order of the Depositor, the Certificates
      in authorized denominations evidencing directly or indirectly the entire
      ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund and
      exercise the rights referred to above for the benefit of all present and future
      Holders of the Certificates.

    
      
         

      

      
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    Section
      2.05 REMIC
      Matters.
      The
      Preliminary Statement sets forth the designations for federal income tax
      purposes of all interests created hereby.  The “Startup
      Day”
for
      purposes of the REMIC Provisions shall be the Closing Date.  The
“latest
      possible maturity date”
is
      the
      Distribution Date occurring three years after the month in which the
      latest Mortgage Loan maturity date (of the Mortgage Loans held in the Trust
      on
      the Closing Date) occurs.

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
        -50-

        
          

        

      

      
         

      

    

     

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

     

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

     

    (h) Immediately
      prior to the transfer and assignment by the Depositor to the Trustee on the
      Closing Date, the Depositor had good title to, and was the sole owner of each
      Mortgage Loan, free of any interest of any other Person, and the Depositor
      has
      transferred all right, title and interest in each Mortgage Loan to the Trustee.
      The transfer of the Mortgage Note and the Mortgage as and in the manner
      contemplated by this Agreement is sufficient either (i) fully to transfer
      to the Trustee, for the benefit of the Certificateholders, all right, title,
      and
      interest of the Depositor thereto as note holder and mortgagee or (ii) to
      grant to the Trustee, for the benefit of the Certificateholders, the security
      interest referred to in Section 12.04.

     

    It
      is
      understood and agreed that the representations, warranties and covenants set
      forth in this Section 2.06 shall survive delivery of the respective
      Mortgage Files to the Custodian and shall inure to the benefit of the
      Trustee.

     

    ARTICLE
      III

     

    ADMINISTRATION
      AND SERVICING

    OF
      MORTGAGE LOANS

     

    Section
      3.01 Establishment
      of Certain Accounts.
      (a)   (i) The Securities Administrator shall establish and maintain
      the Excess Reserve Fund Account as an asset of the Supplemental Interest Trust,
      on behalf of the Class X Certificateholders, to receive any Basis Risk
      Payment and to secure their limited recourse obligation to pay to the LIBOR
      Certificateholders any Basis Risk Carryover Amounts. The Excess Reserve Fund
      Account shall be funded on the Closing Date with an initial deposit of $1,000
      by
      the Depositor.

     

    (ii) On
      each
      Distribution Date, the Securities Administrator shall deposit the amount of
      any
      Basis Risk Payment for such date into the Excess Reserve Fund
      Account.

     

    (b) (i) On
      each
      Distribution Date on which there exists a Basis Risk Carryover Amount on any
      Class of LIBOR Certificates, the Securities Administrator shall
      (1) withdraw from the Distribution Account and deposit in the Excess
      Reserve Fund Account, as set forth in Section 4.02(a)(iii)(D), the lesser
      of (x) the Class X Distributable Amount (without regard to the
      reduction in the definition thereof with respect to the Basis Risk Payment
      (to
      the extent remaining after the distributions specified in
      Sections  4.02(a)(iii)(A)
      through (I)) and (y) the aggregate Basis Risk Carryover Amounts for such
      Distribution Date and (2) withdraw from the Excess Reserve Fund Account
      amounts necessary to pay to such Class or Classes of LIBOR Certificates the
      applicable Basis Risk Carryover Amount. Such payments shall be allocated to
      those Classes on a pro rata
      basis
      based upon the amount of Basis Risk Carryover Amount owed to each such
      Class and shall be paid in the priority set forth in
      Sections 4.02(a)(iii)(E).

    
      
         

      

      
        -51-

        
          

        

      

      
         

      

    

     

    (ii) The
      Securities Administrator shall account for the Excess Reserve Fund Account
      as an
      asset of a grantor trust under subpart E, Part I of subchapter J
      of the Code and not as an asset of any REMIC created pursuant to this Agreement.
      The beneficial owners of the Excess Reserve Fund Account are the Class X
      Certificateholders. For all federal tax purposes, amounts transferred by the
      Upper Tier REMIC to the Excess Reserve Fund Account shall be treated as
      distributions by the Securities Administrator to the Class X
      Certificateholders.

     

    (iii) Any
      Basis
      Risk Carryover Amounts paid by the Securities Administrator to the LIBOR
      Certificateholders shall be accounted for by the Securities Administrator as
      amounts paid first to the Holders of the Class X Certificates and then to
      the respective Class or Classes of LIBOR Certificates. In addition, the
      Securities Administrator shall account for such Certificateholders’ rights to
      receive payments of Basis Risk Carryover Amounts as rights in a limited recourse
      notional principal contract written by the Class X Certificateholders in
      favor of such Certificateholders.

     

    (iv) Notwithstanding
      any provision contained in this Agreement, the Securities Administrator shall
      not be required to make any payments to and from the Excess Reserve Fund Account
      except as expressly set forth in this Section 3.01(b) and
      Sections 4.02(a)(iii)(D), (E) and (J).

     

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

     

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

     

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

     

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

     

    In
      the
      event that a Servicer shall remit any amount not required to be remitted, it
      may
      at any time direct the Securities Administrator in writing to withdraw such
      amount from the Distribution Account, any provision herein to the contrary
      notwithstanding. Such direction may be accomplished by delivering notice to
      the
      Securities Administrator which describes the amounts deposited in error in
      the
      Distribution Account. All funds deposited in the Distribution Account shall
      be
      held by the Securities Administrator in trust for the Certificateholders until
      disbursed in accordance with this Agreement or withdrawn in accordance with
      Section 4.02. 

    
      
         

      

      
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    Section
      3.02 Investment
      of Funds in the Distribution Account.
      (a)  The Securities Administrator may invest funds in the Distribution
      Account during the Securities Administrator’s Float Period, in one or more
      Permitted Investments bearing interest or sold at a discount, and maturing,
      unless payable on demand, no later than the Business Day immediately preceding
      the date on which such funds are required to be withdrawn from such account
      pursuant to this Agreement; provided,
      however,
      that
      any such Permitted Investment managed by or advised by the Securities
      Administrator or any of its Affiliates may mature, unless payable on demand,
      no
      later than the date on which such funds are required to be withdrawn from such
      account pursuant to this Agreement. All such Permitted Investments shall be
      held
      to maturity, unless payable on demand. Any investment of funds in the
      Distribution Account shall be made in the name of the Securities Administrator.
      The Securities Administrator shall be entitled to sole possession over each
      such
      investment, and any certificate or other instrument evidencing any such
      investment shall be delivered directly to the Securities Administrator or its
      agent, as applicable, together with any document of transfer necessary to
      transfer title to such investment to the Securities Administrator or its agent,
      as applicable. In the event amounts on deposit in the Distribution Account
      are
      at any time invested in a Permitted Investment payable on demand, the Securities
      Administrator may:

     

    
      	 	
              (x)

            	
              consistent
                with any notice required to be given thereunder, demand that payment
                thereon be made on the last day such Permitted Investment may otherwise
                mature hereunder in an amount equal to the lesser of (1) all amounts
                then payable thereunder and (2) the amount required to be withdrawn
                on such date; and

            

    

     

    
      	 	
              (y)

            	
              demand
                payment of all amounts due thereunder that such Permitted Investment
                would
                not constitute a Permitted Investment in respect of funds thereafter
                on
                deposit in the Distribution
                Account.

            

    

     

    (b) All
      income and gain realized from the investment of funds deposited in the
      Distribution Account held by the Securities Administrator during the Securities
      Administrator’s Float Period, shall be for the benefit of the Securities
      Administrator, and shall be subject to the Securities Administrator’s withdrawal
      in the manner set forth in Section 4.01. Notwithstanding anything in this
      Section 3.02(b), the Securities Administrator shall be liable to the Trust
      for
      any loss on any funds it has invested under this Section 3.02(b) only during
      the
      Securities Administrator Float Period, and the Securities Administrator shall
      deposit in the Distribution Account the amount of any loss of principal incurred
      in respect of any such Permitted Investment made with funds in such account
      immediately upon realization of such loss.

     

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

    
      
         

      

      
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    Section
      3.03 Report
      on Assessment of Compliance with Relevant Servicing Criteria.
      On
      or
      before March 15th
      of each
      calendar year, commencing in March 2008, the Master Servicer, the Securities
      Administrator and the Custodian, each at its own expense, shall furnish or
      otherwise make available, and each such party shall cause any Servicing Function
      Participant engaged by it to furnish, each at its own expense, to the Securities
      Administrator and the Depositor, a report on an assessment of compliance with
      the Relevant Servicing Criteria set forth in Exhibit S that contains (A) a
      statement by such party of its responsibility for assessing compliance with
      the
      Relevant Servicing Criteria, (B) a statement that such party used the Relevant
      Servicing Criteria to assess compliance with the Relevant Servicing Criteria,
      (C) such party’s assessment of compliance with the Relevant Servicing Criteria
      as of and for the fiscal year covered by the Form 10-K required to be filed
      pursuant to Section 8.12, including, if there has been any material instance
      of
      noncompliance with the Relevant Servicing Criteria, a discussion of each such
      failure and the nature and status thereof, and (D) a statement that a registered
      public accounting firm has issued an attestation report on such party’s
      assessment of compliance with the Relevant Servicing Criteria as of and for
      such
      period. 

     

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

     

    The
      Master Servicer shall enforce any obligation of each Servicer to cause to be
      delivered to the Securities Administrator an annual report on assessment of
      compliance within the time frame set
      forth
      in the applicable Servicing Agreement, and in such form and
      substance as may be required by the applicable Servicing Agreement.

     

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

     

    Section
      3.04 Report
      on Attestation of Compliance with Relevant Servicing Criteria.On
      or
      before March 15th
      of each
      calendar year, commencing in March 2008, the Master Servicer, the Securities
      Administrator and the Custodian, each at its own expense, shall cause, and
      each
      such party shall cause any Servicing Function Participant engaged by it to
      cause, each at its own expense, a registered public accounting firm (which
      may
      also render other services to the Master Servicer, the Securities Administrator,
      the Custodian or such other Servicing Function Participants, as the case may
      be)
      that is a member of the American Institute of Certified Public Accountants
      to
      furnish an attestation report to the Securities Administrator and the Depositor,
      to the effect that (i) it has obtained a representation regarding certain
      matters from the management of such party, which includes an assertion that
      such
      party has complied with the Relevant Servicing Criteria, and (ii) on the basis
      of an examination conducted by such firm in accordance with standards for
      attestation engagements issued or adopted by the Public Company Accounting
      Oversight Board, it is expressing an opinion as to whether such party’s
      compliance with the Relevant Servicing Criteria was fairly stated in all
      material respects, or it cannot express an overall opinion regarding such
      party’s assessment of compliance with the Relevant Servicing Criteria. In the
      event that an overall opinion cannot be expressed, such registered public
      accounting firm shall state in such report why it was unable to express such
      an
      opinion. Such report must be available for general use and not contain
      restricted use language. 

    
      
         

      

      
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    Promptly
      after receipt of each such assessment of compliance and attestation report
      as
      well as the assessment of compliance and attestation report provided the
      Depositor under the Servicing Agreements, the Securities Administrator shall
      confirm that each assessment submitted pursuant to Section 3.03 and the
      Servicing Agreements is coupled with an attestation meeting the requirements
      of
      this Section and notify the Depositor of any exceptions. 

     

    The
      Master Servicer shall enforce any obligation of each Servicer to cause to be
      delivered to the Master Servicer an attestation within the time
      frame set
      forth
      in the applicable Servicing Agreement, and in such form and
      substance as may be required by the applicable Servicing Agreement.

     

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

     

    Section
      3.05 Annual
      Officer’s Certificates.(a)
      Each
      Form 10-K filed with the Commission shall include a Sarbanes-Oxley Certification
      exactly as set forth in Exhibit L attached hereto, required to be included
      therewith pursuant to the Sarbanes-Oxley Act. Each of the Master Servicer,
      the
      Custodian and the Securities Administrator shall, and shall cause any Servicing
      Function Participant engaged by it to, provide to the Person who signs the
      Sarbanes-Oxley Certification (the “Certifying
      Person”),
      by
      March 10th
      of each
      year in which the Trust is subject to the reporting requirements of the Exchange
      Act, commencing in March 2008, and otherwise within a reasonable period of
      time
      upon request, a certification (each, a “Back-Up
      Sarbanes-Oxley Certification”)
      substantially in the form of Exhibit N-1, upon which the Certifying Person,
      the
      entity for which the Certifying Person acts as an officer, and such entity’s
      officers, directors and Affiliates (collectively with the Certifying Person,
      “Certification
      Parties”)
      can
      reasonably rely. The senior officer of the Master Servicer in charge of the
      master servicing function shall serve as the Certifying Person on behalf of
      the
      Trust. Such officer of the Certifying Person can be contacted by e-mail at
      cts.sec.notifications@wellsfargo.com
      or by
      facsimile at 443-367-3307. In the event any such party or any Servicing Function
      Participant engaged by any such party is terminated or resigns pursuant to
      the
      terms of this Agreement, or any applicable sub-servicing agreement, as the
      case
      may be, such party shall provide a Back-Up Sarbanes-Oxley Certification to
      the
      Certifying Person pursuant to this Section 3.05 with respect to the period
      of
      time it was subject to this Agreement or any applicable sub-servicing agreement,
      as the case may be. Notwithstanding the foregoing, (i) the Master Servicer
      and
      the Securities Administrator shall not be required to deliver a Back-Up
      Sarbanes-Oxley Certification to each other if both are the same Person and
      the
      Master Servicer is the Certifying Person and (ii) the Master Servicer shall
      not
      be obligated to sign the Sarbanes-Oxley Certification in the event that it
      does
      not receive any Back-Up Sarbanes-Oxley Certification required to be furnished
      to
      it pursuant to this section or any Servicing Agreement.

    
      
         

      

      
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    (b) On
      or
      before March 15th
      of each
      calendar year, commencing in March 2008, the Master Servicer and the Securities
      Administrator shall deliver (or otherwise make available) (and the Master
      Servicer and Securities Administrator shall cause any Servicing Function
      Participant engaged by it to deliver) to the Depositor and the Securities
      Administrator, an Officer’s Certificate substantially in the form of Exhibit U
      stating, as to the signer thereof, that (A) a review of such party’s activities
      during the preceding calendar year or portion thereof and of such party’s
      performance under this Agreement, or such other applicable agreement in the
      case
      of a Servicing Function Participant, has been made under such officer’s
      supervision and (B) to the best of such officer’s knowledge, based on such
      review, such party has fulfilled all its obligations under this Agreement,
      or
      such other applicable agreement in the case of a Servicing Function Participant,
      in all material respects throughout such year or portion thereof, or, if there
      has been a failure to fulfill any such obligation in any material respect,
      specifying each such failure known to such officer and the nature and status
      thereof.

     

    In
      the
      event the Master Servicer, the Securities Administrator or any Servicing
      Function Participant engaged by any such party is terminated or resigns pursuant
      to the terms of this Agreement, or any applicable agreement in the case of
      a
      Servicing Function Participant, as the case may be, such party shall provide
      an
      Officer’s Certificate pursuant to this Section 3.05 or to such applicable
      agreement, as the case may be, notwithstanding any such termination, assignment
      or resignation. 

     

    Section
      3.06 Indemnification.(a) Each
      of
      the Depositor, the Master Servicer, the Securities Administrator, the Custodian,
      the Trustee (only in the case of any failure to deliver any information, data
      or
      materials required to be included in any Additional Form 10-D Disclosure,
      Additional Form 10-K Disclosure or Form 8-K Disclosure Information that the
      Trustee is obligated to provide, and only with respect to the Depositor, the
      Master Servicer and the Securities Administrator) and any Servicing Function
      Participant (each, an “Indemnifying Party”) engaged by any such party, shall
      indemnify and hold harmless each other Indemnifying Party, and each of its
      directors, officers, employees, agents, and affiliates from and against any
      and
      all claims, losses, damages, penalties, fines, forfeitures, reasonable legal
      fees and related costs, judgments and other costs and expenses arising out
      of or
      based upon (a) any breach by such party of any if its obligations hereunder,
      including particularly its obligations to provide any annual statement of
      compliance, annual assessment of compliance with Servicing Criteria or
      attestation report or any information, data or materials required to be included
      in any Exchange Act report, (b) any material misstatement or omission in any
      information, data or materials provided by such party including any material
      misstatement or material omission in (i) any annual statement of compliance,
      annual assessment of compliance with Servicing Criteria or attestation report
      delivered by it, or by any Servicing Function Participant engaged by it,
      pursuant to this Agreement, or (ii) any Additional Form 10-D Disclosure,
      Additional Form 10-K Disclosure or Form 8-K Disclosure Information provided
      by
      it, or (c) the negligence, bad faith or willful misconduct of such indemnifying
      party in connection with its performance hereunder. If the indemnification
      provided for herein is unavailable or insufficient to hold harmless the Master
      Servicer, the Securities Administrator, the Trustee, the Custodian or the
      Depositor, as the case may be, then each Indemnifying Party agrees that it
      shall
      contribute to the amount paid or payable by the Master Servicer, the Securities
      Administrator, the Trustee, the Custodian or the Depositor, as applicable,
      as a
      result of any claims, losses, damages or liabilities incurred by such party
      in
      such proportion as is appropriate to reflect the relative fault of the
      indemnified party on the one hand and the indemnifying party on the other.
      This
      indemnification shall survive the termination of this Agreement or the
      termination of any party to this Agreement.

    
      
         

      

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

     

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

     

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

    
      
         

      

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

     

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

     

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

     

    ARTICLE
      IV

     

    DISTRIBUTIONS

     

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

    
      
         

      

      
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    Section
      4.02 Priorities
      of Distribution.
      (a)  On each Distribution Date (or, in the case of deposits into the
      Supplemental Interest Trust, on the Derivative Payment Date), the Securities
      Administrator shall make the disbursements and transfers from amounts then
      on
      deposit in the Distribution Account and from amounts that are available for
      payment to the Swap Counterparty, and shall allocate such amounts to the
      interests issued in respect of each REMIC created pursuant to this Agreement
      and
      shall distribute such amounts in the following order of priority and to the
      extent of the Available Funds remaining:

     

    (i) to
      the
      Supplemental Interest Trust and the holders of each Class of LIBOR
      Certificates in the following order of priority:

     

    (A) from
      the
      Interest Remittance Amount, for deposit into the Supplemental Interest Trust
      Account, the amount of any Net Derivative Payment or Swap Termination Payment
      (other than a Swap Termination Payment resulting from a Swap Counterparty
      Trigger Event) owed to the Derivative Counterparty, including any such amounts
      remaining unpaid from previous Distribution Dates;

     

    (B) from
      the
      remaining Interest Remittance Amount, to the Class A-1, Class A-2, Class A-3
      and
      Class A-4 Certificates, pro
      rata,
      the
      Senior Interest Payment Amount for each such Class of Certificates on such
      Distribution Date; and 

     

    (C) from
      any
      remaining Interest Remittance Amount after taking into account the distributions
      made under clauses (i)(A) and (i)(B) above, sequentially, to each Class of
      Class
      M Certificates, in ascending order by numerical Class designation, the Interest
      Payment Amount for such Class and such Distribution Date;

     

    (ii) (A)  on
      each Distribution Date (or, in the case of deposits into the Supplemental
      Interest Trust, on the Derivative Payment Date) (1) before the Stepdown
      Date or (2) with respect to which a Trigger Event is in effect, to the
      Supplemental Interest Trust and to the holders of the Class or Classes of
      LIBOR Certificates then entitled to distributions of principal as set forth
      below, from amounts remaining on deposit in the Distribution Account after
      making distributions pursuant to paragraph (a)(i) of this Section 4.02, an
      amount equal to, in the aggregate, the Principal Payment Amount, in the
      following amounts and order of priority:

     

    (a) for
      deposit into the Supplemental Interest Trust Account, any Net Derivative Payment
      or Swap Termination Payment (other than a Swap Termination Payment resulting
      from a Swap Counterparty Trigger Event) owed to the Derivative Counterparty
      to
      the extent unpaid pursuant to clause (a)(i)(A) of this Section
      4.02;

    
      
         

      

      
        -59-

        
          

        

      

      
         

      

    

     

    (b) to
      the
      Class A-1, Class A-2, Class A-3 and Class A-4 Certificates, the Principal
      Payment Amount, until their respective Class Certificate Balances are reduced
      to
      zero, allocated as described in Section 4.02(c);

     

    (c) sequentially,
      to each Class of Class M Certificates, in ascending order by numerical
      Class designation, until their respective Class Certificate Balances are
      reduced to zero; and

     

    (B) on
      each
      Distribution Date (or, in the case of deposits into the Supplemental Interest
      Trust, on the Derivative Payment Date) on and after the Stepdown Date and as
      long as a Trigger Event is not in effect, to the Supplemental Interest Trust
      and
      to the holders of the Class or Classes of LIBOR Certificates then entitled
      to distributions of principal, from amounts remaining on deposit in the
      Distribution Account after making distributions pursuant to paragraph (a)(i)
      of
      this Section 4.02, an amount equal to, in the aggregate, the Principal Payment
      Amount, in the following amounts and order of priority:

     

    (a) for
      deposit into the Supplemental Interest Trust Account, any Net Derivative Payment
      or Swap Termination Payment (other than a Swap Termination Payment resulting
      from a Swap Counterparty Trigger Event) owed to the Derivative Counterparty
      to
      the extent unpaid pursuant to clause (a)(i)(A) of this Section
      4.02;

     

    (b) to
      the
      Class A-1, Class A-2, Class A-3 and Class A-4 Certificates, the Senior Principal
      Payment Amount, until their respective Class Certificate Balances are reduced
      to
      zero, allocated as described in Section 4.02(c);

     

    (c) sequentially,
      to each Class of Class M Certificates, in the order set forth in the
      definition of Class M Principal Payment Amount, the Class M Principal
      Payment Amount for the related Class of Class M certificates, until their
      respective Class Certificate Balances are reduced to zero;

     

    (iii) any
      amounts remaining after the distributions in paragraphs (i) and (ii) of
      this Section 4.02(a), plus, as specifically indicated below, from amounts on
      deposit in the Excess Reserve Fund Account, shall be distributed in the
      following order of priority:

     

    (A) to
      the
      extent not paid pursuant to Section 4.02(a)(i)(B), to the Class A Certificates,
      any Senior Interest Payment Amount, allocated pro
      rata
      among
      such Classes in proportion to the amount of the unpaid Senior Interest Payment
      Amount for such Classes;

     

    (B) sequentially,
      to each Class of Class M Certificates, in ascending order by numerical
      Class designation, to the extent not paid for such Distribution Date pursuant
      to
      Section 4.02(a)(i)(C), any Interest Payment Amount for any such
      Class;

    
      
         

      

      
        -60-

        
          

        

      

      
         

      

    

     

    (C) sequentially,
      to each Class of Class M Certificates, in ascending order by numerical Class
      designation, first,
      any
      Interest Carry Forward Amount for that Class, and second,
      any
      Unpaid Realized Loss Amount for that Class;

     

    (D) to
      the
      Excess Reserve Fund Account, the amount of any Basis Risk Payment for such
      Distribution Date;

     

    (E) from
      amounts on deposit in the Excess Reserve Fund Account with respect to such
      Distribution Date, an amount equal to any unpaid Basis Risk Carryover Amount
      with respect to each Class of LIBOR Certificates for such Distribution Date,
      allocated in the same order and priority as set forth in clauses (a)(i)(B)
      and
      (a)(i)(C) of this Section 4.02;

     

    (F) to
      the
      Credit Risk Manager, the Credit Risk Manager Fee;

     

    (G) On
      the
      Distribution Date occurring in June 2010 (or the next succeeding Distribution
      Date on which sufficient funds are available in the Distribution Account to
      make
      such distributions to the Class P Certificates), $100 to the Class P
      Certificates in payment of its Class P Principal Amount;

     

    (H) to
      the
      Swap Counterparty, any Swap Termination Payment resulting from a Swap
      Counterparty Trigger Event;

     

    (I) to
      the
      extent not distributed pursuant to Sections 4.02(a)(iii)(A) through (H), to
      the holders of the Class X Certificates, the remainder of the Class X
      Distributable Amount; and

     

    (J) to
      the
      holders of the Class R Certificates, any remaining amount;

     

    If
      on any
      Distribution Date, as a result of the foregoing allocation rules, any
      Class of Class A Certificates does not receive in full the related
      Senior Interest Payment Amount, then such shortfall will be allocated to the
      Holders of such Class, with interest thereon, on future Distribution Dates,
      as
      Interest Carry Forward Amounts, subject to the priorities described
      above.

     

    (b) On
      each
      Distribution Date, prior to any distributions on any other Class of
      Certificates, all amounts representing Prepayment Charges from the Mortgage
      Loans received during the related Prepayment Period shall be distributed by
      the
      Securities Administrator to the holders of the Class P
      Certificates.

     

    (c) Any
      principal distributions allocated to the Certificates will be allocated in
      the
      following order of priority:

     

    (i) to
      the
      Class A-1 Certificates, until the Class Certificate Balance of such Class has
      been reduced to zero;

     

    (ii) 
      to the
      Class A-2 Certificates, until the Class Certificate Balance of such Class has
      been reduced to zero;

    
      
         

      

      
        -61-

        
          

        

      

      
         

      

    

     

    (iii) to
      the
      Class A-3 Certificates, until the Class Certificate Balance of such Class has
      been reduced to zero; and

     

    (iv) to
      the
      Class A-4 Certificates, until the Class Certificate Balance of such Class has
      been reduced to zero.

     

    Notwithstanding
      the above paragraph, on and after the Distribution Date on which the aggregate
      Class Certificate Balances of the Class M Certificates and the
      Overcollateralization Amount have been reduced to zero, any principal
      distributions allocated to the Class A-1, Class A-2, Class A-3 and Class A-4
      Certificates are required to be allocated pro
      rata
      among
      such Classes of Certificates, based upon their respective Class Certificate
      Balances.

     

    (d) On
      any
      Distribution Date, any Relief Act Shortfalls and Net Prepayment Interest
      Shortfalls for such Distribution Date shall be allocated by the Securities
      Administrator as a reduction in the following order:

     

    (i) First,
      to the
      amount of interest payable to the Class X Certificates; and

     

    (ii) Second,
      pro
      rata,
      as a
      reduction of the Interest Payment Amount for the Class A and Class M
      Certificates, based on the amount of interest to which such Classes would
      otherwise be entitled.

     

    (e) On
      any
      Distribution Date (or any Derivative Payment Date, as applicable), the
      Securities Administrator shall distribute any Swap Amount and Cap Amount for
      such date as follows:

     

    (i) to
      the
      Derivative Counterparty, any Net Derivative Payment owed to the Derivative
      Counterparty pursuant to the Swap Agreement for such Derivative Payment Date
      to
      the extent not previously paid pursuant to Sections 4.02(a)(i)(A),
      4.02(a)(ii)(A) or 4.02(a)(ii)(B);

     

    (ii) to
      the
      Swap Counterparty, any Swap Termination Payment not resulting from a Swap
      Counterparty Trigger Event owed to the Swap Counterparty pursuant to the Swap
      Agreement for such Derivative Payment Date;

     

    (iii) to
      the
      extent not paid and in the order of priority provided in clauses (a)(iii)(A)
      and
      (a)(iii)(B) of this Section 4.02, to the Class A Certificates any Senior
      Interest Payment Amounts, and to the Class M Certificates, in ascending order
      by
      numerical class designation, any Interest Payment Amounts;

     

    (iv) to
      the
      Class A Certificates and the Class M Certificates in the order of priority
      set
      forth in clauses (a)(ii)(A)(b), (a)(ii)(A)(c), (a)(ii)(B)(b) and (a)(ii)(B)(c)
      of this Section 4.02, an amount necessary to maintain the Overcollateralization
      Target Amount for such Distribution Date;

     

    (v) to
      the
      extent not paid and in the order of priority provided in clause (a)(iii)(C)
      of
      this Section 4.02, sequentially, to each Class of Class M Certificates, in
      ascending order by numerical Class designation, first,
      any
      Interest Carry Forward Amount for that Class, and second,
      any
      Unpaid Realized Loss Amount for that Class;

    
      
         

      

      
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    (vi) to
      the
      extent not paid and in the order of priority provided in clause (a)(iii)(D)
      of
      this Section 4.02, to the Excess Reserve Fund Account, the amount of any Basis
      Risk Payment for such Distribution Date;

     

    (vii) to
      the
      extent not paid and in the order of priority provided in clause (a)(iii)(E)
      of
      this Section 4.02, to the LIBOR Certificates, any remaining unpaid Basis Risk
      Carryover Amount with respect to such Certificates for that Distribution Date,
      allocated in the same order and priority as set forth in clauses (a)(i)(B)
      and
      (a)(i)(C) of this Section 4.02;

     

    (viii) to
      the
      extent not paid and in the order of priority provided in clause (a)(iii)(F)
      of
      this Section 4.02, to the Credit Risk Manager, the Credit Risk Manager
      Fee;

     

    (ix) if
      applicable, to the Swap Termination Receipts Account or Cap Termination Receipts
      Account for application to the purchase of a replacement swap agreement or
      replacement cap agreement pursuant to Section 4.08;

     

    (x) to
      the
      extent not paid and in the order of priority provided in clause (a)(iii)(G)
      of
      this Section 4.02, to the Swap Counterparty, any Swap Termination Payment
      resulting from a Swap Counterparty Trigger Event; and

     

    (xi) to
      the
      holders of the Class X Certificates, the remainder of the Class X
      Distributable Amount.

     

    With
      respect to each Distribution Date, the sum of all amounts distributed pursuant
      to priorities (e)(iv) and (e)(v) second
      of this
      Section 4.02(e) cannot exceed the amount of cumulative Realized Losses incurred
      up to such Distribution Date minus any distributions made on previous
      Distribution Dates pursuant to such priorities.

     

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

     

    (i) the
      amount thereof allocable to principal, separately identifying the aggregate
      amount of any Principal Prepayments, Liquidation Proceeds and Subsequent
      Recoveries;

     

    (ii) the
      amount thereof allocable to interest, any Interest Carry Forward Amounts
      included in such distribution and any remaining Interest Carry Forward Amounts
      after giving effect to such distribution, any Basis Risk Carryover Amount for
      such Distribution Date and the amount of all Basis Risk Carryover Amount covered
      by withdrawals from the Excess Reserve Fund Account on such Distribution
      Date;

    
      
         

      

      
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    (iii) if
      the
      distribution to the Holders of such Class of Certificates is less than the
      full amount that would be distributable to such Holders if there were sufficient
      funds available therefor, the amount of the shortfall and the allocation thereof
      as between principal and interest, including any Basis Risk Carryover Amount
      not
      covered by amounts in the Excess Reserve Fund Account;

     

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

     

    (v) the
      Pool
      Stated Principal Balance for the following Distribution Date;

     

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

     

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

     

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

     

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

     

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

     

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

     

    (xii) whether
      a
      Trigger Event has occurred and is continuing;

     

    (xiii) the
      amount on deposit in the Excess Reserve Fund Account (after giving effect to
      distributions on such Distribution Date);

     

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

    
      
         

      

      
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    (xv) the
      amount of any Net Monthly Excess Cash Flow on such Distribution Date and the
      allocation thereof to the Certificateholders with respect to Applied Realized
      Loss Amounts and Interest Carry Forward Amounts;

     

    (xvi) the
      Overcollateralization Amount and Overcollateralization Target
      Amount;

     

    (xvii) Prepayment
      Charges collected by the Servicers;

     

    (xviii) the
      Cumulative Loss Percentage and the Rolling Three Month Delinquency
      Rate;

     

    (xix) the
      amount of Credit Risk Management Fees paid during the Due Period to which such
      Distribution Date relates; and

     

    (xx) the
      amount of any Net Derivative Payment made to the Supplemental Interest Trust
      pursuant to Section 4.02, any Net Derivative Payment made to the Derivative
      Counterparty pursuant to Section 4.02, any Swap Termination Payment or Cap
      Termination Payment made to the Supplemental Interest Trust pursuant to Section
      4.02 and any Swap Termination Payment made to the Swap Counterparty pursuant
      to
      Section 4.02.

     

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

     

    (c) The
      Securities Administrator’s responsibility for making available the above
      statement to the Certificateholders, each Rating Agency, the Master Servicer,
      each Servicer, the Trustee and the Depositor is limited to the availability,
      timeliness and accuracy of the information derived from the Master Servicer
      and
      the Servicers. The Securities Administrator will provide the above statement
      via
      the Securities Administrator’s internet website. The Securities Administrator’s
      website will initially be located at https://www.ctslink.com
      and
      assistance in using the website can be obtained by calling the Securities
      Administrator’s customer service desk at (866) 846-4526. Parties that are unable
      to use the above distribution method are entitled to have a paper copy mailed
      to
      them via first Class mail by calling the customer service desk and indicating
      such. The Securities Administrator shall have the right to change the manner
      in
      which the above statement is distributed in order to make such distribution
      more
      convenient and/or more accessible, and the Securities Administrator shall
      provide timely and adequate notification to the Certificateholders and the
      parties hereto regarding any such changes. A paper copy of the statement will
      also be made available upon request.

    
      
         

      

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

     

    Section
      4.04 Certain
      Matters Relating to the Determination of LIBOR.
      LIBOR
      shall be calculated by the Securities Administrator in accordance with the
      definition of LIBOR. Until all of the LIBOR Certificates are paid in full,
      the
      Securities Administrator will at all times retain at least four Reference Banks
      for the purpose of determining LIBOR with respect to each LIBOR Determination
      Date. The Securities Administrator initially shall designate the Reference
      Banks
      (after consultation with the Depositor). Each “Reference
      Bank”
shall
      be a leading bank engaged in transactions in Eurodollar deposits in the
      international Eurocurrency market, shall not control, be controlled by, or
      be
      under common control with, the Securities Administrator and shall have an
      established place of business in London. If any such Reference Bank should
      be
      unwilling or unable to act as such or if the Securities Administrator should
      terminate its appointment as Reference Bank, the Securities Administrator shall
      promptly appoint or cause to be appointed another Reference Bank (after
      consultation with the Depositor). The Securities Administrator shall have no
      liability or responsibility to any Person for (i) the selection of any
      Reference Bank for purposes of determining LIBOR or (ii) any inability to
      retain at least four Reference Banks which is caused by circumstances beyond
      its
      reasonable control.

     

    The
      Interest Rate for each Class of LIBOR Certificates for each Interest
      Accrual Period shall be determined by the Securities Administrator on each
      LIBOR
      Determination Date so long as the LIBOR Certificates are outstanding on the
      basis of LIBOR and the respective formulae appearing in footnotes corresponding
      to the LIBOR Certificates in the table relating to the Certificates in the
      Preliminary Statement. The Securities Administrator shall not have any liability
      or responsibility to any Person for its inability, following a good-faith
      reasonable effort, to obtain quotations from the Reference Banks or to determine
      the arithmetic mean referred to in the definition of LIBOR, all as provided
      for
      in this Section 4.04 and the definition of LIBOR. The establishment of
      LIBOR and each Interest Rate for the LIBOR Certificates by the Securities
      Administrator shall (in the absence of manifest error) be final, conclusive
      and
      binding upon each Holder of a Certificate and the Trustee.

     

    Section
      4.05 Allocation
      of Applied Realized Loss Amounts.
      Any
      Applied Realized Loss Amounts shall be allocated by the Securities Administrator
      to the most junior Class of Class M Certificates then outstanding in
      reduction of the Class Certificate Balance thereof.

     

    Section
      4.06 Supplemental
      Interest Trust. (a)
      A
      separate trust is hereby established (the “Supplemental
      Interest Trust”),
      the
      corpus of which shall be held by the Supplemental Interest Trust Trustee for
      the
      benefit of the Class X Certificateholders. The Securities Administrator is
      hereby appointed Supplemental Interest Trust Trustee. The Supplemental Interest
      Trust Trustee shall establish an account (the “Supplemental Interest Trust
      Account”) consisting of two sub-accounts (the “Swap
      Account”
and
      the
“Cap
      Account,”
      respectively), into each of which the Depositor shall deposit $500 on the
      Closing Date. The Supplemental Interest Trust Account shall be an Eligible
      Account, and funds on deposit therein shall be held separate and apart from,
      and
      shall not be commingled with, any other monies, including, without limitation,
      other monies of the Securities Administrator held pursuant to this Agreement.
      

    
      
         

      

      
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    (b) In
      addition, the Supplemental Interest Trust Trustee shall establish a collateral
      account (the “Collateral
      Account”).
      The
      Collateral Account shall be an Eligible Account, and funds on deposit therein
      shall be held separate and apart from, and shall not be commingled with, any
      other monies, including, without limitation, other monies of the Securities
      Administrator held pursuant to this Agreement.

     

    (c) The
      Supplemental Interest Trust Trustee shall deposit into the Swap Account any
      Net
      Derivative Payment required pursuant to Sections 4.02(a)(i)(A),
      4.02(a)(ii)(A)(a) and 4.02(a)(ii)(B)(a), any Swap Termination Payment required
      pursuant to Sections 4.02(a)(i)(A), 4.02(a)(ii)(A)(a), 4.02(a)(ii)(B)(a) and
      4.02(a)(iii)(G), and any amounts received from the Swap Counterparty under
      the
      Swap Agreement, and shall distribute from the Supplemental Interest Trust
      Account any Net Derivative Payment required pursuant to Section 4.02(e)(i)
      or
      any Swap Termination Payment required pursuant to Sections 4.02(e)(ii) or
      4.02(e)(x), as applicable.

     

    (d) The
      Supplemental Interest Trust Trustee shall deposit into the Cap Account any
      amounts received from the Cap Counterparty under the Cap Agreement.

     

    (e) Funds
      in
      the Swap Account shall be invested in Permitted Investments constituting time
      deposits under clause (ii) of the definition thereof. Any earnings on such
      amounts shall be distributed on each Distribution Date pursuant to Section
      4.02(e). The Class X Certificates shall evidence ownership of the Swap Account
      for federal income tax purposes and the Holder thereof shall direct the
      Supplemental Interest Trust Trustee, in writing, as to investment of amounts
      on
      deposit therein. The Sponsor shall be liable for any losses incurred on such
      investments. In the absence of written instructions from the Class X
      Certificateholders as to investment of funds on deposit in the Swap Account,
      such funds shall be invested in the Wells Fargo Advantage Prime Investment
      Money
      Market Fund or a comparable investment vehicle. Any amounts on deposit in the
      Swap Account in excess of the Swap Amount on any Distribution Date shall be
      held
      for distribution pursuant to Section 4.02(e) on the following Distribution
      Date.

     

    (f) Funds
      in
      the Cap Account shall be invested in Permitted Investments constituting time
      deposits under clause (ii) of the definition thereof. Any earnings on such
      amounts shall be distributed on each Distribution Date pursuant to Section
      4.02(e). The Class X Certificates shall evidence ownership of the Cap Account
      for federal income tax purposes and the Holder thereof shall direct the
      Supplemental Interest Trust Trustee, in writing, as to investment of amounts
      on
      deposit therein. The Sponsor shall be liable for any losses incurred on such
      investments. In the absence of written instructions from the Class X
      Certificateholders as to investment of funds on deposit in the Cap Account,
      such
      funds shall be invested in the Wells Fargo Advantage Prime Investment Money
      Market Fund or a comparable investment vehicle. Any amounts on deposit in the
      Cap Account in excess of the Cap Amount on any Distribution Date shall be held
      for distribution pursuant to Section 4.02(e) on the following Distribution
      Date.

    
      
         

      

      
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    (g) Funds
      required to be held pursuant to the Credit Support Annex shall be deposited
      into
      the Collateral Account. Funds posted by the Cap Counterparty (or its credit
      support provider) and/or the Swap Counterparty (or its credit support provider)
      in the Collateral Account shall be invested in Permitted Investments at the
      written direction of the Cap Counterparty and/or Swap Counterparty, as
      applicable. Any interest earnings on such amounts shall be remitted to the
      Cap
      Counterparty and/or Swap Counterparty, as applicable, pursuant to the terms
      of
      the Credit Support Annex. The Supplemental Interest Trust Trustee shall not
      be
      liable for any losses incurred on such investments. In the absence of prior
      written instructions from the Cap Counterparty (or its credit support provider)
      and/or the Swap Counterparty (or its credit support provider) as to investment
      of funds on deposit in the Collateral Account, such funds shall be invested
      in
      the Wells Fargo Advantage Prime Investment Money Market Fund or a comparable
      investment vehicle. On the Distribution Date immediately following a Swap
      Payment Date where a shortfall exists with respect to a Net Swap Payment or
      a
      Swap Termination Payment owed by the Swap Counterparty as a result of its
      failure to make payments pursuant to the Swap Agreement, amounts necessary
      to
      cover such shortfall shall be removed from the Collateral Account, remitted
      to
      the Swap Account and distributed as all or a portion of such Net Swap Payment
      or
      Swap Termination Payment pursuant to Section 4.02(e). On the Distribution Date
      where a shortfall exists with respect to Cap Amounts owed by the Cap
      Counterparty as a result of its failure to make payments pursuant to the Cap
      Agreement, amounts necessary to cover such shortfall shall be removed from
      the
      Collateral Account, remitted to the Cap Account and distributed as all or a
      portion of such Cap Amount pursuant to Section 4.02(e). Any amounts on deposit
      in the Collateral Account required to be returned to the Cap Counterparty (or
      its credit support provider) and/or the Swap Counterparty (or its credit support
      provider), as applicable, as a result of (i) the termination of the Swap
      Agreement or Cap Agreement, as applicable, (ii) the procurement of a guarantor,
      (iii) the reinstatement of required ratings or (iv) otherwise pursuant to the
      Swap Agreement, shall be released directly to the Swap Counterparty and/or
      the
      Cap Counterparty, as applicable, pursuant to the terms of the Credit Support
      Annex

     

    (h) Upon
      termination of the Trust Fund, any amounts remaining in the Swap Account or
      the
      Cap Account shall be distributed pursuant to the priorities set forth in Section
      4.02(e).

     

    (i) It
      is the
      intention of the parties hereto that, for federal and state income and state
      and
      local franchise tax purposes, the Supplemental Interest Trust be disregarded
      as
      an entity separate from the holder of the Class X Certificates unless and until
      the date when either (i) there is more than one Class X Certificateholder or
      (ii) any Class of Certificates in addition to the Class X Certificates is
      recharacterized as an equity interest in the Supplemental Interest Trust for
      federal income tax purposes. Neither the Securities Administrator nor the
      Trustee shall be responsible for any entity level tax reporting for the
      Supplemental Interest Trust.

     

    (j) Any
      obligation of the Securities Administrator with respect to the Supplemental
      Interest Trust under the Swap Agreement or Cap Agreement shall be deemed to
      be
      an obligation of the Supplemental Interest Trust.

    
      
         

      

      
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    (k) In
      the
      event that the Swap Counterparty or the Cap Counterparty fails to perform any
      of
      its obligations under the Swap Agreement and the Cap Agreement, respectively,
      (including, without limitation, its obligations to make any payment or transfer
      collateral), or breaches any of its representations and warranties under the
      Swap Agreement or the Cap Agreement, as applicable, or in the event that an
      Event of Default, Termination Event, or Additional Termination Event occurs
      (as
      such terms are defined in the Swap Agreement and the Cap Agreement), the
      Supplemental Interest Trust Trustee shall, no later than the next Business
      Day
      following such failure, breach or occurrence, notify the Swap Counterparty
      or
      Cap Counterparty, as applicable, and make any demand for payment pursuant to
      the
      Swap Agreement or Cap Agreement, as applicable. In the event that the Swap
      Counterparty’s or Cap Counterparty’s obligations are at any time guaranteed by a
      third party, then to the extent that the Swap Counterparty or Cap Counterparty
      fails to make any payment or delivery required under terms of the Swap Agreement
      or the Cap Agreement, as applicable, the Supplemental Interest Trust Trustee
      shall, no later than the next Business Day following such failure, demand that
      such guarantor make any and all payments then required to be made by the
      applicable guarantor.

     

    Section
      4.07 Rights
      of the Swap Counterparty. The
      Swap
      Counterparty shall be deemed a third-party beneficiary of this Agreement to
      the
      same extent as if it were a party hereto and shall have the right to enforce
      its
      rights under this Agreement, which rights include but are not limited to the
      obligation of the Supplemental Interest Trust Trustee (A) to deposit any Net
      Derivative Payment required pursuant to Sections 4.02(a)(i)(A),
      4.02(a)(ii)(A)(a) and 4.02(a)(ii)(B)(a), and any Swap Termination Payment
      required pursuant to Sections 4.02(a)(i)(A), 4.02(a)(ii)(A)(a),
      4.02(a)(ii)(B)(a) and 4.02(a)(iii)(H), into the Supplemental Interest Trust
      Account (B) to pay any Net Derivative Payment required pursuant to Section
      4.02(e)(i) or Swap Termination Payment required pursuant to Sections 4.02(e)(ii)
      or Section 4.02(e)(x), as applicable, to the Swap Counterparty and (C) to
      establish and maintain the Swap Account, to make such deposits thereto,
      investments therein and distributions therefrom as are required pursuant to
      Section 4.06. For the protection and enforcement of the provisions of this
      Section the Swap Counterparty shall be entitled to such relief as can be given
      either at law or in equity.

     

    Section
      4.08 Termination
      Receipts.(a)(i)
      In
      the event of a “Termination Event” as defined under the Swap Agreement, (a) any
      Swap Termination Payment made by the Swap Counterparty to the Swap Account
      and
      paid pursuant to Section 4.02(e)(ix) (“Swap
      Termination Receipts”)
      will
      be deposited in a segregated non-interest bearing account which shall be an
      Eligible Account established by the Securities Administrator (the “Swap
      Termination Receipts Account”)
      and
      (b) any amounts received from a replacement swap counterparty (“Swap
      Replacement Receipts”)
      will
      be deposited in a segregated non-interest bearing account which shall be an
      Eligible Account established by the Securities Administrator (the “Swap
      Replacement Receipts Account”).
      The
      Securities Administrator shall invest, or cause to be invested, funds held
      in
      the Swap Termination Receipts Account and the Swap Replacement Receipts Account
      in time deposits of the Securities Administrator as permitted pursuant to clause
      (ii) of the definition of Permitted Investments or as otherwise directed in
      writing by a majority of the Certificateholders. All such Permitted Investments
      must be payable on demand or mature on a Distribution Date or such other date
      as
      directed by the Certificateholders. All such Permitted Investments will be
      made
      in the name of the Supplemental Interest Trust Trustee (in its capacity as
      such)
      or its nominee. All income and gain realized from any such investment shall
      be
      deposited in the Termination Receipts Account or the Replacement Receipts
      Account, as applicable, and all losses, if any, shall be borne by the related
      account. 

    
      
         

      

      
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    (ii) Unless
      otherwise permitted by the Rating Agencies as evidenced in a written
      confirmation, the Depositor shall arrange for a replacement swap agreement(s)
      or
      procure a replacement guarantor, if applicable, and the Securities Administrator
      shall promptly, with the assistance and cooperation of the Depositor, use
      amounts on deposit in the Swap Termination Receipts Account, if necessary,
      to
      enter into any replacement swap agreement(s) or to execute any other agreements
      with respect to such replacement guarantor, if applicable, which shall be
      executed and delivered by the Supplemental Interest Trust Trustee upon receipt
      of written confirmation from each Rating Agency (if required pursuant to the
      terms of the Swap Agreement) that such replacement swap agreement(s) will not
      result in the reduction or withdrawal of the rating of any outstanding Class
      of
      Certificates with respect to which it is a Rating Agency. 

     

    Amounts
      on deposit in the Swap Replacement Receipts Account shall be held for the
      benefit of the related Swap Counterparty and paid to such Swap Counterparty
      if
      the Supplemental Interest Trust is required to make a payment to such Swap
      Counterparty following an event of default or termination event with respect
      to
      the Supplemental Interest Trust under the related Swap Agreement. Any amounts
      not so applied shall, following the termination or expiration of such Swap
      Agreement, be paid to the Class X Certificates.

     

    (b) (i)
      In
      the event of a “Termination Event” as defined under the Cap Agreement, (a) any
      Cap Termination Payment made by the Cap Counterparty to the Cap Account and
      paid
      pursuant to Section 4.02(e)(ix) (“Cap Termination Receipts”) shall be deposited
      in a segregated non-interest bearing account which shall be an Eligible Account
      established by the Securities Administrator (the “Cap Termination Receipts
      Account”) and (b) any amounts received from a replacement cap counterparty (“Cap
      Replacement Receipts”) will be deposited in a segregated non-interest bearing
      account which shall be an Eligible Account established by the Securities
      Administrator (the “Cap Replacement Receipts Account”). The Securities
      Administrator shall invest, or cause to be invested, funds held in the Cap
      Termination Receipts Account in time deposits of the Securities Administrator
      as
      permitted by clause (ii) of the definition of Permitted Investments or as
      otherwise directed in writing by a majority of the Certificateholders. All
      such
      Permitted Investments must be payable on demand or mature on a Cap Payment
      Date,
      a Distribution Date or such other date as directed by the Certificateholders.
      All such Permitted Investments shall be made in the name of the Supplemental
      Interest Trust Trustee (in its capacity as such) or its nominee. All income
      and
      gain realized from any such investment shall be deposited in the Cap Termination
      Receipts Account and all losses, if any, shall be borne by such account.

     

    (ii) Unless
      otherwise permitted by the Rating Agencies as evidenced in a written
      confirmation, the Depositor shall arrange for one or more replacement interest
      rate cap agreements and the Securities Administrator shall promptly, with the
      assistance and cooperation of the Depositor, use amounts on deposit in the
      Cap
      Termination Receipts Account, if necessary, to enter into any such replacement
      interest rate cap agreement which shall be executed and delivered by the
      Supplemental Interest Trust Trustee upon receipt of written confirmation from
      each Rating Agency that any such replacement interest rate cap agreement will
      not result in the reduction or withdrawal of the rating of any outstanding
      Class
      of Certificates with respect to which it is a Rating Agency.

    
      
         

      

      
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    ARTICLE
      V

     

    THE
      CERTIFICATES

     

    Section
      5.01 The
      Certificates.
      The
      Certificates shall be substantially in the forms attached hereto as exhibits.
      The Certificates shall be issuable in registered form, in the minimum
      denominations, integral multiples in excess thereof (except that one Certificate
      in each Class may be issued in a different amount) and aggregate
      denominations per Class set forth in the Preliminary
      Statement.

     

    The
      Depositor hereby directs the Securities Administrator to register the
      Class X, Class X and Class R Certificates in the name of HSBC
      Securities (USA) Inc. or its designee. On a date as to which the Depositor
      notifies the Securities Administrator, the Securities Administrator shall
      transfer the Class X and Class P Certificates in the name of the NIM
      Trustee, or such other name or names as the Depositor shall request, and to
      deliver the Class X and Class P Certificates to the NIM Trustee or to
      such other Person or Persons as the Depositor shall request.

     

    Subject
      to Section 11.02 respecting the final distribution on the Certificates, on
      each Distribution Date the Securities Administrator shall make distributions
      to
      each Certificateholder of record on the preceding Record Date either (x) by
      wire transfer in immediately available funds to the account of such holder
      at a
      bank or other entity having appropriate facilities therefor, if such Holder
      has
      so notified the Securities Administrator at least five Business Days prior
      to
      the related Record Date or (y) by check mailed by first Class mail to such
      Certificateholder at the address of such holder appearing in the Certificate
      Register; provided,
      however,
      so long
      as such Certificate is a Book-Entry Certificate, all distributions on such
      Certificate will be made through the Depository or the Depository
      Participant.

     

    The
      Certificates shall be executed by manual or facsimile signature on behalf of
      the
      Securities Administrator by an authorized officer. Certificates bearing the
      manual or facsimile signatures of individuals who were, at the time such
      signatures were affixed, authorized to sign on behalf of the Securities
      Administrator shall bind the Securities Administrator, notwithstanding that
      such
      individuals or any of them have ceased to be so authorized prior to the
      authentication and delivery of any such Certificates or did not hold such
      offices at the date of such Certificate. No Certificate shall be entitled to
      any
      benefit under this Agreement, or be valid for any purpose, unless authenticated
      by the Securities Administrator by manual signature, and such authentication
      upon any Certificate shall be conclusive evidence, and the only evidence, that
      such Certificate has been duly executed and delivered hereunder. All
      Certificates shall be dated the date of their authentication. On the Closing
      Date, the Securities Administrator shall authenticate the Certificates to be
      issued at the direction of the Depositor, or any affiliate thereof.

     

    
      
         

      

      
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    Section
      5.02 Certificate
      Register; Registration of Transfer and Exchange of Certificates.
      (a)  The Securities Administrator shall maintain, or cause to be
      maintained in accordance with the provisions of Section 5.06, a Certificate
      Register for the Trust Fund in which, subject to the provisions of subsections
      (b) and (c) below and to such reasonable regulations as it may prescribe,
      the Securities Administrator shall provide for the registration of Certificates
      and of transfers and exchanges of Certificates as herein provided. Upon
      surrender for registration of transfer of any Certificate, the Securities
      Administrator shall execute and deliver, in the name of the designated
      transferee or transferees, one or more new Certificates of the same
      Class and aggregate Percentage Interest.

     

    At
      the
      option of a Certificateholder, Certificates may be exchanged for other
      Certificates of the same Class in authorized denominations and evidencing
      the same aggregate Percentage Interest upon surrender of the Certificates to
      be
      exchanged at the office or agency of the Securities Administrator. Whenever
      any
      Certificates are so surrendered for exchange, the Securities Administrator
      shall
      execute, authenticate, and deliver the Certificates which the Certificateholder
      making the exchange is entitled to receive. Every Certificate presented or
      surrendered for registration of transfer or exchange shall be accompanied by
      a
      written instrument of transfer in form satisfactory to the Securities
      Administrator duly executed by the holder thereof or his attorney duly
      authorized in writing.

     

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

     

    All
      Certificates surrendered for registration of transfer or exchange shall be
      cancelled and subsequently destroyed by the Securities Administrator in
      accordance with the Securities Administrator’s customary
      procedures.

     

    (b) No
      transfer of a Private Certificate shall be made unless such transfer is made
      pursuant to an effective registration statement under the Securities Act and
      any
      applicable state securities laws or is exempt from the registration requirements
      under said Act and such state securities laws. In determining whether a transfer
      is being made pursuant to an effective registration statement, the Securities
      Administrator shall be entitled to rely solely upon a written notice to such
      effect from the Depositor. Except with respect to (i) the transfer of the
      Class X, Class P or Class R Certificates to the Depositor or an
      Affiliate of the Depositor, (ii) the transfer of the Class X or
      Class P Certificates to the NIM Issuer or the NIM Trustee, or (iii) a
      transfer of the Class X or Class P Certificates from the NIM Issuer or
      the NIM Trustee to the Depositor or an Affiliate of the Depositor, in the event
      that a transfer of a Private Certificate which is a Physical Certificate is
      to
      be made in reliance upon an exemption from the Securities Act and such laws,
      in
      order to assure compliance with the Securities Act and such laws, the
      Certificateholder desiring to effect such transfer shall certify to the
      Securities Administrator in writing the facts surrounding the transfer in
      substantially the form set forth in Exhibit H (the “Transferor
      Certificate”)
      and
      either (i) there shall be delivered to the Securities Administrator a
      letter in substantially the form of Exhibit I-A (the “Rule 144A
      Investment Letter”)
      or
      Exhibit I-B (the “Regulation
      S Investment Letter”)
      or
      (ii) there shall be delivered to the Securities Administrator at the
      expense of the transferor an Opinion of Counsel stating that such transfer
      may
      be made without registration under the Securities Act. In the event that a
      transfer of a Private Certificate which is a Book-Entry Certificate is to be
      made in reliance upon an exemption from the Securities Act and such laws, in
      order to assure compliance with the Securities Act and such laws, the
      Certificateholder desiring to effect such transfer will be deemed to have made
      as of the transfer date each of the certifications set forth in the Transferor
      Certificate in respect of 

    
      
         

      

      
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    such
      Certificate and the transferee will be deemed to have made as of the transfer
      date each of the certifications set forth in the Rule 144A Investment
      Letter or Regulation S Investment Letter, as applicable, in respect of such
      Certificate, in each case as if such Certificate were evidenced by a Physical
      Certificate. As directed by the Depositor, the Securities Administrator shall
      provide to any Holder of a Private Certificate and any prospective transferee
      designated by any such Holder, information regarding the related Certificates
      and the Mortgage Loans and such other information as shall be necessary to
      satisfy the condition to eligibility set forth in Rule 144A(d)(4) for
      transfer of any such Certificate without registration thereof under the
      Securities Act pursuant to the registration exemption provided by
      Rule 144A. The Depositor, the Master Servicer and the Trustee shall
      cooperate with the Securities Administrator in providing the Rule 144A
      information referenced in the preceding sentence, including providing to the
      Securities Administrator such information regarding the Certificates, the
      Mortgage Loans and other matters regarding the Trust Fund as the Securities
      Administrator shall reasonably determine to meet its obligation under the
      preceding sentence. Each Holder of a Private Certificate desiring to effect
      such
      transfer shall, and does hereby agree to, indemnify the Securities
      Administrator, the Trustee, each Servicer, the Master Servicer and the Depositor
      against any liability that may result if the transfer is not so exempt or is
      not
      made in accordance with such federal and state laws.

     

    Except
      with respect to (i) the transfer of the Class X, Class P or
      Class R Certificates to the Depositor or an Affiliate of the Depositor,
      (ii) the transfer of the Class X or Class P Certificates to the
      NIM Issuer or the NIM Trustee, or (iii) a transfer of the Class X or
      Class P Certificates from the NIM Issuer or the NIM Trustee to the
      Depositor or an Affiliate of the Depositor, no transfer of an ERISA-Restricted
      Certificate shall be made unless the Securities Administrator shall have
      received either (i) a representation from the transferee of such
      Certificate acceptable to and in form and substance satisfactory to the
      Securities Administrator (in the event such Certificate is a Private Certificate
      or a Residual Certificate, such requirement is satisfied only by the Securities
      Administrator’s receipt of a representation letter from the transferee
      substantially in the form of Exhibit I-A or Exhibit I-B), to the effect
      that such transferee is not an employee benefit plan or arrangement subject
      to
      Section 406 of ERISA, a plan subject to Section 4975 of the Code or a
      plan subject to any Federal, state or local law (“Similar
      Law”)
      materially similar to the foregoing provisions of ERISA or the Code, nor a
      person acting on behalf of any such plan or arrangement nor using the assets
      of
      any such plan or arrangement to effect such transfer, or (ii) in the case
      of an ERISA-Restricted Certificate (other than a Residual Certificate, Class
      X
      Certificate or a Class P Certificate) that has been the subject of an
      ERISA-Qualifying Underwriting, and the purchaser is an insurance company, a
      representation that the purchaser is an insurance company that is purchasing
      such Certificates with funds contained in an “insurance company general account”
(as such term is defined in Section V(e) of Prohibited Transaction
      Class Exemption (“PTCE”)
      95-60)
      and that the purchase and holding of such Certificates are covered under
      Sections I and III of PTCE 95-60 or (iii) in the case of any such
      ERISA-Restricted Certificate other than a Residual Certificate, Class X
      Certificate or Class P Certificate presented for registration in the name
      of an employee benefit plan subject to Title I of ERISA, a plan or
      arrangement subject to Section 4975 of the Code (or comparable provisions
      of any subsequent enactments), or a plan subject to Similar Law, or a trustee
      of
      any such plan or any other person acting on behalf of any such plan or
      arrangement or using such plan’s or arrangement’s assets, an Opinion of Counsel
      satisfactory to the Securities Administrator, which Opinion of Counsel shall
      not
      be an expense of the Depositor, the Trustee, the Master Servicer, any Servicer,
      the Securities Administrator or the Trust Fund, addressed to the Securities
      Administrator, to the effect that the purchase or holding of such
      ERISA-Restricted Certificate will not constitute or result in a non-exempt
      prohibited transaction within the meaning of ERISA, Section 4975 of the
      Code or any Similar Law and will not subject the Trustee, the Depositor, the
      Securities Administrator, the Master Servicer or any Servicer to any obligation
      in addition to those expressly undertaken in this Agreement or to any liability.
      For purposes of the preceding sentence, with respect to an ERISA-Restricted
      Certificate that is not a Physical Certificate or a Residual Certificate, in
      the
      event the representation letter referred to in the preceding sentence is not
      furnished, such representation shall be deemed to have been made to the
      Securities Administrator by the transferee’s (including an initial acquirer’s)
      acceptance of the ERISA-Restricted Certificates. Notwithstanding anything else
      to the contrary herein, (a) any purported transfer of an ERISA-Restricted
      Certificate that is a Physical Certificate, other than a Class P
      Certificate, Class X Certificate or Residual Certificate, to or on behalf of
      an
      employee benefit plan subject to ERISA, the Code or Similar Law without the
      delivery to the Securities Administrator of a representation letter or an
      Opinion of Counsel satisfactory to the Securities Administrator as described
      above shall be void and of no effect and (b) any purported transfer of a
      Class P Certificate, Class X Certificate or Residual Certificate to a
      transferee that does not make the representation in clause (i) above
      shall be void and of no effect.

    
      
         

      

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

    

    No
      transfer of an ERISA-Restricted Trust Certificate prior to the termination
      of
      the Cap Agreement and the Swap Agreement shall be made unless the Securities
      Administrator shall have received a representation letter from the transferee
      of
      such Certificate, substantially in the form set forth in Exhibit I-A or Exhibit
      I-B, to the effect that either (i) such transferee is neither an employee
      benefit plan or arrangement subject to Section 406 of ERISA, a plan subject
      to
      Section 4975 of the Code or a plan subject to Similar Law nor a Person acting
      on
      behalf of any such Plan or using the assets of any such Plan to effect such
      transfer or (ii) the acquisition and holding of the ERISA-Restricted Trust
      Certificate are eligible for exemptive relief under the statutory exemption
      for
      non-fiduciary service providers under Section 408(b)(17) of ERISA and Section
      4975(d)(20) of the Code, PTCE 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60 or PTCE
      96-23 or some other applicable exemption. Notwithstanding anything else to
      the
      contrary herein, any purported transfer of an ERISA-Restricted Trust Certificate
      prior to the termination of the Cap Agreement and the Swap Agreement on behalf
      of such Plan without the delivery to the Securities Administrator of a
      representation letter as described above shall be void and of no effect. If
      the
      ERISA-Restricted Trust Certificate is a Book-Entry Certificate, the transferee
      will be deemed to have made a representation as provided in clause (i) or (ii)
      of this paragraph, as applicable.

     

    
      
         

      

      
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    If
      any
      ERISA-Restricted Trust Certificate, or any interest therein, is acquired or
      held
      in violation of the provisions of the preceding paragraph, the next preceding
      permitted beneficial owner will be treated as the beneficial owner of that
      Certificate, retroactive to the date of transfer to the purported beneficial
      owner. Any purported beneficial owner whose acquisition or holding of an
      ERISA-Restricted Trust Certificate, or interest therein, was effected in
      violation of the provisions of the preceding paragraph shall indemnify to the
      extent permitted by law and hold harmless the Depositor, the Securities
      Administrator, the Trustee, each Servicer and the Master Servicer from and
      against any and all liabilities, claims, costs or expenses incurred by such
      parties as a result of such acquisition or holding.

     

    To
      the
      extent permitted under applicable law (including, but not limited to, ERISA),
      the Securities Administrator shall be under no liability to any Person for
      any
      registration of transfer of any ERISA-Restricted Certificate or ERISA-Restricted
      Trust Certificate that is in fact not permitted by this Section 5.02(b) or
      for making any payments due on such Certificate to the Holder thereof or taking
      any other action with respect to such Holder under the provisions of this
      Agreement so long as, in the case of a Physical Certificate, the transfer was
      registered by the Securities Administrator in accordance with the foregoing
      requirements.

     

    (c) Each
      Person who has or who acquires any Ownership Interest in a Residual Certificate
      shall be deemed by the acceptance or acquisition of such Ownership Interest
      to
      have agreed to be bound by the following provisions, and the rights of each
      Person acquiring any Ownership Interest in a Residual Certificate are expressly
      subject to the following provisions:

     

    (i) Each
      Person holding or acquiring any Ownership Interest in a Residual Certificate
      shall be a Permitted Transferee and shall promptly notify the Securities
      Administrator of any change or impending change in its status as a Permitted
      Transferee;

     

    (ii) No
      Ownership Interest in a Residual Certificate may be registered on the Closing
      Date or thereafter transferred, and the Securities Administrator shall not
      register the Transfer of any Residual Certificate unless, in addition to the
      certificates required to be delivered to the Securities Administrator under
      subparagraph (b) above, the Securities Administrator shall have been
      furnished with an affidavit (a “Transfer
      Affidavit”)
      of the
      initial owner or the proposed transferee in the form attached hereto as
      Exhibit G;

     

    (iii) Each
      Person holding or acquiring any Ownership Interest in a Residual Certificate
      shall agree (A) to obtain a Transfer Affidavit from any other Person to
      whom such Person attempts to Transfer its Ownership Interest in a Residual
      Certificate, (B) to obtain a Transfer Affidavit from any Person for whom
      such Person is acting as nominee, trustee or agent in connection with any
      Transfer of a Residual Certificate and (C) not to Transfer its Ownership
      Interest in a Residual Certificate or to cause the Transfer of an Ownership
      Interest in a Residual Certificate to any other Person if it has actual
      knowledge that such Person is a Non-Permitted Transferee;

     

    (iv) Any
      attempted or purported Transfer of any Ownership Interest in a Residual
      Certificate in violation of the provisions of this Section 5.02(c) shall be
      absolutely null and void and shall vest no rights in the purported Transferee.
      If any purported transferee shall become a Holder of a Residual Certificate
      in
      violation of the provisions of this Section 5.02(c), then the last
      preceding Permitted Transferee shall be restored to all rights as Holder thereof
      retroactive to the date of registration of Transfer of such Residual
      Certificate. The Securities Administrator shall be under no liability to any
      Person for any registration of Transfer of a Residual Certificate that is in
      fact not permitted by Section 5.02(a) and this Section 5.02(c) or for
      making any payments due on such Certificate to the Holder thereof or taking
      any
      other action with respect to such Holder under the provisions of this Agreement
      so long as the Transfer was registered after receipt of the related Transfer
      Affidavit, Transferor Certificate and the Rule 144A Investment Letter. The
      Securities Administrator shall be entitled but not obligated to recover from
      any
      Holder of a Residual Certificate that was in fact a Non-Permitted Transferee
      at
      the time it became a Holder or, at such subsequent time as it became a
      Non-Permitted Transferee, all payments made on such Residual Certificate at
      and
      after either such time. Any such payments so recovered by the Securities
      Administrator shall be paid and delivered by the Securities Administrator to
      the
      last preceding Permitted Transferee of such Certificate; and

    
      
         

      

      
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    (v) The
      Depositor shall use its best efforts to make available, upon receipt of written
      request from the Securities Administrator, all information necessary to compute
      any tax imposed under Section 860E(e) of the Code as a result of a Transfer
      of an Ownership Interest in a Residual Certificate to any Holder who is a
      Non-Permitted Transferee.

     

    The
      restrictions on Transfers of a Residual Certificate set forth in this
      Section 5.02(c) shall cease to apply (and the applicable portions of the
      legend on a Residual Certificate may be deleted) with respect to Transfers
      occurring after delivery to the Securities Administrator of an Opinion of
      Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund,
      the
      Trustee, the Securities Administrator or any Servicer, to the effect that the
      elimination of such restrictions will not cause any REMIC created hereunder
      to
      fail to qualify as a REMIC at any time that the Certificates are outstanding
      or
      result in the imposition of any tax on the Trust Fund, a Certificateholder
      or
      another Person. Each Person holding or acquiring any Ownership Interest in
      a
      Residual Certificate hereby consents to any amendment of this Agreement which,
      based on an Opinion of Counsel furnished to the Securities Administrator, is
      reasonably necessary (a) to ensure that the record ownership of, or any
      beneficial interest in, a Residual Certificate is not transferred, directly
      or
      indirectly, to a Person that is a Non-Permitted Transferee and (b) to
      provide for a means to compel the Transfer of a Residual Certificate which
      is
      held by a Person that is a Non-Permitted Transferee to a Holder that is a
      Permitted Transferee.

     

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

     

    (e) Except
      as
      provided below, the Book-Entry Certificates shall at all times remain registered
      in the name of the Depository or its nominee and at all times:
      (i) registration of the Certificates may not be transferred by the
      Securities Administrator except to another Depository; (ii) the Depository
      shall maintain book-entry records with respect to the Certificate Owners and
      with respect to ownership and transfers of such Book-Entry Certificates;
      (iii) ownership and transfers of registration of the Book-Entry
      Certificates on the books of the Depository shall be governed by applicable
      rules established by the Depository; (iv) the Depository may collect its
      usual and customary fees, charges and expenses from its Depository Participants;
      (v) the Securities Administrator shall deal with the Depository, Depository
      Participants and indirect participating firms as representatives of the
      Certificate Owners of the Book-Entry Certificates for purposes of exercising
      the
      rights of holders under this Agreement, and requests and directions for and
      votes of such representatives shall not be deemed to be inconsistent if they
      are
      made with respect to different Certificate Owners; and (vi) the Securities
      Administrator may rely and shall be fully protected in relying upon information
      furnished by the Depository with respect to its Depository Participants and
      furnished by the Depository Participants with respect to indirect participating
      firms and persons shown on the books of such indirect participating firms as
      direct or indirect Certificate Owners.

    
      
         

      

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

     

    If
      (x) (i) the Depository or the Depositor advises the Securities
      Administrator in writing that the Depository is no longer willing or able to
      properly discharge its responsibilities as Depository, and (ii) the
      Securities Administrator or the Depositor is unable to locate a qualified
      successor, or (y) the Depositor notifies the Depository (and the Securities
      Administrator consents) of its intent to terminate the book-entry system through
      the Depository and, upon receipt of notice of such intent from the Depository,
      the Depository Participants holding beneficial interests in the Book-Entry
      Certificates agree to initiate such termination, the Securities Administrator
      shall notify all Certificate Owners, through the Depository, of the occurrence
      of any such event and of the availability of definitive, fully registered
      Certificates (the “Definitive
      Certificates”)
      to
      Certificate Owners requesting the same. Upon surrender to the Securities
      Administrator of the related Class of Certificates by the Depository,
      accompanied by the instructions from the Depository for registration, the
      Securities Administrator shall issue the Definitive Certificates. None of the
      Servicers, the Depositor or the Securities Administrator shall be liable for
      any
      delay in delivery of such instruction and each may conclusively rely on, and
      shall be protected in relying on, such instructions. The Depositor shall provide
      the Securities Administrator with an adequate inventory of Certificates to
      facilitate the issuance and transfer of Definitive Certificates. Upon the
      issuance of Definitive Certificates all references herein to obligations imposed
      upon or to be performed by the Depository shall be deemed to be imposed upon
      and
      performed by the Securities Administrator, to the extent applicable with respect
      to such Definitive Certificates and the Securities Administrator shall recognize
      the Holders of the Definitive Certificates as Certificateholders hereunder;
      provided,
      that
      the Securities Administrator shall not by virtue of its assumption of such
      obligations become liable to any party for any act or failure to act of the
      Depository.

     

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

    
      
         

      

      
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    Section
      5.03 Mutilated,
      Destroyed, Lost or Stolen Certificates.
      If
      (a) any mutilated Certificate is surrendered to the Securities
      Administrator, or the Securities Administrator receives evidence to its
      satisfaction of the destruction, loss or theft of any Certificate and
      (b) there is delivered to the Depositor, the Securities Administrator and
      the Trustee such security or indemnity as may be required by them to hold each
      of them harmless, then, in the absence of notice to the Securities Administrator
      that such Certificate has been acquired by a bona fide purchaser, the Securities
      Administrator shall execute, authenticate and deliver, in exchange for or in
      lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
      Certificate of like Class, tenor and Percentage Interest. In connection with
      the
      issuance of any new Certificate under this Section 5.03, the Securities
      Administrator may require the payment of a sum sufficient to cover any tax
      or
      other governmental charge that may be imposed in relation thereto and any other
      expenses (including the fees and expenses of the Securities Administrator)
      connected therewith. Any replacement Certificate issued pursuant to this
      Section 5.03 shall constitute complete and indefeasible evidence of
      ownership, as if originally issued, whether or not the lost, stolen or destroyed
      Certificate shall be found at any time.

     

    Section
      5.04 Persons
      Deemed Owners.
      The
      Trustee, the Depositor, the Securities Administrator and any agent of the
      Trustee, the Depositor or the Securities Administrator may treat the Person
      in
      whose name any Certificate is registered as the owner of such Certificate for
      the purpose of receiving distributions as provided in this Agreement and for
      all
      other purposes whatsoever, and neither the Trustee, the Depositor, the
      Securities Administrator nor any agent of the Trustee, the Depositor or the
      Securities Administrator shall be affected by any notice to the
      contrary.

     

    Section
      5.05 Access
      to List of Certificateholders’ Names and Addresses.
      If
      three or more Certificateholders (a) request such information in writing
      from the Securities Administrator, (b) state that such Certificateholders
      desire to communicate with other Certificateholders with respect to their rights
      under this Agreement or under the Certificates and (c) provide a copy of
      the communication which such Certificateholders propose to transmit, or if
      the
      Depositor or any Servicer shall request such information in writing from the
      Securities Administrator, then the Securities Administrator shall, within ten
      Business Days after the receipt of such request, provide the Depositor, the
      applicable Servicer or such Certificateholders at such recipients’ expense the
      most recent list of the Certificateholders of such Trust Fund held by the
      Securities Administrator, if any. The Depositor and every Certificateholder,
      by
      receiving and holding a Certificate, agree that the Securities Administrator
      shall not be held accountable by reason of the disclosure of any such
      information as to the list of the Certificateholders hereunder, regardless
      of
      the source from which such information was derived.

     

    
      
         

      

      
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    Section
      5.06 Maintenance
      of Office or Agency.
      The
      Securities Administrator will maintain or cause to be maintained at its expense
      an office or offices or agency or agencies where Certificates may be surrendered
      for registration of transfer or exchange. The Securities Administrator initially
      designates its offices located at Sixth Street and Marquette Avenue,
      Minneapolis, Minnesota 55479 for such purposes. The Securities Administrator
      shall give prompt written notice to the Certificateholders of any change in
      such
      location of any such office or agency.

     

    ARTICLE
      VI

     

    THE
      DEPOSITOR

     

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

     

    Section
      6.02 Merger
      or Consolidation of the Depositor.
      (a) The Depositor will keep in full effect its existence, rights and
      franchises as a corporation, under the laws of the United States or under the
      laws of one of the states thereof and will each obtain and preserve its
      qualification to do business as a foreign corporation in each jurisdiction
      in
      which such qualification is or shall be necessary to protect the validity and
      enforceability of this Agreement, or any of the Mortgage Loans and to perform
      its respective duties under this Agreement.

     

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

     

    Section
      6.03 Limitation
      on Liability of the Depositor and Others. Neither
      the Depositor nor any of its respective directors, officers, employees or
      agents, shall be under any liability to the Certificateholders for any action
      taken or for refraining from the taking of any action in good faith pursuant
      to
      this Agreement, or for errors in judgment; provided,
      however,
      that
      this provision shall not protect the Depositor or any such Person against any
      breach of representations or warranties made by it herein or protect the
      Depositor or any such Person from any liability which would otherwise be imposed
      by reasons of willful misfeasance, bad faith or negligence (or gross negligence
      in the case of the Depositor) in the performance of duties or by reason of
      reckless disregard of obligations and duties hereunder. The Depositor, its
      Affiliates and any of their respective directors, officers, employees or agents
      may rely in good faith on any document of any kind prima facie properly executed
      and submitted by any Person respecting any matters arising hereunder. The
      Depositor, its Affiliates, and any of their respective directors, officers,
      employees or agents shall be indemnified by the Trust Fund and held harmless
      against any loss, liability or expense incurred in connection with any audit,
      controversy or judicial proceeding relating to a governmental taxing authority
      or any legal action relating to this Agreement or the Certificates other than
      any loss, liability or expense related to any specific Mortgage Loan or Mortgage
      Loans (except as any such loss, liability or expense shall be otherwise
      reimbursable pursuant to this Agreement and any loss, liability or expense
      incurred by reason of willful misfeasance, bad faith or gross negligence in
      the
      performance of duties hereunder or by reason of reckless disregard of
      obligations and duties hereunder. The Depositor shall not be under any
      obligation to appear in, prosecute or defend any legal action that is not
      incidental to its respective duties hereunder and which in its opinion may
      involve it in any expense or liability; provided,
      however,
      that
      the Depositor may in its discretion undertake any such action (or direct the
      Trustee to undertake such actions pursuant to Section 2.03 for the benefit
      of the Certificateholders) that it may deem necessary or desirable in respect
      of
      this Agreement and the rights and duties of the parties hereto and interests
      of
      the Trustee and the Certificateholders hereunder. In such event, the legal
      expenses and costs of such action and any liability resulting therefrom shall
      be
      expenses, costs and liabilities of the Trust Fund, and the Depositor shall
      be
      entitled to be reimbursed therefor out of the Distribution
      Account.

    
      
         

      

      
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    ARTICLE
      VII

     

    DEFAULT

     

    Section
      7.01 Master
      Servicer to Act; Appointment of Successor.
      (a) The
      Master Servicer or the Trustee (as successor master servicer), as applicable,
      shall be entitled to terminate the rights and obligations of any Servicer under
      the applicable Servicing Agreement in accordance with the terms and conditions
      of such Servicing Agreement and without any limitation by virtue of this
      Agreement. Upon termination of a Servicer under the applicable Servicing
      Agreement, the Master Servicer or the Trustee (as successor master servicer),
      as
      applicable, shall, subject to the rights of the Master Servicer or the Trustee
      (as successor master servicer), as applicable, to appoint a successor servicer
      pursuant to this Section 7.01, be the successor to such Servicer in its capacity
      as servicer under the applicable Servicing Agreement, provided,
      however,
      that
      the Master Servicer or the Trustee (as successor master servicer), as
      applicable, shall not be (i) liable for losses of the predecessor Servicer
      with
      respect to such predecessor’s investment of funds in its Collection Account;
      (ii) obligated to effectuate repurchases or substitutions of Mortgage Loans
      hereunder, including but not limited to repurchases or substitutions pursuant
      to
      Section 2.03, (iii) responsible for expenses of the predecessor servicer related
      to any repurchase or substitution of Mortgage Loans hereunder, including but
      not
      limited to repurchases or substitutions pursuant to Section 2.03, (iv) deemed
      to
      have made any of the representations and warranties of the terminated Servicer
      under the applicable Servicing Agreement or (v) liable for any obligations
      of
      the predecessor Servicer incurred prior to its termination. It is understood
      and
      acknowledged by the parties hereto that there will be a period of transition
      before the transfer of servicing obligations is fully effective. Notwithstanding
      the foregoing, the Master Servicer or the Trustee (as successor master
      servicer), as applicable, will have a period (not to exceed 90 days) to
      complete the transfer of all servicing data and correct or manipulate such
      servicing data as may be required by the Master Servicer or the Trustee (as
      successor master servicer), as applicable, to correct any errors or
      insufficiencies in the servicing data or otherwise enable the Master Servicer
      or
      the Trustee (as successor master servicer), as applicable, to service the
      Mortgage Loans in accordance with the applicable Servicing Agreement. Except
      as
      provided in Section 7.01(c) below, the Master Servicer or the Trustee (as
      successor master servicer), as applicable, shall be entitled to be reimbursed
      from each Servicer (or by the Trust Fund, if such Servicer is unable to fulfill
      such obligation) for all costs associated with the transfer of servicing from
      the predecessor servicer, including without limitation, any costs or expenses
      associated with the complete transfer of all servicing data and the completion,
      correction or manipulation of such servicing data, as may be required by the
      Master Servicer or the Trustee (as successor master servicer), as applicable,
      to
      correct any errors or insufficiencies in the servicing data or otherwise to
      enable the Master Servicer or the Trustee (as successor master servicer), as
      applicable, to service the Mortgage Loans properly and 

    
      
         

      

      
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    effectively.
      As compensation in its role as successor servicer, the Master Servicer or the
      Trustee (as successor master servicer), as applicable, shall be entitled to
      the
      applicable Servicing Fee and any income on investments or gain related to the
      related Collection Account. Notwithstanding the foregoing, if the Master
      Servicer or the Trustee (as successor master servicer), as applicable, has
      become the successor to a Servicer pursuant to an Event of Default, the Master
      Servicer or the Trustee (as successor master servicer), as applicable, may,
      if
      it shall be unwilling to so act, or shall, if it is prohibited by applicable
      law
      from making P&I Advances and Servicing Advances pursuant to the applicable
      Servicing Agreement, if it is otherwise unable to so act, or at the written
      request of Certificateholders entitled to at least a majority of the Voting
      Rights, appoint, or petition a court of competent jurisdiction to appoint,
      any
      established mortgage loan servicing institution the appointment of which does
      not adversely affect the then current rating of the Certificates by each Rating
      Agency, as the successor to the Servicer under the applicable Servicing
      Agreement in the assumption of all or any part of the responsibilities, duties
      or liabilities of such Servicer thereunder. Any successor to a Servicer shall
      be
      an institution which is willing to service the Mortgage Loans and which executes
      and delivers to the Depositor, the Master Servicer and the Trustee (as successor
      master servicer) an agreement accepting such delegation and assignment,
      containing an assumption by such Person of the rights, powers, duties,
      responsibilities, obligations and liabilities of the applicable Servicer (other
      than liabilities of the predecessor servicer incurred prior to its termination),
      with like effect as if originally named as a party to such Servicing Agreement;
      provided,
      that
      each Rating Agency acknowledges that its rating of the Certificates in effect
      immediately prior to such assignment and delegation will not be qualified or
      reduced, as a result of such assignment and delegation. Pending appointment
      of a
      successor to a Servicer under any Servicing Agreement, the Master Servicer
      or
      the Trustee (as successor master servicer), as applicable, unless such party
      is
      prohibited by law from so acting, shall act in such capacity as hereinabove
      provided. In connection with such appointment and assumption, the Master
      Servicer or the Trustee (as successor master servicer), as applicable, may
      make
      such arrangements for the compensation of such successor out of payments on
      Mortgage Loans as it and such successor shall agree in accordance with the
      applicable Servicing Agreement; provided,
      however,
      that no
      such compensation shall be in excess of the applicable Servicing Fee and any
      income on investments or gain related to the related Collection Account. The
      Master Servicer or the Trustee (as successor master servicer), as applicable,
      and such successor servicer shall take such action, consistent with this
      Agreement and the applicable Servicing Agreement, as shall be necessary to
      effectuate any such succession. Neither the Master Servicer nor the Trustee
      (as
      successor master servicer) shall be deemed to be in default hereunder by reason
      of any failure to make, or any delay in making, any distribution hereunder
      or
      any portion thereof or any failure to perform, or any delay in performing,
      any
      duties or responsibilities hereunder, in either case caused by the failure
      of
      any Servicer to deliver or provide, or any delay in delivering or providing,
      any
      cash, information, documents or records to it.

     

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

    
      
         

      

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

     

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

     

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

     

    ARTICLE
      VIII

     

    CONCERNING
      THE TRUSTEE

     

    Section
      8.01 Duties
      of the Trustee.
      The
      Trustee, before the occurrence of a Master Servicer Event of Default and after
      the curing of all Master Servicer Events of Default that may have occurred,
      shall undertake to perform such duties and only such duties as are specifically
      set forth in this Agreement. In case a Master Servicer Event of Default has
      occurred and remains uncured, the Trustee shall exercise such of the rights
      and
      powers vested in it by this Agreement, and use the same degree of care and
      skill
      in their exercise as a prudent person would exercise or use under the
      circumstances in the conduct of such person’s own affairs.

    
      
         

      

      
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    The
      Trustee, upon receipt of all resolutions, certificates, statements, opinions,
      reports, documents, orders or other instruments furnished to the Trustee that
      are specifically required to be furnished pursuant to any provision of this
      Agreement, shall examine them to determine whether they are in the form required
      by this Agreement. The Trustee shall not be responsible for the accuracy or
      content of any resolution, certificate, statement, opinion, report, document,
      order, or other instrument.

     

    No
      provision of this Agreement shall be construed to relieve the Trustee from
      liability for its own negligent action, its own negligent failure to act or
      its
      own willful misconduct.

     

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

     

    (a) the
      duties and obligations of the Trustee shall be determined solely by the express
      provisions of this Agreement, the Trustee shall not be liable except for the
      performance of the duties and obligations specifically set forth in this
      Agreement, no implied covenants or obligations shall be read into this Agreement
      against the Trustee, and the Trustee may conclusively rely, as to the truth
      of
      the statements and the correctness of the opinions expressed therein, upon
      any
      certificates or opinions furnished to the Trustee and conforming to the
      requirements of this Agreement which it believes in good faith to be genuine
      and
      to have been duly executed by the proper authorities respecting any matters
      arising hereunder;

     

    (b) the
      Trustee shall not be liable for an error of judgment made in good faith by
      a
      Responsible Officer or Responsible Officers of the Trustee, unless it is finally
      proven that the Trustee was negligent in ascertaining the pertinent facts;
      and

     

    (c) the
      Trustee shall not be liable with respect to any action taken, suffered, or
      omitted to be taken by it in good faith in accordance with the direction of
      the
      Holders of Certificates evidencing not less than 25.00% of the Voting Rights
      of
      Certificates relating to the time, method, and place of conducting any
      proceeding for any remedy available to the Trustee, or exercising any trust
      or
      power conferred upon the Trustee under this Agreement.

     

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

     

    (a) the
      Trustee may rely upon and shall be protected in acting or refraining from acting
      upon any resolution, Officer’s Certificate, certificate of auditors or any other
      certificate, statement, instrument, opinion, report, notice, request, consent,
      order, appraisal, bond or other paper or document believed by it to be genuine
      and to have been signed or presented by the proper party or parties and the
      Trustee shall have no responsibility to ascertain or confirm the genuineness
      of
      any signature of any such party or parties;

     

    
      
         

      

      
        -83-

        
          

        

      

      
         

      

    

     

    (b) the
      Trustee may consult with counsel, financial advisers or accountants and the
      advice of any such counsel, financial advisers or accountants and any Opinion
      of
      Counsel shall be full and complete authorization and protection in respect
      of
      any action taken or suffered or omitted by it hereunder in good faith and in
      accordance with such advice or Opinion of Counsel;

     

    (c) the
      Trustee shall not be liable for any action taken, suffered or omitted by it
      in
      good faith and believed by it to be authorized or within the discretion or
      rights or powers conferred upon it by this Agreement;

     

    (d) the
      Trustee shall not be bound to make any investigation into the facts or matters
      stated in any resolution, certificate, statement, instrument, opinion, report,
      notice, request, consent, order, approval, bond or other paper or document,
      unless requested in writing to do so by the Holders of Certificates evidencing
      not less than 25.00% of the Voting Rights allocated to each Class of
      Certificates;

     

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

     

    (f) the
      Trustee shall not be required to risk or expend its own funds or otherwise incur
      any financial liability in the performance of any of its duties or in the
      exercise of any of its rights or powers hereunder if it shall have reasonable
      grounds for believing that repayment of such funds or indemnity satisfactory
      to
      it against such risk or liability is not assured to it;

     

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

     

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

     

    (i) the
      Trustee shall be under no obligation to exercise any of the trusts, rights
      or
      powers vested in it by this Agreement or to institute, conduct or defend any
      litigation hereunder or in relation hereto at the request, order or direction
      of
      any of the Certificateholders, pursuant to this Agreement, unless such
      Certificateholders shall have offered to the Trustee reasonable security or
      indemnity satisfactory to the Trustee against the costs, expenses and
      liabilities which may be incurred therein or thereby; 

     

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

     

    
      
         

      

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

     

    (l) the
      Depositor hereby authorizes and directs the Trustee to execute each of the
      Servicing Agreements.

     

    Section
      8.03 Trustee
      Not Liable for Certificates or Mortgage Loans.
      The
      recitals contained herein and in the Certificates shall be taken as the
      statements of the Depositor and the Trustee assumes no responsibility for their
      correctness. The Trustee makes no representations as to the validity or
      sufficiency of this Agreement, the Cap Agreement, the Swap Agreement, or of
      the
      Certificates or of any Mortgage Loan or related document. The Trustee shall
      not
      be accountable for the use or application by the Depositor, the Master Servicer,
      a Servicer, the Securities Administrator or the Derivative Counterparty of
      any
      funds paid to the Depositor, the Master Servicer, a Servicer, the Securities
      Administrator or the Derivative Counterparty in respect of the Mortgage Loans
      or
      deposited in or withdrawn from any Collection Account, the Distribution Account
      or any other fund or account with respect to the Certificates by the Depositor,
      the Master Servicer, a Servicer, the Securities Administrator or the Derivative
      Counterparty.

     

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

     

    Section
      8.04 Trustee
      May Own Certificates.
      The
      Trustee in its individual or any other capacity may become the owner or pledgee
      of Certificates with the same rights as it would have if it were not the
      Trustee.

     

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

     

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

     

    (i) this
      Agreement or any Servicing Agreement, and any other document executed in
      connection therewith,

     

    (ii) the
      Certificates, or

     

    
      
         

      

      
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    (iii) the
      performance of any of the Trustee’s duties under this Agreement or any Servicing
      Agreement, and any other document executed in connection therewith,

     

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

     

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

     

    (B) the
      reasonable compensation, expenses, and disbursements of any accountant,
      engineer, or appraiser that is not regularly employed by the Trustee, to the
      extent that the Trustee must engage them to perform services under this
      Agreement.

     

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

     

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

     

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

     

    Section
      8.06 Eligibility
      Requirements for the Trustee.
      The
      Trustee hereunder shall at all times be a corporation or association organized
      and doing business under the laws of a state or the United States of America,
      authorized under such laws to exercise corporate trust powers, having a combined
      capital and surplus of at least $50,000,000, subject to supervision or
      examination by federal or state authority and with a credit rating which would
      not cause any of the Rating Agencies to reduce their respective then current
      ratings of the Certificates (or having provided such security from time to
      time
      as is sufficient to avoid such reduction) as evidenced in writing by each Rating
      Agency. If such corporation or association publishes reports of condition at
      least annually, pursuant to law or to the requirements of the aforesaid
      supervising or examining authority, then for the purposes of this
      Section 8.06 the combined capital and surplus of such corporation or
      association shall be deemed to be its combined capital and surplus as set forth
      in its most recent report of condition so published. In case at any time the
      Trustee shall cease to be eligible in accordance with this Section 8.06,
      the Trustee shall resign immediately in the manner and with the effect specified
      in Section 8.07. The entity serving as Trustee may have normal banking and
      trust relationships with the Depositor and its affiliates, the Master Servicer,
      the Securities Administrator or any Servicer and its affiliates; provided,
      however,
      that
      such entity cannot be an affiliate of the Depositor or any Servicer other than
      the Trustee in its role as successor to the Master Servicer.

    
      
         

      

      
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    Section
      8.07 Resignation
      and Removal of the Trustee.
      The
      Trustee may at any time resign and be discharged from the trusts hereby created
      by giving written notice of resignation to the Depositor, the Master Servicer,
      the Securities Administrator and each Rating Agency not less than 60 days
      before the date specified in such notice, when, subject to Section 8.08,
      such resignation is to take effect and acceptance by a successor trustee in
      accordance with Section 8.08 meeting the qualifications set forth in
      Section 8.06. If no successor trustee meeting such qualifications shall
      have been so appointed and have accepted appointment within 30 days after
      the giving of such notice or resignation, the resigning Trustee may petition
      any
      court of competent jurisdiction for the appointment of a successor
      trustee.

     

    If
      at any
      time the Trustee shall cease to be eligible in accordance with Section 8.06
      and shall fail to resign after written request thereto by the Depositor, or
      if
      at any time the Trustee shall become incapable of acting, or shall be adjudged
      as bankrupt or insolvent, or a receiver of the Trustee or of its property shall
      be appointed, or any public officer shall take charge or control of the Trustee
      or of its property or affairs for the purpose of rehabilitation, conservation
      or
      liquidation, or a tax is imposed with respect to the Trust Fund by any state
      in
      which the Trustee or the Trust Fund is located and the imposition of such tax
      would be avoided by the appointment of a different trustee, then the Depositor
      may remove the Trustee and, subject to the approval of the Rating Agencies,
      appoint a successor trustee by written instrument, in triplicate, one copy
      of
      which shall be delivered to the Trustee, one copy to each of the Servicers
      and
      one copy to the successor trustee.

     

    The
      Holders of Certificates entitled to at least a majority of the Voting Rights
      may
      at any time remove the Trustee and, subject to the approval of the Rating
      Agencies, appoint a successor trustee by written instrument or instruments,
      in
      triplicate, signed by such Holders or their attorneys-in-fact duly authorized,
      one complete set of which shall be delivered by the successor Trustee to each
      Servicer, one complete set to the Trustee so removed and one complete set to
      the
      successor so appointed. The successor trustee shall notify each Rating Agency
      of
      any removal of the Trustee.

     

    
      
         

      

      
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    Any
      resignation or removal of the Trustee and appointment of a successor trustee
      pursuant to this Section 8.07 shall become effective upon acceptance of
      appointment by the successor trustee as provided in
      Section 8.08.

     

    Section
      8.08 Successor
      Trustee.
      Any
      successor trustee appointed as provided in Section 8.07 shall execute,
      acknowledge and deliver to the Depositor and to its predecessor trustee and
      each
      Servicer an instrument accepting such appointment hereunder and thereupon the
      resignation or removal of the predecessor trustee shall become effective and
      such successor trustee, without any further act, deed or conveyance, shall
      become fully vested with all the rights, powers, duties and obligations of
      its
      predecessor hereunder, with like effect as if originally named as trustee
      herein. The Depositor and the predecessor trustee shall execute and deliver
      such
      instruments and do such other things as may reasonably be required for more
      fully and certainly vesting and confirming in the successor trustee all such
      rights, powers, duties, and obligations.

     

    No
      successor trustee shall accept appointment as provided in this Section 8.08
      unless at the time of its acceptance, the successor trustee is eligible under
      Section 8.06 and its appointment does not adversely affect then the current
      rating of the Certificates.

     

    Upon
      acceptance of appointment by a successor trustee as provided in this
      Section 8.08, the Depositor shall mail notice of the succession of such
      trustee hereunder to all Holders of Certificates. If the Depositor fails to
      mail
      such notice within 10 days after acceptance of appointment by the successor
      trustee, the successor trustee shall cause such notice to be mailed at the
      expense of the Depositor.

     

    Section
      8.09 Merger
      or Consolidation of the Trustee.
      Any
      corporation into which the Trustee may be merged or converted or with which
      it
      may be consolidated or any corporation resulting from any merger, conversion
      or
      consolidation to which the Trustee shall be a party, or any corporation
      succeeding to the business of the Trustee, shall be the successor of the Trustee
      hereunder; provided,
      that
      such corporation shall be eligible under Section 8.06 without the execution
      or filing of any paper or further act on the part of any of the parties hereto,
      anything herein to the contrary notwithstanding.

     

    Section
      8.10 Appointment
      of Co-Trustee or Separate Trustee.
      Notwithstanding any other provisions of this Agreement, at any time, for the
      purpose of meeting any legal requirements of any jurisdiction in which any
      part
      of the Trust Fund or property securing any Mortgage Note may at the time be
      located, the Trustee shall have the power and shall execute and deliver all
      instruments to appoint one or more Persons approved by the Trustee to act as
      co-trustee or co-trustees jointly with the Trustee, or separate trustee or
      separate trustees, of all or any part of the Trust Fund, and to vest in such
      Person or Persons, in such capacity and for the benefit of the
      Certificateholders, such title to the Trust Fund or any part thereof, whichever
      is applicable, and, subject to the other provisions of this Section 8.10,
      such powers, duties, obligations, rights and trusts as the Trustee may consider
      appropriate. No co-trustee or separate trustee hereunder shall be required
      to
      meet the terms of eligibility as a successor trustee under Section 8.06 and
      no notice to Certificateholders of the appointment of any co-trustee or separate
      trustee shall be required under Section 8.08.

     

    
      
         

      

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

     

    (a) To
      the
      extent necessary to effectuate the purposes of this Section 8.10, all
      rights, powers, duties and obligations conferred or imposed upon the Trustee,
      except for the obligation of the Trustee (as successor master servicer) under
      this Agreement to advance funds on behalf of the Master Servicer, shall be
      conferred or imposed upon and exercised or performed by the Trustee and such
      separate trustee or co-trustee jointly (it being understood that such separate
      trustee or co-trustee is not authorized to act separately without the Trustee
      joining in such act), except to the extent that under any law of any
      jurisdiction in which any particular act or acts are to be performed (whether
      as
      Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee
      shall be incompetent or unqualified to perform such act or acts, in which event
      such rights, powers, duties and obligations (including the holding of title
      to
      the applicable Trust Fund or any portion thereof in any such jurisdiction)
      shall
      be exercised and performed singly by such separate trustee or co-trustee, but
      solely at the direction of the Trustee;

     

    (b) No
      trustee hereunder shall be held personally liable because of any act or omission
      of any other trustee hereunder and such appointment shall not, and shall not
      be
      deemed to, constitute any such separate trustee or co-trustee as agent of the
      Trustee;

     

    (c) The
      Trustee may at any time accept the resignation of or remove any separate trustee
      or co-trustee; and

     

    (d) The
      Trust
      Fund, and not the Trustee, shall be liable for the payment of reasonable
      compensation, reimbursement and indemnification to any such separate trustee
      or
      co-trustee.

     

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

     

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

     

    Section
      8.11 Tax
      Matters.
      It is
      intended that the assets with respect to which any REMIC election pertaining
      to
      the Trust Fund is to be made, as set forth in the Preliminary Statement, shall
      constitute, and that the conduct of matters relating to such assets shall be
      such as to qualify such assets as, a “real estate mortgage investment conduit”
as defined in and in accordance with the REMIC Provisions. In furtherance of
      such intention, the Securities Administrator covenants and agrees that it shall
      act as agent (and the Securities Administrator is hereby appointed to act as
      agent) on behalf of each REMIC created hereunder and that in such capacity
      it
      shall:

    
      
         

      

      
        -89-

        
          

        

      

      
         

      

    

     

    (a) prepare
      and file in a timely manner, a U.S. Real Estate Mortgage Investment Conduit
      (REMIC) Income Tax Return (Form 1066 or any successor form adopted by the
      Internal Revenue Service), which return the Trustee shall sign upon receipt
      from
      the Securities Administrator, and the Securities Administrator shall prepare
      and
      file with the Internal Revenue Service and applicable state or local tax
      authorities income tax or information returns for each taxable year with respect
      to each REMIC hereunder containing such information and at the times and in
      the
      manner as may be required by the Code or state or local tax laws, regulations,
      or rules, and furnish to Certificateholders the schedules, statements or
      information at such times and in such manner as may be required
      thereby;

     

    (b) within
      thirty days of the Closing Date, apply for an employer identification
      number from the Internal Revenue Service via Form SS-4 or any other
      acceptable method for all tax entities and shall also furnish to the Internal
      Revenue Service, on Form 8811 or as otherwise may be required by the Code,
      the name, title, address, and telephone number of the person that the holders
      of
      the Certificates may contact for tax information relating thereto, together
      with
      such additional information as may be required by such Form, and update such
      information at the time or times in the manner required by the
      Code;

     

    (c) make
      an
      election that each REMIC created hereunder be treated as a REMIC on the federal
      tax return for its first taxable year (and, if necessary, under applicable
      state
      law);

     

    (d) prepare
      and forward to the Certificateholders and to the Internal Revenue Service and,
      if necessary, state tax authorities, all information returns and reports as
      and
      when required to be provided to them in accordance with the REMIC Provisions,
      including the calculation of any original issue discount using the prepayment
      assumption (as described in the Prospectus Supplement);

     

    (e) provide
      information necessary for the computation of tax imposed on the transfer of
      a
      Residual Certificate to a Person that is a Non-Permitted Transferee, or an
      agent
      (including a broker, nominee or other middleman) of a Non-Permitted Transferee,
      or a pass-through entity in which a Non-Permitted Transferee is the record
      holder of an interest (the reasonable cost of computing and furnishing such
      information may be charged to the Person liable for such tax);

     

    (f) to
      the
      extent that they are under its control, conduct matters relating to such assets
      at all times that any Certificates are outstanding so as to maintain the status
      of each REMIC created hereunder as a REMIC under the REMIC
      Provisions;

     

    
      
         

      

      
        -90-

        
          

        

      

      
         

      

    

     

    (g) not
      knowingly or intentionally take any action or omit to take any action that
      would
      cause the termination of the REMIC status of any of the REMICs created
      hereunder;

     

    (h) pay,
      from
      the sources specified in the last paragraph of this Section 8.11, the
      amount of any federal or state tax, including prohibited transaction taxes
      as
      described below, imposed on each REMIC created hereunder before its termination
      when and as the same shall be due and payable (but such obligation shall not
      prevent the Securities Administrator or any other appropriate Person from
      contesting any such tax in appropriate proceedings and shall not prevent the
      Securities Administrator from withholding payment of such tax, if permitted
      by
      law, pending the outcome of such proceedings);

     

    (i) cause
      federal, state or local income tax or information returns to be signed by the
      Securities Administrator or, if required by applicable tax law, the Trustee
      or
      such other person as may be required to sign such returns by the Code or state
      or local laws, regulations or rules; and

     

    (j) maintain
      records relating to each REMIC created hereunder, including the income,
      expenses, assets, and liabilities thereof on a calendar year basis and on the
      accrual method of accounting and the adjusted basis of the assets determined
      at
      such intervals as may be required by the Code, as may be necessary to prepare
      the foregoing returns, schedules, statements or information.

     

    The
      Holder of the largest Percentage Interest of the Class R Certificates shall
      act as Tax Matters Person for each REMIC created hereunder, within the meaning
      of Treasury Regulations Section 1.860F-4(d), and the Securities
      Administrator is hereby designated as agent of such Certificateholder for such
      purpose (or if the Securities Administrator is not so permitted, such Holder
      shall be the Tax Matters Person in accordance with the REMIC Provisions). In
      such capacity, the Securities Administrator shall, as and when necessary and
      appropriate, represent each REMIC created hereunder in any administrative or
      judicial proceedings relating to an examination or audit by any governmental
      taxing authority, request an administrative adjustment as to any taxable year
      of
      each REMIC created hereunder, enter into settlement agreements with any
      governmental taxing agency, extend any statute of limitations relating to any
      tax item of each REMIC created hereunder, and otherwise act on behalf of each
      REMIC in relation to any tax matter or controversy involving it.

     

    The
      Securities Administrator shall treat the beneficial owners of the Certificates
      (other than the Class P, Class X and Class R Certificates) as having entered
      into a notional principal contract with the beneficial owners of the Class
      X
      Certificates. Pursuant to each such notional principal contract, all beneficial
      owners of the LIBOR Certificates shall be treated as having agreed to pay,
      on
      each Distribution Date, to the beneficial owners of the Class X Certificates
      an
      aggregate amount equal to the excess, if any, of (i) the amount payable on
      such
      Distribution Date on the interest in the Upper Tier REMIC corresponding to
      such
      Class of Certificates over (ii) the amount payable on such Class of Certificates
      on such Distribution Date (such excess, a “Class I Shortfall”). A Class I
      Shortfall payable from interest collections shall be allocated to each Class
      of
      Certificates (other than the Class P, Class X and Class R Certificates) to
      the
      extent that interest accrued on such Class for the related Interest Accrual
      Period at the Interest Rate for a Class, computed by substituting “REMIC 2 Net
      Funds Cap” for “Available Funds Cap,” exceeds the amount of interest accrued for
      the related Interest Accrual Period based on the Available Funds Cap, and a
      Class I Shortfall payable from principal collections shall be allocated to
      the
      most subordinate Class of Certificates with an outstanding principal balance
      to
      the extent of such balance. In addition, pursuant to such notional principal
      contract, the beneficial owner of the Class X Certificates shall be treated
      as
      having agreed to pay Basis Risk Carryover Amounts to the Owners of the LIBOR
      Certificates in accordance with the terms of this Agreement. Any payments to
      the
      Certificates in light of the foregoing shall not be payments with respect to
      a
“regular interest” in a REMIC within the meaning of Code Section 860G(a)(1).
      However, any payment from the Certificates of a Class I Shortfall shall be
      treated for tax purposes as having been received by the beneficial owners of
      such Certificates in respect of their Interests in the Upper Tier REMIC and
      as
      having been paid by such beneficial owners to the Supplemental Interest Trust
      pursuant to the notional principal contract. Thus,
      each Certificate (other than a Class P and Class R Certificate) shall be treated
      as representing not only ownership of regular interests in the Upper Tier REMIC,
      but also ownership of an interest in (and obligations with respect to) a
      notional principal contract. For tax purposes, the notional principal contract
      shall be deemed to have a value in favor of the Certificates entitled to receive
      Basis Risk Carryover Amounts of $10,000 as of the Closing Date.

    
      
         

      

      
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    Notwithstanding
      the priority and sources of payments set forth in Article IV hereof or
      otherwise, the Securities Administrator shall account for all distributions
      on
      the Certificates as set forth in this Section 8.11. In no event shall any
      payments of Basis Risk Carryover Amounts provided for in this Section 8.11
      be
      treated as payments
      with respect to a “regular interest” in a REMIC within the meaning of Code
      Section 860G(a)(1). The
      Securities Administrator shall file or cause to be filed with the IRS together
      with Form 1041 or such other form as may be applicable and shall furnish or
      cause to be furnished, to the Class X Certificateholders and the LIBOR
      Certificateholders, the respective amounts described above that are received,
      in
      the time or times and in the manner required by the Code.

     

    To
      enable
      the Securities Administrator to perform its duties under this Agreement, the
      Depositor shall provide to the Securities Administrator within ten days
      after the Closing Date all information or data that the Securities Administrator
      requests in writing and determines to be relevant for tax purposes to the
      valuations and offering prices of the Certificates, including the price, yield,
      prepayment assumption, and projected cash flows of the Certificates and the
      Mortgage Loans. Moreover, the Depositor shall provide information to the
      Securities Administrator concerning the value to each Class of Certificates
      of the right to receive Basis Risk Carryover Amounts from the Excess Reserve
      Fund Account. Unless otherwise advised by the Depositor, for federal income
      tax
      purposes, the Securities Administrator is hereby directed to assign a value
      of
      zero to the right of each Holder allocating the purchase price of an initial
      Offered Certificateholder between such right and the related Upper Tier Regular
      Interest. Thereafter, the Depositor shall provide to the Securities
      Administrator promptly upon written request therefor any additional information
      or data that the Securities Administrator may, from time to time, reasonably
      request to enable the Securities Administrator to perform its duties under
      this
      Agreement; provided,
      however,
      that
      the Depositor shall not be required to provide any information regarding the
      Mortgage Loans that a Servicer is required to provide to the Securities
      Administrator pursuant to any Servicing Agreement. The Depositor hereby
      indemnifies the Securities Administrator for any losses, liabilities, damages,
      claims, or expenses of the Securities Administrator arising from any errors
      or
      miscalculations of the Securities Administrator that result from any failure
      of
      the Depositor to provide, pursuant to this paragraph, accurate information
      or
      data to the Securities Administrator on a timely basis.

     

    
      
         

      

      
        -92-

        
          

        

      

      
         

      

    

     

    None
      of the Master Servicer, the Securities Administrator or the Trustee shall (i)
      permit the creation of any interests in any REMIC other than the regular and
      residual interests set forth in the Preliminary Statement, (ii) receive any
      amount representing a fee or other compensation for services (except as
      otherwise permitted by this Agreement or the related Mortgage Loan documents)
      or
      (iii) otherwise knowingly or intentionally take any action, cause the Trust
      Fund
      to take any action or fail to take (or fail to cause to be taken) any action
      reasonably within its control and the scope of duties more specifically set
      forth herein, that, under the REMIC Provisions, if taken or not taken, as the
      case may be, could (i) endanger the status of any REMIC as a REMIC or (ii)
      result in the imposition of a tax upon any REMIC or the Trust Fund (including
      but not limited to the tax on “prohibited transactions” as defined in Section
      860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in
      Section 860G(d) of the Code, or the tax on “net income from foreclosure
      property”) unless the Securities Administrator receives an Opinion of Counsel
      (at the expense of the party seeking to take such action or, if such party
      fails
      to pay such expense, and the Securities Administrator determines that taking
      such action is in the best interest of the Trust Fund and the
      Certificateholders, at the expense of the Trust Fund, but in no event at the
      expense of the Securities Administrator) to the effect that the contemplated
      action will not, with respect to the Trust Fund or any REMIC created hereunder,
      endanger such status or result in the imposition of such a tax).

     

    If
      any
      tax is imposed on “prohibited transactions” of a REMIC created hereunder as
      defined in Section 860F(a)(2) of the Code, on the “net income from
      foreclosure property” of any REMIC created hereunder as defined in
      Section 860G(c) of the Code, on any contribution to any REMIC created
      hereunder after the Startup Day pursuant to Section 860G(d) of the Code, or
      any other tax is imposed, including any minimum tax imposed on either REMIC
      pursuant to Sections 23153 and 24874 of the California Revenue and Taxation
      Code, if not paid as otherwise provided for herein, the tax shall be paid by
      (i) the Master Servicer, the Trustee, or the Securities Administrator, as
      applicable, if such tax arises out of or results from negligence of the Master
      Servicer, the Trustee or the Securities Administrator, as applicable, in the
      performance of any of its obligations under this Agreement, (ii) the Sponsor,
      if
      such tax arises out of or results from the Sponsor’s obligation to repurchase a
      Mortgage Loan pursuant to Section 2.03(k), or (iii) in all other cases, or
      if the Master Servicer, the Trustee or the Securities Administrator fails to
      honor its obligations under the preceding clause (i) or (ii), any such
      tax will be paid with amounts otherwise to be distributed to the
      Certificateholders, as provided in Section 4.02(a).

     

    Section
      8.12 Commission
      Reporting.
      (a) The
      Securities Administrator shall, in accordance with industry standards, prepare
      and file with the Commission, via EDGAR, the following reports in respect of
      the
      Trust as and to the extent required under the Exchange Act: 

     

    (i) (A)
      Within 15 days after each Distribution Date (subject to permitted extensions
      under the Exchange Act), the Securities Administrator shall prepare and file
      on
      behalf of the Trust any Form 10-D required by the Exchange Act, in form and
      substance as required by the Exchange Act. The Securities Administrator shall
      file each Form 10-D with a copy of the related Monthly Statement attached
      thereto. Any disclosure in addition to the Monthly Statement that is required
      to
      be included on Form 10-D (“Additional Form 10-D Disclosure”) shall be reported
      by the parties set forth on Exhibit V to the Depositor and the Securities
      Administrator and directed and approved by the Depositor pursuant to the
      following paragraph and the Securities Administrator will have no duty or
      liability for any failure hereunder to determine or prepare any Additional
      Form
      10-D Disclosure, except to the extent of its obligations set forth in the next
      paragraph. 

    
      
         

      

      
        -93-

        
          

        

      

      
         

      

    

     

    (B)
      As
      set forth on Exhibit V hereto, within 5 calendar days after the related
      Distribution Date, (i) the parties specified in Exhibit V hereto, shall be
      required to provide to the Securities Administrator and to the Depositor, to
      the
      extent known, in EDGAR-compatible format, or in such other format as agreed
      upon
      by the Securities Administrator and such party, the form and substance of any
      Additional Form 10-D Disclosure, if applicable, together with an Additional
      Disclosure Notification, and (ii) the Depositor will approve, as to form and
      substance, or disapprove, as the case may be, the inclusion of the Additional
      Form 10-D Disclosure on Form 10-D. The Securities Administrator has no duty
      under this Agreement to monitor or enforce the performance by the parties listed
      on Exhibit V of their duties under this paragraph or proactively solicit or
      procure from such parties any Additional Form 10-D Disclosure information.
      The
      Depositor shall be responsible for any reasonable fees and expenses assessed
      or
      incurred by the Securities Administrator in connection with including any
      Additional Form 10-D Disclosure on Form 10-D pursuant to this paragraph.

     

    (C)
      After
      preparing the Form 10-D, the Securities Administrator shall, upon request,
      forward electronically a copy of the Form 10-D to the Depositor (provided that
      such Form 10-D includes any Additional Form 10-D Disclosure). Within two
      Business Days after receipt of such copy, but no later than the 12th
      calendar
      day after the Distribution Date, the Depositor shall notify the Securities
      Administrator in writing (which may be furnished electronically) of any changes
      to or approval of such Form 10-D. In the absence of receipt of any written
      changes or approval, or if the Depositor does not request a copy of a Form
      10-D,
      the Securities Administrator shall be entitled to assume that such Form 10-D
      is
      in final form and the Securities Administrator may proceed with the process
      for
      execution and filing of the Form 10-D. A duly authorized representative of
      the
      Master Servicer shall sign each Form 10-D. If a Form 10-D cannot be filed on
      time or if a previously filed Form 10-D needs to be amended, the Securities
      Administrator will follow the procedures set forth in paragraph (d) of this
      Section 8.12. Promptly (but no later than one Business Day) after filing with
      the Commission, the Securities Administrator will make available on its internet
      website (located at www.ctslink.com)
      a final
      executed copy of each Form 10-D prepared and filed by the Securities
      Administrator. Each party to this Agreement acknowledges that the performance
      by
      each of the Master Servicer and the Securities Administrator of its duties
      under
      this Section 8.12(a)(i) related to the timely preparation, execution and filing
      of Form 10-D is contingent upon such parties strictly observing all applicable
      deadlines in the performance of their duties under this Section 8.12(a)(i).
      The
      Depositor acknowledges that the performance by each of the Master Servicer
      and
      the Securities Administrator of its duties under this Section 8.12(i) related
      to
      the timely preparation, execution and filing of Form 10-D is also contingent
      upon any Servicing Function Participant strictly observing deadlines no later
      than those set forth in this paragraph that are applicable to the parties to
      this Agreement in the delivery to the Securities Administrator of any necessary
      Additional Form 10-D Disclosure pursuant to any applicable agreement. Neither
      the Master Servicer nor the Securities Administrator shall have any liability
      for any loss, expense, damage, claim arising out of or with respect to any
      failure to properly prepare, execute and/or timely file such Form 10-D, where
      such failure results from the Securities Administrator’s inability or failure to
      receive, on a timely basis, any information from any other party hereto or
      any
      Servicing Function Participant needed to prepare, arrange for execution or
      file
      such Form 10-D, not resulting from its own negligence, bad faith or willful
      misconduct. 

    
      
         

      

      
        -94-

        
          

        

      

      
         

      

    

     

    (D)
       Form
      10-D
      requires the registrant to indicate (by checking “yes” or “no”) that it “(1) has
      filed all reports required to be filed by Section 13 or 15(d) of the Exchange
      Act during the preceding 12 months (or for such shorter period that the
      registrant was required to file such reports), and (2) has been subject to
      such
      filing requirements for the past 90 days.” The Depositor hereby instructs the
      Securities Administrator to check “Yes” for each item, unless the Depositor
      shall notify the Securities Administrator in writing, no later than the fifth
      calendar day after the related Distribution Date with respect to the filing
      of a
      report on Form 10-D, that the answer to either item should be “no.” The
      Depositor has filed all reports required to be filed by Section 13 or 15(d)
      of
      the Exchange Act during the preceding 12 months (or for such shorter period
      that
      the Depositor was required to file such reports) and it has been subject to
      such
      filing requirement for the past 90 days.” The Securities Administrator shall be
      entitled to rely on such representations in preparing, executing and/or filing
      any such Form 10-D.

     

    (ii) (A)
      On or
      prior to the 90th
      day
      after the end of each fiscal year of the Trust or such earlier date as may
      be
      required by the Exchange Act (the “10-K
      Filing Deadline”)
      (it
      being understood that the fiscal year for the Trust ends on December
      31st
      of each
      year), for so long as the Depositor is required to file reports with respect
      to
      the Trust under the Exchange Act, commencing in March 2008, the Securities
      Administrator shall prepare and file on behalf of the Trust a Form 10-K, in
      form
      and substance as required by the Exchange Act. Each such Form 10-K shall include
      the following items, in each case to the extent they have been delivered to
      the
      Securities Administrator within the applicable time frames set forth in this
      Agreement or the Servicing Agreements, (i) an annual compliance statement for
      each Servicer, the Master Servicer and the Securities Administrator and any
      Servicing Function Participant engaged by any such party (together with the
      Custodian, each a “Reporting
      Servicer”)
      as
      described under Section 3.05(b), (ii)(A) the annual reports on assessment of
      compliance with Servicing Criteria for each Reporting Servicer, as described
      under Section 3.03, and (B) if each Reporting Servicer’s report on assessment of
      compliance with Servicing Criteria described under Section 3.03 identifies
      any
      material instance of noncompliance, disclosure identifying such instance of
      noncompliance, or if each Reporting Servicer’s report on assessment of
      compliance with Servicing Criteria described under Section 3.03 is not included
      as an exhibit to such Form 10-K, disclosure that such report is not included
      and
      an explanation why such report is not included, provided,
      however,
      that
      the Securities Administrator, at its discretion, may omit from the Form 10-K
      any
      assessment of compliance or attestation report described in clause (iii) below
      that is not required to be filed with such Form 10-K pursuant to Regulation
      AB;
      (iii)(A) the registered public accounting firm attestation report for each
      Reporting Servicer, as described under Section 3.04, and (B) if any registered
      public accounting firm attestation report described under Section 3.04
      identifies any material instance of noncompliance, disclosure identifying such
      instance of noncompliance, or if any such registered public accounting firm
      attestation report is not included as an exhibit to such Form 10-K, disclosure
      that such report is not included and an explanation why such report is not
      included, and (iv) a Sarbanes-Oxley Certification as described in Section 3.05.
      Any disclosure or information in addition to (i) through (iv) above that is
      required to be included on Form 10-K (“Additional
      Form 10-K Disclosure”)
      shall
      be reported by the parties set forth on Exhibit W to the Depositor and the
      Securities Administrator and directed and approved by the Depositor pursuant
      to
      the following paragraph and the Securities Administrator will have no duty
      or
      liability for any failure hereunder to determine or prepare any Additional
      Form
      10-K Disclosure, except to the extent of its obligations set forth in the next
      paragraph. 

    
      
         

      

      
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    (B)
      As
      set forth on Exhibit W hereto, no later than March 10 (with a 5 calendar day
      cure period, but in no event later than March 15) of each year that the Trust
      is
      subject to the Exchange Act reporting requirements, commencing in 2008, (i)
      the
      parties specified on Exhibit W shall be required to provide to the Securities
      Administrator and to the Depositor, to the extent known, in EDGAR-compatible
      format, or in such other format as agreed upon by the Securities Administrator
      and such party, the form and substance of any Additional Form 10-K Disclosure,
      if applicable, together with an Additional Disclosure Notification, and (ii)
      the
      Depositor will approve, as to form and substance, or disapprove, as the case
      may
      be, the inclusion of the Additional Form 10-K Disclosure on Form 10-K. The
      Securities Administrator has no duty under this Agreement to monitor or enforce
      the performance by the parties listed on Exhibit W of their duties under this
      paragraph or proactively solicit or procure from such parties any Additional
      Form 10-K Disclosure information. The Depositor will be responsible for any
      reasonable fees and expenses assessed or incurred by the Securities
      Administrator in connection with including any Additional Form 10-K Disclosure
      on Form 10-K pursuant to this Section 8.12 (a) (ii) (B).

     

    (C)
      After
      preparing the Form 10-K, the Securities Administrator shall, upon request,
      forward electronically a copy of the Form 10-K to the Depositor. Within three
      Business Days after receipt of such copy, but no later than March 25th
      in each
      year that the Trust is subject to the reporting requirements of the Exchange
      Act, commencing in March 2008, the Depositor shall notify the Securities
      Administrator in writing (which may be furnished electronically) of any changes
      to or approval of such Form 10-K. In the absence of receipt of any written
      changes or approval, or if the Depositor does not request a copy of a Form
      10-K,
      the Securities Administrator shall be entitled to assume that such Form 10-K
      is
      in final form and the Securities Administrator may proceed with the process
      for
      execution and filing of the Form 10-K. A senior officer of the Master Servicer
      in charge of the master servicing function shall sign the Form 10-K. If a Form
      10-K cannot be filed on time or if a previously filed Form 10-K needs to be
      

    
      
         

      

      
        -96-

        
          

        

      

      
         

      

    

     

    amended,
      the Securities Administrator will follow the procedures set forth in paragraph
      (d) of this Section 8.12. Promptly (but no later than one Business Day) after
      filing with the Commission, the Securities Administrator will make available
      on
      its internet website a final executed copy of each Form 10-K prepared and filed
      by the Securities Administrator. The parties to this Agreement acknowledge
      that
      the performance by the Securities Administrator of its duties under this Section
      8.12(a)(ii) related to the timely preparation, execution and filing of Form
      10-K
      is contingent upon such parties strictly observing all applicable deadlines
      in
      the performance of their duties under this Section 8.12(a)(ii) and Sections
      3.03, 3.04 and 3.05. The Depositor acknowledges that the performance by the
      Master Servicer and the Securities Administrator of its duties under this
      Section 8.12(ii) related to the timely preparation, execution and filing of
      Form
      10-K is also contingent upon any Servicing Function Participant strictly
      observing deadlines no later than those set forth in this paragraph that are
      applicable to the parties to this Agreement in the delivery to the Securities
      Administrator of any necessary Additional Form 10-K Disclosure, any annual
      statement of compliance and any assessment of compliance and attestation
      pursuant to any applicable agreement. Neither the Master Servicer nor the
      Securities Administrator shall have any liability for any loss, expense, damage,
      claim arising out of or with respect to any failure to properly prepare, execute
      and/or timely file such Form 10-K, where such failure results from the
      Securities Administrator’s inability or failure to obtain or receive, on a
      timely basis, any information from any other party hereto or any Servicing
      Function Participant needed to prepare, arrange for execution or file such
      Form
      10-K, not resulting from its own negligence, bad faith or willful
      misconduct.

     

    (D) Form
      10-K
      requires the registrant to indicate (by checking “yes” or “no”) that it “(1) has
      filed all reports required to be filed by Section 13 or 15(d) of the Exchange
      Act during the preceding 12 months (or for such shorter period that the
      registrant was required to file such reports), and (2) has been subject to
      such
      filing requirement for the past 90 days.” The Depositor hereby instructs the
      Securities Administrator to check “Yes” for each item, unless the Depositor
      shall notify the Securities Administrator in writing, no later than the
      15th
      calendar
      day of March in any year in which the Trust is subject to the reporting
      requirements of the Exchange Act, commencing in March 2008, that the answer
      to
      either item should be “no.” The Depositor has filed all reports required to be
      filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
      (or for such shorter period that the Depositor was required to file such
      reports) and it has been subject to such filing requirement for the past 90
      days.” The Securities Administrator shall be entitled to rely on such
      representations in preparing, executing and/or filing any such Form 10-K.

     

    
      
         

      

      
        -97-

        
          

        

      

      
         

      

    

     

    (iii) (A)
      Within four (4) Business Days after the occurrence of an event requiring
      disclosure on Form 8-K (each such event, a “Reportable
      Event”),
      if
      directed by the Depositor, the Securities Administrator shall prepare and file
      on behalf of the Trust Fund any Form 8-K, as required by the Exchange Act,
      provided
      that the
      Depositor shall file the initial Form 8-K in connection with the issuance of
      the
      Certificates. Any disclosure or information related to a Reportable Event or
      that is otherwise required to be included on Form 8-K (“Form
      8-K Disclosure Information”)
      shall
      be reported by the parties set forth on Exhibit X to the Depositor and the
      Securities Administrator and directed and approved by the Depositor pursuant
      to
      the following paragraph and the Securities Administrator will have no duty
      or
      liability for any failure hereunder to determine or prepare any Form 8-K
      Disclosure Information or any Form 8-K, except to the extent of its obligations
      set forth in the next paragraph. 

     

    (B)
      As
      set forth on Exhibit X hereto, for so long as the Trust is subject to the
      Exchange Act reporting requirements, no later than the close of business New
      York City time on the 2nd Business Day after the occurrence of a Reportable
      Event (i) the parties hereto shall be required to provide to the Securities
      Administrator and the Depositor, to the extent known, in EDGAR-compatible
      format, or in such other format as agreed upon by the Securities Administrator
      and such party, the form and substance of any Form 8-K Disclosure Information,
      if applicable, together with an Additional Disclosure Notification, and (ii)
      the
      Depositor will approve, as to form and substance, or disapprove, as the case
      may
      be, the inclusion of the Form 8-K Disclosure Information. The Depositor will
      be
      responsible for any reasonable fees and expenses assessed or incurred by the
      Securities Administrator in connection with including any Form 8-K Disclosure
      Information on Form 8-K pursuant to this paragraph. 

     

    (C)
      After
      preparing the Form 8-K, the Securities Administrator shall, upon request,
      forward electronically a copy of the Form 8-K to the Depositor. Promptly, but
      no
      later than the close of business on the third Business Day after the Reportable
      Event, the Depositor shall notify the Securities Administrator in writing (which
      may be furnished electronically) of any changes to or approval of such Form
      8-K.
      In the absence of receipt of any written changes or approval, or if the
      Depositor does not request a copy of a Form 8-K, the Securities Administrator
      shall be entitled to assume that such Form 8-K is in final form and the
      Securities Administrator may proceed with the process for execution and filing
      of the Form 8-K. A duly authorized representative of the Master Servicer shall
      sign each Form 8-K. If a Form 8-K cannot be filed on time or if a previously
      filed Form 8-K needs to be amended, the Securities Administrator will follow
      the
      procedures set forth in paragraph (d) of this Section 8.12. Promptly (but no
      later than one Business Day) after filing with the Commission, the Securities
      Administrator will make available on its internet website (located at
www.ctslink.com)
      a final
      executed copy of each Form 8-K prepared and filed by the Securities
      Administrator. The parties to this Agreement acknowledge that the performance
      by
      the Securities Administrator of its duties under this Section 8.12(d)(iii)
      related to the timely preparation, execution and filing of Form 8-K is
      contingent upon such parties strictly observing all applicable deadlines in
      the
      performance of their duties under this Section 8.12(d)(iii). The Depositor
      acknowledges that the performance by the Master Servicer and the Securities
      Administrator of its duties under this Section 8.12(iii) related to the timely
      preparation, execution and filing of Form 8-K is also contingent upon any
      Servicing Function Participant strictly 

    
      
         

      

      
        -98-

        
          

        

      

      
         

      

    

     

    observing
      deadlines no later than those set forth in this paragraph that are applicable
      to
      the parties to this Agreement in the delivery to the Securities Administrator
      of
      any necessary Form 8-K Disclosure Information pursuant to the related any
      applicable agreement. The Securities Administrator shall have no liability
      for
      any loss, expense, damage, claim arising out of or with respect to any failure
      to properly prepare and/or timely file such Form 8-K, where such failure results
      from the Securities Administrator’s inability or failure to obtain or receive,
      on a timely basis, any information from any other party hereto or any Servicing
      Function Participant needed to prepare, arrange for execution or file such
      Form
      8-K, not resulting from its own negligence, bad faith or willful
      misconduct.

    

    (b) The
      Depositor acknowledges and agrees that the Securities Administrator may include
      in any Exchange Act report all relevant information, data, and exhibits as
      the
      Securities Administrator may receive in connection with such report irrespective
      of any provision or Regulation AB that may permit the exclusion of such
      material. By the way of example, the Securities Administrator may file all
      assessments of compliance, attestation reports and compliance statements timely
      received from any Item 1122 Servicing Function Participant irrespective of
      any
      applicable minimum pool asset percentage requirement for disclosure related
      to
      such Servicing Function Participant.

    

    (c) The
      Depositor agrees to furnish promptly to the Securities Administrator, from
      time
      to time upon request, such additional information, data, reports, documents,
      and
      financial statements within the Depositor’s possession or control as the
      Securities Administrator reasonably requests as necessary or appropriate to
      prepare and file the foregoing reports. The Securities Administrator shall
      make
      available to the Depositor copies of all Exchange Act reports filed
      hereunder.

     

    (d)
      (i) On
      or
      before January 30 of the first year in which the Securities Administrator is
      able to do so under applicable law, the Securities Administrator shall prepare
      and file a Form 15 relating to the automatic suspension of reporting in respect
      of the Trust under the Exchange Act. 

    

    (ii)
      In
      the event that the Securities Administrator is unable to timely file with the
      Commission all or any required portion of any Form 8-K, 10-D or 10-K required
      to
      be filed by this Agreement because required disclosure information was either
      not delivered to it or delivered to it after the delivery deadlines set forth
      in
      this Agreement or for any other reason, the Securities Administrator will
      promptly notify electronically the Depositor. In the case of Form 10-D and
      10-K,
      the parties to this Agreement will cooperate to prepare and file a Form 12b-25
      and a 10-DA and 10-KA as applicable, pursuant to Rule 12b-25 of the Exchange
      Act. In the case of Form 8-K, the Securities Administrator will, upon receipt
      of
      all required Form 8-K Disclosure Information and upon the approval and direction
      of the Depositor, include such disclosure information on the next Form 10-D.
      In
      the event that any previously filed Form 8-K, 10-D or 10-K needs to be amended
      in connection with any Additional Form 10-D Disclosure (other than, in the
      case
      of Form 10-D, for the purpose of restating any Monthly Statement), Additional
      Form 10-K Disclosure or Form 8-K Disclosure Information, the Securities
      Administrator will notify electronically the Depositor and such other parties
      to
      this Agreement as are affected by this 

    
      
         

      

      
        -99-

        
          

        

      

      
         

      

    

    Amendment
      and such parties will cooperate to prepare any necessary 8-KA, 10-DA or 10-KA.
      Any Form 15, Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K shall be
      signed by a duly authorized representative or senior officer in charge of master
      servicing, as applicable, of the Master Servicer. The parties to this Agreement
      acknowledge that the performance by each of the Master Servicer and the
      Securities Administrator of its duties under this Section 8.12(d) related to
      the
      timely preparation, execution and filing of Form 15, a Form 12b-25 or any
      amendment to Form 8-K, 10-D or 10-K is contingent upon each such party
      performing its duties under this Section. Neither the Master Servicer nor the
      Securities Administrator shall have any liability for any loss, expense, damage,
      claim arising out of or with respect to any failure to properly prepare, execute
      and/or timely file any such Form 15, Form 12b-25 or any amendments to Forms
      8-K,
      10-D or 10-K, where such failure results from the Securities Administrator’s
      inability or failure to obtain or receive, on a timely basis, any information
      from any other party hereto or any Servicing Function Participant needed to
      prepare, arrange for execution or file such Form 15, Form 12b-25 or any
      amendments to Forms 8-K, 10-D or 10-K, not resulting from its own negligence,
      bad faith or willful misconduct. The Depositor shall be responsible for all
      costs and expenses of the Securities Administrator related to the preparation
      and filing of any such amendment. Notwithstanding the foregoing, if any Form
      10-D needs to be amended solely to change the information contained in the
      Monthly Statement, the Securities Administrator shall not be required to notify
      the Depositor of such amendment.

    

    (e) Other
      than the Exchange Act reports specified above, the Securities Administrator
      shall have no responsibility to file any items or reports with the Commission
      under the Exchange Act or otherwise; provided,
      however,
      the
      Securities Administrator and Master Servicer will cooperate with the Depositor
      in connection with any additional filings with respect to the Trust as the
      Depositor deems necessary under the Exchange Act.

     

    (f) The
      Depositor shall pay all costs and expenses of the Securities Administrator
      related to the preparation and filing of any current report on Form 8-K, any
      periodic report on Form 10-D (other than the costs and expense of the Securities
      Administrator associated with the preparation and filing of the Monthly
      Statement), or any amendment to any Exchange Act report. Except as otherwise
      provided herein, all expenses incurred by the Securities Administrator in
      connection with its preparation and filing of Exchange Act reports hereunder
      shall not be reimbursable from the Trust.

    

    (g) Any
      notice required under this Section 8.12 may be given by facsimile or by
      electronic mail.

     

    Section
      8.13 Tax
      Classification of the Excess Reserve Fund Account and the Supplemental Interest
      Trust.
      For
      federal income tax purposes, the Securities Administrator shall treat the Excess
      Reserve Fund Account and the Supplemental Interest Trust as a disregarded entity
      for so long as a single holder owns all of the Class X
      Certificates.

    

    
      
         

      

      
        -100-

        
          

        

      

      
         

      

    

     

    ARTICLE
      IX

     

    ADMINISTRATION
      OF THE MORTGAGE LOANS

    BY
      THE MASTER SERVICER 

     

    Section
      9.01 Duties
      of the Master Servicer; Enforcement of Servicer’s Obligations.(a) 
      The Master Servicer, on behalf of the Trustee, the Securities Administrator,
      the
      Depositor and the Certificateholders, shall monitor the performance of the
      obligations of the Servicers under their respective Servicing Agreements, and
      (except as set forth below) shall use its reasonable good faith efforts to
      cause
      each Servicer to duly and punctually perform its duties and obligations under
      its related Servicing Agreement. Upon the occurrence of an Event of Default
      of
      which a Responsible Officer of the Master Servicer or, if the Master Servicer
      and a Servicer are the same entity, the Trustee, has actual knowledge, the
      Master Servicer or the Trustee, as applicable, shall promptly notify the
      Securities Administrator and the Trustee, as applicable, and shall specify
      in
      such notice the action, if any, the Master Servicer or the Trustee, as
      applicable, plans to take in respect of such default. So long as an Event of
      Default shall occur and be continuing, the Master Servicer or the Trustee,
      as
      applicable, shall take the actions specified in Article VII.
      Notwithstanding anything in this Agreement or any Credit Risk Management
      Agreement to the contrary, the Master Servicer or the Trustee, as applicable,
      shall have no duty or obligation to enforce any such Credit Risk Management
      Agreement or to supervise, monitor or oversee the activities of a Servicer
      under
      such Credit Risk Management Agreement with respect to any action taken or not
      taken by such Servicer at the direction of the Sponsor or pursuant to a
      recommendation of the Credit Risk Manager.

     

    If
      (i) a Servicer reports a delinquency on a monthly report and (ii) such
      Servicer, by 11 a.m. (New York Time) on the related Remittance Date, neither
      makes an Advance nor provides the Securities Administrator, the Master Servicer
      and the Trustee with an Officer’s Certificate certifying that such an Advance
      would be a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance,
      then the Master Servicer or, if the Master Servicer and such Servicer are the
      same entity, the Trustee, shall deposit in the Distribution Account not later
      than the Business Day immediately preceding the related Distribution Date an
      Advance in an amount equal to the difference between (x) with respect to
      each Monthly Payment due on a Mortgage Loan that is delinquent (other than
      Relief Act Interest Shortfalls) and for which such Servicer was required to
      make
      an Advance pursuant to the related Servicing Agreement and (y) amounts
      deposited in the related Collection Account to be used for Advances with respect
      to such Mortgage Loan, except to the extent the Master Servicer or the Trustee,
      as applicable, determines any such Advance to be a Nonrecoverable P&I
      Advance or Nonrecoverable Servicing Advance. Subject to the foregoing and
      Section 7.01, the Master Servicer or the Trustee, as applicable, shall
      continue to make such Advances for so long as such Servicer is required to
      do so
      under its respective Servicing Agreement. If applicable, on the Business Day
      immediately preceding the Distribution Date, the Master Servicer shall deliver
      an Officer’s Certificate to the Trustee stating that the Master Servicer elects
      not to make an Advance in a stated amount and detailing the reason(s) it deems
      the Advance to be a Nonrecoverable P&I Advance or Nonrecoverable Servicing
      Advance. Any amounts deposited by the Master Servicer or the Trustee, as
      applicable, pursuant to this Section 9.01 shall be net of the Servicing Fee
      for the related Mortgage Loans.

    
      
         

      

      
        -101-

        
          

        

      

      
         

      

    

     

    (b) The
      Master Servicer or the Trustee (as successor master servicer), as applicable,
      shall pay the costs of monitoring the Servicers (including costs associated
      with
      (i) termination of a Servicer, (ii) the appointment of a successor
      servicer or (iii) the transfer to and assumption of the servicing by the
      Master Servicer or the Trustee, as applicable) and shall, to the extent
      permitted under the related Servicing Agreement, seek reimbursement therefor
      initially from the terminated Servicer. In the event the full costs associated
      with the transition of servicing responsibilities to the Master Servicer or
      the
      Trustee (as successor master servicer), as applicable, are not paid for by
      the
      predecessor or successor servicer (provided such successor servicer is not
      the
      Master Servicer or the Trustee (as successor master servicer)), the Master
      Servicer or the Trustee, as applicable, may be reimbursed therefor by the Trust
      for all costs incurred by the Master Servicer or the Trustee (as successor
      master servicer), as applicable, associated with any such transfer of servicing
      duties from a Servicer to the Master Servicer or the Trustee, as applicable,
      or
      any other successor servicer.

     

    (c) If
      the
      Master Servicer or the Trustee (as successor master servicer), as applicable,
      assumes the servicing with respect to any of the Mortgage Loans, it will not
      assume liability for the representations and warranties of the Servicer it
      replaces or for any errors or omissions of such Servicer.

     

    (d) Neither
      the Depositor nor the Securities Administrator shall consent to the assignment
      by any Servicer of such Servicer’s rights and obligations under that Servicer’s
      Servicing Agreement without the prior written consent of the Master Servicer
      and
      the Trustee, which consent shall not be unreasonably withheld.

     

    Section
      9.02 [Reserved].
      

     

    Section
      9.03 [Reserved].
      

     

    Section
      9.04 Maintenance
      of Fidelity Bond and Errors and Omissions Insurance.The
      Master Servicer, at its expense, shall maintain in effect a blanket fidelity
      bond and an errors and omissions insurance policy, affording coverage with
      respect to all directors, officers, directors, employees and other Persons
      acting on such Master Servicer’s behalf, and covering errors and omissions in
      the performance of the Master Servicer’s obligations hereunder. The errors and
      omissions insurance policy and the fidelity bond shall be in such form and
      amount generally acceptable for entities serving as master servicers or
      trustees. 

     

    Section
      9.05 Representations
      and Warranties of the Master Servicer.
      (a) The
      Master Servicer hereby represents and warrants to the Depositor, the Securities
      Administrator and the Trustee, for the benefit of the Certificateholders, as
      of
      the Closing Date that:

     

    (i) it
      is a
      national banking association validly existing and in good standing under the
      laws of the United States of America, and as Master Servicer has full power
      and
      authority to transact any and all business contemplated by this Agreement and
      to
      execute, deliver and comply with its obligations under the terms of this
      Agreement, the execution, delivery and performance of which have been duly
      authorized by all necessary corporate action on the part of the Master
      Servicer;

    
      
         

      

      
        -102-

        
          

        

      

      
         

      

    

     

    (ii) the
      execution and delivery of this Agreement by the Master Servicer and its
      performance and compliance with the terms of this Agreement will not
      (A) violate the Master Servicer’s charter or bylaws, (B) violate any
      law or regulation or any administrative decree or order to which it is subject
      or (C) constitute a default (or an event which, with notice or lapse of
      time, or both, would constitute a default) under, or result in the breach of,
      any material contract, agreement or other instrument to which the Master
      Servicer is a party or by which it is bound or to which any of its assets are
      subject, which violation, default or breach would materially and adversely
      affect the Master Servicer’s ability to perform its obligations under this
      Agreement;

     

    (iii) this
      Agreement constitutes, assuming due authorization, execution and delivery hereof
      by the other respective parties hereto, a legal, valid and binding obligation
      of
      the Master Servicer, enforceable against it in accordance with the terms hereof,
      except as such enforcement may be limited by bankruptcy, insolvency,
      reorganization, moratorium and other laws affecting the enforcement of
      creditors’ rights in general, and by general equity principles (regardless of
      whether such enforcement is considered in a proceeding in equity or at
      law);

     

    (iv) the
      Master Servicer is not in default with respect to any order or decree of any
      court or any order or regulation of any federal, state, municipal or
      governmental agency to the extent that any such default would materially and
      adversely affect its performance hereunder;

     

    (v) the
      Master Servicer is not a party to or bound by any agreement or instrument or
      subject to any charter provision, bylaw or any other corporate restriction
      or
      any judgment, order, writ, injunction, decree, law or regulation that may
      materially and adversely affect its ability as Master Servicer to perform its
      obligations under this Agreement or that requires the consent of any third
      person to the execution of this Agreement or the performance by the Master
      Servicer of its obligations under this Agreement;

     

    (vi) no
      litigation is pending or, to the best of the Master Servicer’s knowledge,
      threatened against the Master Servicer which would prohibit its entering into
      this Agreement or performing its obligations under this Agreement;

     

    (vii) no
      consent, approval, authorization or order of any court or governmental agency
      or
      body is required for the execution, delivery and performance by the Master
      Servicer of or compliance by the Master Servicer with this Agreement or the
      consummation of the transactions contemplated by this Agreement, except for
      such
      consents, approvals, authorizations and orders (if any) as have been obtained;
      and

     

    (viii) the
      consummation of the transactions contemplated by this Agreement are in the
      ordinary course of business of the Master Servicer.

     

    
      
         

      

      
        -103-

        
          

        

      

      
         

      

    

     

    (b) It
      is
      understood and agreed that the representations and warranties set forth in
      this
      Section shall survive the execution and delivery of this Agreement. The Master
      Servicer shall indemnify the Depositor, Securities Administrator, the Trustee
      and the Trust and hold them harmless against any loss, damages, penalties,
      fines, forfeitures, reasonable legal fees and related costs, judgments, and
      other reasonable costs and expenses resulting from any claim, demand, defense
      or
      assertion based on or grounded upon, or resulting from, a material breach of
      the
      Master Servicer’s representations and warranties contained in
      Section 9.05(a) above. It is understood and agreed that the enforcement of
      the obligation of the Master Servicer set forth in this Section 9.05 to
      indemnify the Depositor, the Securities Administrator, the Trustee and the
      Trust
      constitutes the sole remedy of the Depositor, the Securities Administrator,
      the
      Trustee and the Trust respecting a breach of the foregoing representations
      and
      warranties. Such indemnification shall survive any termination of the Master
      Servicer as Master Servicer hereunder, any termination of this Agreement and
      resignation or removal of the Trustee.

     

    Any
      cause
      of action against the Master Servicer relating to or arising out of the breach
      of any representations and warranties made in this Section shall accrue upon
      discovery of such breach by either the Depositor, the Master Servicer,
      Securities Administrator or the Trustee or notice thereof by any one of such
      parties to the other parties.

     

    Section
      9.06 Master
      Servicer Events of Default.
      Each of
      the following shall constitute a “Master
      Servicer Event of Default”:

     

    (a) any
      failure by the Master Servicer to deposit in the Distribution Account any
      payment received by it from a Servicer to make any P&I Advance or required
      to be made by the Master Servicer under the terms of this Agreement which
      continues unremedied for a period of two (2) Business Days after the date
      upon which written notice of such failure, requiring the same to be remedied,
      shall have been given to the Master Servicer by any other party
      hereto;

     

    (b) failure
      by the Master Servicer to duly observe or perform, in any material respect,
      any
      other covenants, obligations or agreements of the Master Servicer as set forth
      in this Agreement which failure continues unremedied for a period of thirty
      (30) days after the date on which written notice of such failure, requiring
      the same to be remedied, shall have been given to the Master Servicer by the
      Trustee or to the Master Servicer and Trustee by the holders of Certificates
      evidencing at least 25.00% of the Voting Rights;

     

    (c) a
      decree
      or order of a court or agency or supervisory authority having jurisdiction
      for
      the appointment of a conservator or receiver or liquidator in any insolvency,
      bankruptcy, readjustment of debt, marshaling of assets and liabilities or
      similar proceedings, or for the winding-up or liquidation of its affairs, shall
      have been entered against the Master Servicer and such decree or order shall
      have remained in force, undischarged or unstayed for a period of sixty
      (60) days;

     

    (d) the
      Master Servicer shall consent to the appointment of a conservator or receiver
      or
      liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling
      of
      assets and liabilities or similar proceedings of or relating to the Master
      Servicer or relating to all or substantially all of its property;

     

    
      
         

      

      
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    (e) the
      Master Servicer shall admit in writing its inability to pay its debts as they
      become due, file a petition to take advantage of any applicable insolvency
      or
      reorganization statute, make an assignment for the benefit of its creditors,
      or
      voluntarily suspend payment of its obligations for three (3) Business
      Days;

     

    (f) Except
      as
      otherwise set forth herein, the Master Servicer attempts to assign this
      Agreement or its responsibilities hereunder or to delegate its duties hereunder
      (or any portion thereof) without the consent of the Securities Administrator
      and
      the Depositor; 

     

    (g) the
      indictment of the Master Servicer for the taking of any action by the Master
      Servicer, any Affiliate or any director or employee thereof that constitutes
      fraud or criminal activity in the performance of its obligations under this
      Agreement, in each case, where such indictment materially and adversely affects
      the ability of the Master Servicer to perform its obligations under this
      Agreement (subject to the condition that such indictment is not dismissed within
      ninety (90) days); or

     

    (h) failure
      of the Master Servicer to timely provide the Depositor with the assessment,
      attestation and annual statement of compliance required by Item 1122 of
      Regulation AB in accordance with Sections 3.03, 3.04 and 3.05.

     

    In
      each
      and every such case, so long as a Master Servicer Event of Default shall not
      have been remedied, in addition to whatever rights the Trustee may have at
      law
      or equity or to damages, including injunctive relief and specific performance,
      the Trustee, by notice in writing to the Master Servicer, may, and upon the
      request of the Holders of Certificates representing at least 51.00% of the
      Voting Rights shall, terminate with cause all the rights and obligations of
      the
      Master Servicer under this Agreement.

     

    Upon
      receipt by the Master Servicer of such written notice, all authority and power
      of the Master Servicer under this Agreement, shall pass to and be vested in
      any
      successor master servicer appointed hereunder which accepts such appointments.
      Upon written request from the Trustee or the Depositor, the Master Servicer
      shall prepare, execute and deliver to the successor entity designated by the
      Trustee any and all documents and other instruments related to the performance
      of its duties hereunder as the Master Servicer and, place in such successor’s
      possession all such documents with respect to the master servicing of the
      Mortgage Loans and do or cause to be done all other acts or things necessary
      or
      appropriate to effect the purposes of such notice of termination, at the Master
      Servicer’s sole expense. The Master Servicer shall cooperate with the Trustee
      and such successor master servicer in effecting the termination of the Master
      Servicer’s responsibilities and rights hereunder, including without limitation,
      the transfer to such successor master servicer for administration by it of
      all
      cash amounts which shall at the time be credited to the Distribution Account
      or
      are thereafter received with respect to the Mortgage Loans.

     

    Section
      9.07 Waiver
      of Default. By
      a
      written notice, the Trustee may at the direction of Holders of Certificates
      evidencing at least 51.00% of the Voting Rights waive any default by the Master
      Servicer in the performance of its obligations hereunder and its consequences.
      Upon any waiver of a past default, such default shall cease to exist, and any
      Master Servicer Event of Default arising therefrom shall be deemed to have
      been
      remedied for every purpose of this Agreement. No such waiver shall extend to
      any
      subsequent or other default or impair any right consequent thereon except to
      the
      extent expressly so waived.

    
      
         

      

      
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    Section
      9.08 Successor
      to the Master Servicer. Upon
      termination of the Master Servicer’s responsibilities and duties under this
      Agreement, the Depositor shall use its reasonable good faith efforts to appoint
      a successor, which shall succeed to all rights and assume all of the
      responsibilities, duties and liabilities of the Master Servicer under this
      Agreement prior to the termination of the Master Servicer. Any successor shall
      be a Fannie Mae and Freddie Mac approved servicer in good standing and
      acceptable to the Depositor and the Rating Agencies. In connection with such
      appointment and assumption, the Depositor may make such arrangements for the
      compensation of such successor as it and such successor shall agree. In the
      event that the Master Servicer’s duties, responsibilities and liabilities under
      this Agreement are terminated, the Master Servicer shall continue to discharge
      its duties and responsibilities hereunder until the effective date of such
      termination with the same degree of diligence and prudence which it is obligated
      to exercise under this Agreement and shall take no action whatsoever that might
      impair or prejudice the rights of its successor. The termination of the Master
      Servicer shall not become effective until a successor shall be appointed
      pursuant hereto and shall in no event (i) relieve the Master Servicer of
      responsibility for the representations and warranties made pursuant to
      Section 9.05(a) hereof and the remedies available to the Trustee under
      Section 9.05(b) hereof, it being understood and agreed that the provisions
      of Section 9.05 hereof shall be applicable to the Master Servicer
      notwithstanding any such sale, assignment, resignation or termination of the
      Master Servicer or the termination of this Agreement; or (ii) affect the
      right of the Master Servicer to receive payment and/or reimbursement of any
      amounts accruing to it hereunder prior to the date of termination (or during
      any
      transition period in which the Master Servicer continues to perform its duties
      hereunder prior to the date the successor master servicer fully assumes its
      duties).

     

    If
      no
      successor master servicer has accepted its appointment within 90 days of
      the time the Trustee receives the resignation of the Master Servicer, the
      Trustee shall be the successor master servicer in all respects under this
      Agreement and shall have all the rights and powers and be subject to all the
      responsibilities, duties and liabilities relating thereto, including the
      obligation to make Advances; provided,
      however,
      that
      any failure to perform any duties or responsibilities caused by the Master
      Servicer’s failure to provide information required by this Agreement shall not
      be considered a default by the Trustee hereunder. In the Trustee’s capacity as
      such successor, the Trustee shall have the same limitations on liability herein
      granted to the Master Servicer. Notwithstanding anything herein to the contrary,
      the Trustee in its role as successor master servicer shall have no obligation
      to
      monitor or supervise any Servicer, shall only have the obligation to make
      Advances if it terminates the Servicer pursuant to an Event of Default (in
      its
      role as successor master servicer), and shall make such Advances only pursuant
      to Section 7.01. As compensation therefor, the Trustee shall be entitled to
      receive the compensation, reimbursement and indemnities otherwise payable to
      the
      Master Servicer, including the fees and other amounts payable pursuant to
      Section 9.09 hereof. 

     

    Any
      successor master servicer appointed as provided herein, shall execute,
      acknowledge and deliver to the Master Servicer, the Depositor and to the Trustee
      an instrument accepting such appointment, wherein the successor shall make
      the
      representations and warranties set forth in Section 9.05 hereof, and
      whereupon such successor shall become fully vested with all of the rights,
      powers, duties, responsibilities, obligations and liabilities of the Master
      Servicer, with like effect as if originally named as a party to this Agreement.
      Any termination or resignation of the Master Servicer or termination of this
      Agreement shall not affect any claims that the Trustee may have against the
      Master Servicer arising out of the Master Servicer’s actions or failure to act
      prior to any such termination or resignation or in connection with the Trustee’s
      assumption of such obligations, duties and responsibilities. 

    
      
         

      

      
        -106-

        
          

        

      

      
         

      

    

     

    Upon
      a
      successor’s acceptance of appointment as such, the Master Servicer shall notify
      by mail the Trustee and the Depositor of such appointment.

     

    Section
      9.09 [Reserved].

     

    Section
      9.10 Merger
      or Consolidation. Any
      Person into which the Master Servicer may be merged or consolidated, or any
      Person resulting from any merger, conversion, other change in form or
      consolidation to which the Master Servicer shall be a party, or any Person
      succeeding to the business of the Master Servicer, shall be the successor to
      the
      Master Servicer hereunder, without the execution or filing of any paper or
      any
      further act on the part of any of the parties hereto, anything herein to the
      contrary notwithstanding; provided,
      however,
      that
      the successor or resulting Person to the Master Servicer shall (i) be a
      Person (or have an Affiliate) that is qualified and approved to service mortgage
      loans for Fannie Mae and Freddie Mac (provided further
      that a
      successor master servicer that satisfies subclause (i) through an
      Affiliate agrees to service the Mortgage Loans in accordance with all applicable
      Fannie Mae and Freddie Mac guidelines) and (ii) have a net worth of not
      less than $25,000,000.

     

    Section
      9.11 Resignation
      of the Master Servicer. Except
      as
      otherwise provided in Sections 9.08 and 9.10 hereof, the Master Servicer
      shall not resign from the obligations and duties hereby imposed on it unless
      the
      Master Servicer’s duties hereunder are no longer permissible under applicable
      law or are in material conflict by reason of applicable law with any other
      activities carried on by it and cannot be cured. Any such determination
      permitting the resignation of the Master Servicer shall be evidenced by an
      Opinion of Counsel that shall be independent to such effect delivered to the
      Trustee. No such resignation shall become effective until the Trustee shall
      have
      assumed, or a successor master servicer satisfactory to the Trustee and the
      Depositor shall have assumed, the Master Servicer’s responsibilities and
      obligations under this Agreement. Notice of such resignation shall be given
      promptly by the Master Servicer and the Depositor to the Trustee.

     

    If
      at any
      time, Wells Fargo, as Master Servicer, resigns under this Section 9.11, or
      is removed as Master Servicer pursuant to Section 9.06, then at such time
      Wells Fargo shall also resign (and shall be entitled to resign) as Securities
      Administrator under this Agreement.

     

    Section
      9.12 Assignment
      or Delegation of Duties by the Master Servicer. Except
      as
      expressly provided herein, the Master Servicer shall not assign or transfer
      any
      of its rights, benefits or privileges hereunder to any other Person, or delegate
      to or subcontract with, or authorize or appoint any other Person to perform
      any
      of the duties, covenants or obligations to be performed by the Master Servicer;
      provided,
      however,
      that
      the Master Servicer shall have the right with the prior written consent of
      the
      Depositor (which shall not be unreasonably withheld or delayed), and upon
      delivery to the Trustee and the Depositor of a letter from each Rating Agency
      to
      the effect that such action shall not result in a downgrade of the ratings
      assigned to any of the Certificates, to delegate or assign to or subcontract
      with or authorize or appoint any qualified Person to perform and carry out
      any
      duties, covenants or obligations to be performed and carried out by the Master
      Servicer hereunder. Notice of such permitted assignment shall be given promptly
      by the Master Servicer to the Depositor and the Trustee. If, pursuant to any
      provision hereof, the duties of the Master Servicer are transferred to a
      successor master servicer, the entire compensation payable to the Master
      Servicer pursuant hereto shall thereafter be payable to such successor master
      servicer but in no event shall the fee payable to the successor master servicer
      exceed that payable to the predecessor master servicer.

    
      
         

      

      
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    Section
      9.13 Limitation
      on Liability of the Master Servicer. Neither
      the Master Servicer nor any of the directors, officers, employees or agents
      of
      the Master Servicer shall be under any liability to the Trustee or the
      Certificateholders for any action taken or for refraining from the taking of
      any
      action in good faith pursuant to this Agreement, or for errors in judgment;
      provided,
      however,
      that
      this provision shall not protect the Master Servicer or any such person against
      any liability that would otherwise be imposed by reason of willful malfeasance,
      bad faith or negligence in the performance of its duties or by reason of
      reckless disregard for its obligations and duties under this Agreement. The
      Master Servicer and any director, officer, employee or agent of the Master
      Servicer may rely in good faith on any document prima facie properly executed
      and submitted by any Person respecting any matters arising hereunder. The Master
      Servicer shall be under no obligation to appear in, prosecute or defend any
      legal action that is not incidental to its duties as Master Servicer with
      respect to the Mortgage Loans under this Agreement and that in its opinion
      may
      involve it in any expenses or liability; provided,
      however,
      that
      the Master Servicer may in its sole discretion undertake any such action that
      it
      may deem necessary or desirable in respect to this Agreement and the rights
      and
      duties of the parties hereto and the interests of the Certificateholders
      hereunder. In such event, the legal expenses and costs of such action and any
      liability resulting therefrom, shall be liabilities of the Trust, and the Master
      Servicer shall be entitled to be reimbursed therefor out of the Distribution
      Account in accordance with the provisions of Section 9.09 and
      Section 9.14.

     

    The
      Master Servicer shall not be liable under this Agreement for any acts or
      omissions of any Servicer except to the extent that damages or expenses are
      incurred as a result of such acts or omissions and such damages and expenses
      would not have been incurred but for the negligence, willful malfeasance, bad
      faith or recklessness of the Master Servicer in supervising, monitoring and
      overseeing the performance of the obligations of any Servicer as required under
      this Agreement. 

     

    Section
      9.14 Indemnification;
      Third Party Claims. The
      Master Servicer agrees to indemnify and hold harmless the Trustee as successor
      master servicer from and against any and all claims, losses, penalties, fines,
      forfeitures, legal fees and related costs, judgments, and any other costs,
      liability, fees and expenses (including reasonable attorneys’ fees) that the
      Trustee may sustain as a result of such liability or obligations of the Master
      Servicer and in connection with the Trustee’s assumption (not including the
      Trustee’s performance, except to the extent that costs or liability of the
      Trustee are created or increased as a result of negligent or wrongful acts
      or
      omissions of the Master Servicer prior to its replacement as Master Servicer)
      of
      the Master Servicer’s obligations, duties or responsibilities under such
      agreement. 

     

    
      
         

      

      
        -108-

        
          

        

      

      
         

      

    

     

    The
      Trust
      will indemnify the Master Servicer and hold it harmless against any and all
      claims, losses, penalties, fines, forfeitures, legal fees and related costs,
      judgments, and any other costs, liabilities, fees and expenses that the Master
      Servicer may incur or sustain in connection with, arising out of or related
      to
      this Agreement or the Certificates, except to the extent that any such loss,
      liability or expense is related to (i) a material breach of the Master
      Servicer’s representations and warranties in this Agreement, (ii) the
      Master Servicer’s willful malfeasance, bad faith or negligence or by reason of
      its reckless disregard of its duties and obligations under this Agreement or
      (iii) failure to provide the assessment, attestation and annual statement of
      compliance in accordance with Sections 3.03, 3.04 and 3.05; provided that any
      such loss, liability or expense constitutes an “unanticipated expense incurred
      by the REMIC” within the meaning of Treasury Regulations
      Section 1.860G-1(b)(3)(ii). The Master Servicer shall be entitled to
      reimbursement for any such indemnified amount from funds on deposit in the
      Distribution Account. The Master Servicer shall not be liable for any course
      of
      action taken by a Servicer with respect to loss mitigation of defaulted Mortgage
      Loans at the direction of the Credit Risk Manager or the Sponsor pursuant to
      a
      Credit Risk Management Agreement or otherwise. Further, the Master Servicer
      shall not be liable for the performance by a Servicer under any Credit Risk
      Management Agreement.

     

    Section
      9.15 Duties
      of the Credit Risk Manager.

     

    (a) The
      Certificateholders, by their purchase and acceptance of the Certificates,
      appoint OfficeTiger Global Real Estate Services Inc., formerly known as
      MortgageRamp, Inc., as Credit Risk Manager. For and on behalf of the Depositor
      and the Trust, the Credit Risk Manager will provide reports and recommendations
      concerning certain delinquent and defaulted Mortgage Loans, and as to the
      collection of any Prepayment Charges with respect to the Mortgage Loans. Such
      reports and recommendations will be based upon the Monthly Statement and
      information provided by the Servicers (other than Countrywide Servicing) and
      the
      Master Servicer pursuant to the Credit Risk Management Agreements. The Credit
      Risk Manager shall look solely to the Servicers, the Master Servicer and to
      the
      Monthly Statement for all information and data (including loss and delinquency
      information and data) and loan level information and data relating to the
      servicing of the Mortgage Loans and neither the Securities Administrator nor
      the
      Trustee shall have any obligation to provide any such information to the Credit
      Risk Manager and shall not otherwise have any responsibility under any Credit
      Risk Management Agreement. The Credit Risk Manager shall be entitled to
      compensation from the Trust equal to the Credit Risk Manager Fee.

     

    (b) On
      or
      about the 15th calendar day of each month, the Credit Risk Manager shall have
      prepared and shall make available to the Depositor, the following
      reports:

     

    (i) Executive
      Summary:
      The Executive Summary will consist of a brief high level summary of certain
      key
      performance metrics as well as a narrative summary of loans identified and
      reviewed for follow-up actions by the Servicer.

     

    (ii) General
      Pool Characteristics:
      This report will contain a listing of various characteristics of the mortgage
      loan pool (including history and stratification) such as documentation levels,
      occupancy status, weighted aging, CLTV, NOO rate, junior lien percentage,
      etc.

    
      
         

      

      
        -109-

        
          

        

      

      
         

      

    

     

    (iii) Performance
      Report:
      This report will graphically summarize the delinquency rates as well as the
      loss
      mitigation, foreclosure, REO, CPR and loss severity and related summary
      information.

     

    (iv) Prepayment
      Analysis:
      This report will consist of a compilation and summary of various loan
      characteristics for Mortgage Loans that have prepaid, along with prepayment
      premium analytics.

     

    (v) Servicer
      Remittance Report:
      This report will consist of an analysis of any discrepancy between the monthly
      servicer remittance file and the final monthly trust report including, without
      limitation, the collection of prepayment premiums.

     

    (vi) OfficeTiger
      Loan Review Report:
      This report will consist of a narrative summary with respect to the individual
      loans that have been flagged for manual review and follow-up consultation with
      the Servicer. This report may also include narrative summaries of the
      recommendation of the Credit Risk Manager. 

     

    Section
      9.16 Limitation
      Upon Liability of the Credit Risk Manager.
      Neither
      the Credit Risk Manager, nor any of the directors, officers, employees or agents
      of the Credit Risk Manager, shall be under any liability to the Trustee, the
      Securities Administrator, the Certificateholders or the Depositor for any action
      taken or for refraining from the taking of any action in good faith pursuant
      to
      this Agreement, in reliance upon information provided by any Servicer (other
      than Countrywide Servicing) and the Master Servicer under the Credit Risk
      Management Agreements or for errors in judgment; provided, however,
      that
      this provision shall not protect the Credit Risk Manager or any such person
      against liability that would otherwise be imposed by reason of willful
      malfeasance, bad faith or gross negligence in its performance of its duties
      or
      by reason of reckless disregard for its obligations and duties under this
      Agreement or the Credit Risk Management Agreements. The Credit Risk Manager
      and
      any director, officer, employee or agent of the Credit Risk Manager may rely
      in
      good faith on any document of any kind prima facie properly executed and
      submitted by any Person respecting any matters arising hereunder, and may rely
      in good faith upon the accuracy of information furnished by the Servicers (other
      than Countrywide Servicing) and the Master Servicer pursuant to the Credit
      Risk
      Management Agreements in the performance of its duties thereunder and
      hereunder.

     

    Section
      9.17 Removal
      and Resignation of Credit Risk Manager.
      The
      Credit Risk Manager may be removed as Credit Risk Manager by Certificateholders
      holding not less than 66-2/3% of the Voting Rights of Certificates, in the
      exercise of its or their sole discretion, at any time, without cause, upon
      ten
      (10) days prior written notice. The Certificateholders shall provide such
      written notice to the Trustee and upon receipt of such notice, the Trustee
      shall
      provide written notice to the Credit Risk Manager of its removal, effective
      upon
      receipt of such notice. In addition, on June 5, 2012 and each anniversary date
      thereafter, upon thirty (30) days prior written notice, the Credit Risk Manager
      will have the option to resign as Credit Risk Manager and the Depositor shall
      have the option to terminate the Credit Risk Manager without
      cause.

    
      
         

      

      
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    ARTICLE
      X

     

    CONCERNING
      THE SECURITIES ADMINISTRATOR

     

    Section
      10.01 Duties
      of Securities Administrator. The
      Securities Administrator shall undertake to perform such duties and only such
      duties as are specifically set forth in this Agreement.

     

    The
      Securities Administrator, upon receipt of all resolutions, certificates,
      statements, opinions, reports, documents, orders or other instruments furnished
      to the Securities Administrator that are specifically required to be furnished
      pursuant to any provision of this Agreement, shall examine them to determine
      whether they are in the form required by this Agreement; provided,
      however,
      that
      the Securities Administrator shall not be responsible for the accuracy or
      content of any such resolution, certificate, statement, opinion, report,
      document, order or other instrument. If any such instrument is found not to
      conform in any material respect to the requirements of this Agreement, the
      Securities Administrator shall notify the Certificateholders of such
      non-conforming instrument in the event the Securities Administrator, after
      so
      requesting, does not receive a satisfactorily corrected instrument.

     

    No
      provision of this Agreement shall be construed to relieve the Securities
      Administrator of liability for its own negligent action, its own negligent
      failure to act or its own willful misconduct; provided,
      however,
      that:

     

    (i) the
      duties and obligations of the Securities Administrator shall be determined
      solely by the express provisions of this Agreement, the Securities Administrator
      shall not be liable except for the performance of such duties and obligations
      as
      are specifically set forth in this Agreement, no implied covenants or
      obligations shall be read into this Agreement against the Securities
      Administrator and the Securities Administrator may conclusively rely, as to
      the
      truth of the statements and the correctness of the opinions expressed therein,
      upon any certificates or opinions furnished to the Securities Administrator
      and
      conforming to the requirements of this Agreement which it believed in good
      faith
      to be genuine and to have been duly executed by the proper authorities
      respecting any matters arising hereunder;

     

    (ii) the
      Securities Administrator shall not be liable for any error of judgment made
      in
      good faith by a Responsible Officer or Responsible Officers of the Securities
      Administrator, unless it shall be conclusively determined by a court of
      competent jurisdiction, such determination not subject to appeal, that the
      Securities Administrator was negligent in ascertaining the pertinent
      facts;

     

    (iii) the
      Securities Administrator shall not be liable with respect to any action or
      inaction taken, suffered or omitted to be taken by it in good faith in
      accordance with the direction of Holders of Certificates evidencing not less
      than 25.00% of the Voting Rights of Certificates relating to the time, method
      and place of conducting any proceeding for any remedy available to the
      Securities Administrator, or exercising or omitting to exercise any trust or
      power conferred upon the Securities Administrator under this Agreement;
      and

    
      
         

      

      
        -111-

        
          

        

      

      
         

      

    

     

    (iv) the
      Securities Administrator shall not be accountable, shall have no liability
      and
      makes no representation as to any acts or omissions hereunder of the Master
      Servicer or the Trustee.

     

    Section
      10.02 Certain
      Matters Affecting the Securities Administrator. Except
      as
      otherwise provided in Section 10.01:

     

    (i) the
      Securities Administrator may request and conclusively rely upon and shall be
      fully protected in acting or refraining from acting upon any resolution,
      Officer’s Certificate, certificate of auditors or any other certificate,
      statement, instrument, opinion, report, notice, request, consent, order,
      appraisal, bond or other paper or document believed by it to be genuine and
      to
      have been signed or presented by the proper party or parties and the Securities
      Administrator shall have no responsibility to ascertain or confirm the
      genuineness of any signature of any such party or parties;

     

    (ii) the
      Securities Administrator may consult with counsel, financial advisers or
      accountants and the advice of any such counsel, financial advisers or
      accountants and any advice or Opinion of Counsel shall be full and complete
      authorization and protection in respect of any action taken or suffered or
      omitted by it hereunder in good faith and in accordance with such advice or
      Opinion of Counsel;

     

    (iii) the
      Securities Administrator shall not be liable for any action or inaction taken,
      suffered or omitted by it in good faith and believed by it to be authorized
      or
      within the discretion or rights or powers conferred upon it by this
      Agreement;

     

    (iv) the
      Securities Administrator shall not be bound to make any investigation into
      the
      facts or matters stated in any resolution, certificate, statement, instrument,
      opinion, report, notice, request, consent, order, approval, bond or other paper
      or document, unless requested in writing so to do by Holders of Certificates
      evidencing not less than 25.00% of the Voting Rights allocated to each
      Class of Certificates; provided,
      however,
      that if
      the payment within a reasonable time to the Securities Administrator of the
      costs, expenses or liabilities likely to be incurred by it in the making of
      such
      investigation is, in the opinion of the Securities Administrator, not reasonably
      assured to the Securities Administrator by the security afforded to it by the
      terms of this Agreement, the Securities Administrator may require reasonable
      indemnity against such expense or liability as a condition to so proceeding.
      Nothing in this clause (iv) shall derogate from the obligation of the
      Securities Administrator to observe any applicable law prohibiting disclosure
      of
      information regarding the Mortgagors, provided that the Securities Administrator
      shall have no liability for disclosure required by this Agreement;

     

    (v) the
      Securities Administrator may execute any of the trusts or powers hereunder
      or
      perform any duties hereunder either directly or by or through agents or
      attorneys or a custodian and the Securities Administrator shall not be
      responsible for any misconduct or negligence on the part of any such agent,
      attorney or custodian appointed by the Securities Administrator with due
      care;

    
      
         

      

      
        -112-

        
          

        

      

      
         

      

    

     

    (vi) the
      Securities Administrator shall not be required to risk or expend its own funds
      or otherwise incur any financial liability in the performance of any of its
      duties or in the exercise of any of its rights or powers hereunder if it shall
      have reasonable grounds for believing that repayment of such funds or adequate
      indemnity against such risk or liability is not assured to it, and none of
      the
      provisions contained in this Agreement shall in any event require the Securities
      Administrator to perform, or be responsible for the manner of performance of,
      any of the obligations of the Master Servicer or the Trustee under this
      Agreement;

     

    (vii) the
      Securities Administrator shall be under no obligation to exercise any of the
      trusts, rights or powers vested in it by this Agreement or to institute, conduct
      or defend any litigation hereunder or in relation hereto at the request, order
      or direction of any of the Certificateholders, pursuant to the provisions of
      this Agreement, unless such Certificateholders shall have offered to the
      Securities Administrator reasonable security or indemnity satisfactory to the
      Securities Administrator against the costs, expenses and liabilities which
      may
      be incurred therein or thereby; and

     

    (viii) the
      Securities Administrator shall have no obligation to appear in, prosecute or
      defend any legal action that is not incidental to its duties hereunder and
      which
      in its opinion may involve it in any expense or liability; provided,
      however,
      that in the event of a breach or default by the Derivative
      Counterparty
      under the Cap Agreement or the Swap Agreement, the Securities Administrator
      shall pursue all legal remedies available against the Derivative
      Counterparty
      under the Cap Agreement or the Swap Agreement, as applicable, in consultation
      with the Depositor; provided,
      further,
      that
      the Securities Administrator may in its discretion undertake any such action
      that it may deem necessary or desirable in respect of this Agreement and the
      rights and duties of the parties hereto and the interests of the Trustee, the
      Securities Administrator and the Certificateholders hereunder. In such event,
      the legal expenses and costs of such action and any liability resulting
      therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
      Securities Administrator shall be entitled to be reimbursed therefor out of
      the
      Collection Account.

     

    The
      Securities Administrator shall have no duty (A) to undertake or ensure any
      recording, filing, or depositing of this Agreement or any agreement referred
      to
      herein or any financing statement or continuation statement evidencing a
      security interest, or to see to the maintenance of any such recording or filing
      or depositing or to any rerecording, refiling or redepositing thereof,
      (B) to procure or maintain any insurance or (C) to pay or discharge
      any tax, assessment, or other governmental charge or any lien or encumbrance
      of
      any kind owing with respect to, assessed or levied against, any part of the
      Trust Fund other than from funds available in the Distribution
      Account.

     

    Section
      10.03 Securities
      Administrator Not Liable for Certificates or Mortgage Loans. The
      recitals contained herein and in the Certificates shall be taken as the
      statements of the Depositor or the transferor, as the case may be, and the
      Securities Administrator assumes no responsibility for their correctness. The
      Securities Administrator makes no representations as to the validity or
      sufficiency of this Agreement, the Cap Agreement, the Swap Agreement, or of
      the
      Certificates or of any Mortgage Loan or related document other than with respect
      to the Securities Administrator’s execution and authentication of the
      Certificates. The Securities Administrator shall not be accountable for the
      use
      or application by the Depositor, the Trustee, the Master Servicer, or the
      Derivative Counterparty of any funds paid to the Depositor, the Trustee, the
      Master Servicer or the Derivative Counterparty in respect of the Mortgage Loans
      or deposited in or withdrawn from any Collection Account or any other fund
      or
      account with respect to the Certificates by the Depositor, the Trustee, the
      Master Servicer or the Derivative Counterparty.

    
      
         

      

      
        -113-

        
          

        

      

      
         

      

    

     

    The
      Securities Administrator executes and authenticates the Certificates not in
      its
      individual capacity but solely as Securities Administrator of the Trust Fund
      created by this Agreement, in the exercise of the powers and authority conferred
      and vested in it by this Agreement. Each of the undertakings and agreements
      made
      on the part of the Securities Administrator on behalf of the Trust Fund in
      the
      Certificates is made and intended not as a personal undertaking or agreement
      by
      the Securities Administrator but is made and intended for the purpose of binding
      only the Trust Fund.

     

    Section
      10.04 Securities
      Administrator May Own Certificates. The
      Securities Administrator in its individual or any other capacity may become
      the
      owner or pledgee of Certificates and may transact business with the parties
      hereto and their Affiliates with the same rights as it would have if it were
      not
      the Securities Administrator.

     

    Section
      10.05 Securities
      Administrator’s Fees and Expenses. The
      Securities Administrator shall be entitled to the investment income earned
      on
      amounts in the Distribution Account during the Securities Administrator Float
      Period. The Securities Administrator and any director, officer, employee, agent
      or “control person” within the meaning of the Securities Act of 1933, as
      amended, and the Securities Exchange Act of 1934, as amended (“Control
      Person”),
      of
      the Securities Administrator shall be indemnified by the Trust and held harmless
      against any loss, liability or expense (including reasonable attorney’s fees)
      (i) incurred in connection with any claim or legal action relating to
      (a) this Agreement, (b) the Mortgage Loans or (c) the
      Certificates, other than any loss, liability or expense incurred by reason
      of
      willful misfeasance, bad faith or negligence in the performance of any of the
      Securities Administrator’s duties hereunder, (ii) incurred in connection
      with the performance of any of the Securities Administrator’s duties hereunder,
      other than any loss, liability or expense incurred by reason of willful
      misfeasance, bad faith or negligence in the performance of any of the Securities
      Administrator’s duties hereunder or (iii) incurred by reason of any action
      of the Securities Administrator taken at the direction of the
      Certificateholders, provided that any such loss, liability or expense
      constitutes an “unanticipated expense incurred by the REMIC” within the meaning
      of Treasury Regulations Section 1.860G 1(b)(3)(ii). Such indemnity shall
      survive the termination of this Agreement or the resignation or removal of
      the
      Securities Administrator hereunder. Without limiting the foregoing, and except
      for any such expense, disbursement or advance as may arise from the Securities
      Administrator’s negligence, bad faith or willful misconduct, or which would not
      be an “unanticipated expense” within the meaning of the second preceding
      sentence, the Securities Administrator shall be reimbursed by the Trust for
      all
      reasonable expenses, disbursements and advances incurred or made by the
      Securities Administrator in accordance with any of the provisions of this
      Agreement with respect to: (A) the reasonable compensation and the expenses
      and disbursements of its counsel not associated with the closing of the issuance
      of the Certificates, (B) the reasonable compensation, expenses and
      disbursements of any accountant, engineer, appraiser or other agent that is
      not
      regularly employed by the Securities Administrator, to the extent that the
      Securities Administrator must engage such Persons to perform acts or services
      hereunder and (C) printing and engraving expenses in connection with
      preparing any Definitive Certificates. The Trust shall fulfill its obligations
      under this paragraph from amounts on deposit from time to time in the
      Distribution Account.

    
      
         

      

      
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    The
      Securities Administrator shall be required to pay all expenses incurred by
      it in
      connection with its activities hereunder and shall not be entitled to
      reimbursement therefor except as provided in this Agreement.

     

    Section
      10.06 Eligibility
      Requirements for Securities Administrator. The
      Securities Administrator hereunder shall at all times be a corporation or
      association organized and doing business under the laws the United States of
      America or any state thereof, authorized under such laws to exercise corporate
      trust powers, having a combined capital and surplus of at least $50,000,000,
      subject to supervision or examination by federal or state authority and with
      a
      credit rating of at least investment grade. If such corporation or association
      publishes reports of condition at least annually, pursuant to law or to the
      requirements of the aforesaid supervising or examining authority, then for
      the
      purposes of this Section 10.06 the combined capital and surplus of such
      corporation or association shall be deemed to be its combined capital and
      surplus as set forth in its most recent report of condition so published. In
      case at any time the Securities Administrator shall cease to be eligible in
      accordance with the provisions of this Section 10.06, the Securities
      Administrator shall resign immediately in the manner and with the effect
      specified in Section 10.07 hereof. The entity serving as Securities
      Administrator may have normal banking and trust relationships with the Depositor
      and its affiliates or the Trustee and its affiliates.

     

    Any
      successor securities administrator (i) may not be the Mortgage Loan Seller,
      the Master Servicer, a Servicer, the Depositor or an affiliate of the Depositor
      unless such successor securities administrator’s functions are operated through
      an institutional trust department of the Securities Administrator,
      (ii) must be authorized to exercise corporate trust powers under the laws
      of its jurisdiction of organization, and (iii) must be rated at least
“A/F1” by Fitch, if Fitch is a Rating Agency and if rated by Fitch, or the
      equivalent rating by Standard & Poor’s or Moody’s. If no successor
      securities administrator shall have been appointed and shall have accepted
      appointment within 60 days after the Securities Administrator ceases to be
      the Securities Administrator pursuant to Section 10.07, then the Trustee
      may (but shall not be obligated to) become the successor securities
      administrator. The Depositor shall appoint a successor to the Securities
      Administrator in accordance with Section 10.07. The Trustee shall notify
      the Rating Agencies of any change of Securities Administrator.

     

    Section
      10.07 Resignation
      and Removal of Securities Administrator. The
      Securities Administrator may at any time resign by giving written notice of
      resignation to the Depositor and the Trustee and each Rating Agency not less
      than 60 days before the date specified in such notice when, subject to
      Section 10.08, such resignation is to take effect, and acceptance by a
      successor securities administrator in accordance with Section 10.08 meeting
      the qualifications set forth in Section 10.06. If no successor securities
      administrator meeting such qualifications shall have been so appointed by the
      Depositor and have accepted appointment within 30 days after the giving of
      such notice of resignation, the resigning Securities Administrator may petition
      any court of competent jurisdiction for the appointment of a successor
      securities administrator.

    
      
         

      

      
        -115-

        
          

        

      

      
         

      

    

     

    If
      at any
      time the Securities Administrator shall cease to be eligible in accordance
      with
      the provisions of Section 10.06 hereof and shall fail to resign after
      written request thereto by the Depositor, or if at any time the Securities
      Administrator shall become incapable of acting, or shall be adjudged as bankrupt
      or insolvent, or a receiver of the Securities Administrator or of its property
      shall be appointed, or any public officer shall take charge or control of the
      Securities Administrator or of its property or affairs for the purpose of
      rehabilitation, conservation or liquidation, or a tax is imposed with respect
      to
      the Trust Fund by any state in which the Securities Administrator or the Trust
      Fund is located and the imposition of such tax would be avoided by the
      appointment of a different securities administrator, then the Depositor may
      remove the Securities Administrator and appoint a successor securities
      administrator by written instrument, in triplicate, one copy of which instrument
      shall be delivered to the Securities Administrator so removed, one copy of
      which
      shall be delivered to the Master Servicer and one copy to the successor
      securities administrator.

     

    The
      Holders of Certificates entitled to at least 51.00% of the Voting Rights may
      at
      any time remove the Securities Administrator and appoint a successor securities
      administrator by written instrument or instruments, in triplicate, signed by
      such Holders or their attorneys in fact duly authorized, one complete set of
      which instruments shall be delivered by the successor securities administrator
      to the Trustee, one complete set to the Securities Administrator so removed
      and
      one complete set to the successor so appointed. Notice of any removal of the
      Securities Administrator shall be given to the Derivative Counterparty and
      each
      Rating Agency by the successor securities administrator.

     

    Any
      resignation or removal of the Securities Administrator and appointment of a
      successor securities administrator pursuant to any of the provisions of this
      Section 10.07 shall become effective upon acceptance by the successor
      securities administrator of appointment as provided in Section 10.08
      hereof.

     

    If
      at any
      time, Wells Fargo, as Securities Administrator, resigns under this
      Section 10.07, or is removed as Securities Administrator pursuant to this
      Section 10.07, then at such time Wells Fargo shall also resign (and shall
      be entitled to resign) as Master Servicer under this Agreement.

     

    Section
      10.08 Successor
      Securities Administrator. Any
      successor securities administrator (which may be the Trustee) appointed as
      provided in Section 10.07 hereof shall execute, acknowledge and deliver to
      the Depositor and to its predecessor Securities Administrator and the Trustee
      an
      instrument accepting such appointment hereunder and thereupon the resignation
      or
      removal of the predecessor Securities Administrator shall become effective
      and
      such successor securities administrator, without any further act, deed or
      conveyance, shall become fully vested with all the rights, powers, duties and
      obligations of its predecessor hereunder, with the like effect as if originally
      named as Securities Administrator herein. The Depositor, the Trustee, the Master
      Servicer and the predecessor Securities Administrator shall execute and deliver
      such instruments and do such other things as may reasonably be required for
      more
      fully and certainly vesting and confirming in the successor securities
      administrator all such rights, powers, duties, and obligations.

    
      
         

      

      
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    No
      successor securities administrator shall accept appointment as provided in
      this
      Section 10.08 unless at the time of such acceptance such successor
      securities administrator shall be eligible under the provisions of
      Section 10.06 hereof and its appointment shall not adversely affect then
      current rating of the Certificates, as confirmed in writing by each Rating
      Agency.

     

    Upon
      acceptance by a successor securities administrator of appointment as provided
      in
      this Section 10.08, the Depositor shall mail notice of the succession of
      such Securities Administrator hereunder to all Holders of Certificates and
      the
      Derivative Counterparty. If the Depositor fails to mail such notice within
      10 days after acceptance by the successor securities administrator of
      appointment, the successor securities administrator shall cause such notice
      to
      be mailed at the expense of the Depositor.

     

    Section
      10.09 Merger
      or Consolidation of Securities Administrator. Any
      corporation or other entity into which the Securities Administrator may be
      merged or converted or with which it may be consolidated or any corporation
      or
      other entity resulting from any merger, conversion or consolidation to which
      the
      Securities Administrator shall be a party, or any corporation or other entity
      succeeding to the business of the Securities Administrator, shall be the
      successor of the Securities Administrator hereunder, provided that such
      corporation or other entity shall be eligible under the provisions of
      Section 10.06 hereof, without the execution or filing of any paper or
      further act on the part of any of the parties hereto, anything herein to the
      contrary notwithstanding.

     

    Section
      10.10 Assignment
      or Delegation of Duties by the Securities Administrator. Except
      as
      expressly provided herein, the Securities Administrator shall not assign or
      transfer any of its rights, benefits or privileges hereunder to any other
      Person, or delegate to or subcontract with, or authorize or appoint any other
      Person to perform any of the duties, covenants or obligations to be performed
      by
      the Securities Administrator; provided,
      however,
      that
      the Securities Administrator shall have the right with the prior written consent
      of the Depositor (which shall not be unreasonably withheld or delayed), and
      upon
      delivery to the Trustee, the Derivative Counterparty and the Depositor of a
      letter from each Rating Agency to the effect that such action shall not result
      in a downgrade of the ratings assigned to any of the Certificates, to delegate
      or assign to or subcontract with or authorize or appoint any qualified Person
      to
      perform and carry out any duties, covenants or obligations to be performed
      and
      carried out by the Securities Administrator hereunder. Notice of such permitted
      assignment shall be given promptly by the Securities Administrator to the
      Depositor and the Trustee. If, pursuant to any provision hereof, the duties
      of
      the Securities Administrator are transferred to a successor securities
      administrator, the entire compensation payable to the Securities Administrator
      pursuant hereto shall thereafter be payable to such successor securities
      administrator but in no event shall the fee payable to the successor securities
      administrator exceed that payable to the predecessor securities
      administrator.

    
      
         

      

      
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    ARTICLE
      XI

     

    TERMINATION

     

    Section
      11.01 Termination
      upon Liquidation or Purchase of the Mortgage Loans.
      Subject
      to Section 11.03, the obligations and responsibilities of the Depositor,
      the Master Servicer, the Credit Risk Manager, the Securities Administrator
      and
      the Trustee created hereby with respect to the Trust Fund shall terminate upon
      the earlier of (a) the exercise of an Option to Purchase, on or after the
      Optional Termination Date, in the aggregate of all Mortgage Loans (and REO
      Properties) at the price (the “Termination
      Price”)
      equal
      to the sum of (i) 100.00% of the unpaid principal balance of each Mortgage
      Loan (other than in respect of REO Property) plus accrued and unpaid interest
      thereon at the applicable Mortgage Rate, (ii) the lesser of (x) the
      appraised value of any REO Property as determined by the higher of two
      appraisals completed by two independent appraisers selected by the Master
      Servicer at the expense of that Trust Fund and (y) the unpaid principal
      balance of each Mortgage Loan related to any REO Property, in each case plus
      accrued and unpaid interest thereon at the applicable Mortgage Rate,
      (iii) amounts in reimbursement for Advances previously made with respect to
      the Mortgage Loans and other amounts as to which the Servicer, the Depositor,
      the Master Servicer, the Securities Administrator, the Credit Risk Manager
      or
      the Trustee are entitled to be paid or reimbursed pursuant to this Agreement
      and
      (iv) any Net Swap Payments remaining unpaid and any Swap Termination Payments
      payable to the Swap Counterparty as a result of a termination pursuant to this
      Section 11.01 and (b) the later of (i) the maturity or other
      liquidation (or any Advance with respect thereto) of the last Mortgage Loan
      remaining in the Trust Fund and the disposition of all REO Property and
      (ii) the distribution to Certificateholders of all amounts required to be
      distributed to them pursuant to this Agreement. In no event shall the trusts
      created hereby continue beyond the expiration of 21 years from the death of
      the survivor of the descendants of Joseph P. Kennedy, the late Ambassador of
      the
      United States to the Court of St. James’s, living on the date
      hereof.

     

    Notwithstanding
      anything to the contrary contained herein, no such purchase by the Master
      Servicer (either upon instruction from the Depositor or voluntarily) shall
      be
      permitted unless (i) after distribution of the proceeds thereof to the
      Certificateholders (other than the Holders of the Class X, Class P and
      Residual Certificates and any other Classes of Certificates which constitute
      NIM
      Securities) pursuant to Section 11.02, the distribution of the remaining
      proceeds to the Class X and Class P Certificates is sufficient to pay
      the outstanding principal amount of and accrued and unpaid interest on the
      NIM
      Securities, to the extent the NIM Securities are then outstanding, or
      (ii) prior to such purchase, the Master Servicer, remits to the Securities
      Administrator an amount that, together with such remaining proceeds, will be
      sufficient to pay the outstanding principal amount of, and accrued and unpaid
      interest on, the NIM Securities, to the extent the NIM Securities are then
      outstanding.

     

    Section
      11.02 Final
      Distribution on the Certificates.
      If on
      any Remittance Date, the Master Servicer determines that there are no
      Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
      than the funds in any Collection Account, the Master Servicer shall direct
      the
      Securities Administrator promptly to send a Notice of Final Distribution to
      each
      Certificateholder and to the Swap Counterparty. If the Master Servicer (upon
      instruction from the Depositor or voluntarily) elects to exercise their option
      to purchase the Mortgage Loans pursuant to clause (a) of
      Section 11.01, at least 20 days prior to the date the Notice of Final
      Distribution is to be mailed to the affected Certificateholders, the Master
      Servicer shall notify the Depositor, the Derivative Counterparty and the
      Securities Administrator of (a) the date on which the Master Servicer
      intends to exercise such purchase option and (b) the Termination
      Price.

    
      
         

      

      
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    A
      Notice
      of Final Distribution, specifying the Distribution Date on which
      Certificateholders may surrender their Certificates for payment of the final
      distribution and cancellation, shall be given promptly by the Securities
      Administrator by letter to Certificateholders mailed not earlier than the 10th
      day and not later than the 15th day of the month of such final distribution.
      Any
      such Notice of Final Distribution shall specify (a) the Distribution Date
      upon which final distribution on the Certificates will be made upon presentation
      and surrender of Certificates at the office therein designated, (b) the
      amount of such final distribution, (c) the location of the office or agency
      at which such presentation and surrender must be made and (d) that the
      Record Date otherwise applicable to such Distribution Date is not applicable,
      distributions being made only upon presentation and surrender of the
      Certificates at the office therein specified. The Securities Administrator
      will
      give such Notice of Final Distribution to the Swap Counterparty and to each
      Rating Agency at the time such Notice of Final Distribution is given to
      Certificateholders.

     

    Upon
      the
      final deposit with respect to the Trust Fund and the receipt by the Custodian
      of
      a Request for Release therefor, the Custodian shall promptly release to the
      Servicers the Custodial Files for the Mortgage Loans.

     

    Upon
      presentation and surrender of the Certificates, the Securities Administrator
      shall cause to be distributed to the Certificateholders of each
      Class (after reimbursement of all amounts due to the Servicers under the
      Servicing Agreements and the Master Servicer, the Securities Administrator,
      the
      Depositor, the Trustee and the Swap Counterparty hereunder and payment of any
      amounts due to the Supplemental Interest Trust as provided under Section 4.02),
      in each case on the final Distribution Date and in the order set forth in
      Section 4.02, in proportion to their respective Percentage Interests, with
      respect to Certificateholders of the same Class, up to an amount equal to
      (i) as to each Class of Regular Certificates (except the Class X
      Certificates), the Certificate Balance thereof plus for each such Class and
      the Class X Certificates accrued interest thereon in the case of an
      interest-bearing Certificate and all other amounts to which such Classes are
      entitled pursuant to Section 4.02 and (ii) as to the Residual
      Certificates, the amount, if any, which remains on deposit in the Distribution
      Account (other than the amounts retained to meet claims) after application
      pursuant to clause (i) above.

     

    In
      the
      event that any affected Certificateholders shall not surrender Certificates
      for
      cancellation within six months after the date specified in the Notice of Final
      Distribution, the Securities Administrator shall give a second written notice
      to
      the remaining Certificateholders to surrender their Certificates for
      cancellation and receive the final distribution with respect thereto. If within
      six months after such second notice all the applicable Certificates shall not
      have been surrendered for cancellation, the Securities Administrator may take
      appropriate steps, or may appoint an agent to take appropriate steps, to contact
      the remaining Certificateholders concerning surrender of their Certificates,
      and
      the cost thereof shall be paid out of the funds and other assets which remain
      a
      part of the Trust Fund. If within one year after the second notice all
      Certificates shall not have been surrendered for cancellation, the Class R
      Certificateholders shall be entitled to all unclaimed funds and other assets
      of
      the Trust Fund which remain subject hereto.

    
      
         

      

      
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    Section
      11.03 Additional
      Termination Requirements.
      In the
      event an Option to Purchase is exercised with respect to the Mortgage Loans
      as
      provided in Section 11.01, the Trust Fund shall be terminated in accordance
      with the following additional requirements, unless the Trustee has been supplied
      with an Opinion of Counsel, at the expense of the party upon whose instruction
      causes the exercise of an Option to Purchase, to the effect that the failure
      to
      comply with the requirements of this Section 11.03 will not (i) result
      in the imposition of taxes on “prohibited transactions” on any REMIC formed
      hereby as defined in Section 860F of the Code or (ii) cause any REMIC
      formed hereby to fail to qualify as a REMIC at any time that any Certificates
      are outstanding:

     

    (a) The
      Securities Administrator on behalf of the Trustee shall sell all of the assets
      of the Trust Fund to the party exercising the Option to Purchase, and, within
      90 days of such sale, shall distribute to the Certificateholders the
      proceeds of such sale in complete liquidation of each REMIC formed hereby;
      and

     

    (b) The
      Securities Administrator shall attach a statement to the final federal income
      tax return for each REMIC formed hereby stating that pursuant to Treasury
      Regulations Section 1.860F-1, the first day of the 90-day liquidation
      period for each such REMIC was the date on which the Securities Administrator
      on
      behalf of the Trustee sold the assets of the Trust Fund to the Master
      Servicer.

     

    ARTICLE
      XII

     

    MISCELLANEOUS
      PROVISIONS

     

    Section
      12.01 Amendment.
      (a)
      This Agreement may be amended from time to time by the Depositor, the Master
      Servicer, the Securities Administrator and the Trustee, without the consent
      of
      any of the Certificateholders or the Derivative Counterparty (except to the
      extent that the rights or obligations of the Derivative Counterparty under
      the
      Cap Agreement or the Swap Agreement are affected thereby, and except to the
      extent that the ability of the Securities Administrator to perform fully and
      timely its obligations under the Cap Agreement or the Swap Agreement is
      adversely affected, in which case prior written consent of the Derivative
      Counterparty is required) (i) to cure any ambiguity or mistake,
      (ii) to correct any defective provision herein or to supplement any
      provision herein which may be inconsistent with any other provision herein,
      (iii) to add to the duties of the Depositor, the Master Servicer, the
      Securities Administrator or the Trustee, (iv) to add any other provisions
      with respect to matters or questions arising hereunder, (v) to modify,
      alter, amend, add to or rescind any of the terms or provisions contained in
      this
      Agreement, (vi) to comply with the requirements of the Internal Revenue Code
      or
      (vii) to conform this agreement to the Offering Documents provided to investors
      in connection with the offering of the Certificates; provided,
      that
      any action pursuant to clause (iv) or (v) above shall not, as
      evidenced by an Opinion of Counsel (which Opinion of Counsel shall not be an
      expense of the Trustee, the Master Servicer, the Securities Administrator or
      the
      Trust Fund), adversely affect in any material respect the interests of any
      Certificateholder; provided,
      further,
      that
      any such action pursuant to clause (iv) or (v) above shall not be
      deemed to adversely affect 

    
      
         

      

      
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    in
      any
      material respect the interests of the Certificateholders if the Person
      requesting the amendment obtains a letter from each Rating Agency stating that
      the amendment would not result in the downgrading or withdrawal of the
      respective ratings then assigned to the Certificates; it being understood and
      agreed that any such letter in and of itself will not represent a determination
      as to the materiality of any such amendment and will represent a determination
      only as to the credit issues affecting any such rating. The Trustee, the
      Depositor, the Master Servicer and the Securities Administrator also may at
      any
      time and from time to time amend this Agreement, but without the consent of
      the
      Certificateholders or the Derivative Counterparty (except to the extent that
      the
      rights or obligations of the Derivative Counterparty hereunder or under the
      Cap
      Agreement or the Swap Agreement are affected thereby, and except to the extent
      that the ability of the Supplemental Interest Trust Trustee to perform fully
      and
      timely its obligations under the Cap Agreement or the Swap Agreement is
      adversely affected, in which case prior written consent of the Derivative
      Counterparty is required) to modify, eliminate or add to any of its provisions
      to such extent as shall be necessary or helpful to (i) maintain the
      qualification of each REMIC created hereunder under the Code, (ii) avoid or
      minimize the risk of the imposition of any tax on any REMIC created hereunder
      pursuant to the Code that would be a claim at any time prior to the final
      redemption of the Certificates or (iii) comply with any other requirements
      of the Code; provided,
      that
      the Trustee and the Master Servicer have been provided an Opinion of Counsel,
      which opinion shall be an expense of the party requesting such opinion but
      in
      any case shall not be an expense of the Trustee or the Trust Fund, to the effect
      that such action is necessary or helpful to, as applicable, (i) maintain
      such qualification, (ii) avoid or minimize the risk of the imposition of
      such a tax or (iii) comply with any such requirements of the
      Code.

     

    This
      Agreement may also be amended from time to time by the Depositor, the Master
      Servicer, the Securities Administrator and the Trustee, but with the consent
      of
      the Holders of Certificates evidencing Percentage Interests aggregating not
      less
      than 662/3%
      of each
      Class of Certificates affected thereby for the purpose of adding any
      provisions to or changing in any manner or eliminating any of the provisions
      of
      this Agreement or of modifying in any manner the rights of the Holders of
      Certificates; provided,
      however,
      that no
      such amendment shall (i) reduce in any manner the amount of, or delay the
      timing of, payments required to be distributed on any Certificate without the
      consent of the Holder of such Certificate, (ii) adversely affect in any
      material respect the interests of the Holders of any Class of Certificates
      in a manner other than as described in clause (i), without the consent of
      the Holders of Certificates of such Class evidencing, as to such Class,
      Percentage Interests aggregating not less than 662/3%,
      (iii) reduce the aforesaid percentages of Certificates the Holders of which
      are required to consent to any such amendment, without the consent of the
      Holders of all such Certificates then outstanding or (iv) adversely affect
      the
      rights or obligations of the Derivative Counterparty hereunder or under the
      Cap
      Agreement or the Swap Agreement or the rights of the Securities Administrator,
      as the Supplemental Interest Trust Trustee, to fully and timely perform its
      obligations under the Cap Agreement or the Swap Agreement without obtaining
      the
      prior written consent of the Derivative Counterparty.

     

    Notwithstanding
      any contrary provision of this Agreement, the Trustee and the Master Servicer
      shall not consent to any amendment to this Agreement unless (i) it shall
      have first received an Opinion of Counsel, which opinion shall not be an expense
      of the Trustee, the Master Servicer or the Trust Fund, to the effect that such
      amendment will not cause the imposition of any tax on any REMIC created
      hereunder or the Certificateholders or cause any such REMIC to fail to qualify
      as a REMIC or the grantor trust to fail to qualify as a grantor trust at any
      time that any Certificates are outstanding and (ii) the party seeking such
      amendment shall have provided written notice to the Rating Agencies (with a
      copy
      of such notice to the Trustee, the Master Servicer and the Derivative
      Counterparty) of such amendment, stating the provisions of the Agreement to
      be
      amended.

    
      
         

      

      
        -121-

        
          

        

      

      
         

      

    

     

    Notwithstanding
      the foregoing provisions of this Section 12.01(a), with respect to any
      amendment that significantly modifies the permitted activities of the Trustee,
      any Certificate beneficially owned by the Depositor shall be deemed not to
      be
      outstanding (and shall not be considered when determining the percentage of
      Certificateholders consenting or when calculating the total number of
      Certificates entitled to consent) for purposes of determining if the requisite
      consents of Certificateholders under this Section 12.01(a) have been
      obtained.

     

    Promptly
      after the execution of any amendment to this Agreement requiring the consent
      of
      Certificateholders, the Trustee shall furnish written notification of the
      substance or a copy of such amendment to each Certificateholder and each Rating
      Agency.

     

    It
      shall
      not be necessary for the consent of Certificateholders under this
      Section 12.01 to approve the particular form of any proposed amendment, but
      it shall be sufficient if such consent shall approve the substance thereof.
      The
      manner of obtaining such consents and of evidencing the authorization of the
      execution thereof by Certificateholders shall be subject to such reasonable
      regulations as the Trustee may prescribe.

     

    Nothing
      in this Agreement shall require the Trustee, the Master Servicer or the
      Securities Administrator to enter into an amendment without receiving an Opinion
      of Counsel (which opinion shall not be an expense of the Trustee, the Master
      Servicer, the Securities Administrator or the Trust Fund), satisfactory to
      the
      Trustee, the Master Servicer and the Securities Administrator, as applicable,
      that (i) such amendment is permitted and is not prohibited by this
      Agreement and that all requirements for amending this Agreement have been
      complied with and (ii) either (A) the amendment does not adversely
      affect in any material respect the interests of any Certificateholder or
      (B) the conclusion set forth in the immediately preceding
      clause (A) is not required to be reached pursuant to this
      Section 12.01(a).

     

    (b)
      No
      party hereto shall agree to amend any Servicing Agreement unless the party
      requesting such amendment, at such party’s expense, has delivered to the Trustee
      and the Master Servicer an Opinion of Counsel that such amendment (i) is
      permitted under the terms of the applicable Servicing Agreement and (ii) will
      not materially adversely affect the interest of the Certificateholders in the
      Mortgage Loans or the NIM Securities to be issued in the NIMS
      Transaction.

     

    Section
      12.02 Recordation
      of Agreement; Counterparts.
      This
      Agreement is subject to recordation in all appropriate public offices for real
      property records in all the counties or other comparable jurisdictions in which
      any or all of the Mortgaged Properties are situated, and in any other
      appropriate public recording office or elsewhere, such recordation to be
      effected by the Securities Administrator at the direction and expense of the
      Depositor, but only upon receipt of an Opinion of Counsel to the effect that
      such recordation materially and beneficially affects the interests of the
      Certificateholders.

    
      
         

      

      
        -122-

        
          

        

      

      
         

      

    

     

    For
      the
      purpose of facilitating the recordation of this Agreement as herein provided
      and
      for other purposes, this Agreement may be executed simultaneously in any number
      of counterparts, each of which counterparts shall be deemed to be an original,
      and such counterparts shall constitute but one and the same
      instrument.

     

    Section
      12.03 Governing
      Law.
      THIS
      AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE
      LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
      IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
      HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
      LAWS.

     

    Section
      12.04 Intention
      of Parties.
      (a) It
      is intended that the conveyance of the Depositor’s right, title and interest in
      and to property constituting the Trust Fund pursuant to this Agreement shall
      constitute, and shall be construed as, a sale of such property and not a grant
      of a security interest to secure a loan. However, if such conveyance is deemed
      to be in respect of a loan, it is intended that: (1) the rights and obligations
      of the parties shall be established pursuant to the terms of this Agreement;
      (2)
      the Depositor hereby grants to the Trustee for the benefit of the Holders of
      the
      Certificates a first priority security interest to secure repayment of an
      obligation in an amount equal to the aggregate Class Certificate Balances of
      the
      Certificates in all of the Depositor’s right, title and interest in, to and
      under, whether now owned or hereafter acquired, the Trust Fund and the
      Supplemental Interest Trust and all proceeds of any and all property
      constituting the Trust Fund and the Supplemental Interest Trust to secure
      payment of the Certificates (such security interest being, to the extent of
      the
      assets that constitute the Supplemental Interest Trust, pari
      passu
      with the
      security interest as provided in clause (4) below); (3) this Agreement shall
      constitute a security agreement under applicable law; and (4) the Derivative
      Counterparty shall be deemed, during the term of such agreement and while such
      agreement is the property of the Trustee, to have a security interest in all
      of
      the assets that constitute the Supplemental Interest Trust, but only to the
      extent of such Derivative Counterparty’s right to payment under the Derivative
      Agreements (such security interest being pari
      passu
      with the
      security interest as provided in clause (2) above). If such conveyance is deemed
      to be in respect of a loan and the trust created by this Agreement terminates
      prior to the satisfaction of the claims of any Person holding any Certificate,
      the security interest created hereby shall continue in full force and effect
      and
      the Trustee shall be deemed to be the collateral agent for the benefit of such
      Person, and all proceeds shall be distributed by the Securities Administrator
      as
      herein provided.

     

    (b) The
      Depositor shall, to the extent consistent with this Agreement, take such
      reasonable actions as may be necessary to ensure that, if this Agreement were
      deemed to create a security interest in the Mortgage Loans and the other
      property described above, such security interest would be deemed to be a
      perfected security interest of first priority under applicable law and shall
      be
      maintained as such throughout the term of this Agreement. The Depositor shall,
      at its own expense, make all initial filings on or about the Closing Date and
      shall forward a copy of such filing or filings to the Trustee. Without limiting
      the generality of the 

    
      
         

      

      
        -123-

        
          

        

      

      
         

      

    

     

    foregoing,
      the Depositor shall prepare and forward for filing, or shall cause to be
      forwarded for filing, at the expense of the Depositor, all filings necessary
      to
      maintain the effectiveness of any original filings necessary under the relevant
      UCC to perfect the Trustee’s security interest in or lien on the Mortgage Loans,
      including without limitation (x) continuation statements, and (y) such other
      statements as may be occasioned by (1) any change of name of the Sponsor, the
      Depositor or the Trustee, (2) any change of location of the jurisdiction of
      organization of the Sponsor or the Depositor, (3) any transfer of any interest
      of the Sponsor or the Depositor in any Mortgage Loan or (4) any change under
      the
      relevant UCC or other applicable laws. Neither the Sponsor nor the Depositor
      shall organize under the law of any jurisdiction other than the State under
      which each is organized as of the Closing Date (whether changing its
      jurisdiction of organization or organizing under an additional jurisdiction)
      without giving 30 days prior written notice of such action to its immediate
      and
      intermediate transferee, including the Trustee. Before effecting such change,
      the Sponsor or the Depositor proposing to change its jurisdiction of
      organization shall prepare and file in the appropriate filing office any
      financing statements or other statements necessary to continue the perfection
      of
      the interests of its immediate and intermediate transferees, including the
      Trustee, in the Mortgage Loans. In connection with the transactions contemplated
      by this Agreement, each of the Sponsor and the Depositor authorizes its
      immediate or intermediate transferee to file in any filing office any initial
      financing statements, any amendments to financing statements, any continuation
      statements, or any other statements or filings described in this paragraph
      (b).

     

    Section
      12.05 Notices.
      (a)  The Securities Administrator shall use its best efforts to
      promptly provide notice to each Rating Agency with respect to each of the
      following of which it has actual knowledge:

     

    1. Any
      material change or amendment to this Agreement;

     

    2. The
      occurrence of any Event of Default that has not been cured;

     

    3. The
      resignation or termination of a Servicer, the Master Servicer, the Securities
      Administrator or the Trustee and the appointment of any successor;

     

    4. The
      repurchase or substitution of Mortgage Loans pursuant to Section 2.03;

     

    5. The
      final
      payment to Certificateholders; and

     

    6. An
      Early
      Termination Event with respect to the Cap Agreement or the Swap
      Agreement.

     

    (b) In
      addition, the Securities Administrator shall promptly make available on its
      internet website to each Rating Agency copies of the following:

     

    1. Each
      report to Certificateholders described in Section 4.03; and

     

    2. Any
      notice of a purchase of a Mortgage Loan pursuant to
      Section 2.03.

    
      
         

      

      
        -124-

        
          

        

      

      
         

      

    

     

    (c) All
      directions, demands, consents and notices hereunder shall be in writing and
      shall be deemed to have been duly given when delivered to: 

     

    (i) in
      the
      case of the Depositor,
      HSI
      Asset Securitization Corporation, 452 Fifth Avenue, 10th
      Floor,
      New York, New York 10018, Attention: Head MBS Principal Finance, or such other
      address as may be hereafter furnished to the other parties by the Depositor
      in
      writing;

     

    (ii) in
      the
      case of the Master Servicer,
      Wells
      Fargo Bank, N.A., P.O. Box 98, Columbia, Maryland 21046, Attention: Client
      Manager - HASCO 2007-NC1, with a copy to 9062 Old Annapolis Road, Columbia,
      Maryland 21045, Attention: Client Manager - HASCO 2007-NC1, or such other
      address as may be hereafter furnished to the other parties by Wells Fargo in
      writing;

     

    (iii) in
      the
      case of the Trustee,
      the
      Corporate Trust Office (Attention: Corporate Trust Services - HB07NC1), or
      such
      other address as may be hereafter furnished to the to the other parties by
      the
      Trustee in writing;

     

    (iv) in
      the
      case of the Derivative Counterparty,
      ABN
      AMRO Bank, N.V., Chicago Branch, Global
      Documentation Unit, 540 W. Madison Street, 22nd
      Floor, Chicago, IL 60661, Attention: Treasury Documentation,
      with a
      copy to ABN AMRO Bank, N.V., Amsterdam
      Head Office, P.O. Box 283, 1000 AE Amsterdam, The Netherlands, Attention:
      Operations Derivatives Markets;
      

     

    (v) in
      the
      case of the Credit Risk Manager,
      OfficeTiger Global Real Estate Services Inc., One Glenlake Parkway, Suite 1400,
      Atlanta, Ga. 30328, Attention: President; and

     

    (vi) in
      the
      case of each of the Rating Agencies,
      the
      address specified therefor in the definition corresponding to the name of such
      Rating Agency.

     

    Notices
      to Certificateholders shall be deemed given when mailed, first class postage
      prepaid, to their respective addresses appearing in the Certificate
      Register

     

    Section
      12.06 Severability
      of Provisions.
      If any
      one or more of the covenants, agreements, provisions or terms of this Agreement
      shall be for any reason whatsoever held invalid, then such covenants,
      agreements, provisions or terms shall be deemed severable from the remaining
      covenants, agreements, provisions or terms of this Agreement and shall in no
      way
      affect the validity or enforceability of the other provisions of this Agreement
      or of the Certificates or the rights of the Holders thereof.

     

    Section
      12.07 Limitation
      on Rights of Certificateholders.
      The
      death or incapacity of any Certificateholder shall not operate to terminate
      this
      Agreement or the trust created hereby, nor entitle such Certificateholder’s
      legal representative or heirs to claim an accounting or to take any action
      or
      commence any proceeding in any court for a petition or winding up of the trust
      created hereby, or otherwise affect the rights, obligations and liabilities
      of
      the parties hereto or any of them.

    
      
         

      

      
        -125-

        
          

        

      

      
         

      

    

     

    No
      Certificateholder shall have any right to vote (except as provided herein)
      or in
      any manner otherwise control the operation and management of the Trust Fund,
      or
      the obligations of the parties hereto, nor shall anything herein set forth
      or
      contained in the terms of the Certificates be construed so as to constitute
      the
      Certificateholders from time to time as partners or members of an association;
      nor shall any Certificateholder be under any liability to any third party by
      reason of any action taken by the parties to this Agreement pursuant to any
      provision hereof.

     

    No
      Certificateholder shall have any right by virtue or by availing itself of any
      provisions of this Agreement to institute any suit, action or proceeding in
      equity or at law upon or under or with respect to this Agreement, unless such
      Holder previously shall have given to the Trustee a written notice of an Event
      of Default and of the continuance thereof, as herein provided, and unless the
      Holders of Certificates evidencing not less than 25.00% of the Voting Rights
      evidenced by the Certificates shall also have made written request to the
      Trustee to institute such action, suit or proceeding in its own name as Trustee
      hereunder and shall have offered to the Trustee such reasonable indemnity as
      it
      may require against the costs, expenses, and liabilities to be incurred therein
      or thereby, and the Trustee, for 60 days after its receipt of such notice,
      request and offer of indemnity shall have neglected or refused to institute
      any
      such action, suit or proceeding; it being understood and intended, and being
      expressly covenanted by each Certificateholder with every other
      Certificateholder and the Trustee, that no one or more Holders of Certificates
      shall have any right in any manner whatever by virtue or by availing itself
      or
      themselves of any provisions of this Agreement to affect, disturb or prejudice
      the rights of the Holders of any other of the Certificates, or to obtain or
      seek
      to obtain priority over or preference to any other such Holder or to enforce
      any
      right under this Agreement, except in the manner herein provided and for the
      common benefit of all Certificateholders. For the protection and enforcement
      of
      the provisions of this Section 12.08, each and every Certificateholder and
      the Trustee shall be entitled to such relief as can be given either at law
      or in
      equity.

     

    Section
      12.08 Certificates
      Nonassessable and Fully Paid.
      It is
      the intention of the Depositor that Certificateholders shall not be personally
      liable for obligations of the Trust Fund, that the interests in the Trust Fund
      represented by the Certificates shall be nonassessable for any reason
      whatsoever, and that the Certificates, upon due authentication thereof by the
      Securities Administrator pursuant to this Agreement, are and shall be deemed
      fully paid.

     

    Section
      12.09 Rule of
      Construction.
      Article
      and section headings are for the convenience of the reader and shall not be
      considered in interpreting this Agreement or the intent of the parties
      hereto.

     

    Section
      12.10 Waiver
      of Jury Trial.
      EACH
      PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT
      PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY
      DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH
      DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
         

      

      
        -126-

        
          

        

      

      
         

      

    

     

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

    

       

      HSI
        ASSET
        SECURITIZATION CORPORATION, 

      as
        Depositor

       

      By  
        /s/
        Andrea
        Lenox                     
  

      Name:
        Andrea Lenox

      Title:
        Vice President

       

      DEUTSCHE
        BANK NATIONAL TRUST 

      COMPANY,
        as Trustee 

       

      By:  
        /s/
        Manuel
        Rivas                    
  

      Name:
        Manuel Rivas

      Title:
        Authorized Signer

       

      DEUTSCHE
        BANK NATIONAL TRUST 

      COMPANY,
        as Trustee

       

      By:  
        /s/
        Karlene
        Benvenuto             

      Name:
        Karlene Benvenuto

      Title:
        Authorized Signer

       

      WELLS
        FARGO BANK, N.A., as Master 

      Servicer

       

      By: 
        /s/
        Sandra
        Whalen                     

      Name:
        Sandra Whalen

      Title:
        Vice President

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      WELLS
        FARGO BANK, N.A., as Securities 

      Administrator

       

      By:  /s/
        Sandra
        Whalen                     

      Name:
        Sandra Whalen

      Title:
        Vice President

       

      WELLS
        FARGO BANK, N.A., 

      as
        Custodian

       

      By:  
        /s/
        Patrick M
        Gorrien                

      Name:
        Patrick M. Gorrien

      Title:
        Vice President

       

      OFFICETIGER
        GLOBAL REAL ESTATE 

      SERVICES
        INC., as Credit Risk Manager

       

      By:  
        /s/
        Ken
        Beyer                            

      Name:
        Ken
        Beyer

      Title:
        President

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ACKNOWLEDGED
      BY HSBC BANK USA, 

    NATIONAL
      ASSOCIATION,

    as
      Sponsor, solely for the purposes of 

    Section
      2.03(d). 

     

    By:
      /s/ Mark
      Wirth                             

    Name:
      Mark Wirth

    Title:
      Officer #15252

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SCHEDULE
      I

     

    Mortgage
      Loan Schedule

    

    

    [To
      be
      retained in a separate closing binder entitled “HASCO 2007-NC1 Mortgage Loan

    Schedules”
      at the Washington, D.C. offices of McKee Nelson LLP]

     

    

    
      
         

      

      
        SCH.
          I-1

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

     

    [IF
      THIS
      CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS CERTIFICATE NOR ANY INTEREST
      HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED TRANSFEROR DELIVERS TO THE
      SECURITIES ADMINISTRATOR A TRANSFEROR LETTER (THE “TRANSFEROR
      LETTER”)
      IN THE
      FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER
      (I) THE SECURITIES ADMINISTRATOR RECEIVES A RULE 144A INVESTMENT LETTER
      (THE “144A
      INVESTMENT
      LETTER”)
      OR A
      REGULATION S INVESTMENT LETTER (THE “REGULATION S INVESTMENT LETTER”) IN THE
      FORM OF EXHIBIT I-A AND EXHIBIT I-B, RESPECTIVELY, TO THE AGREEMENT
      REFERRED TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR RECEIVES AN OPINION
      OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER
      MAY
      BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.]
      [To
      be added to the Class M-10 Certificates while such Certificates remain
      Private Certificates.]

     

    [IF
      THIS
      CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE DEEMED
      TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR LETTER
      AND
      THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS
      SET FORTH IN THE RULE 144A INVESTMENT LETTER OR REGULATION S INVESTMENT LETTER,
      AS APPLICABLE, IN EACH CASE AS IF SUCH CERTIFICATE WERE EVIDENCED BY A PHYSICAL
      CERTIFICATE.] [To be added to the Class M-10 Certificates while such
      Certificates remain Private Certificates.]

     

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

     

    SOLELY
      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST
      IN
      A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE
      TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
      REVENUE CODE OF 1986, AS AMENDED (THE “CODE”),
      AND
      CERTAIN OTHER ASSETS. 

     

    [PRIOR
      TO TERMINATION OF THE SWAP AGREEMENT AND THE CAP AGREEMENT, NO TRANSFER OF
      THIS
      CERTIFICATE SHALL BE MADE UNLESS THE SECURITIES ADMINISTRATOR SHALL HAVE
      RECEIVED A REPRESENTATION LETTER FROM 

     

    
      
         

      

      
        EXHIBIT
          A-1

        
          

        

      

      
         

      

    

     

    THE
      TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT EITHER (I) SUCH TRANSFEREE
      IS
      NEITHER AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
      SUBJECT TO SECTION 406 OF ERISA AND/OR SECTION 4975 OF THE CODE OR ANY ENTITY
      WHOSE UNDERLYING ASSETS INCLUDE SUCH PLAN’S OR ARRANGEMENT’S ASSETS BY REASON OF
      THEIR INVESTMENT IN THE ENTITY (A “PLAN”) NOR A PERSON ACTING ON BEHALF OF ANY
      SUCH PLAN OR USING THE ASSETS OF ANY SUCH PLAN TO EFFECT SUCH TRANSFER OR (II)
      THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE ELIGIBLE FOR EXEMPTIVE
      RELIEF UNDER THE
      STATUTORY EXEMPTION FOR NON-FIDUCIARY SERVICE PROVIDERS UNDER SECTION
      408(b)(17)
      OF ERISA AND SECTION 4975(d)(20)
      OF THE CODE, PROHIBITED TRANSACTION CLASS EXEMPTION (“PTCE”) 84-14, PTCE 90-1,
      PTCE 91-38, PTCE 95-60 OR PTCE 96-23 OR ANOTHER EXEMPTION.
      ANY PURPORTED TRANSFER OF THIS CERTIFICATE PRIOR TO THE TERMINATION OF THE
      SWAP
      AGREEMENT AND THE CAP AGREEMENT TO OR ON BEHALF OF A PLAN WITHOUT THE DELIVERY
      TO THE SECURITIES ADMINISTRATOR OF A REPRESENTATION LETTER AS DESCRIBED ABOVE
      SHALL BE VOID AND OF NO EFFECT. IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE,
      THE TRANSFEREE WILL BE DEEMED TO HAVE MADE A REPRESENTATION AS PROVIDED IN
      CLAUSE (I) OR (II) OF THIS PARAGRAPH, AS APPLICABLE.] [To
      be
      added to all Offered Certificates and Class M-10 Certificates.]

     

     

    [THE
      HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF REPRESENTS AND WARRANTS
      THAT
      (A) UNTIL THE EXPIRATION OF THE APPLICABLE “DISTRIBUTION COMPLIANCE PERIOD”
WITHIN THE MEANING OF REGULATION S, ANY OFFER, SALE, PLEDGE OR OTHER TRANSFER
      OF
      THIS CERTIFICATE SHALL NOT BE MADE IN THE UNITED STATES OR TO, OR FOR THE
      ACCOUNT OR BENEFIT OF, ANY U.S. PERSON (EACH AS DEFINED IN REGULATION S) AND
      (B)
      IF THIS CERTIFICATE IS HELD WITHIN THE UNITED STATES OR SUCH HOLDER IS A U.S.
      PERSON OR THIS CERTIFICATE IS HELD FOR THE ACCOUNT OR SUCH BENEFIT OF, A U.S.
      PERSON (EACH AS DEFINED IN REGULATION S) SUCH CERTIFICATE WAS ACQUIRED ONLY
      (1)
      PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
      THE
      1933 ACT OR (2) BY SUCH HOLDER AS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED
      IN RULE 144A UNDER THE 1933 ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
      ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
      TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A.][For any Private Certificate
      to
      be acquired or transferred pursuant to Regulation S.]

     

    
      
         

      

      
        EXHIBIT
          A-2

        
          

        

      

      
         

      

    

    

    
      	
              Certificate
                No:

            	 	
              1

            
	 	 	 
	
              Cut-off
                Date:

            	 	
              May
                1, 2007

            
	 	 	 
	
              First
                Distribution Date:

            	 	
              June
                25, 2007

            
	 	 	 
	
              Initial
                Certificate Balance of this Certificate (“Denomination”):

            	 	
              $[                                      
                ]

            
	 	 	 
	
              Initial
                Certificate Balances of all Certificates of this Class:

            	 	 
	 	
              A-1

            	
              $495,395,000.00

            
	 	
              A-2

            	
              $81,189,000.00

            
	 	
              A-3

            	
              $152,344,000.00

            
	 	
              A-4

            	
              $27,032,000.00

            
	 	
              M-1

            	
              $44,347,000.00

            
	 	
              M-2

            	
              $41,253,000.00

            
	 	
              M-3

            	
              $25,267,000.00

            
	 	
              M-4

            	
              $23,205,000.00

            
	 	
              M-5

            	
              $21,142,000.00

            
	 	
              M-6

            	
              $18,564,000.00

            
	 	
              M-7

            	
              $18,048,000.00

            
	 	
              M-8

            	
              $14,439,000.00

            
	 	
              M-9

            	
              $14,438,000.00

            
	 	
              M-10

            	
              $14,954,000.00

            

    

     

    
      
         

      

      
        EXHIBIT
          A-3

        
          

        

      

      
         

      

    

     

    
      	 	 	 
	
              Interest
                Rate:

            	 	 
	 	
              A-1

            	
              Variable

            
	 	
              A-2

            	
              Variable

            
	 	
              A-3

            	
              Variable

            
	 	
              A-4

            	
              Variable

            
	 	
              M-1

            	
              Variable

            
	 	
              M-2

            	
              Variable

            
	 	
              M-3

            	
              Variable

            
	 	
              M-4

            	
              Variable

            
	 	
              M-5

            	
              Variable

            
	 	
              M-6

            	
              Variable

            
	 	
              M-7

            	
              Variable

            
	 	
              M-8

            	
              Variable

            
	 	
              M-9

            	
              Variable

            
	 	
              M-10

            	
              Variable

            
	 	 	 
	
              CUSIP:

            	 	 
	 	
              A-1

            	
              40430T
                AA0

            
	 	
              A-2

            	
              40430T
                AB8

            
	 	
              A-3

            	
              40430T
                AC6

            
	 	
              A-4

            	
              40430T
                AD4

            
	 	
              M-1

            	
              40430T
                AE2

            
	 	
              M-2

            	
              40430T
                AF9

            
	 	
              M-3

            	
              40430T
                AG7

            
	 	
              M-4

            	
              40430T
                AH5

            
	 	
              M-5

            	
              40430T
                AJ1

            
	 	
              M-6

            	
              40430T
                AK8

            
	 	
              M-7

            	
              40430T
                AL6

            
	 	
              M-8

            	
              40430T
                AM4

            
	 	
              M-9

            	
              40430T
                AN2

            
	 	
              M-10

            	
              40430T
                AP7

            
	 	 	 
	
              ISIN:

            	 	 
	 	
              A-1

            	
              US40430TAA07

            
	 	
              A-2

            	
              US40430TAB89

            
	 	
              A-3

            	
              US40430TAC62

            
	 	
              A-4

            	
              US40430TAD46

            
	 	
              M-1

            	
              US40430TAE29

            
	 	
              M-2

            	
              US40430TAF93

            
	 	
              M-3

            	
              US40430TAG76

            
	 	
              M-4

            	
              US40430TAH59

            
	 	
              M-5

            	
              US40430TAJ16

            
	 	
              M-6

            	
              US40430TAK88

            

    

     

    
      
         

      

      
        EXHIBIT
          A-4

        
          

        

      

      
         

      

    

     

    
      	 	
              M-7

            	
              US40430TAL61

            
	 	
              M-8

            	
              US40430TAM45

            
	 	
              M-9

            	
              US40430TAN28

            
	 	
              M-10

            	
              US40430TAP75

            

    

    
      
         

      

      
        EXHIBIT
          A-5

        
          

        

      

      
         

      

    

     

    HSI
      ASSET
      SECURITIZATION CORPORATION

     

    HSI
      Asset
      Securitization Corporation Trust, 2007-NC1

    Mortgage
      Pass-Through Certificates, Series 2007-NC1

    Class
      [A-__][M-__]

     

    evidencing
      a percentage interest in the distributions allocable to the Certificates of
      the
      above-referenced Class.

     

    Principal
      in respect of this Certificate is distributable monthly as set forth herein.
      Accordingly, the Certificate Balance at any time may be less than the
      Certificate Balance as set forth herein. This Certificate does not evidence
      an
      obligation of, or an interest in, and is not guaranteed by the Depositor, the
      Trustee or any other party to the Agreement referred to below or any of their
      respective affiliates. Neither this Certificate nor the Mortgage Loans are
      guaranteed or insured by any governmental agency or
      instrumentality.

     

    This
      certifies that [____________] is the registered owner of the Percentage Interest
      evidenced by this Certificate (obtained by dividing the denomination of this
      Certificate by the aggregate of the denominations of all Certificates of the
      Class to which this Certificate belongs) in certain monthly distributions of
      principal and interest pursuant to a Pooling and Servicing Agreement dated
      as of
      the Cut-off Date specified above (the “Agreement”)
      among
      HSI Asset Securitization Corporation, as depositor (the “Depositor”),
      Wells
      Fargo Bank, N.A., as master servicer, (in such capacity, the “Master
      Servicer”)
      securities administrator (in such capacity, the “Securities
      Administrator”)
      and
      custodian, OfficeTiger Global Real Estate Services Inc., as credit risk manager,
      and Deutsche Bank National Trust Company, as trustee (the “Trustee”).
      To
      the extent not defined herein, the capitalized terms used herein have the
      meanings assigned in the Agreement. This Certificate is issued under and is
      subject to the terms, provisions and conditions of the Agreement, to which
      Agreement the Holder of this Certificate by virtue of the acceptance hereof
      assents and by which such Holder is bound.

     

    Reference
      is hereby made to the further provisions of this Certificate set forth on the
      reverse hereof, which further provisions shall for all purposes have the same
      effect as if set forth at this place.

     

    This
      Certificate shall not be entitled to any benefit under the Agreement or be
      valid
      for any purpose unless manually authenticated by an authorized signatory of
      the
      Securities Administrator.

     

    * * *

    

    
      
         

      

      
        EXHIBIT
          A-6

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
      be
      duly executed.

     

    
      	
              Dated:

            	 

    

     

    WELLS
      FARGO BANK, N.A.,

    not
      in
      its individual capacity, but solely as

    Securities
      Administrator

     

     

    By:
      _____________________________

     

    Authenticated:

     

     

    By:
      __________________________________

    Authorized
      Signatory of

    WELLS
      FARGO BANK, N.A.,

    not
      in
      its individual capacity,

    but
      solely as Securities Administrator

    
      
         

      

      
        EXHIBIT
          A-7

        
          

        

      

      
         

      

    

     

    HSI
      ASSET
      SECURITIZATION CORPORATION 

     

    HSI
      Asset
      Securitization Corporation Trust 2007-NC1

    Mortgage
      Pass-Through Certificates

     

    This
      Certificate is one of a duly authorized issue of Certificates designated as
      HSI
      Asset Securitization Corporation Trust 2007-NC1 Mortgage Pass-Through
      Certificates, of the Series specified on the face hereof (herein collectively
      called the “Certificates”),
      and
      representing a beneficial ownership interest in the Trust Fund created by the
      Agreement.

     

    The
      Certificateholder, by its acceptance of this Certificate, agrees that it will
      look solely
      to the
      funds on deposit in the Distribution Account or Supplemental Interest Trust
      Account for payment hereunder and that neither the Trustee nor the Securities
      Administrator is liable to the Certificateholders for any amount payable under
      this Certificate or the Agreement or, except as expressly provided in the
      Agreement, subject to any liability under the Agreement.

     

    This
      Certificate does not purport to summarize the Agreement and reference is made
      to
      the Agreement for the interests, rights and limitations of rights, benefits,
      obligations and duties evidenced thereby, and the rights, duties and immunities
      of the Trustee.

     

    Pursuant
      to the terms of the Agreement, a distribution will be made on the 25th day
      of
      each month or, if such day is not a Business Day, the Business Day immediately
      following (the “Distribution
      Date”),
      commencing on the first Distribution Date specified on the face hereof, to
      the
      Person in whose name this Certificate is registered at the close of business
      on
      the applicable Record Date in an amount equal to the product of the Percentage
      Interest evidenced by this Certificate and the amount required to be distributed
      to Holders of Certificates of the Class to which this Certificate belongs on
      such Distribution Date pursuant to the Agreement. The Record Date applicable
      to
      each Distribution Date is the Business Day immediately preceding such
      Distribution Date.

     

    Distributions
      on this Certificate shall be made by wire transfer of immediately available
      funds to the account of the Holder hereof at a bank or other entity having
      appropriate facilities therefor, if such Certificateholder shall have so
      notified the Securities Administrator in writing at least five Business Days
      prior to the related Record Date and such Certificateholder shall satisfy the
      conditions to receive such form of payment set forth in the Agreement, or,
      if
      not, by check mailed by first class mail to the address of such
      Certificateholder appearing in the Certificate Register. The final distribution
      on each Certificate will be made in like manner, but only upon presentment
      and
      surrender of such Certificate at the offices designated by the Securities
      Administrator for such purposes or such other location specified in the notice
      to Certificateholders of such final distribution.

     

    The
      Agreement permits, with certain exceptions therein provided, the amendment
      thereof and the modification of the rights and obligations of the Trustee and
      the rights of the Certificateholders under the Agreement at any time by the
      parties to the Agreement with the consent of the Holders of Certificates
      affected by such amendment evidencing the requisite Percentage Interest, as
      provided in the Agreement. Any such consent by the Holder of this Certificate
      shall be conclusive and binding on such Holder and upon all future Holders
      of
      this Certificate and of any Certificate issued upon the transfer hereof or
      in
      exchange therefor or in lieu hereof whether or not notation of such consent
      is
      made upon this Certificate. The Agreement also permits the amendment thereof,
      in
      certain limited circumstances, without the consent of the Holders of any of
      the
      Certificates.

    
      
         

      

      
        EXHIBIT
          A-8

        
          

        

      

      
         

      

    

     

    As
      provided in the Agreement and subject to certain limitations therein set forth,
      the transfer of this Certificate is registrable in the Certificate Register
      of
      the Securities Administrator upon surrender of this Certificate for registration
      of transfer at the offices designated by the Securities Administrator for such
      purposes, accompanied by a written instrument of transfer in form satisfactory
      to the Securities Administrator duly executed by the holder hereof or such
      holder’s attorney duly authorized in writing, and thereupon one or more new
      Certificates of the same Class in authorized denominations and evidencing the
      same aggregate Percentage Interest in the Trust Fund will be issued to the
      designated transferee or transferees.

     

    The
      Certificates are issuable only as registered Certificates without coupons in
      denominations specified in the Agreement. As provided in the Agreement and
      subject to certain limitations therein set forth, Certificates are exchangeable
      for new Certificates of the same Class in authorized denominations and
      evidencing the same aggregate Percentage Interest, as requested by the Holder
      surrendering the same.

     

    No
      service charge will be made for any such registration of transfer or exchange,
      but the Securities Administrator may require payment of a sum sufficient to
      cover any tax or other governmental charge payable in connection
      therewith.

     

    The
      Trustee, the Depositor and the Securities Administrator and any agent of the
      Trustee, the Depositor or the Securities Administrator may treat the Person
      in
      whose name this Certificate is registered as the owner hereof for all purposes,
      and neither the Trustee, the Depositor, the Securities Administrator nor any
      such agent shall be affected by any notice to the contrary.

     

    The
      Master Servicer shall have the option to purchase the Mortgage Loans and
      therefore cause the termination of the Trust on any Optional Termination Date,
      which is any Distribution Date in which the aggregate Stated Principal Balance
      of the Mortgage Loans as of the last day of the related Due Period is less
      than
      or equal to 10% of the aggregate Stated Principal Balance of the Mortgage Loans
      as of the Cut-off Date. 

     

    The
      obligations and responsibilities created by the Agreement will terminate as
      provided in Section 11.01 of the Agreement.

     

    Any
      term
      used herein that is defined in the Agreement shall have the meaning assigned
      in
      the Agreement, and nothing herein shall be deemed inconsistent with that
      meaning.

    
      
         

      

      
        EXHIBIT
          A-9

        
          

        

      

      
         

      

    

     

    ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
      unto

    _____________________________________________________________________________________________

    _____________________________________________________________________________________________

    _____________________________________________________________________________________________

    _____________________________________________________________________________________________

     

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

     

    the
      Percentage Interest evidenced by the within Certificate and hereby authorizes
      the transfer of registration of such Percentage Interest to assignee on the
      Certificate Register of the Trust Fund.

     

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

    _____________________________________________________________________________________________

     

    
      	
              Dated:

            	 

    

     

     

     

    ______________________________

    Signature
      by or on behalf of assignor

    

     

    DISTRIBUTION
      INSTRUCTIONS

     

    The
      assignee should include the following for purposes of distribution:

     

    Distributions
      shall be made, by wire transfer or otherwise, in immediately 

    available
      funds to
      ____________________________________________________________________________________________,

    __________________________________________________________________________________________________________,

    for
      the
      account of
      ____________________________________________________________________________________________,

    account
      number __________, or, if mailed by check, to
      _______________________________________________________________.

    
      Applicable
        statements should be mailed to
        _________________________________________________________________________,

    

    
      __________________________________________________________________________________________________________

    

     

     

    This
      information is provided by
      ___________________________________________________________________,

    the
      assignee named above, or
      __________________________________________________________________________________,

    as
      its
      agent.

    

    

    
      
         

      

      
        EXHIBIT
          A-10

        
          

        

      

      
         

      

    

     

    EXHIBIT
      B

     

    NEITHER
      THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED
      TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR LETTER IN
      THE
      FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER
      (I) THE SECURITIES ADMINISTRATOR RECEIVES EITHER A RULE 144A INVESTMENT
      LETTER OR REGULATION S INVESTMENT LETTER IN THE FORM OF EXHIBIT I-A AND
      EXHIBIT I-B, RESPECTIVELY, TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE
      SECURITIES ADMINISTRATOR RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
      EXPENSE OF THE TRANSFEROR, STATING THAT SUCH TRANSFER MAY BE MADE WITHOUT
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

     

    NEITHER
      THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
      TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A REPRESENTATION LETTER
      TO
      THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
      TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
      (“ERISA”),
      OR A
      PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY
      SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW (“SIMILAR
      LAW”)
      OR A
      PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT
      THAT SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO
      A
      PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO
      SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON
      ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY
      SUCH
      PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND
      OF
      NO EFFECT.

     

    
      	
              Certificate
                No.

            	
              :

            	
              P-1

            
	 	 	 
	
              Cut-off
                Date

            	
              :

            	
              May
                1, 2007

            
	 	 	 
	
              First
                Distribution Date

            	
              :

            	
              June
                25, 2007

            
	 	 	 
	
              Percentage
                Interest of this Certificate 

            	
              :

            	
              100%

            
	 	 	 
	
              Interest

            	
              :

            	
              None

            
	 	 	 
	
              CUSIP

            	
              :

            	
              40430T
                AQ5

            
	 	 	 
	
              ISIN

            	
              :

            	
              US40430TAQ58

            

    

    
      
         

      

      
        EXHIBIT
          B-1

        
          

        

      

      
         

      

    

     

    HSI
      ASSET
      SECURITIZATION CORPORATION

     

    HSI
      Asset
      Securitization Corporation Trust 2007-NC1

    Mortgage
      Pass-Through Certificates, Series 2007-NC1

     

    Class
      P

     

    evidencing
      a percentage interest in the distribution of Prepayment Charges allocable to
      the
      Certificates of the above-referenced Class.

     

    Distributions
      in respect of this Certificate are distributable monthly as set forth herein.
      This Certificate does not evidence an obligation of, or an interest in, and
      is
      not guaranteed by the Depositor, the Trustee or any other party to the Agreement
      referred to below or any of their respective affiliates. Neither this
      Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
      agency or instrumentality.

     

    This
      certifies that [____________] is the registered owner of the Percentage Interest
      evidenced by this Certificate in certain monthly distributions of Prepayment
      Charges pursuant to a Pooling and Servicing Agreement dated as of the Cut-off
      Date specified above (the “Agreement”)
      among
      HSI Asset Securitization Corporation, as depositor (the “Depositor”),
      Wells
      Fargo Bank, N.A., as master servicer, (in such capacity, the “Master
      Servicer”)
      securities administrator (in such capacity, the “Securities
      Administrator”)
      and
      custodian, OfficeTiger Global Real Estate Services Inc., as credit risk manager,
      and Deutsche Bank National Trust Company, as trustee (the “Trustee”).
      To
      the extent not defined herein, the capitalized terms used herein have the
      meanings assigned in the Agreement. This Certificate is issued under and is
      subject to the terms, provisions and conditions of the Agreement, to which
      Agreement the Holder of this Certificate by virtue of the acceptance hereof
      assents and by which such Holder is bound.

     

    This
      Certificate does not have an Interest Rate and will solely be entitled to
      receive distributions of Prepayment Charges to the extent set forth in the
      Agreement. In addition, any distribution of the proceeds of any remaining assets
      of the Trust will be made only upon presentment and surrender of this
      Certificate at the offices designated by the Securities Administrator for such
      purpose, or such other location specified in the notice to
      Certificateholders.

     

    No
      transfer of a Certificate of this Class shall be made unless such disposition
      is
      exempt from the registration requirements of the Securities Act of 1933, as
      amended (the “1933 Act”),
      and
      any applicable state securities laws or is made in accordance with the 1933
      Act
      and such laws. In the event of any such transfer, the Securities Administrator
      shall require the transferor to execute a transferor certificate (in
      substantially the form attached to the Agreement) and deliver either (i) a
      Rule 144A Investment Letter or a Regulation S Investment Letter, as
      applicable, in either case substantially in the form attached as Exhibit I-A
      and
      Exhibit I-B, respectively, to the Agreement, or (ii) a written Opinion of
      Counsel to the Securities Administrator that such transfer may be made pursuant
      to an exemption, describing the applicable exemption and the basis therefor,
      from the 1933 Act or is being made pursuant to the 1933 Act, which Opinion
      of
      Counsel shall be an expense of the transferor.

    
      
         

      

      
        EXHIBIT
          B-2

        
          

        

      

      
         

      

    

     

    No
      transfer of a Certificate of this Class shall be made unless the Securities
      Administrator shall have received a representation letter from the transferee
      of
      such Certificate, acceptable to and in form and substance satisfactory to the
      Securities Administrator, to the effect that such transferee is not an employee
      benefit plan subject to Section 406 of ERISA, Section 4975 of the Code
      or any materially similar provisions of applicable federal, state or local
      law
      (“Similar
      Law”),
      or a
      person acting on behalf of or investing plan assets of any such plan, which
      representation letter shall not be an expense of the Securities
      Administrator.

     

    Reference
      is hereby made to the further provisions of this Certificate set forth on the
      reverse hereof, which further provisions shall for all purposes have the same
      effect as if set forth at this place.

     

    This
      Certificate shall not be entitled to any benefit under the Agreement or be
      valid
      for any purpose unless manually authenticated by an authorized signatory of
      the
      Securities Administrator.

     

    * * *

    

    

    
      
         

      

      
        EXHIBIT
          B-3

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
      be
      duly executed.

     

    
      	
              Dated:

            	 

    

     

    WELLS
      FARGO BANK, N.A.,

    not
      in
      its individual capacity, but solely as

    Securities
      Administrator

     

     

    By:
      ___________________________________

     

    Authenticated:

     

     

    By:
      ______________________________

    Authorized
      Signatory of

    WELLS
      FARGO BANK, N.A.,

    not
      in
      its individual capacity,

    but
      solely as Securities Administrator

    
      
         

      

      
        EXHIBIT
          B-4

        
          

        

      

      
         

      

    

     

    HSI
      ASSET
      SECURITIZATION CORPORATION

     

    HSI
      Asset
      Securitization Corporation Trust 2007-NC1

    Mortgage
      Pass-Through Certificates

     

    This
      Certificate is one of a duly authorized issue of Certificates designated as
      HSI
      Asset Securitization Corporation Trust 2007-NC1 Mortgage Pass-Through
      Certificates, of the Series specified on the face hereof (herein collectively
      called the “Certificates”),
      and
      representing a beneficial ownership interest in the Trust Fund created by the
      Agreement.

     

    The
      Certificateholder, by its acceptance of this Certificate, agrees that it will
      look solely
      to the
      funds on deposit in the Distribution Account or constituting Prepayment Charges
      for payment hereunder and that neither the Trustee nor the Securities
      Administrator is liable to the Certificateholders for any amount payable under
      this Certificate or the Agreement or, except as expressly provided in the
      Agreement, subject to any liability under the Agreement.

     

    This
      Certificate does not purport to summarize the Agreement and reference is made
      to
      the Agreement for the interests, rights and limitations of rights, benefits,
      obligations and duties evidenced thereby, and the rights, duties and immunities
      of the Trustee.

     

    Pursuant
      to the terms of the Agreement, a distribution will be made on the 25th day
      of
      each month or, if such day is not a Business Day, the Business Day immediately
      following (the “Distribution
      Date”),
      commencing on the first Distribution Date specified on the face hereof, to
      the
      Person in whose name this Certificate is registered at the close of business
      on
      the applicable Record Date in an amount equal to the product of the Percentage
      Interest evidenced by this Certificate and the amount required to be distributed
      to Holders of Certificates of the Class to which this Certificate belongs on
      such Distribution Date pursuant to the Agreement. The Record Date applicable
      to
      each Distribution Date is the last Business Day of the month next preceding
      the
      month of such Distribution Date.

     

    Distributions
      on this Certificate shall be made by wire transfer of immediately available
      funds to the account of the Holder hereof at a bank or other entity having
      appropriate facilities therefor, if such Certificateholder shall have so
      notified the Securities Administrator in writing at least five Business Days
      prior to the related Record Date and such Certificateholder shall satisfy the
      conditions to receive such form of payment set forth in the Agreement, or,
      if
      not, by check mailed by first class mail to the address of such
      Certificateholder appearing in the Certificate Register. The final distribution
      on each Certificate will be made in like manner, but only upon presentment
      and
      surrender of such Certificate at the offices designated by the Securities
      Administrator for such purposes or such other location specified in the notice
      to Certificateholders of such final distribution.

     

    The
      Agreement permits, with certain exceptions therein provided, the amendment
      thereof and the modification of the rights and obligations of the Trustee and
      the rights of the Certificateholders under the Agreement at any time by the
      parties to the Agreement with the consent of the Holders of Certificates
      affected by such amendment evidencing the requisite Percentage Interest, as
      provided in the Agreement. Any such consent by the Holder of this Certificate
      shall be conclusive and binding on such Holder and upon all future Holders
      of
      this Certificate and of any Certificate issued upon the transfer hereof or
      in
      exchange therefor or in lieu hereof whether or not notation of such consent
      is
      made upon this Certificate. The Agreement also permits the amendment thereof,
      in
      certain limited circumstances, without the consent of the Holders of any of
      the
      Certificates.

    
      
         

      

      
        EXHIBIT
          B-5

        
          

        

      

      
         

      

    

     

    As
      provided in the Agreement and subject to certain limitations therein set forth,
      the transfer of this Certificate is registrable in the Certificate Register
      of
      the Securities Administrator upon surrender of this Certificate for registration
      of transfer at the offices designated by the Securities Administrator for such
      purposes, accompanied by a written instrument of transfer in form satisfactory
      to the Securities Administrator duly executed by the holder hereof or such
      holder’s attorney duly authorized in writing, and thereupon one or more new
      Certificates of the same Class in authorized denominations and evidencing the
      same aggregate Percentage Interest in the Trust Fund will be issued to the
      designated transferee or transferees.

     

    The
      Certificates are issuable only as registered Certificates without coupons in
      denominations specified in the Agreement. As provided in the Agreement and
      subject to certain limitations therein set forth, Certificates are exchangeable
      for new Certificates of the same Class in authorized denominations and
      evidencing the same aggregate Percentage Interest, as requested by the Holder
      surrendering the same.

     

    No
      service charge will be made for any such registration of transfer or exchange,
      but the Securities Administrator may require payment of a sum sufficient to
      cover any tax or other governmental charge payable in connection
      therewith.

     

    The
      Trustee, the Depositor and the Securities Administrator and any agent of the
      Trustee, the Depositor or the Securities Administrator may treat the Person
      in
      whose name this Certificate is registered as the owner hereof for all purposes,
      and neither the Trustee, the Depositor, the Securities Administrator nor any
      such agent shall be affected by any notice to the contrary.

     

    The
      Master Servicer shall have the option to purchase the Mortgage Loans and
      therefore cause the termination of the Trust on any Optional Termination Date,
      which is any Distribution Date in which the aggregate Stated Principal Balance
      of the Mortgage Loans as of the last day of the related Due Period is less
      than
      or equal to 10% of the aggregate Stated Principal Balance of the Mortgage Loans
      as of the Cut-off Date. 

     

    The
      obligations and responsibilities created by the Agreement will terminate as
      provided in Section 11.01 of the Agreement.

     

    Any
      term
      used herein that is defined in the Agreement shall have the meaning assigned
      in
      the Agreement, and nothing herein shall be deemed inconsistent with that
      meaning.

    

    
      
         

      

      
        EXHIBIT
          B-6

        
          

        

      

      
         

      

    

     

    ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
      unto

    _____________________________________________________________________________________________

    _____________________________________________________________________________________________

    _____________________________________________________________________________________________

    _____________________________________________________________________________________________

     

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

     

    the
      Percentage Interest evidenced by the within Certificate and hereby authorizes
      the transfer of registration of such Percentage Interest to assignee on the
      Certificate Register of the Trust Fund.

     

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

    _____________________________________________________________________________________________

     

    
      	
              Dated:

            	 

    

     

     

     

    ______________________________

    Signature
      by or on behalf of assignor

    

     

    DISTRIBUTION
      INSTRUCTIONS

     

    The
      assignee should include the following for purposes of distribution:

     

    Distributions
      shall be made, by wire transfer or otherwise, in immediately 

    available
      funds to
      ____________________________________________________________________________________________,

    __________________________________________________________________________________________________________,

    for
      the
      account of
      ____________________________________________________________________________________________,

    account
      number __________, or, if mailed by check, to
      _______________________________________________________________.

    
      Applicable
        statements should be mailed to
        _________________________________________________________________________,

    

    
      __________________________________________________________________________________________________________

    

     

     

    This
      information is provided by
      ___________________________________________________________________,

    the
      assignee named above, or
      __________________________________________________________________________________,

    as
      its
      agent.

    

     

    
      
         

      

      
        EXHIBIT
          B-7

        
          

        

      

      
         

      

    

     

    EXHIBIT
      C

     

    SOLELY
      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “RESIDUAL INTEREST”
IN TWO “REAL ESTATE MORTGAGE INVESTMENT CONDUITS,” AS THOSE TERMS ARE DEFINED,
      RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986,
      AS
      AMENDED (THE “CODE”).

     

    NEITHER
      THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED
      TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFER AFFIDAVIT IN
      ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

     

    NEITHER
      THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A PERSON
      OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02I OF THE
      AGREEMENT OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES
      ADMINISTRATOR A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS
      NOT
      AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
      SECURITY ACT OF 1974, AS AMENDED (“ERISA”),
      OR A
      PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY
      SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW (“SIMILAR
      LAW”)
      OR A
      PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT
      THAT SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO
      A
      PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO
      SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON
      ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY
      SUCH
      PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND
      OF
      NO EFFECT.

     

    
      	
              Certificate
                No.

            	
              :

            	
              R-1

            
	 	 	 
	
              Cut-off
                Date

            	
              :

            	
              May
                1, 2007

            
	 	 	 
	
              First
                Distribution Date

            	
              :

            	
              June
                25, 2007

            
	 	 	 
	
              Percentage
                Interest of this Certificate

            	
              :

            	
              100.00%

            
	 	 	 
	
              Interest
                Rate

            	
              :

            	
              None

            
	 	 	 
	
              CUSIP

            	
              :

            	
              40430T
                AS1

            
	 	 	 
	
              ISN

            	
              :

            	
              US40430TAS15

            

    

    
      
         

      

      
        EXHIBIT
          C-1

        
          

        

      

      
         

      

    

     

    HSI
      ASSET
      SECURITIZATION CORPORATION

     

    HSI
      Asset
      Securitization Corporation Trust 2007-NC1

    Mortgage
      Pass-Through Certificates, Series 2007-NC1

     

    Class
      R

     

    evidencing
      a percentage interest in the distributions allocable to the Certificates of
      the
      above-referenced Class.

     

    Distributions
      in respect of this Certificate are distributable monthly as set forth herein.
      This Class R Certificate has no Certificate Balance and is not entitled to
      distributions in respect of principal or interest. This Certificate does not
      evidence an obligation of, or an interest in, and is not guaranteed by the
      Depositor, the Trustee or any other party to the Agreement referred to below
      or
      any of their respective affiliates. Neither this Certificate nor the Mortgage
      Loans are guaranteed or insured by any governmental agency or
      instrumentality.

     

    This
      certifies that [____________] is the registered owner of the Percentage Interest
      specified above of any monthly distributions due to the Class R
      Certificates pursuant to a Pooling and Servicing Agreement dated as of the
      Cut-off Date specified above (the “Agreement”)
      among
      HSI Asset Securitization Corporation, as depositor (the “Depositor”),
      Wells
      Fargo Bank, N.A., as master servicer, (in such capacity, the “Master
      Servicer”)
      securities administrator (in such capacity, the “Securities
      Administrator”)
      and
      custodian, OfficeTiger Global Real Estate Services Inc., as credit risk manager,
      and Deutsche Bank National Trust Company, as trustee (the “Trustee”).
      To
      the extent not defined herein, the capitalized terms used herein have the
      meanings assigned in the Agreement. This Certificate is issued under and is
      subject to the terms, provisions and conditions of the Agreement, to which
      Agreement the Holder of this Certificate by virtue of the acceptance hereof
      assents and by which such Holder is bound.

     

    Any
      distribution of the proceeds of any remaining assets of the Trust will be made
      only upon presentment and surrender of this Class R Certificate at the
      offices designated by the Securities Administrator for such purpose, or such
      other location specified in the notice to Certificateholders.

     

    No
      transfer of a Class R Certificate shall be made unless the Securities
      Administrator shall have received a representation letter from the transferee
      of
      such Certificate, acceptable to and in form and substance satisfactory to the
      Securities Administrator, to the effect that such transferee is not an employee
      benefit plan or arrangement subject to Section 406 of ERISA, a plan or
      arrangement subject to Section 4975 of the Code or a plan subject to
      Similar Law, or a person acting on behalf of any such plan or arrangement nor
      using the assets of any such plan or arrangement to effect such transfer, which
      representation letter shall not be an expense of the Trustee, the Securities
      Administrator, the Depositor, the Master Servicer or the Trust Fund. In the
      event that such representation is violated, or any attempt is made to transfer
      to a plan or arrangement subject to Section 406 of ERISA or a plan subject
      to Section 4975 of the Code or a plan subject to Similar Law, or a person
      acting on behalf of any such plan or arrangement or using the assets of any
      such
      plan or arrangement, such attempted transfer or acquisition shall be void and
      of
      no effect.

    
      
         

      

      
        EXHIBIT
          C-2

        
          

        

      

      
         

      

    

     

    Each
      Holder of this Class R Certificate shall be deemed by the acceptance or
      acquisition an Ownership Interest in this Class R Certificate to have
      agreed to be bound by the following provisions, and the rights of each Person
      acquiring any Ownership Interest in this Class R Certificate are expressly
      subject to the following provisions: (i) each Person holding or acquiring
      any Ownership Interest in this Class R Certificate shall be a Permitted
      Transferee and shall promptly notify the Securities Administrator of any change
      or impending change in its status as a Permitted Transferee, (ii) no
      Ownership Interest in this Class R Certificate may be registered on the
      Closing Date or thereafter transferred, and the Securities Administrator shall
      not register the Transfer of this Certificate unless, in addition to the
      certificates required to be delivered to the Securities Administrator under
      Section 5.02(b) of the Agreement, the Securities Administrator shall have
      been furnished with a Transfer Affidavit of the initial owner or the proposed
      transferee in the form attached as Exhibit G to the Agreement,
      (iii) each Person holding or acquiring any Ownership Interest in this
      Class R Certificate shall agree (A) to obtain a Transfer Affidavit
      from any other Person to whom such Person attempts to Transfer its Ownership
      Interest this Class R Certificate, (B) to obtain a Transfer Affidavit
      from any Person for whom such Person is acting as nominee, trustee or agent
      in
      connection with any Transfer of this Class R Certificate, (C) not to
      cause income with respect to the Class R Certificate to be attributable to
      a foreign permanent establishment or fixed base, within the meaning of an
      applicable income tax treaty, of such Person or any other U.S. Person and
      (D) not to Transfer the Ownership Interest in this Class R Certificate
      or to cause the Transfer of the Ownership Interest in this Class R
      Certificate to any other Person if it has actual knowledge that such Person
      is a
      Non-Permitted Transferee and (iv) any attempted or purported Transfer of
      the Ownership Interest in this Class R Certificate in violation of the
      provisions herein shall be absolutely null and void and shall vest no rights
      in
      the purported Transferee.

     

    Reference
      is hereby made to the further provisions of this Certificate set forth on the
      reverse hereof, which further provisions shall for all purposes have the same
      effect as if set forth at this place.

     

    This
      Certificate shall not be entitled to any benefit under the Agreement or be
      valid
      for any purpose unless manually authenticated by an authorized signatory of
      the
      Securities Administrator.

     

    * * *

    
      
         

      

      
        EXHIBIT
          C-3

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
      be
      duly executed.

     

    
      	
              Dated:

            	 

    

     

    WELLS
      FARGO BANK, N.A.,

    not
      in
      its individual capacity, but solely as

    Securities
      Administrator

     

     

    By:
      ________________________________

     

    Authenticated:

     

     

    By:
      ____________________________________

    Authorized
      Signatory of

    WELLS
      FARGO BANK, N.A.,

    not
      in
      its individual capacity,

    but
      solely as Securities Administrator

    
      
         

      

      
        EXHIBIT
          C-4

        
          

        

      

      
         

      

    

     

    HSI
      ASSET
      SECURITIZATION CORPORATION

     

    HSI
      Asset
      Securitization Corporation Trust 2007-NC1

    Mortgage
      Pass-Through Certificates

     

    This
      Certificate is one of a duly authorized issue of Certificates designated as
      HSI
      Asset Securitization Corporation Trust 2007-NC1 Mortgage Pass-Through
      Certificates, of the Series specified on the face hereof (herein collectively
      called the “Certificates”),
      and
      representing a beneficial ownership interest in the Trust Fund created by the
      Agreement.

     

    The
      Certificateholder, by its acceptance of this Certificate, agrees that it will
      look solely
      to the
      funds on deposit in the Distribution Account or Supplemental Interest Trust
      Account for payment hereunder and that neither the Trustee nor the Securities
      Administrator is liable to the Certificateholders for any amount payable under
      this Certificate or the Agreement or, except as expressly provided in the
      Agreement, subject to any liability under the Agreement.

     

    This
      Certificate does not purport to summarize the Agreement and reference is made
      to
      the Agreement for the interests, rights and limitations of rights, benefits,
      obligations and duties evidenced thereby, and the rights, duties and immunities
      of the Trustee.

     

    Pursuant
      to the terms of the Agreement, a distribution will be made on the 25th day
      of
      each month or, if such day is not a Business Day, the Business Day immediately
      following (the “Distribution
      Date”),
      commencing on the first Distribution Date specified on the face hereof, to
      the
      Person in whose name this Certificate is registered at the close of business
      on
      the applicable Record Date in an amount equal to the product of the Percentage
      Interest evidenced by this Certificate and the amount required to be distributed
      to Holders of Certificates of the Class to which this Certificate belongs on
      such Distribution Date pursuant to the Agreement. The Record Date applicable
      to
      each Distribution Date is the last Business Day of the month next preceding
      the
      month of such Distribution Date.

     

    Distributions
      on this Certificate shall be made by wire transfer of immediately available
      funds to the account of the Holder hereof at a bank or other entity having
      appropriate facilities therefor, if such Certificateholder shall have so
      notified the Securities Administrator in writing at least five Business Days
      prior to the related Record Date and such Certificateholder shall satisfy the
      conditions to receive such form of payment set forth in the Agreement, or,
      if
      not, by check mailed by first class mail to the address of such
      Certificateholder appearing in the Certificate Register. The final distribution
      on each Certificate will be made in like manner, but only upon presentment
      and
      surrender of such Certificate at the offices designated by the Securities
      Administrator for such purpose, or such other location specified in the notice
      to Certificateholders of such final distribution.

     

    The
      Agreement permits, with certain exceptions therein provided, the amendment
      thereof and the modification of the rights and obligations of the Trustee and
      the rights of the Certificateholders under the Agreement at any time by the
      parties to the Agreement with the consent of the Holders of Certificates
      affected by such amendment evidencing the requisite Percentage Interest, as
      provided in the Agreement. Any such consent by the Holder of this Certificate
      shall be conclusive and binding on such Holder and upon all future Holders
      of
      this Certificate and of any Certificate issued upon the transfer hereof or
      in
      exchange therefor or in lieu hereof whether or not notation of such consent
      is
      made upon this Certificate. The Agreement also permits the amendment thereof,
      in
      certain limited circumstances, without the consent of the Holders of any of
      the
      Certificates.

    
      
         

      

      
        EXHIBIT
          C-5

        
          

        

      

      
         

      

    

     

    As
      provided in the Agreement and subject to certain limitations therein set forth,
      the transfer of this Certificate is registrable in the Certificate Register
      of
      the Securities Administrator upon surrender of this Certificate for registration
      of transfer at the offices designated by the Securities Administrator for such
      purposes, accompanied by a written instrument of transfer in form satisfactory
      to the Securities Administrator duly executed by the holder hereof or such
      holder’s attorney duly authorized in writing, and thereupon one or more new
      Certificates of the same Class in authorized denominations and evidencing the
      same aggregate Percentage Interest in the Trust Fund will be issued to the
      designated transferee or transferees.

     

    The
      Certificates are issuable only as registered Certificates without coupons in
      denominations specified in the Agreement. As provided in the Agreement and
      subject to certain limitations therein set forth, Certificates are exchangeable
      for new Certificates of the same Class in authorized denominations and
      evidencing the same aggregate Percentage Interest, as requested by the Holder
      surrendering the same.

     

    No
      service charge will be made for any such registration of transfer or exchange,
      but the Securities Administrator may require payment of a sum sufficient to
      cover any tax or other governmental charge payable in connection
      therewith.

     

    The
      Trustee, the Depositor and the Securities Administrator and any agent of the
      Trustee, the Depositor or the Securities Administrator may treat the Person
      in
      whose name this Certificate is registered as the owner hereof for all purposes,
      and neither the Trustee, the Depositor, the Securities Administrator nor any
      such agent shall be affected by any notice to the contrary.

     

    The
      Master Servicer shall have the option to purchase the Mortgage Loans and
      therefore cause the termination of the Trust on any Optional Termination Date,
      which is any Distribution Date in which the aggregate Stated Principal Balance
      of the Mortgage Loans as of the last day of the related Due Period is less
      than
      or equal to 10% of the aggregate Stated Principal Balance of the Mortgage Loans
      as of the Cut-off Date. 

     

    The
      obligations and responsibilities created by the Agreement will terminate as
      provided in Section 11.01 of the Agreement.

     

    Any
      term
      used herein that is defined in the Agreement shall have the meaning assigned
      in
      the Agreement, and nothing herein shall be deemed inconsistent with that
      meaning.

    

    
      
         

      

      
        EXHIBIT
          C-6

        
          

        

      

      
         

      

    

     

    ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
      unto

    _____________________________________________________________________________________________

    _____________________________________________________________________________________________

    _____________________________________________________________________________________________

    _____________________________________________________________________________________________

     

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

     

    the
      Percentage Interest evidenced by the within Certificate and hereby authorizes
      the transfer of registration of such Percentage Interest to assignee on the
      Certificate Register of the Trust Fund.

     

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

    _____________________________________________________________________________________________

     

    
      	
              Dated:

            	 

    

     

     

     

    ______________________________

    Signature
      by or on behalf of assignor

    

     

    DISTRIBUTION
      INSTRUCTIONS

     

    The
      assignee should include the following for purposes of distribution:

     

    Distributions
      shall be made, by wire transfer or otherwise, in immediately 

    available
      funds to
      ____________________________________________________________________________________________,

    __________________________________________________________________________________________________________,

    for
      the
      account of
      ____________________________________________________________________________________________,

    account
      number __________, or, if mailed by check, to
      _______________________________________________________________.

    
      Applicable
        statements should be mailed to
        _________________________________________________________________________,

    

    
      __________________________________________________________________________________________________________

    

     

     

    This
      information is provided by
      ___________________________________________________________________,

    the
      assignee named above, or
      __________________________________________________________________________________,

    as
      its
      agent.

    

    

    
      
         

      

      
        EXHIBIT
          C-7

        
          

        

      

      
         

      

    

     

    EXHIBIT
      D

     

    SOLELY
      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST
      IN
      A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE
      TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
      REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)
      AND
      CERTAIN OTHER ASSETS.

     

    NEITHER
      THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED
      TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR LETTER IN
      THE
      FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER
      (I) THE SECURITIES ADMINISTRATOR RECEIVES EITHER A RULE 144A INVESTMENT
      LETTER OR A REGULATION S INVESTMENT LETTER IN THE FORM OF EXHIBIT I-A AND
      EXHIBIT I-B, RESPECTIVELY, TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE
      SECURITIES ADMINISTRATOR RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
      EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

     

    NEITHER
      THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
      TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A REPRESENTATION LETTER
      TO
      THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
      TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
      (“ERISA”),
      OR A
      PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY
      SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW (“SIMILAR
      LAW”)
      OR A
      PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT
      THAT SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO
      A
      PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO
      SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON
      ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY
      SUCH
      PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND
      OF
      NO EFFECT.

     

    
      	
              Certificate
                No.

            	
              :

            	
              X

            
	 	 	 
	
              Cut-off
                Date

            	
              :

            	
              May
                1, 2007

            
	 	 	 
	
              First
                Distribution Date

            	
              :

            	
              June
                25, 2007

            
	 	 	 
	
              Percentage
                Interest of this Certificate

            	
              :

            	
              100%

            
	 	 	 
	
              Interest
                Rate

            	
              :

            	
              None

            
	 	 	 
	
              CUSIP

            	
              :

            	
              40430T
                AR3

            
	 	 	 
	
              ISIN

            	
              :

            	
              US40430TAR32

            

    

    
      
         

      

      
        EXHIBIT
          D-1

        
          

        

      

      
         

      

    

     

    HSI
      ASSET
      SECURITIZATION CORPORATION

     

    HSI
      Asset
      Securitization Corporation Trust 2007-NC1

    Mortgage
      Pass-Through Certificates, Series 2007-NC1

     

    Class
      X

     

    evidencing
      a percentage interest in the distributions allocable to the Certificates of
      the
      above-referenced Class.

     

    Distributions
      in respect of this Certificate are distributable monthly as set forth herein.
      This Certificate does not evidence an obligation of, or an interest in, and
      is
      not guaranteed by the Depositor, the Trustee or any other party to the Agreement
      referred to below or any of their respective affiliates. Neither this
      Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
      agency or instrumentality.

     

    This
      certifies that [____________] is the registered owner of the Percentage Interest
      evidenced by this Certificate (obtained by dividing the denomination of this
      Certificate by the aggregate of the denominations of all Certificates of the
      Class to which this Certificate belongs) in certain monthly distributions
      pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date
      specified above (the “Agreement”)
      among
      HSI Asset Securitization Corporation, as depositor (the “Depositor”),
      Wells
      Fargo Bank, N.A., as master servicer, (in such capacity, the “Master
      Servicer”)
      securities administrator (in such capacity, the “Securities
      Administrator”)
      and
      custodian, OfficeTiger Global Real Estate Services Inc., as credit risk manager,
      and Deutsche Bank National Trust Company, as trustee (the “Trustee”).
      To
      the extent not defined herein, the capitalized terms used herein have the
      meanings assigned in the Agreement. This Certificate is issued under and is
      subject to the terms, provisions and conditions of the Agreement, to which
      Agreement the Holder of this Certificate by virtue of the acceptance hereof
      assents and by which such Holder is bound.

     

    This
      Certificate does not have a Certificate Balance or an Interest Rate and will
      be
      entitled to distributions only to the extent set forth in the Agreement. In
      addition, any distribution of the proceeds of any remaining assets of the Trust
      will be made only upon presentment and surrender of this Certificate at the
      offices designated by the Securities Administrator for such purpose, or such
      other location specified in the notice to Certificateholders.

     

    No
      transfer of a Certificate of this Class shall be made unless such disposition
      is
      exempt from the registration requirements of the Securities Act of 1933, as
      amended (the “1933 Act”),
      and
      any applicable state securities laws or is made in accordance with the 1933
      Act
      and such laws. In the event of any such transfer, the Securities Administrator
      shall require the transferor to execute a transferor certificate (in
      substantially the form attached to the Agreement) and deliver either (i) a
      Rule 144A Investment Letter or Regulation S Investment Letter, as
      applicable, in either case substantially in the form attached to the Agreement,
      or (ii) a written Opinion of Counsel to the Securities Administrator that
      such transfer may be made pursuant to an exemption, describing the applicable
      exemption and the basis therefor, from the 1933 Act or is being made pursuant
      to
      the 1933 Act, which Opinion of Counsel shall be an expense of the
      transferor.

    
      
         

      

      
        EXHIBIT
          D-2

        
          

        

      

      
         

      

    

     

    No
      transfer of a Certificate of this Class shall be made unless the Securities
      Administrator shall have received a representation letter from the transferee
      of
      such Certificate, acceptable to and in form and substance satisfactory to the
      Securities Administrator, to the effect that such transferee is not an employee
      benefit plan subject to Section 406 of ERISA, Section 4975 of the Code
      or any materially similar provisions of applicable federal, state or local
      law
      (“Similar
      Law”),
      or a
      person acting on behalf of or investing plan assets of any such plan, which
      representation letter shall not be an expense of the Securities
      Administrator.

     

    Reference
      is hereby made to the further provisions of this Certificate set forth on the
      reverse hereof, which further provisions shall for all purposes have the same
      effect as if set forth at this place.

     

    This
      Certificate shall not be entitled to any benefit under the Agreement or be
      valid
      for any purpose unless manually authenticated by an authorized signatory of
      the
      Securities Administrator.

     

    * * *

    
      
         

      

      
        EXHIBIT
          D-3

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
      be
      duly executed.

     

    
      	
              Dated:

            	 

    

     

    WELLS
      FARGO BANK, N.A.,

    not
      in
      its individual capacity, but solely as

    Securities
      Administrator

     

     

    By:
      ____________________________________

     

    Authenticated:

     

     

    By:
      ________________________________

    Authorized
      Signatory of

    WELLS
      FARGO BANK, N.A.,

    not
      in
      its individual capacity,

    but
      solely as Securities Administrator

    
      
         

      

      
        EXHIBIT
          D-4

        
          

        

      

      
         

      

    

     

    HSI
      ASSET
      SECURITIZATION CORPORATION

     

    HSI
      Asset
      Securitization Corporation Trust 2007-NC1

    Mortgage
      Pass-Through Certificates

     

    This
      Certificate is one of a duly authorized issue of Certificates designated as
      HSI
      Asset Securitization Corporation Trust 2007-NC1 Mortgage Pass-Through
      Certificates, of the Series specified on the face hereof (herein collectively
      called the “Certificates”),
      and
      representing a beneficial ownership interest in the Trust Fund created by the
      Agreement.

     

    The
      Certificateholder, by its acceptance of this Certificate, agrees that it will
      look solely
      to the
      funds on deposit in the Distribution Account or Supplemental Interest Trust
      Account for payment hereunder and that neither the Trustee nor the Securities
      Administrator is liable to the Certificateholders for any amount payable under
      this Certificate or the Agreement or, except as expressly provided in the
      Agreement, subject to any liability under the Agreement.

     

    This
      Certificate does not purport to summarize the Agreement and reference is made
      to
      the Agreement for the interests, rights and limitations of rights, benefits,
      obligations and duties evidenced thereby, and the rights, duties and immunities
      of the Trustee.

     

    Pursuant
      to the terms of the Agreement, a distribution will be made on the 25th day
      of
      each month or, if such 25th day is not a Business Day, the Business Day
      immediately following (the “Distribution
      Date”),
      commencing on the first Distribution Date specified on the face hereof, to
      the
      Person in whose name this Certificate is registered at the close of business
      on
      the applicable Record Date in an amount equal to the product of the Percentage
      Interest evidenced by this Certificate and the amount required to be distributed
      to Holders of Certificates of the Class to which this Certificate belongs on
      such Distribution Date pursuant to the Agreement. The Record Date applicable
      to
      each Distribution Date is the last Business Day of the month next preceding
      the
      month of such Distribution Date.

     

    Distributions
      on this Certificate shall be made by wire transfer of immediately available
      funds to the account of the Holder hereof at a bank or other entity having
      appropriate facilities therefor, if such Certificateholder shall have so
      notified the Securities Administrator in writing at least five Business Days
      prior to the related Record Date and such Certificateholder shall satisfy the
      conditions to receive such form of payment set forth in the Agreement, or,
      if
      not, by check mailed by first class mail to the address of such
      Certificateholder appearing in the Certificate Register. The final distribution
      on each Certificate will be made in like manner, but only upon presentment
      and
      surrender of such Certificate at the offices designated by the Securities
      Administrator for such purposes or such other location specified in the notice
      to Certificateholders of such final distribution.

     

    The
      Agreement permits, with certain exceptions therein provided, the amendment
      thereof and the modification of the rights and obligations of the Trustee and
      the rights of the Certificateholders under the Agreement at any time by the
      parties to the Agreement with the consent of the Holders of Certificates
      affected by such amendment evidencing the requisite Percentage Interest, as
      provided in the Agreement. Any such consent by the Holder of this Certificate
      shall be conclusive and binding on such Holder and upon all future Holders
      of
      this Certificate and of any Certificate issued upon the transfer hereof or
      in
      exchange therefor or in lieu hereof whether or not notation of such consent
      is
      made upon this Certificate. The Agreement also permits the amendment thereof,
      in
      certain limited circumstances, without the consent of the Holders of any of
      the
      Certificates.

    
      
         

      

      
        EXHIBIT
          D-5

        
          

        

      

      
         

      

    

     

    As
      provided in the Agreement and subject to certain limitations therein set forth,
      the transfer of this Certificate is registrable in the Certificate Register
      of
      the Securities Administrator upon surrender of this Certificate for registration
      of transfer at the offices designated by the Securities Administrator for such
      purposes, accompanied by a written instrument of transfer in form satisfactory
      to the Securities Administrator duly executed by the holder hereof or such
      holder’s attorney duly authorized in writing, and thereupon one or more new
      Certificates of the same Class in authorized denominations and evidencing the
      same aggregate Percentage Interest in the Trust Fund will be issued to the
      designated transferee or transferees.

     

    The
      Certificates are issuable only as registered Certificates without coupons in
      denominations specified in the Agreement. As provided in the Agreement and
      subject to certain limitations therein set forth, Certificates are exchangeable
      for new Certificates of the same Class in authorized denominations and
      evidencing the same aggregate Percentage Interest, as requested by the Holder
      surrendering the same.

     

    No
      service charge will be made for any such registration of transfer or exchange,
      but the Securities Administrator may require payment of a sum sufficient to
      cover any tax or other governmental charge payable in connection
      therewith.

     

    The
      Trustee, the Depositor and the Securities Administrator and any agent of the
      Trustee, the Depositor or the Securities Administrator may treat the Person
      in
      whose name this Certificate is registered as the owner hereof for all purposes,
      and neither the Trustee, the Depositor, the Securities Administrator nor any
      such agent shall be affected by any notice to the contrary.

     

    The
      Master Servicer shall have the option to purchase the Mortgage Loans and
      therefore cause the termination of the Trust on any Optional Termination Date,
      which is any Distribution Date in which the aggregate Stated Principal Balance
      of the Mortgage Loans as of the last day of the related Due Period is less
      than
      or equal to 10% of the aggregate Stated Principal Balance of the Mortgage Loans
      as of the Cut-off Date. 

     

    The
      obligations and responsibilities created by the Agreement will terminate as
      provided in Section 11.01 of the Agreement.

     

    Any
      term
      used herein that is defined in the Agreement shall have the meaning assigned
      in
      the Agreement, and nothing herein shall be deemed inconsistent with that
      meaning

    
      
         

      

      
        EXHIBIT
          D-6

        
          

        

      

      
         

      

    

     

    ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
      unto

    _____________________________________________________________________________________________

    _____________________________________________________________________________________________

    _____________________________________________________________________________________________

    _____________________________________________________________________________________________

     

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

     

    the
      Percentage Interest evidenced by the within Certificate and hereby authorizes
      the transfer of registration of such Percentage Interest to assignee on the
      Certificate Register of the Trust Fund.

     

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

    _____________________________________________________________________________________________

     

    
      	
              Dated:

            	 

    

     

     

     

    ______________________________

    Signature
      by or on behalf of assignor

    

     

    DISTRIBUTION
      INSTRUCTIONS

     

    The
      assignee should include the following for purposes of distribution:

     

    Distributions
      shall be made, by wire transfer or otherwise, in immediately 

    available
      funds to
      ____________________________________________________________________________________________,

    __________________________________________________________________________________________________________,

    for
      the
      account of
      ____________________________________________________________________________________________,

    account
      number __________, or, if mailed by check, to
      _______________________________________________________________.

    
      Applicable
        statements should be mailed to
        _________________________________________________________________________,

    

    
      __________________________________________________________________________________________________________

    

     

     

    This
      information is provided by
      ___________________________________________________________________,

    the
      assignee named above, or
      __________________________________________________________________________________,

    as
      its
      agent.

    

    

    

    
      
         

      

      
        EXHIBIT
          D-7

        
          

        

      

      
         

      

    

     

    EXHIBIT
      E

     

    FORM
      OF
      INITIAL CERTIFICATION OF CUSTODIAN

     

    [date]

     

    

    
      	
              HSI
                Asset Securitization Corporation

              452
                Fifth Avenue

              New
                York, New York 10018

            	
              Wells
                Fargo Bank, N.A.

              1
                Home Campus

              Des
                Moines, Iowa 50328-0001

            
	 	 
	
              Wells
                Fargo Bank, N.A.

              9062
                Old Annapolis Road 

              Columbia,
                Maryland 21045-1951

            	
              Countrywide
                Home Loans Servicing LP

              4500
                Park Granada

              Calabas,
                California 91302

            
	 	 
	
              Deutsche
                Bank National Trust Company

              1761
                East St. Andrew Place

              Santa
                Ana, California 92705-4934

            	 

    

     

    
      	 	
              Re:

            	
              HSI
                Asset Securitization Corporation, Series
                2007-NC1

            

    

     

    Ladies
      and Gentlemen:

     

    In
      accordance with Section 2.02 of the Pooling and Servicing Agreement (the
“Pooling
      and Servicing Agreement”)
      dated
      as of May 1, 2007 among HSI Asset Securitization Corporation, as depositor,
      Wells Fargo Bank, N.A., as master servicer, securities administrator and
      custodian, OfficeTiger Global Real Estate Services Inc., as credit risk manager,
      and Deutsche Bank National Trust Company, as trustee, for each Mortgage Loan
      listed in the Mortgage Loan Schedule (other than any Mortgage Loan listed in
      the
      attached schedule), it has received:

     

    (i) the
      original Mortgage Note, endorsed as provided in the following form: “Pay to the
      order of ________, without recourse”; and

     

    (ii) a
      duly
      executed assignment of the Mortgage (which may be included in a blanket
      assignment or assignments).

     

    Based
      on
      its review and examination and only as to the foregoing documents, such
      documents appear regular on their face and related to such Mortgage
      Loan.

     

    The
      Custodian has made no independent examination of any documents contained in
      each
      Mortgage File beyond the review specifically required in the Pooling and
      Servicing Agreement. The Custodian makes no representations as to: (i) the
      validity, legality, sufficiency, enforceability or genuineness of any of the
      documents contained in each Mortgage File of any of the Mortgage Loans
      identified on the Mortgage Loan Schedule, or (ii) the collectability,
      insurability, effectiveness or suitability of any such Mortgage
      Loan.

    
      
         

      

      
        EXHIBIT
          E-1

        
          

        

      

      
         

      

    

     

    Capitalized
      words and phrases used herein shall have the respective meanings assigned to
      them in the Pooling and Servicing Agreement.

     

    WELLS
      FARGO BANK, N.A., as Custodian

     

     

    By:
      ____________________________

    Name:
      _______________________

    Title:
      ________________________

    

    

    
      
         

      

      
        EXHIBIT
          E-2

        
          

        

      

      
         

      

    

     

    EXHIBIT
      F

     

    FORM
      OF
      DOCUMENT CERTIFICATION

    AND
      EXCEPTION REPORT OF CUSTODIAN

     

    ______,
      20___

     

    
      	
              HSI
                Asset Securitization Corporation

              452
                Fifth Avenue

              New
                York, New York 10018

            	
              Wells
                Fargo Bank, N.A.

              1
                Home Campus

              Des
                Moines, Iowa 50328-0001

            
	 	 
	
              Wells
                Fargo Bank, N.A.

              9062
                Old Annapolis Road 

              Columbia,
                Maryland 21045-1951

            	
              Countrywide
                Home Loans Servicing LP

              4500
                Park Granada

              Calabas,
                California 91302

            
	 	 
	
              Deutsche
                Bank National Trust Company

              1761
                East St. Andrew Place

              Santa
                Ana, California 92705-4934

            	 

    

     

    
      	 	
              Re:

            	
              HSI
                Asset Securitization Corporation, Series
                2007-NC1

            

    

     

    Ladies
      and Gentlemen:

     

    In
      accordance with Section 2.02 of the Pooling and Servicing Agreement (the
“Pooling
      and Servicing Agreement”)
      dated
      as of May 1, 2007 among HSI Asset Securitization Corporation, as depositor,
      Wells Fargo Bank, N.A., as master servicer, securities administrator and
      custodian, OfficeTiger Global Real Estate Services Inc., as credit risk manager,
      and Deutsche Bank National Trust Company, as trustee, the undersigned, as
      Custodian, hereby certifies that as to each Mortgage Loan listed in the Mortgage
      Loan Schedule (other than any Mortgage Loan paid in full or listed on the
      attached Document Exception Report) it has received:

     

    (i) The
      original Mortgage Note, endorsed in the form provided in Section 2.01 of
      the Pooling and Servicing Agreement, with all intervening endorsements showing
      a
      complete chain of endorsement from the Mortgage Loan Seller to the last
      endorsee.

     

    (ii) The
      original recorded Mortgage.

     

    (iii) A
      duly
      executed assignment of the Mortgage in the form provided in Section 2.01 of
      the Pooling and Servicing Agreement; or, if the Mortgage Loan Seller has
      certified or the Custodian otherwise knows that the related Mortgage has not
      been returned from the applicable recording office, a copy of the assignment
      of
      the Mortgage (excluding information to be provided by the recording
      office).

    
      
         

      

      
        EXHIBIT
          F-1

        
          

        

      

      
         

      

    

     

    (iv) The
      original or duplicate original recorded assignment or assignments of the
      Mortgage showing a complete chain of assignment from the Mortgage Loan Seller
      to
      the last endorsee.

     

    (v) The
      original or duplicate original lender’s title policy and all riders thereto or,
      any one of an original title binder, an original preliminary title report or
      an
      original title commitment, or a copy thereof certified by the title
      company.

     

    Based
      on
      its review and examination and only as to the foregoing documents, (a) such
      documents appear regular on their face and related to such Mortgage Loan, and
      (b) the information set forth in items (1), (2), (3), (15), (18) and
      (22) of the Data Tape Information accurately reflects information set forth
      in
      the Custodial File.

     

    The
      Custodian has made no independent examination of any documents contained in
      each
      Mortgage File beyond the review of the Custodial File specifically required
      in
      the Pooling and Servicing Agreement. The Custodian makes no representation
      as
      to: (i) the validity, legality, sufficiency, enforceability or genuineness
      of any of the documents contained in each Mortgage File of any of the Mortgage
      Loans identified on the Mortgage Loan Schedule, or (ii) the collectability,
      insurability, effectiveness or suitability of any such Mortgage Loan.
      Notwithstanding anything herein to the contrary, the Custodian has made no
      determination and makes no representations as to whether (i) any
      endorsement is sufficient to transfer all right, title and interest of the
      party
      so endorsing, as noteholder or assignee thereof, in and to that Mortgage Note
      or
      (ii) any assignment is in recordable form or sufficient to effect the
      assignment of and transfer to the assignee thereof, under the Mortgage to which
      the assignment relates.

     

    Capitalized
      words and phrases used herein shall have the respective meanings assigned to
      them in the Pooling and Servicing Agreement.

    
       

      WELLS
        FARGO BANK, N.A., as Custodian

       

       

      By:
        ____________________________

      Name:
        _______________________

      Title:
        ________________________

    

     

     

    

    
      
         

      

      
        EXHIBIT
          F-2

        
          

        

      

      
         

      

    

     

    EXHIBIT
      G

     

    FORM
      OF
      RESIDUAL TRANSFER AFFIDAVIT

     

    HSI
      Asset
      Securitization Corporation Trust 2007-NC1

    Mortgage
      Pass-Through Certificates, Series 2007-NC1

     

    
      	
              STATE
                OF

            	
              )

            	 
	 	
              )

            	
              ss.:

            
	
              COUNTY
                OF

            	
              )

            	 

    

     

    The
      undersigned, being first duly sworn, deposes and says as follows:

     

    1. The
      undersigned is an officer of ___________________, the proposed Transferee of
      an
      Ownership Interest in a Class R Certificate (the “Certificate”)
      issued
      pursuant to the Pooling and Servicing Agreement (the “Agreement”),
      relating to the above-referenced Series, dated as of May 1, 2007 among HSI
      Asset
      Securitization Corporation, as depositor, Wells Fargo Bank, N.A., as master
      servicer, securities administrator and custodian, OfficeTiger Global Real Estate
      Services Inc., as credit risk manager, and Deutsche Bank National Trust Company,
      as trustee. Capitalized terms used, but not defined herein, shall have the
      meanings ascribed to such terms in the Agreement. The Transferee has authorized
      the undersigned to make this affidavit on behalf of the Transferee for the
      benefit of the Depositor, the Securities Administrator and the
      Trustee.

     

    2. The
      Transferee is, as of the date hereof, and will be, as of the date of the
      Transfer, a Permitted Transferee. The Transferee is acquiring its Ownership
      Interest in the Certificate for its own account. The Transferee has no knowledge
      that any such affidavit is false.

     

    3. The
      Transferee has been advised of, and understands that (i) a tax will be
      imposed on Transfers of the Certificate to Persons that are Non-Permitted
      Transferees; (ii) such tax will be imposed on the transferor, or, if such
      Transfer is through an agent (which includes a broker, nominee or middleman)
      for
      a Person that is a Non-Permitted Transferee, on the agent; and (iii) the
      Person otherwise liable for the tax shall be relieved of liability for the
      tax
      if the subsequent Transferee furnished to such Person an affidavit that such
      subsequent Transferee is a Permitted Transferee and, at the time of Transfer,
      such Person does not have actual knowledge that the affidavit is
      false.

     

    4. The
      Transferee has been advised of, and understands that a tax will be imposed
      on a
“pass-through entity” holding the Certificate if at any time during the taxable
      year of the pass-through entity a Person that is a Non-Permitted Transferee
      is
      the record holder of an interest in such entity. The Transferee understands
      that
      such tax will not be imposed for any period with respect to which the record
      holder furnishes to the pass-through entity an affidavit that such record holder
      is a Permitted Transferee and the pass-through entity does not have actual
      knowledge that such affidavit is false. (For this purpose, a “pass-through
      entity” includes a regulated investment company, a real estate investment trust
      or common trust fund, a partnership, trust or estate, and certain cooperatives
      and, except as may be provided in Treasury Regulations, persons holding
      interests in pass-through entities as a nominee for another
      Person.)

    
      
         

      

      
        EXHIBIT
          G-1

        
          

        

      

      
         

      

    

     

    5. The
      Transferee has reviewed the provisions of Section 5.02(c) of the Agreement
      and understands the legal consequences of the acquisition of an Ownership
      Interest in the Certificate including, without limitation, the restrictions
      on
      subsequent Transfers and the provisions regarding voiding the Transfer and
      mandatory sales. The Transferee expressly agrees to be bound by and to abide
      by
      the provisions of Section 5.02(c) of the Agreement and the restrictions
      noted on the face of the Certificate. The Transferee understands and agrees
      that
      any breach of any of the representations included herein shall render the
      Transfer to the Transferee contemplated hereby null and void.

     

    6. The
      Transferee agrees to require a Transfer Affidavit from any Person to whom the
      Transferee attempts to Transfer its Ownership Interest in the Certificate,
      and
      in connection with any Transfer by a Person for whom the Transferee is acting
      as
      nominee, trustee or agent, and the Transferee will not Transfer its Ownership
      Interest or cause any Ownership Interest to be Transferred to any Person that
      the Transferee knows is a Non-Permitted Transferee. In connection with any
      such
      Transfer by the Transferee, the Transferee agrees to deliver to the Securities
      Administrator a certificate substantially in the form set forth as
      Exhibit H to the Agreement (a “Transferor
      Certificate”)
      to the
      effect that, among other things, such Transferee has no actual knowledge that
      the Person to which the Transfer is to be made is a Non-Permitted
      Transferee.

     

    7. The
      Transferee does not have the intention to impede the assessment or collection
      of
      any tax legally required to be paid with respect to the Certificate. The
      Transferee has historically paid its debts as they have come due and intends
      to
      pay its debts as they come due in the future. The Transferee intends to pay
      all
      taxes due with respect to the Certificate as they become due.

     

    8. The
      Transferee’s taxpayer identification number is __________.

     

    9. The
      Transferee is not a Disqualified Non-U.S. Person as defined in the
      Agreement.

     

    10. The
      Transferee is aware that the Certificate may be a “noneconomic residual
      interest” within the meaning of proposed Treasury regulations promulgated
      pursuant to the Code and that the transferor of a noneconomic residual interest
      will remain liable for any taxes due with respect to the income on such residual
      interest, unless no significant purpose of the transfer was to impede the
      assessment or collection of tax.

     

    11. The
      Transferee will not cause income from the Residual Certificate to be
      attributable to a foreign permanent establishment or fixed base, within the
      meaning of an applicable income tax treaty, of the Transferee or any other
      U.S.
      Person.

    
      
         

      

      
        EXHIBIT
          G-2

        
          

        

      

      
         

      

    

     

    12. Check
      the
      applicable paragraph:

     

    o
The
      present value of
      the anticipated tax liabilities associated with holding the Certificate, as
      applicable, does not exceed the sum of:

     

    (i) the
      present value of any consideration given to the Transferee to acquire such
      Certificate;

     

    (ii) the
      present value of the expected future distributions on such Certificate;
      and

     

    (iii) the
      present value of the anticipated tax savings associated with holding such
      Certificate as the related REMIC generates losses.

     

    For
      purposes of this calculation, (i) the Transferee is assumed to pay tax at
      the highest rate currently specified in Section 11(b) of the Code (but the
      tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the highest
      rate specified in Section 11(b) of the Code if the Transferee has been
      subject to the alternative minimum tax under Section 55 of the Code in the
      preceding two years and will compute its taxable income in the current taxable
      year using the alternative minimum tax rate) and (ii) present values are
      computed using a discount rate equal to the short-term Federal rate prescribed
      by Section 1274(d) of the Code for the month of the transfer and the
      compounding period used by the Transferee.

     

    o
The
      transfer of the Certificate complies with U.S.
      Treasury Regulations Sections 1.860E-1(c)(5) and (6) and,
      accordingly,

     

    (i) the
      Transferee is an “eligible corporation,” as defined in U.S. Treasury Regulations
      Section 1.860E-1(c)(6)(i), as to which income from the Certificate will only
      be
      taxed in the United States;

     

    (ii) at
      the
      time of the transfer, and at the close of the Transferee’s two fiscal years
      preceding the year of the transfer, the Transferee had gross assets for
      financial reporting purposes (excluding any obligation of a person related
      to
      the Transferee within the meaning of U.S. Treasury Regulations Section
      1.860E-1(c)(6)(ii)) in excess of $100 million and net assets in excess of
      $10 million;

     

    (iii) the
      Transferee will transfer the Certificate only to another “eligible corporation,”
as defined in U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), in a
      transaction that satisfies the requirements of Sections 1.860E-1(c)(4)(i),
      (ii)
      and (iii) and Section 1.860E-1(c)(5) of the U.S. Treasury Regulations;
      and

     

    (iv) the
      Transferee determined the consideration paid to it to acquire the Certificate
      based on reasonable market assumptions (including, but not limited to, borrowing
      and investment rates, prepayment and loss assumptions, expense and reinvestment
      assumptions, tax rates and other factors specific to the Transferee) that it
      has
      determined in good faith.

     

    o
None
      of the above.

    
      
         

      

      
        EXHIBIT
          G-3

        
          

        

      

      
         

      

    

     

    13. The
      Transferee is not an employee benefit plan that is subject to Title I of
      ERISA or a plan that is subject to Section 4975 of the Code or a plan
      subject to any Federal, state or local law that is substantially similar to
      Title I of ERISA or Section 4975 of the Code, and the Transferee is
      not acting on behalf of or investing plan assets of such a plan.

     

    * * *

     

    IN
      WITNESS WHEREOF, the Transferee has caused this instrument to be executed on
      its
      behalf, pursuant to authority of its Board of Directors, by its duly authorized
      officer and its corporate seal to be hereunto affixed, duly attested, this
      ___
      day of _______, 20__.

     

     

     

    ____________________________

    Print
      Name of Transferee

     

     

    By:
      _________________________

    Name:

    Title:

     

    [Corporate
      Seal]

     

    ATTEST:

     

    __________________________

    [Assistant]
      Secretary

     

    Personally
      appeared before me the above-named __________, known or proved to me to be
      the
      same person who executed the foregoing instrument and to be the ___________
      of
      the Transferee, and acknowledged that he executed the same as his free act
      and
      deed and the free act and deed of the Transferee.

     

    Subscribed
      and sworn before me this ___ day of _______, 20__.

     

     

     

    __________________________________

    NOTARY
      PUBLIC

     

    My
      Commission expires the __ day

    of
      _________, 20__

    

    

    
      
         

      

      
        EXHIBIT
          G-4

        
          

        

      

      
         

      

    

     

    EXHIBIT
      H

     

    FORM
      OF
      TRANSFEROR CERTIFICATE

     

    __________,
      20__

     

    HSI
      Asset
      Securitization Corporation

    452
      Fifth
      Avenue

    New
      York,
      New York 10018

    Attention:
      Head MBS Principal Finance

     

    Wells
      Fargo Bank, N.A.,

    as
      Securities Administrator

    Sixth
      Street and Marquette Avenue

    Minneapolis,
      Minnesota 55479

     

    Attention:
      Corporate Trust Services - HASCO 2007-NC1

     

    
      	 	
              Re:

            	
              HSI
                Asset Securitization Corporation Trust 2007-NC1 Mortgage Pass-Through
                Certificates, Series 2007-NC1, Class
                [__]

            

    

     

    Ladies
      and Gentlemen:

     

    In
      connection with our disposition of the above Certificates we certify that
      (a) we understand that the Certificates have not been registered under the
      Securities Act of 1933, as amended (the “Act”),
      and
      are being disposed by us in a transaction that is exempt from the registration
      requirements of the Act, (b) we have not offered or sold any Certificates
      to, or solicited offers to buy any Certificates from, any person, or otherwise
      approached or negotiated with any person with respect thereto, in a manner
      that
      would be deemed, or taken any other action which would result in, a violation
      of
      Section 5 of the Act and (c) to the extent we are disposing of a
      Residual Certificate, (i) we have no knowledge the Transferee is a
      Non-Permitted Transferee, (ii) after conducting a reasonable investigation
      of the financial condition of the Transferee, we have no knowledge and no reason
      to believe that the Transferee will not pay all taxes with respect to the
      Residual Certificates as they become due and (iii) we have no reason to
      believe that the statements made in paragraphs 7, 10 and 11 of the
      Transferee’s Residual Transfer Affidavit are false.

     

    In
      connection with any disposition of the above Certificates in accordance with
      Rule 904 of Regulation S we hereby certify that:

     

    
      	 	
              a.
                

            	
              the
                offer of the Certificates was not made to a person in the United
                States;

            

    

     

    
      	 	
              b.
                

            	
              at
                the time the buy order was originated, the transferee was outside
                the
                United States or the Transferor and any person acting on its behalf
                responsibly believed
                the transferee was outside the United
                States;

            

    

    
      
         

      

      
        EXHIBIT
          H-1

        
          

        

      

      
         

      

    

     

    
      	 	
              c.

            	
              no
                directed selling efforts have been made in contravention of the
                requirements of Rule 903 or Rule 904 of Regulation S, as
                applicable;

            

    

     

    
      	 	
              d.
                

            	
              the
                transaction is not part of a plan or scheme to
                evade the registration requirements of the Securities Act, as amended;
                and

            

    

     

    
      	 	
              e.

            	
              the
                transferee is not a U.S. person (as defined in Regulation
                S).

            

    

     

    

     

    Very
      truly yours,

     

    ___________________________

    Print
      Name of Transferor

     

     

    By:
      _________________________

    Authorized
      Officer

    

    
      
         

      

      
        EXHIBIT
          H-2

        
          

        

      

      
         

      

    

     

    EXHIBIT
      I-A

     

    FORM
      OF
      RULE 144A INVESTMENT LETTER

     

    ____________,
      20__

     

    HSI
      Asset
      Securitization Corporation

    452
      Fifth
      Avenue

    New
      York,
      New York 10018

    Attention:
      Head MBS Principal Finance

     

    Wells
      Fargo Bank, N.A.,

    as
      Securities Administrator

    Sixth
      Street and Marquette Avenue

    Minneapolis,
      Minnesota 55479

     

    Attention:
      Corporate Trust Services - HASCO 2007-NC1

     

    
      	 	
              Re:

            	
              HSI
                Asset Securitization Corporation Trust
                2007-NC1

            

    

    
      	 	 	
              Mortgage
                Pass-Through Certificates, Series 2007-NC1, Class
                [__]

            

    

     

    Ladies
      and Gentlemen:

    

    In
      connection with our acquisition of the above Certificates we certify that
      (a) we understand that the Certificates are not being registered under the
      Securities Act of 1933, as amended (the “Act”),
      or
      any state securities laws and are being transferred to us in a transaction
      that
      is exempt from the registration requirements of the Act and any such laws,
      (b) we have such knowledge and experience in financial and business matters
      that we are capable of evaluating the merits and risks of investments in the
      Certificates, (c) we have had the opportunity to ask questions of and
      receive answers from the Depositor concerning the purchase of the Certificates
      and all matters relating thereto or any additional information deemed necessary
      to our decision to purchase the Certificates, (d) in the case of an
      ERISA-Restricted Certificate, we are not an employee benefit plan that is
      subject to Title I of the Employee Retirement Income Security Act of 1974,
      as amended (“ERISA”),
      or a
      plan or arrangement that is subject to Section 4975 of the Internal Revenue
      Code of 1986, as amended, or a plan subject to materially similar provisions
      of
      applicable federal, state or local law, nor are we acting on behalf of any
      such
      plan or arrangement nor using the assets of any such plan or arrangement to
      effect such acquisition or, with respect to an ERISA-Restricted Certificate
      other than a Class P Certificate, a Class X Certificate or a Residual
      Certificate, such Certificate has been the subject of an ERISA-Qualifying
      Underwriting and the purchaser is an insurance company that is purchasing this
      certificate with funds contained in an “insurance company general account” (as
      such term is defined in Section V(e) of Prohibited Transaction Class
      Exemption (“PTCE”)
      95-60)
      and that the purchase and holding of such Certificates are covered under
      Sections I and III of PTCE 95-60, (e)  in the case of an
      ERISA-Restricted Trust Certificate prior to the termination of the swap
      agreement and the cap agreement, either (i) we are not an employee benefit
      plan
      that is subject to Title I of ERISA, or a plan or arrangement that is
      subject to Section 4975 of the Internal Revenue 

    
      
         

      

      
        EXHIBIT
          I-A-1

        
          

        

      

      
         

      

    

    Code
      of
      1986, as amended, nor a person acting on behalf of any such plan, nor are we
      using the assets of any such plan to effect such transfer or (ii) our
      acquisition and holding of the ERISA-Restricted Trust Certificate is eligible
      for exemptive relief under the statutory exemption for non-fiduciary service
      providers under Section 408(b)(17) of ERISA and Section 4975(d)(20) of the
      Code,
      PTCE 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60 or PTCE 96-23 or some other
      applicable exemption, (f) we have not, nor has anyone acting on our behalf
      offered, transferred, pledged, sold or otherwise disposed of the Certificates,
      any interest in the Certificates or any other similar security to, or solicited
      any offer to buy or accept a transfer, pledge or other disposition of the
      Certificates, any interest in the Certificates or any other similar security
      from, or otherwise approached or negotiated with respect to the Certificates,
      any interest in the Certificates or any other similar security with, any person
      in any manner, or made any general solicitation by means of general advertising
      or in any other manner, or taken any other action, that would constitute a
      distribution of the Certificates under the Securities Act or that would render
      the disposition of the Certificates a violation of Section 5 of the
      Securities Act or require registration pursuant thereto, nor will act, nor
      has
      authorized or will authorize any person to act, in such manner with respect
      to
      the Certificates, and (g) we are a “qualified institutional buyer” as that
      term is defined in Rule 144A under the Securities Act and have completed
      either of the forms of certification to that effect attached hereto as
      Annex 1 or Annex 2. We are aware that the sale to us is being made in
      reliance on Rule 144A. We are acquiring the Certificates for our own
      account or for resale pursuant to Rule 144A and further, understand that
      such Certificates may be resold, pledged or transferred only (i) to a
      person reasonably believed to be a qualified institutional buyer that purchases
      for its own account or for the account of a qualified institutional buyer to
      whom notice is given that the resale, pledge or transfer is being made in
      reliance on Rule 144A, or (ii) pursuant to another exemption from
      registration under the Securities Act.

    
      
         

      

      
        EXHIBIT
          I-A-2

        
          

        

      

      
         

      

    

     

    ANNEX
      1 TO EXHIBIT I

     

    QUALIFIED
      INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

     

    [For
      Transferees Other Than Registered Investment Companies]

     

    The
      undersigned (the “Buyer”)
      hereby
      certifies as follows to the parties listed in the Rule 144A Transferee
      Certificate to which this certification relates with respect to the Certificates
      described therein:

     

    1. As
      indicated below, the undersigned is the President, Chief Financial Officer,
      Senior Vice President or other executive officer of the Buyer.

     

    2. In
      connection with purchases by the Buyer, the Buyer is a “qualified institutional
      buyer” as that term is defined in Rule 144A under the Securities Act of
      1933, as amended (“Rule 144A”),
      because (i) the Buyer owned and/or invested on a discretionary basis
      $________1 
      in
      securities (except for the excluded securities referred to below) as of the
      end
      of the Buyer’s most recent fiscal year (such amount being calculated in
      accordance with Rule 144A and (ii) the Buyer satisfies the criteria in
      the category marked below.

     

    
      	 	
              ____

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

            

    

     

    
      	 	
              ____

            	
              Bank.
                The Buyer (a) is a national bank or banking institution organized
                under the laws of any State, territory or the District of Columbia,
                the
                business of which is substantially confined to banking and is supervised
                by the State or territorial banking commission or similar official
                or is a
                foreign bank or equivalent institution, and (b) has an audited net
                worth of at least $25,000,000 as demonstrated in its latest annual
                financial statements, a copy of which is attached
                hereto.

            

    

     

    
      	 	
              ____

            	
              Savings
                and Loan.
                The Buyer (a) is a savings and loan association, building and loan
                association, cooperative bank, homestead association or similar
                institution, which is supervised and examined by a State or Federal
                authority having supervision over any such institutions or is a foreign
                savings and loan association or equivalent institution and (b) has an
                audited net worth of at least $25,000,000 as demonstrated in its
                latest
                annual financial statements, a copy of which is attached
                hereto.

            

    

     

    
      	 	
              ____

            	
              Broker-dealer.
                The Buyer is a dealer registered pursuant to Section 15 of the
                Securities Exchange Act of 1934.

            

    

     

    ___________________

    
      1 Buyer
        must own and/or invest on a discretionary basis at least $100,000,000 in
        securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
        invest on a discretionary basis at least $10,000,000 in
        securities.

    

    
 

    
      
         

      

      
        EXHIBIT
          I-A-3

        
          

        

      

      
         

      

    

     

    
      	 	
              ____

            	
              Insurance
                Company.
                The Buyer is an insurance company whose primary and predominant business
                activity is the writing of insurance or the reinsuring of risks
                underwritten by insurance companies and which is subject to supervision
                by
                the insurance commissioner or a similar official or agency of a State,
                territory or the District of
                Columbia.

            

    

     

    
      	 	
              ____

            	
              State
                or Local Plan.
                The Buyer is a plan established and maintained by a State, its political
                subdivisions, or any agency or instrumentality of the State or its
                political subdivisions, for the benefit of its
                employees.

            

    

     

    
      	 	
              ____

            	
              ERISA
                Plan.
                The Buyer is an employee benefit plan within the meaning of Title I
                of the Employee Retirement Income Security Act of
                1974.

            

    

     

    
      	 	
              ____

            	
              Investment
                Advisor.
                The Buyer is an investment advisor registered under the Investment
                Advisors Act of 1940.

            

    

     

    
      	 	
              ____

            	
              Small
                Business Investment Company.
                Buyer is a small business investment company licensed by the U.S.
                Small
                Business Administration under Section 301(c) or (d) of the Small
                Business
                Investment Act of 1958.

            

    

     

    
      	 	
              ____

            	
              Business
                Development Company.
                Buyer is a business development company as defined in Section 202(a)(22)
                of the Investment Advisors Act of
                1940.

            

    

     

    3. The
      term
“securities”
as
      used
      herein does
      not include
      (i) securities of issuers that are affiliated with the Buyer,
      (ii) securities that are part of an unsold allotment to or subscription by
      the Buyer, if the Buyer is a dealer, (iii) securities issued or guaranteed
      by the U.S. or any instrumentality thereof, (iv) bank deposit notes and
      certificates of deposit, (v) loan participations, (vi) repurchase
      agreements, (vii) securities owned but subject to a repurchase agreement
      and (viii) currency, interest rate and commodity swaps.

     

    4. For
      purposes of determining the aggregate amount of securities owned and/or invested
      on a discretionary basis by the Buyer, the Buyer used the cost of such
      securities to the Buyer and did not include any of the securities referred
      to in
      the preceding paragraph, except (i) where the Buyer reports its securities
      holdings in its financial statements on the basis of their market value, and
      (ii) no current information with respect to the cost of those securities
      has been published. If clause (ii) in the preceding sentence applies, the
      securities may be valued at market. Further, in determining such aggregate
      amount, the Buyer may have included securities owned by subsidiaries of the
      Buyer, but only if such subsidiaries are consolidated with the Buyer in its
      financial statements prepared in accordance with generally accepted accounting
      principles and if the investments of such subsidiaries are managed under the
      Buyer’s direction. However, such securities were not included if the Buyer is a
      majority-owned, consolidated subsidiary of another enterprise and the Buyer
      is
      not itself a reporting company under the Securities Exchange Act of 1934, as
      amended.

     

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

    
      
         

      

      
        EXHIBIT
          I-A-4

        
          

        

      

      
         

      

    

     

    6. Until
      the
      date of purchase of the Rule 144A Securities, the Buyer will notify each of
      the parties to which this certification is made of any changes in the
      information and conclusions herein. Until such notice is given, the Buyer’s
      purchase of the Certificates will constitute a reaffirmation of this
      certification as of the date of such purchase. In addition, if the Buyer is
      a
      bank or savings and loan is provided above, the Buyer agrees that it will
      furnish to such parties updated annual financial statements promptly after
      they
      become available.

     

     

     

    ____________________________

    Print
      Name of Transferee

     

     

    By:
      _________________________

    Name:

    Title:

     

     

    Date:
      ________________________

    

    
      
         

      

      
        EXHIBIT
          I-A-5

        
          

        

      

      
         

      

    

     

    ANNEX
      2 TO EXHIBIT I

     

    QUALIFIED
      INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

     

    [For
      Transferees That Are Registered Investment Companies]

     

    The
      undersigned (the “Buyer”)
      hereby
      certifies as follows to the parties listed in the Rule 144A Transferee
      Certificate to which this certification relates with respect to the Certificates
      described therein:

     

    1. As
      indicated below, the undersigned is the President, Chief Financial Officer
      or
      Senior Vice President of the Buyer or, if the Buyer is a “qualified
      institutional buyer” as that term is defined in Rule 144A under the
      Securities Act of 1933, as amended (“Rule 144A”),
      because Buyer is part of a Family of Investment Companies (as defined below),
      is
      such an officer of the Adviser.

     

    2. In
      connection with purchases by Buyer, the Buyer is a “qualified institutional
      buyer” as defined in SEC Rule 144A because (i) the Buyer is an
      investment company registered under the Investment Company Act of 1940, as
      amended, and (ii) as marked below, the Buyer alone, or the Buyer’s Family
      of Investment Companies, owned at least $100,000,000 in securities (other than
      the excluded securities referred to below) as of the end of the Buyer’s most
      recent fiscal year. For purposes of determining the amount of securities owned
      by the Buyer or the Buyer’s Family of Investment Companies, the cost of such
      securities was used, except (i) where the Buyer or the Buyer’s Family of
      Investment Companies reports its securities holdings in its financial statements
      on the basis of their market value, and (ii) no current information with
      respect to the cost of those securities has been published. If clause (ii)
      in the preceding sentence applies, the securities may be valued at
      market.

     

    
      	 	
              ____

            	
              The
                Buyer owned $_______ in securities (other than the excluded securities
                referred to below) as of the end of the Buyer’s most recent fiscal year
                (such amount being calculated in accordance with
                Rule 144A).

            

    

     

    
      	 	
              ____

            	
              The
                Buyer is part of a Family of Investment Companies which owned in
                the
                aggregate $_______ in securities (other than the excluded securities
                referred to below) as of the end of the Buyer’s most recent fiscal year
                (such amount being calculated in accordance with
                Rule 144A).

            

    

     

    3. The
      term
“Family
      of Investment Companies”
as
      used
      herein means two or more registered investment companies (or series thereof)
      that have the same investment adviser or investment advisers that are affiliated
      (by virtue of being majority owned subsidiaries of the same parent or because
      one investment adviser is a majority owned subsidiary of the
      other).

     

    4. The
      term
“securities”
as
      used
      herein does not include (i) securities of issuers that are affiliated with
      the Buyer or are part of the Buyer’s Family of Investment Companies,
      (ii) securities issued or guaranteed by the U.S. or any instrumentality
      thereof, (iii) bank deposit notes and certificates of deposit,
      (iv) loan participations, (v) repurchase agreements,
      (vi) securities owned but subject to a repurchase agreement and
      (vii) currency, interest rate and commodity swaps.

    
      
         

      

      
        EXHIBIT
          I-A-6

        
          

        

      

      
         

      

    

     

    5. The
      Buyer
      is familiar with Rule 144A and understands that the parties listed in the
      Rule 144A Transferee Certificate to which this certification relates are
      relying and will continue to rely on the statements made herein because one
      or
      more sales to the Buyer will be in reliance on Rule 144A. In addition, the
      Buyer will only purchase for the Buyer’s own account.

     

    6. Until
      the
      date of purchase of the Certificates, the undersigned will notify the parties
      listed in the Rule 144A Transferee Certificate to which this certification
      relates of any changes in the information and conclusions herein. Until such
      notice is given, the Buyer’s purchase of the Certificates will constitute a
      reaffirmation of this certification by the undersigned as of the date of such
      purchase.

     

     

    
       

      ____________________________

      Print
        Name of Transferee

       

       

      By:
        _________________________

      Name:

      Title:

       

    

     

    IF
      AN
      ADVISER:

     

    ____________________________

    Print
      Name of Buyer

     

     

    
      Date:
        ________________________

    

     

    

    
      
         

      

      
        EXHIBIT
          I-A-7

        
          

        

      

      
         

      

    

     

    EXHIBIT
      I-B

     

    FORM
      OF
      REGULATION S INVESTMENT LETTER

     

    ____________,
      20__

     

    HSI
      Asset
      Securitization Corporation

    452
      Fifth
      Avenue

    New
      York,
      New York 10018

    Attention:
      Head MBS Principal Finance

     

    Wells
      Fargo Bank, N.A.,

    as
      Securities Administrator

    Sixth
      Street and Marquette Avenue

    Minneapolis,
      Minnesota 55479

     

    Attention:
      Corporate Trust Services - HASCO 2007-NC1

     

    
      	 	
              Re:

            	
              HSI
                Asset Securitization Corporation Trust 2007-NC1

            

    

    Mortgage
      Pass-Through Certificates, Series 2007-NC1, Class [__] 

     

    Ladies
      and Gentlemen:

     

    In
      connection with our acquisition of the above Certificates we certify that
      (a) we understand that the Certificates are not being registered under the
      Securities Act of 1933, as amended (the “Act”),
      or
      any state securities laws and are being transferred to us in a transaction
      that
      is exempt from the registration requirements of the Act and any such laws,
      (b) we have such knowledge and experience in financial and business matters
      that we are capable of evaluating the merits and risks of investments in the
      Certificates, (c) we have had the opportunity to ask questions of and
      receive answers from the Depositor concerning the purchase of the Certificates
      and all matters relating thereto or any additional information deemed necessary
      to our decision to purchase the Certificates, (d) in the case of an
      ERISA-Restricted Certificate, we are not an employee benefit plan that is
      subject to Title I of the Employee Retirement Income Security Act of 1974,
      as amended (“ERISA”),
      or a
      plan or arrangement that is subject to Section 4975 of the Internal Revenue
      Code of 1986, as amended, or a plan subject to materially similar provisions
      of
      applicable federal, state or local law, nor are we acting on behalf of any
      such
      plan or arrangement nor using the assets of any such plan or arrangement to
      effect such acquisition or, with respect to an ERISA-Restricted Certificate
      other than a Class P Certificate, a Class X Certificate or a Residual
      Certificate, such Certificate has been the subject of an ERISA-Qualifying
      Underwriting and the purchaser is an insurance company that is purchasing this
      certificate with funds contained in an “insurance company general account” (as
      such term is defined in Section V(e) of Prohibited Transaction Class
      Exemption (“PTCE”)
      95-60)
      and that the purchase and holding of such Certificates are covered under
      Sections I and III of PTCE 95-60, (e)  in the case of an
      ERISA-Restricted Trust Certificate prior to the termination of the swap
      agreement and the cap agreement, either (i) we are not an employee benefit
      plan
      that is subject to Title I of ERISA, or a plan or arrangement that is
      subject to Section 4975 of the Internal Revenue 

    
      
         

      

      
        EXHIBIT
          I-B-1

        
          

        

      

      
         

      

    

     

    Code
      of
      1986, as amended, nor a person acting on behalf of any such plan, nor are we
      using the assets of any such plan to effect such transfer or (ii) our
      acquisition and holding of the ERISA-Restricted Trust Certificate is eligible
      for exemptive relief under the statutory exemption for non-fiduciary service
      providers under Section 408(b)(17) of ERISA and Section 4975(d)(20) of the
      Code,
      PTCE 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60 or PTCE 96-23 or some other
      applicable exemption, (f) we have not, nor has anyone acting on our behalf
      offered, transferred, pledged, sold or otherwise disposed of the Certificates,
      any interest in the Certificates or any other similar security to, or solicited
      any offer to buy or accept a transfer, pledge or other disposition of the
      Certificates, any interest in the Certificates or any other similar security
      from, or otherwise approached or negotiated with respect to the Certificates,
      any interest in the Certificates or any other similar security with, any person
      in any manner, or made any general solicitation by means of general advertising
      or in any other manner, or taken any other action, that would constitute a
      distribution of the Certificates under the Securities Act or that would render
      the disposition of the Certificates a violation of Section 5 of the
      Securities Act or require registration pursuant thereto, nor will act, nor
      has
      authorized or will authorize any person to act, in such manner with respect
      to
      the Certificates, and (g) we are not a U.S. person within the meaning of
      Regulation S of the Securities Act and was at the time the buy order was
      originated for the Class [ ] Certificates outside the United States. We are
      aware that the sale to us is being made in reliance on Regulation S of the
      Securities Act and we understand (x) that until the expiration of the
      40-day distribution
      compliance period (within the meaning of Regulation S), no offer, sale, pledge
      or other transfer of such Certificates or any interest therein shall be made
      in
      the United States or to or for the account or benefit of a U.S. person (each
      as
      defined in Regulation S), (y) if in the future we decide to offer, resell,
      pledge or otherwise transfer such Certificates, such Certificates may be
      offered, resold, pledged or transferred only to (A) a person which the seller
      reasonably believes is a “qualified institutional buyer” (a “QIB”) as defined in
      Rule 144A under the Securities Act, that is purchasing such Certificate for
      its
      own account or for the account of a QIB in reliance on Rule 144A or (B) in
      an
      offshore transaction (as defined in Regulation S) in compliance with the
      provisions of Regulation S, in each case in compliance with the requirements
      of
      the Agreement; and we will notify such transferee of the transfer restrictions
      specified in the Agreement. 

     

    

     

    

     

    

     

    

    
      
         

      

      
        EXHIBIT
          I-B-2

        
          

        

      

      
         

      

    

     

    
       

      
         

        ____________________________

        Print
          Name of Transferee

         

         

        By:
          _________________________

        Name:

        Title:

         

      

       

      IF
        AN
        ADVISER:

       

      ____________________________

      Print
        Name of Buyer

       

       

      
        Date:

      

    

    
      
         

      

      
        EXHIBIT
          I-B-3

        
          

        

      

      
         

      

    

     

    EXHIBIT
      J

     

    FORM
      OF
      REQUEST FOR RELEASE

    (for
      Custodian)

     

    
      	
              To:

            	
              Wells
                Fargo Bank, N.A.

              
                24
                  Executive Park

                Irvine,
                  California 92614

              

            

    

     

    
      	 	
              Re:

            	
              Pooling
                and Servicing Agreement (the “Pooling and Servicing Agreement”) dated as
                of May 1, 2007 among HSI Asset Securitization Corporation, as depositor,
                Wells Fargo Bank, N.A., as master servicer, securities administrator
                and
                custodian, OfficeTiger Global Real Estate Services Inc., as credit
                risk
                manager, and Deutsche Bank National Trust Company, as
                trustee.

            

    

     

    In
      connection with the administration of the Mortgage Loans held by you as the
      Custodian on behalf of the Certificateholders, we request the release, and
      acknowledge receipt, of the (Custodial File/[specify documents]) for the
      Mortgage Loan described below, for the reason indicated.

     

    Mortgagor’s
      Name, Address & Zip Code:

     

    Mortgage
      Loan Number:

     

    Send
      Custodial File to:

     

    Delivery
      Method (check one)

     

    
      	
              ____1.

            	
              Regular
                mail

            

    

     

    
      	
              ____2.

            	
              Overnight
                courier (Tracking information:
                                   )

            

    

     

    If
      neither box 1 nor 2 is checked, regular mail shall be assumed.

     

    Reason
      for Requesting Documents
      (check
      one)

     

    
      	
              ____1.

            	
              Mortgage
                Loan Paid in Full.
                (The Servicer hereby certifies that all amounts received in connection
                therewith have been credited to the Collection Account as provided
                in the
                Pooling and Servicing Agreement.)

            

    

     

    
      	
              ____2.

            	
              Mortgage
                Loan Repurchase Pursuant to Subsection 2.03 of the Pooling and Servicing
                Agreement.
                (The Servicer hereby certifies that the repurchase price has been
                credited
                to the Collection Account as provided in the Pooling and Servicing
                Agreement.)

            

    

     

    
      	
              ____3.

            	
              Mortgage
                Loan Liquidated by _________________. (The Servicer hereby certifies
                that
                all proceeds of foreclosure, insurance, condemnation or other liquidation
                have been finally received and credited to the Collection Account
                pursuant
                to the Pooling and Servicing
                Agreement.)

            

    

    
      
         

      

      
        EXHIBIT
          J-1

        
          

        

      

      
         

      

    

     

    
      	
              ____4.

            	
              Mortgage
                Loan in Foreclosure.

            

    

     

    
      	____5.	
              Other
                (explain).  

            

    

     

    If
      box 1,
      2 or 3 above is checked, and if all or part of the Custodial File was previously
      released to us, please release to us our previous request and receipt on file
      with you, as well as any additional documents in your possession relating to
      the
      specified Mortgage Loan.

     

    If
      box 4
      or 5 above is checked, upon our return of all of the above documents to you
      as
      the Trustee, please acknowledge your receipt by signing in the space indicated
      below, and returning this form if requested by us.

     

    [                                     
      ]

     

     

    By:
      _____________________________

    Name:

    Title:

    Date:

     

    ACKNOWLEDGED
      AND AGREED:

     

     

    WELLS
      FARGO BANK, N.A.

     

     

    By:
      _______________________________

    Name:

    Title:

    Date:

    

    

    
      
         

      

      
        EXHIBIT
          J-2

        
          

        

      

      
         

      

    

     

    EXHIBIT
      K

     

    CONTENTS
      OF EACH MORTGAGE FILE

     

    With
      respect to each Mortgage Loan, the Mortgage File shall include each of the
      following items, which shall be available for inspection by the Depositor and
      which shall be retained by the Servicer or delivered to and retained by the
      Custodian:

     

    (a) The
      documents or instruments set forth as items (i) to (ix) in Section 2.01(b)
      of the Pooling and Servicing Agreement.

     

    (b) Residential
      loan application.

     

    (c) Mortgage
      Loan closing statement.

     

    (d) Verification
      of employment and income.

     

    (e) Verification
      of acceptable evidence of source and amount of downpayment.

     

    (f) Credit
      report on Mortgagor.

     

    (g) Residential
      appraisal report.

     

    (h) Photograph
      of the Mortgaged Property.

     

    (i) Survey
      of
      the Mortgaged Property.

     

    (j) Copy
      of
      each instrument necessary to complete identification of any exception set forth
      in the exception schedule in the title policy, i.e., map or plat, restrictions,
      easements, sewer agreements, home association declarations, etc.

     

    (k) All
      required disclosure statements and statement of Mortgagor confirming receipt
      thereof.

     

    (l) If
      available, termite report, structural engineer’s report, water potability and
      septic certification.

     

    (m) Sales
      contract, if applicable.

     

    (n) Hazard
      insurance policy.

     

    (o) Tax
      receipts, insurance premium receipts, ledger sheets, payment history from date
      of origination, insurance claim files, correspondence, current and historical
      computerized data files, and all other processing, underwriting and closing
      papers and records which are customarily contained in a mortgage loan file
      and
      which are required to document the Mortgage Loan or to service the Mortgage
      Loan.

    
      
         

      

      
        EXHIBIT
          K-1

        
          

        

      

      
         

      

    

     

    (p) Amortization
      schedule, if available.

     

    (q) Payment
      history for Mortgage Loans that have been closed for more than 90
      days.

    

    
      
         

      

      
        EXHIBIT
          K-2

        
          

        

      

      
         

      

    

     

    EXHIBIT
      L

     

    FORM
      OF
      SARBANES-OXLEY CERTIFICATION TO BE

    PROVIDED
      BY MASTER SERVICER (OR OTHER 

    CERTIFICATION
      PARTY) WITH FORM 10-K

     

    HSI
      Asset
      Securitization Corporation Trust 2007-NC1

    Mortgage
      Pass-Through Certificates

    Series
      2007-NC1

     

    This
      Certification is being made pursuant to Section 3.05 and Section 8.12 of
      the Pooling and Servicing Agreement dated as of May 1, 2007 (the “Pooling
      and Servicing Agreement”)
      relating to the above-referenced Series, among HSI Asset Securitization
      Corporation, as depositor, Wells Fargo Bank, N.A., as master servicer,
      securities administrator and custodian, OfficeTiger Global Real Estate Services
      Inc., as credit risk manager, and Deutsche Bank National Trust Company, as
      trustee. Capitalized terms used but not defined herein shall have the meanings
      assigned in the Pooling and Servicing Agreement.

     

    1. I
      have
      reviewed this annual report on Form 10-K, and all reports on Form 10-D
      required to be filed in respect of the period covered by this report on Form
      10-K of HSI Asset Securitization Corporation Trust 2007-NC1 (the “Exchange Act
      periodic reports”);

     

    2. Based
      on
      my knowledge, the Exchange Act periodic reports, taken as a whole, do not
      contain any untrue statement of a material fact or omit to state a material
      fact
      necessary to make the statements made, in light of the circumstances under
      which
      such statements were made, not misleading with respect to the period covered
      by
      this report;

     

    3. Based
      on
      my knowledge, all of the distribution, servicing and other information required
      to be provided under Form 10-D for the period covered by this report is included
      in the Exchange Act periodic reports;

     

    4. I
      am
      responsible for reviewing the activities performed by each Servicer and based
      on
      my knowledge and the compliance review conducted in preparing the Servicer
      compliance statement required in this report under Item 1123 of Regulation
      AB,
      and except as disclosed in the Exchange Act periodic reports, each Servicer
      has
      fulfilled its obligations under its related Servicing Agreement;
      and

     

    5. All
      of
      the reports on assessment of compliance with servicing criteria for asset-backed
      securities and their related attestation reports on assessment of compliance
      with servicing criteria for asset-backed securities required to be included
      in
      this report in accordance with Item 1122 of Regulation AB and Exchange Act
      Rules
      13a-18 and 15d-18 have been included as an exhibit to this report, except as
      otherwise disclosed in this report. Any material instances of noncompliance
      described in such reports have been disclosed in this report on Form
      10-K.

    
      
         

      

      
        EXHIBIT
          L-1

        
          

        

      

      
         

      

    

     

    In
      giving
      the certifications above, I have reasonably relied on information provided
      to me
      by the following parties: [  ]

    

     

    WELLS
      FARGO BANK, N.A.

    as
      Master
      Servicer

     

    By:
      _________________________________

    Name:

    Title:

    Date:

    

    

    
      
         

      

      
        EXHIBIT
          L-2

        
          

        

      

      
         

      

    

     

    EXHIBIT
      M

     

    LIST
      OF
      SERVICING AGREEMENTS

     

    

    1. Servicing
      Agreement, dated as of June 30, 2006, by and among HSBC Bank (USA) Inc. and
      Wells Fargo Bank, N.A., as servicer, as reconstituted pursuant to a
      Reconstituted Servicing Agreement, dated as of May 1, 2007, by and among HSBC
      Bank USA, National Association, HSI Asset Securitization Corporation and Wells
      Fargo Bank, N.A., as servicer,
      and
      acknowledged by Wells Fargo Bank, N.A., as master servicer, and Deutsche Bank
      National Trust Company, as trustee.

     

    2. Mortgage
      Loan Servicing Rights Purchase and Servicing Agreement as amended by Amendment
      Reg AB, each dated as of December 1, 2006, each among HSBC Bank USA, National
      Association, Countrywide Home Loans, Inc. and Countrywide Home Loans Servicing
      LP, each as reconstituted pursuant to an Assignment, Assumption and Recognition
      Agreement, dated as of May 1, 2007, among HSBC Bank (USA), National Association,
      HSI Asset Securitization Corporation, Countrywide Home Loans, Inc., Countrywide
      Home Loans Servicing LP, Wells Fargo Bank, N.A., as master servicer, and
      Deutsche Bank National Trust Company, as trustee.

     

    

     

    

    
      
         

      

      
        EXHIBIT
          M-1

        
          

        

      

      
         

      

    

     

    EXHIBIT
      N-1

    

     

    FORM
      OF
      BACK-UP SARBANES-OXLEY
      CERTIFICATION

     

    
      	 	
              Re:

            	
              Pooling
                and Servicing Agreement, dated as of May 1, 2007 (the “Agreement”),
                among HSI Asset Securitization Corporation, as depositor (the
                “Depositor”),
                Wells Fargo Bank, N.A., master servicer (the “Master
                Servicer”),
                securities administrator (the “Securities
                Administrator”)
                and custodian, OfficeTiger Global Real Estate Services Inc., as credit
                risk manager, and Deutsche Bank National Trust Company, as
                trustee

            

    

     

    I,
      ____________________________, the _______________________ of [NAME OF COMPANY]
      (the “Company”), certify to the Depositor and their officers, with the knowledge
      and intent that they will rely upon this certification, that:

     

    1. I
      have
      reviewed the servicer compliance statement of the Company provided in accordance
      with Item 1123 of Regulation AB (the “Compliance Statement”), the report on
      assessment of the Company’s compliance with the servicing criteria set forth in
      Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided in accordance
      with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended
      (the “Exchange Act”) and Item 1122 of Regulation AB (the “Servicing
      Assessment”), the registered public accounting firm’s attestation report
      provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act
      and
      Section 1122(b) of Regulation AB (the “Attestation Report”), and all servicing
      reports, officer’s certificates and other information relating to the servicing
      of the Mortgage Loans by the Company during 200[ ] that were delivered by the
      Company to the Depositor pursuant to the Agreement (collectively, the “Company
      Servicing Information”);

     

    2. Based
      on
      my knowledge, the Company Servicing Information, taken as a whole, does not
      contain any untrue statement of a material fact or omit to state a material
      fact
      necessary to make the statements made, in the light of the circumstances under
      which such statements were made, not misleading with respect to the period
      of
      time covered by the Company Servicing Information;

     

    3. Based
      on
      my knowledge, all of the Company Servicing Information required to be provided
      by the Company under the Agreement has been provided to the
      Depositor;

     

    4. I
      am
      responsible for reviewing the activities performed by the Company as servicer
      under the Agreement, and based on my knowledge and the compliance review
      conducted in preparing the Compliance Statement and except as disclosed in
      the
      Compliance Statement, the Servicing Assessment or the Attestation Report, the
      Company has fulfilled its obligations under the Agreement in all material
      respects; and

     

    5. The
      Compliance Statement required to be delivered by the Company pursuant to this
      Agreement, and the Servicing Assessment and Attestation Report required to
      be

    
      
         

      

      
        EXHIBIT
          N-1-1

        
          

        

      

      
         

      

    

     

    provided
      by the Company and by any Subservicer and Subcontractor pursuant to the
      Agreement, have been provided to the Depositor. Any material instances of
      noncompliance described in such reports have been disclosed to the Depositor.
      Any material instance of noncompliance with the Servicing Criteria has been
      disclosed in such reports.

    

    

    
      	 	
              Date:
                _________________________

            
	 	 
	 	 
	 	
              By: _______________________________

            
	 	
              Name:

            
	 	
              Title:

            

    

    

     

    

    

    

    
      
         

      

      
        EXHIBIT
          N-1-2

        
          

        

      

      
         

      

    

    EXHIBIT
      N-2

     

    [RESERVED]

     

    

    

    
      
         

      

      
        EXHIBIT
          N-2-1

        
          

        

      

      
         

      

    

    EXHIBIT
      N-3

     

    [RESERVED]

    

    

    
      
         

      

      
        EXHIBIT
          N-3-1

        
          

        

      

      
         

      

    

     

    EXHIBIT
      O

     

    FORM
      OF SWAP AGREEMENT

    

    
      
         

      

      
        EXHIBIT
          O-1

        
          

        

      

      
         

      

    

     

    EXHIBIT
      P

     

    FORM
      OF CAP AGREEMENT

    
      
         

      

      
        EXHIBIT
          P-1

        
          

        

      

      
         

      

    

     

    EXHIBIT
      Q

     

    FORM
      OF AMENDED AND RESTATED MASTER MORTGAGE LOAN PURCHASE AND INTERIM SERVICING
      AGREEMENT

    

    

    
      
         

      

      
        EXHIBIT
          Q-1

        
          

        

      

      
         

      

    

    EXHIBIT
      R

    

    [Reserved]

    

    

    
      
         

      

      
        EXHIBIT
          R-1

        
          

        

      

      
         

      

    

    EXHIBIT
      S

    

    SERVICING
      CRITERIA MATRIX

    

    The
      assessment of compliance to be delivered by Wells Fargo Bank, N.A. (“Wells
      Fargo”), in its capacities as Master Servicer, Securities Administrator and
      Custodian, shall address, at a minimum, the criteria identified as below as
      “Applicable Servicing Criteria”.

     

    Capitalized
      terms used herein but not defined herein shall have the meanings assigned to
      them in the Pooling and Servicing Agreement dated as of May 1, 2007 (the
“Pooling and Servicing Agreement”), by and among HSI Asset Securitization
      Corporation, as depositor, Wells Fargo Bank, N.A., as master servicer,
      securities administrator and custodian, OfficeTiger Global Real Estate Services
      Inc., as credit risk manager, and Deutsche Bank National Trust Company, as
      trustee. 

    

    
      	
              Reg
                AB

              Reference

            	
              Servicing
                Criteria

            	
              Wells
                Fargo

            
	 	
              General Servicing
                 Considerations

            	 
	
              1122(d)(1)(i)

            	
              Policies
                and procedures are instituted to monitor any performance or other
                triggers
                and events of default in accordance with the transaction
                agreements.

            	
              X

            
	
              1122(d)(1)(ii)

            	
              If
                any material servicing activities are outsourced to third parties,
                policies and procedures are instituted to monitor the third party’s
                performance and compliance with such servicing activities.

            	
              X

            
	
              1122(d)(1)(iii)

            	
              Any
                requirements in the transaction agreements to maintain a back-up
                servicer
                for the pool assets are maintained. 

            	 
	
              1122(d)(1)(iv)

            	
              A
                fidelity bond and errors and omissions policy is in effect on the
                party
                participating in the servicing function throughout the reporting
                period in
                the amount of coverage required by and otherwise in accordance with
                the
                terms of the transaction agreements. 

            	
              X

            
	 	
              Cash Collection and Administration

            	 
	
              1122(d)(2)(i)

            	
              Payments
                on pool assets are deposited into the appropriate custodial bank
                accounts
                and related bank clearing accounts no more than two business days
                following receipt, or such other number of days specified in the
                transaction agreements. 

            	
              X

            
	
              1122(d)(2)(ii)

            	
              Disbursements
                made via wire transfer on behalf of an obligor or to an investor
                are made
                only by authorized personnel. 

            	
              X

            
	
              1122(d)(2)(iii)

            	
              Advances
                of funds or guarantees regarding collections, cash flows or distributions,
                and any interest or other fees charged for such advances, are made,
                reviewed and approved as specified in the transaction agreements.
                

            	
              X

            
	
              1122(d)(2)(iv)

            	
              The
                related accounts for the transaction, such as cash reserve accounts
                or
                accounts established as a form of over collateralization, are separately
                maintained (e.g., with respect to commingling of cash) as set forth
                in the
                transaction agreements. 

            	
              X

            
	
              1122(d)(2)(v)

            	
              Each
                custodial account is maintained at a federally insured depository
                institution as set forth in the transaction agreements. For purposes
                of
                this criterion, “federally insured depository institution” with respect to
                a foreign financial institution means a foreign financial institution
                that
                meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
                Act.
                

            	
              X

            
	
              1122(d)(2)(vi)

            	
              Unissued
                checks are safeguarded so as to prevent unauthorized access.
                

            	
              X

            

    

     

    
      
         

      

      
        EXHIBIT
          S-1

        
          

        

      

      
         

      

    

     

    
      	
              Reg
                AB

              Reference

            	
              Servicing
                Criteria

            	
              Wells
                Fargo

            
	
              1122(d)(2)(vii)
                

            	
              Reconciliations
                are prepared on a monthly basis for all asset-backed securities related
                bank accounts, including custodial accounts and related bank clearing
                accounts. These reconciliations are (A) mathematically accurate;
                (B)
                prepared within 30 calendar days after the bank statement cutoff
                date, or
                such other number of days specified in the transaction agreements;
                (C)
                reviewed and approved by someone other than the person who prepared
                the
                reconciliation; and (D) contain explanations for reconciling items.
                These
                reconciling items are resolved within 90 calendar days of their original
                identification, or such other number of days specified in the transaction
                agreements. 

            	
              X

            
	 	
              Investor
                Remittances and Reporting

            	 
	
              1122(d)(3)(i)

            	
              Reports
                to investors, including those to be filed with the Commission, are
                maintained in accordance with the transaction agreements and applicable
                Commission requirements. Specifically, such reports (A) are prepared in
                accordance with timeframes and other terms set forth in the transaction
                agreements; (B) provide information calculated in accordance with
                the
                terms specified in the transaction agreements; (C) are filed with
                the
                Commission as required by its rules and regulations; and (D) agree
                with
                investors’ or the trustee’s records as to the total unpaid principal
                balance and number of pool assets serviced by the Servicer.
                

            	
              X

            
	
              1122(d)(3)(ii)

            	
              Amounts
                due to investors are allocated and remitted in accordance with timeframes,
                distribution priority and other terms set forth in the transaction
                agreements. 

            	
              X

            
	
              1122(d)(3)(iii)

            	
              Disbursements
                made to an investor are posted within two business days to the Servicer’s
                investor records, or such other number of days specified in the
                transaction agreements. 

            	
              X

            
	
              1122(d)(3)(iv)

            	
              Amounts
                remitted to investors per the investor reports agree with cancelled
                checks, or other form of payment, or custodial bank statements.
                

            	
              X

            
	 	
              Pool
                Asset Administration

            	 
	
              1122(d)(4)(i)
                

            	
              Collateral
                or security on pool assets is maintained as required by the transaction
                agreements or related pool asset documents. 

            	
              X

            
	
              1122(d)(4)(ii)

            	
              Pool
                assets and related documents are safeguarded as required by the
                transaction agreements 

            	
              X

            
	
              1122(d)(4)(iii)

            	
              Any
                additions, removals or substitutions to the asset pool are made,
                reviewed
                and approved in accordance with any conditions or requirements in
                the
                transaction agreements. 

            	 
	
              1122(d)(4)(iv)

            	
              Payments
                on pool assets, including any payoffs, made in accordance with the
                related
                pool asset documents are posted to the Servicer’s obligor records
                maintained no more than two business days after receipt, or such
                other
                number of days specified in the transaction agreements, and allocated
                to
                principal, interest or other items (e.g., escrow) in accordance with
                the
                related pool asset documents. 

            	 
	
              1122(d)(4)(v)

            	
              The
                Servicer’s records regarding the pool assets agree with the Servicer’s
                records with respect to an obligor’s unpaid principal balance.
                

            	 
	
              1122(d)(4)(vi)

            	
              Changes
                with respect to the terms or status of an obligor's pool assets (e.g.,
                loan modifications or re-agings) are made, reviewed and approved
                by
                authorized personnel in accordance with the transaction agreements
                and
                related pool asset documents. 

            	 
	
              1122(d)(4)(vii)

            	
              Loss
                mitigation or recovery actions (e.g., forbearance plans, modifications
                and
                deeds in lieu of foreclosure, foreclosures and repossessions, as
                applicable) are initiated, conducted and concluded in accordance
                with the
                timeframes or other requirements established by the transaction
                agreements. 

            	 

    

     

    
      
         

      

      
        EXHIBIT
          S-2

        
          

        

      

      
         

      

    

     

    
      	
              Reg
                AB

              Reference

            	
              Servicing
                Criteria

            	
              Wells
                Fargo

            
	
              1122(d)(4)(viii)

            	
              Records
                documenting collection efforts are maintained during the period a
                pool
                asset is delinquent in accordance with the transaction agreements.
                Such
                records are maintained on at least a monthly basis, or such other
                period
                specified in the transaction agreements, and describe the entity’s
                activities in monitoring delinquent pool assets including, for example,
                phone calls, letters and payment rescheduling plans in cases where
                delinquency is deemed temporary (e.g., illness or unemployment).
                

            	 
	
              1122(d)(4)(ix)

            	
              Adjustments
                to interest rates or rates of return for pool assets with variable
                rates
                are computed based on the related pool asset documents. 

            	 
	
              1122(d)(4)(x)

            	
              Regarding
                any funds held in trust for an obligor (such as escrow accounts):
                (A) such
                funds are analyzed, in accordance with the obligor’s pool asset documents,
                on at least an annual basis, or such other period specified in the
                transaction agreements; (B) interest on such funds is paid, or credited,
                to obligors in accordance with applicable pool asset documents and
                state
                laws; and (C) such funds are returned to the obligor within 30 calendar
                days of full repayment of the related pool assets, or such other
                number of
                days specified in the transaction agreements. 

            	 
	
              1122(d)(4)(xi)

            	
              Payments
                made on behalf of an obligor (such as tax or insurance payments)
                are made
                on or before the related penalty or expiration dates, as indicated
                on the
                appropriate bills or notices for such payments, provided that such
                support
                has been received by the servicer at least 30 calendar days prior
                to these
                dates, or such other number of days specified in the transaction
                agreements. 

            	 
	
              1122(d)(4)(xii)

            	
              Any
                late payment penalties in connection with any payment to be made
                on behalf
                of an obligor are paid from the Servicer’s funds and not charged to the
                obligor, unless the late payment was due to the obligor’s error or
                omission. 

            	 
	
              1122(d)(4)(xiii)

            	
              Disbursements
                made on behalf of an obligor are posted within two business days
                to the
                obligor’s records maintained by the servicer, or such other number of days
                specified in the transaction agreements. 

            	 
	
              1122(d)(4)(xiv)
                

            	
              Delinquencies,
                charge-offs and uncollectible accounts are recognized and recorded
                in
                accordance with the transaction agreements. 

            	
              X

            
	
              1122(d)(4)(xv)

            	
              Any
                external enhancement or other support, identified in Item 1114(a)(1)
                through (3) or Item 1115 of Regulation AB, is maintained as set forth
                in
                the transaction agreements. 

            	
              [X]

              if
                obligated under transaction documents

            
	 	 	 

    

    

    
      
         

      

      
        EXHIBIT
          S-3

        
          

        

      

      
         

      

    

    EXHIBIT
      T

    

    

    Trustee:
      Deutsche Bank National Trust Company

    

    Securities
      Administrator:
      Wells
      Fargo Bank, N.A.

    

    Master
      Servicer:
      Wells
      Fargo Bank, N.A. 

    

    Derivative
      Counterparty:
      ABN
      AMRO Bank, N.V.

    

    Servicers:
      Wells
      Fargo Bank, N.A. and Countrywide Home Loans Servicing LP

    

    Originator:
      New
      Century Mortgage Corporation

    

    Custodian:
      Wells
      Fargo Bank, N.A.

    

    Sponsor:
      HSBC
      Bank USA, National Association

    

    Credit
      Risk Manager:
      OfficeTiger Global Real Estate Services Inc.

    

    

    

    

    
      
         

      

      
        EXHIBIT
          T-1

        
          

        

      

      
         

      

    

    EXHIBIT
      U

    

    FORM
      OF ANNUAL COMPLIANCE CERTIFICATE

    

    Via
      Overnight Delivery

    

    [DATE]

    

    HSI
      Asset
      Securitization Corporation,

    452
      Fifth
      Avenue

    New
      York,
      New York 10018

    Attention:
      Head MBS Principal Finance

    

    Wells
      Fargo Bank, N.A., 

    9062
      Old
      Annapolis Road

    Columbia,
      Maryland 21045

    Attention:
      Client Manager - HASCO 2007-NC1

    

    
      	
              RE:

            	
              Annual
                officer’s certificate delivered pursuant to Section 3.05 of that certain
                Pooling and Servicing Agreement, dated as of May 1, 2007 (the
                “Pooling
                and Servicing Agreement”),
                among HSI Asset Securitization Corporation, as depositor (the
                “Depositor”),
                Wells Fargo Bank, N.A., master servicer (the “Master
                Servicer”),
                securities administrator (the “Securities
                Administrator”)
                and custodian, OfficeTiger Global Real Estate Services Inc., as credit
                risk manager, and Deutsche Bank National Trust Company, as trustee
                (the
                “Trustee”)

            

    

    

    [_______],
      the undersigned, a duly authorized [_______] of [Master Servicer] [Securities
      Administrator] [Subservicer], does hereby certify the following for the
      [calendar year][identify other period] ending on December 31,
      20[__]:

    

    
      	
              1.

            	
              A
                review of the activities of the [Master Servicer] [Securities
                Administrator] during the preceding calendar year (or portion thereof)
                and
                of its performance under the Agreement for such period has been made
                under
                my supervision.

            

    

    

    
      	
              2.

            	
              To
                the best of my knowledge, based on such review, the [Master Servicer]
                [Securities Administrator] [Subservicer] has fulfilled all of its
                obligations under the Agreement in all material respects throughout
                such
                year (or applicable portion thereof), or, if there has been a failure
                to
                fulfill any such obligation in any material respect, I have specifically
                identified to the Depositor and the Securities Administrator each
                such
                failure known to me and the nature and status thereof, including
                the steps
                being taken by the [Master Servicer] [Securities Administrator]
                [Subservicer] to remedy such
                default.

            

    

    

    
      
         

      

      
        EXHIBIT
          U-1

        
          

        

      

      
         

      

    

    Certified
      By:

    

    

    

    ______________________________

    Name:

    Title:
      

    

    
      
         

      

      
        EXHIBIT
          U-2

        
          

        

      

      
         

      

    

    EXHIBIT
      V

     

    ADDITIONAL
      FORM 10-D DISCLOSURE

     

    
      	
              ADDITIONAL
                FORM 10-D DISCLOSURE

            
	
              Item
                on Form 10-D

            	
              Party
                Responsible 

            
	
              Item
                1: Distribution and Pool Performance Information

            	 
	
              Information
                included in the [Monthly Statement]

            	
              Master
                Servicer, Servicer(1)

              Securities
                Administrator

            
	
              Any
                information required by 1121 which is NOT included on the [Monthly
                Statement]

            	
              Depositor

            
	
              Item
                2: Legal Proceedings

               

              Any
                legal proceeding pending against the following entities or their
                respective property, that is material to Certificateholders, including
                any
                proceeding known to be contemplated by governmental
                authorities:

            	 
	
              ▪
                Issuing Entity (Trust Fund)

            	
              Master
                Servicer, Securities Administrator, Servicer(1)
                and Depositor

            
	
              ▪
                Sponsor (Seller)

            	
              Seller
                (if a party to the Pooling and Servicing Agreement) or
                Depositor

            
	
              ▪
                Depositor

            	
              Depositor

            
	
              ▪
                Trustee

            	
              Trustee

            
	
              ▪
                Securities Administrator

            	
              Securities
                Administrator

            
	
              ▪
                Master Servicer

            	
              Master
                Servicer

            
	
              ▪
                Servicer

            	
              Servicer(1)

            
	
              ▪
                Custodian

            	
              Custodian

            
	
              ▪
                1110(b) Originator

            	
              Depositor

            
	
              ▪
                Any 1108(a)(2) Servicer (other than the Master Servicer or Securities
                Administrator)

            	
              Servicer(1)

            
	
              ▪
                Any other party contemplated by 1100(d)(1)

            	
              Depositor

            
	
              Item
                3: Sale of Securities and Use of Proceeds

              Information
                from Item 2(a) of Part II of Form 10-Q:

               

              With
                respect to any sale of securities by the sponsor, depositor or issuing
                entity, that are backed by the same asset pool or are otherwise issued
                by
                the issuing entity, whether or not registered, provide the sales
                and use
                of proceeds information in Item 701 of Regulation S-K. Pricing information
                can be omitted if securities were not registered.

            	
              Depositor

            

    

     

    
      
         

      

      
        EXHIBIT
          V-1

        
          

        

      

      
         

      

    

     

    
      	
              ADDITIONAL
                FORM 10-D DISCLOSURE

            
	
              Item
                on Form 10-D

            	
              Party
                Responsible 

            
	
               

              Item
                4: Defaults Upon Senior Securities

               

              Information
                from Item 3 of Part II of Form 10-Q:

               

              Report
                the occurrence of any Event of Default (after expiration of any grace
                period and provision of any required notice)

            	
               

              Securities
                Administrator

            
	
              Item
                5: Submission of Matters to a Vote of Security
                Holders

               

              Information
                from Item 4 of Part II of Form 10-Q

            	
              Securities
                Administrator

            
	
              Item
                6: Significant Obligors of Pool Assets

               

              Item
                1112(b) - Significant
                Obligor Financial Information*

            	
              Depositor

            
	
              *This
                information need only be reported on the Form 10-D for the distribution
                period in which updated information is required pursuant to the
                Item.

            	 
	
              Item
                7: Significant Enhancement Provider Information

               

              Item
                1114(b)(2) - Credit Enhancement Provider Financial
                Information*

            	 
	
              ▪
                Determining applicable disclosure threshold

            	
              Depositor

            
	
              ▪
                Requesting required financial information (including any required
                accountants’ consent to the use thereof) or effecting incorporation by
                reference

            	
              Depositor

            
	
              Item
                1115(b) - Derivative Counterparty Financial
                Information*

            	 
	
              ▪
                Determining current maximum probable exposure

            	
              Depositor

            
	
              ▪
                Determining current significance percentage

            	
              Depositor

            
	
              ▪
                Requesting required financial information (including any required
                accountants’ consent to the use thereof) or effecting incorporation by
                reference

            	
              Depositor

            
	
              *This
                information need only be reported on the Form 10-D for the distribution
                period in which updated information is required pursuant to the
                Items.

            	 

    

     

    
      
         

      

      
        EXHIBIT
          V-2

        
          

        

      

      
         

      

    

     

    
      	
              ADDITIONAL
                FORM 10-D DISCLOSURE

            
	
              Item
                on Form 10-D

            	
              Party
                Responsible 

            
	
              Item
                8: Other Information

               

              Disclose
                any information required to be reported on Form 8-K during the period
                covered by the Form 10-D but not reported

            	
               

               

               

              Any
                party responsible for the applicable Form 8-K Disclosure
                item

            
	
              Item
                9: Exhibits

              Monthly
                Statement to Certificateholders

            	
               

              Securities
                Administrator

            
	
              Exhibits
                required by Item 601 of Regulation S-K, such as material
                agreements

            	
              Depositor

            
	 	 

    

    (1)
      This
      information is provided pursuant to the applicable Servicing
      Agreement.

    
      
         

      

      
        EXHIBIT
          V-3

        
          

        

      

      
         

      

    

    EXHIBIT
      W

    

    ADDITIONAL
      FORM 10-K DISCLOSURE

     

    
      	
              ADDITIONAL
                FORM 10-K DISCLOSURE

            
	
              Item
                on Form 10-K

            	
              Party
                Responsible 

            
	
              Item
                1B: Unresolved Staff Comments

            	
              Depositor

            
	
              Item
                9B: Other Information

              Disclose
                any information required to be reported on Form 8-K during the fourth
                quarter covered by the Form 10-K but not reported

            	
              Any
                party responsible for disclosure items on Form 8-K

            
	
              Item
                15: Exhibits, Financial Statement Schedules

            	
              Securities
                Administrator

              Depositor

            
	
              Reg
                AB Item 1112(b): Significant Obligors of Pool
                Assets

            	 
	
              Significant
                Obligor Financial Information*

            	
              Depositor

            
	
              *This
                information need only be reported on the Form 10-K if updated information
                is required pursuant to the Item.

            	 
	
              Reg
                AB Item 1114(b)(2): Credit Enhancement Provider Financial
                Information

            	 
	
              ▪
                Determining applicable disclosure threshold

            	
              Depositor

            
	
              ▪
                Requesting required financial information (including any required
                accountants’ consent to the use thereof) or effecting incorporation by
                reference

            	
              Depositor

            
	
              *This
                information need only be reported on the Form 10-K if updated information
                is required pursuant to the Item.

            	 
	
              Reg
                AB Item 1115(b): Derivative Counterparty Financial
                Information

            	 
	
              ▪
                Determining current maximum probable exposure

            	
              Depositor

            
	
              ▪
                Determining current significance percentage

            	
              Depositor

            
	
              ▪
                Requesting required financial information (including any required
                accountants’ consent to the use thereof) or effecting incorporation by
                reference

            	
              Depositor

            
	
              *This
                information need only be reported on the Form 10-K if updated information
                is required pursuant to the Item.

            	 
	
              Reg
                AB Item 1117: Legal Proceedings

               

              Any
                legal proceeding pending against the following entities or their
                respective property, that is material to Certificateholders, including
                any
                proceeding known to be contemplated by governmental
                authorities:

            	 

    

     

    
      
         

      

      
        EXHIBIT
          W-1

        
          

        

      

      
         

      

    

     

    
      	
              ADDITIONAL
                FORM 10-K DISCLOSURE

            
	
              Item
                on Form 10-K

            	
              Party
                Responsible 

            
	
              ▪
                Issuing Entity (Trust Fund)

            	
              Master
                Servicer, Securities Administrator, Servicer(1)
                and
                Depositor

            
	
              ▪
                Sponsor (Seller)

            	
              Seller
                (if a party to the Pooling and Servicing Agreement) or
                Depositor

            
	
              ▪
                Depositor

            	
              Depositor

            
	
              ▪
                Trustee

            	
              Trustee

            
	
              ▪
                Securities Administrator

            	
              Securities
                Administrator

            
	
              ▪
                Master Servicer

            	
              Master
                Servicer

            
	
              ▪
                Servicer

            	
              Servicer(1)

            
	
              ▪
                Custodian

            	
              Custodian

            
	
              ▪
                1110(b) Originator

            	
              Depositor

            
	
              ▪
                Any 1108(a)(2) Servicer (other than the Servicer, Master Servicer
                or
                Securities Administrator)

            	
              Servicer

            
	
              ▪
                Any other party contemplated by 1100(d)(1)

            	
              Depositor

            
	
              Reg
                AB Item 1119: Affiliations and Relationships

            	 
	
              Whether
                (a) the Sponsor (Seller), Depositor or Issuing Entity is an affiliate
                of
                the following parties, and (b) to the extent known and material,
                any of
                the following parties are affiliated with one another:

            	
              Depositor
                as to (a) 

              Sponsor/Seller
                as to (a)

            
	
              ▪
                Master Servicer

            	
              Master
                Servicer 

            
	
              ▪
                Servicer

            	
              Servicer(1)

            
	
              ▪
                Securities Administrator

            	
              Securities
                Administrator

            
	
              ▪
                Trustee

            	
              Trustee

            
	
              ▪
                Any other 1108(a)(3) servicer

            	
              Servicer(1)

            
	
              ▪
                Any 1110 Originator

            	
              Depositor/Sponsor

            
	
              ▪
                Any 1112(b) Significant Obligor

            	
              Depositor/Sponsor

            
	
              ▪
                Any 1114 Credit Enhancement Provider

            	
              Depositor/Sponsor

            
	
              ▪
                Any 1115 Derivative Counterparty Provider

            	
              Depositor/Sponsor

            
	
              ▪
                Any other 1101(d)(1) material party

            	
              Depositor/Sponsor

            
	
              Whether
                there are any “outside the ordinary course business arrangements” other
                than would be obtained in an arm’s length transaction between (a) the
                Sponsor (Seller), Depositor or Issuing Entity on the one hand, and
                (b) any
                of the following parties (or their affiliates) on the other hand,
                that
                exist currently or within the past two years and that are material
                to a
                Certificateholder’s understanding of the Certificates:

            	
              Depositor
                as to (a) 

              Sponsor/Seller
                as to (a)

            

    

     

    
      
         

      

      
        EXHIBIT
          W-2

        
          

        

      

      
         

      

    

     

    
      	
              ADDITIONAL
                FORM 10-K DISCLOSURE

            
	
              Item
                on Form 10-K

            	
              Party
                Responsible 

            
	
              ▪
                Master Servicer

            	
              Master
                Servicer 

            
	
              ▪
                Servicer

            	
              Servicer(1)

            
	
              ▪
                Securities Administrator

            	
              Securities
                Administrator

            
	
              ▪
                Trustee

            	
              Depositor/Sponsor

            
	
              ▪
                Any other 1108(a)(3) servicer

            	
              Depositor/Sponsor

            
	
              ▪
                Any 1110 Originator

            	
              Depositor/Sponsor

            
	
              ▪
                Any 1112(b) Significant Obligor

            	
              Depositor/Sponsor

            
	
              ▪
                Any 1114 Credit Enhancement Provider

            	
              Depositor/Sponsor

            
	
              ▪
                Any 1115 Derivative Counterparty Provider

            	
              Depositor/Sponsor

            
	
              ▪
                Any other 1101(d)(1) material party

            	
              Depositor/Sponsor

            
	
              Whether
                there are any specific relationships involving the transaction or
                the pool
                assets between (a) the Sponsor (Seller), Depositor or Issuing Entity
                on
                the one hand, and (b) any of the following parties (or their affiliates)
                on the other hand, that exist currently or within the past two years
                and
                that are material:

            	
              Depositor
                as to (a) 

              Sponsor/Seller
                as to (a)

            
	
              ▪
                Master Servicer

            	
              Master
                Servicer 

            
	
              ▪
                Servicer

            	
              Servicer(1)

            
	
              ▪
                Securities Administrator

            	
              Securities
                Administrator

            
	
              ▪
                Trustee

            	
              Depositor/Sponsor

            
	
              ▪
                Any other 1108(a)(3) servicer

            	
              Servicer(1)

            
	
              ▪
                Any 1110 Originator

            	
              Depositor/Sponsor

            
	
              ▪
                Any 1112(b) Significant Obligor

            	
              Depositor/Sponsor

            
	
              ▪
                Any 1114 Credit Enhancement Provider

            	
              Depositor/Sponsor

            
	
              ▪
                Any 1115 Derivate Counterparty Provider

            	
              Depositor/Sponsor

            
	
              ▪
                Any other 1101(d)(1) material party

            	
              Depositor/Sponsor

            

    

    (1)
      This
      information is provided pursuant to the applicable Servicing
      Agreement.

    

    

    
      
         

      

      
        EXHIBIT
          W-3

        
          

        

      

      
         

      

    

    EXHIBIT
      X

    

    FORM
      8-K DISCLOSURE INFORMATION

    

    
      	
              FORM
                8-K DISCLOSURE INFORMATION

            
	
              Item
                on Form 8-K

            	
              Party
                Responsible 

            
	
              Item
                1.01- Entry into a Material Definitive Agreement

               

              Disclosure
                is required regarding entry into or amendment of any definitive agreement
                that is material to the securitization, even if depositor is not
                a party.
                

               

              Examples:
                servicing agreement, custodial agreement.

               

              Note:
                disclosure not required as to definitive agreements that are fully
                disclosed in the prospectus

            	
              All
                parties other than the Trustee

            
	
              Item
                1.02- Termination of a Material Definitive Agreement

               

              Disclosure
                is required regarding termination of any definitive agreement that
                is
                material to the securitization (other than expiration in accordance
                with
                its terms), even if depositor is not a party. 

               

              Examples:
                servicing agreement, custodial agreement.

            	
              All
                parties other than the Trustee

            
	
              Item
                1.03- Bankruptcy or Receivership

               

              Disclosure
                is required regarding the bankruptcy or receivership, with respect
                to any
                of the following: 

            	
              Depositor

            
	
              ▪
                Sponsor (Seller)

            	
              Depositor/Sponsor
                (Seller)

            
	
              ▪
                Depositor

            	
              Depositor

            
	
              ▪
                Master Servicer

            	
              Master
                Servicer

            
	
              ▪
                Affiliated Servicer

            	
              Servicer(1)

            
	
              ▪
                Other Servicer servicing 20% or more of the pool assets at the time
                of the
                report

            	
              Servicer(1)

            
	
              ▪
                Other material servicers

            	
              Servicer(1)

            
	
              ▪
                Trustee

            	
              Trustee

            
	
              ▪
                Securities Administrator

            	
              Securities
                Administrator

            

    

    
      
         

      

      
        EXHIBIT
          X-1

        
          

        

      

      
         

      

    

    

    
      	
              FORM
                8-K DISCLOSURE INFORMATION

            
	
              Item
                on Form 8-K

            	
              Party
                Responsible 

            
	
              ▪
                Significant Obligor

            	
              Depositor

            
	
              ▪
                Credit Enhancer (10% or more)

            	
              Depositor

            
	
              ▪
                Derivative Counterparty

            	
              Depositor

            
	
              ▪
                Custodian

            	
              Custodian

            
	
              Item
                2.04- Triggering Events that Accelerate or Increase a Direct Financial
                Obligation or an Obligation under an Off-Balance Sheet
                Arrangement

               

              Includes
                an early amortization, performance trigger or other event, including
                event
                of default, that would materially alter the payment priority/distribution
                of cash flows/amortization schedule.

               

              Disclosure
                will be made of events other than waterfall triggers which are disclosed
                in the monthly statements to the certificateholders.

            	
              Depositor

              Master
                Servicer

              Securities
                Administrator

            
	
              Item
                3.03- Material Modification to Rights of Security
                Holders

               

              Disclosure
                is required of any material modification to documents defining the
                rights
                of Certificateholders, including the Pooling and Servicing
                Agreement.

            	
              Securities
                Administrator

              Depositor

            
	
              Item
                5.03- Amendments of Articles of Incorporation or Bylaws; Change of
                Fiscal
                Year

              Disclosure
                is required of any amendment “to the governing documents of the issuing
                entity”.

            	
              Depositor

            
	
              Item
                6.01- ABS Informational and Computational
                Material

            	
              Depositor

            
	
              Item
                6.02- Change of Servicer or Securities Administrator

               

              Requires
                disclosure of any removal, replacement, substitution or addition
                of any
                master servicer, affiliated servicer, other servicer servicing 10%
                or more
                of pool assets at time of report, other material servicers or
                trustee.

            	
              Master
                Servicer/Securities Administrator/Depositor/

              Servicer(1)

            
	
              Reg
                AB disclosure about any new servicer or master servicer is also
                required.

            	
              Servicer(1)/Master
                Servicer/Depositor

            
	
              Reg
                AB disclosure about any new Trustee is also required.

            	
              Trustee

            

    

    
      
         

      

      
        EXHIBIT
          X-2

        
          

        

      

      
         

      

    

    

    
      	
              FORM
                8-K DISCLOSURE INFORMATION

            
	
              Item
                on Form 8-K

            	
              Party
                Responsible 

            
	
              Item
                6.03- Change in Credit Enhancement or External
                Support

              Covers
                termination of any enhancement in manner other than by its terms,
                the
                addition of an enhancement, or a material change in the enhancement
                provided. Applies to external credit enhancements as well as derivatives.
                

            	
              Depositor/Securities
                Administrator

            
	
              Reg
                AB disclosure about any new enhancement provider is also
                required.

            	
              Depositor

            
	
              Item
                6.04- Failure to Make a Required Distribution

            	
              Securities
                Administrator

            
	
              Item
                6.05- Securities Act Updating Disclosure

               

              If
                any material pool characteristic differs by 5% or more at the time
                of
                issuance of the securities from the description in the final prospectus,
                provide updated Reg AB disclosure about the actual asset
                pool.

            	
              Depositor

            
	
              If
                there are any new servicers or originators required to be disclosed
                under
                Regulation AB as a result of the foregoing, provide the information
                called
                for in Items 1108 and 1110 respectively.

            	
              Depositor

            
	
              Item
                7.01- Reg FD Disclosure

            	
              All
                parties other than the Trustee

            
	
              Item
                8.01- Other Events

               

              Any
                event, with respect to which information is not otherwise called
                for in
                Form 8-K, that the registrant deems of importance to
                certificateholders.

            	
              Depositor

            
	
              Item
                9.01- Financial Statements and Exhibits

            	
              Responsible
                party for reporting/disclosing the financial statement or
                exhibit

            

    

    (1)
      This
      information is provided pursuant to the applicable Servicing
      Agreement.

    

    

    
      
         

      

      
        EXHIBIT
          X-3

        
          

        

      

      
         

      

    

    EXHIBIT
      Y

    

    ADDITIONAL
      DISCLOSURE NOTIFICATION

     

    **SEND
      TO WELLS FARGO VIA FAX TO 443-367-3307 AND VIA EMAIL TO
      cts.sec.notifications@wellsfargo.com AND VIA OVERNIGHT MAIL TO THE ADDRESS
      IMMEDIATELY BELOW. SEND TO THE DEPOSITOR AT THE ADDRESS
      BELOW**

    

     

    Wells
      Fargo Bank, N.A. as Securities Administrator 

    9062
      Old
      Annapolis Road

    Columbia,
      Maryland 21045

    Fax:
      (410) 715-2380

    E-mail:
      cts.sec.notifications@wellsfargo.com

     

    HSI
      Asset
      Securitization Corporation

    452
      Fifth
      Avenue

    New
      York,
      New York 10018

    Attention:
      Head MBS Principal Finance

    

    Attn:
      Client Manager - HASCO 2007-NC1-SEC REPORT PROCESSING

     

    RE:
      **Additional Form [ ] Disclosure**Required

     

    Ladies
      and Gentlemen:

     

    In
      accordance with Section 8.12 of the Pooling and Servicing Agreement, dated
      as of
      May 1, 2007 (the “Pooling
      and Servicing Agreement”),
      among
      HSI Asset Securitization Corporation, as depositor (the “Depositor”),
      Wells
      Fargo Bank, N.A., master servicer (the “Master
      Servicer”),
      securities administrator (the “Securities
      Administrator”)
      and
      custodian, OfficeTiger Global Real Estate Services Inc., as credit risk manager,
      and Deutsche Bank National Trust Company, as trustee. The Undersigned, as [
      ],
      hereby notifies you that certain events have come to our attention that
      [will][may] need to be disclosed on Form [ ].

     

    Description
      of Additional Form [ ] Disclosure:

     

    

     

    List
      of
      Any Attachments hereto to be included in the Additional Form [ ]
      Disclosure:

     

     

     

    Any
      inquiries related to this notification should be directed to [ ], phone number:
      [ ]; email address: [ ].

     

     

     

    

     

    
      
         

      

      
        EXHIBIT
          Y-1

        
          

        

      

      
         

      

    

    [NAME
      OF
      PARTY]

    as
      [role]

     

     

    By:
      ___________________________

    Name:

    Title: 

     

    

    
      
         

      

      
        EXHIBIT
          Y-2ICONIX
      BRAND GROUP, INC.

     

    1.875%
      CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2012

     

    

     

    

     

    INDENTURE

     

    

     

    

     

    DATED
      AS
      OF JUNE 20, 2007

     

    

     

    

     

    THE
      BANK
      OF NEW YORK,

     

    AS
      TRUSTEE

     

    

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    TABLE
      OF
      CONTENTS

    

      
        	 	
                Page

              
	 	 
	
                ARTICLE
                  1 DEFINITIONS AND INCORPORATION BY REFERENCE

              	
                1

              
	
                Section
                  1.01.

              	
                Definitions.

              	
                1

              
	
                Section
                  1.02.

              	
                Other
                  Definitions.

              	
                9

              
	
                Section
                  1.03.

              	
                Trust
                  Indenture Act Provisions

              	
                10

              
	
                Section
                  1.04.

              	
                Rules
                  of Construction.

              	
                11

              
	
                ARTICLE
                  2 THE SECURITIES

              	
                11

              
	
                Section
                  2.01.

              	
                Form
                  and Dating

              	
                11

              
	
                Section
                  2.02.

              	
                Execution
                  and Authentication.

              	
                13

              
	
                Section
                  2.03.

              	
                Registrar,
                  Paying Agent and Conversion Agent.

              	
                14

              
	
                Section
                  2.04.

              	
                Paying
                  Agent to Hold Money in Trust.

              	
                14

              
	
                Section
                  2.05.

              	
                Lists
                  of Holders of Securities.

              	
                15

              
	
                Section
                  2.06.

              	
                Transfer
                  and Exchange.

              	
                15

              
	
                Section
                  2.07.

              	
                Replacement
                  Securities.

              	
                16

              
	
                Section
                  2.08.

              	
                Outstanding
                  Securities.

              	
                17

              
	
                Section
                  2.09.

              	
                Treasury
                  Securities.

              	
                17

              
	
                Section
                  2.10.

              	
                Temporary
                  Securities.

              	
                17

              
	
                Section
                  2.11.

              	
                Cancellation.

              	
                18

              
	
                Section
                  2.12.

              	
                Legend;
                  Additional Transfer and Exchange Requirements.

              	
                18

              
	
                Section
                  2.13.

              	
                CUSIP
                  Numbers.

              	
                22

              
	
                ARTICLE
                  3 PURCHASE UPON FUNDAMENTAL CHANGE

              	
                22

              
	
                Section
                  3.01.

              	
                Purchase
                  at Holders’ Option upon a Fundamental Change.

              	
                22

              
	
                Section
                  3.02.

              	
                Effect
                  of Fundamental Change Purchase Notice.

              	
                24

              
	
                Section
                  3.03.

              	
                Deposit
                  of Fundamental Change Purchase Price.

              	
                25

              
	
                Section
                  3.04.

              	
                Repayment
                  to the Company.

              	
                26

              
	
                Section
                  3.05.

              	
                Securities
                  Purchased in Part.

              	
                26

              
	
                Section
                  3.06.

              	
                Compliance
                  with Securities Laws upon Purchase of Securities.

              	
                26

              
	
                Section
                  3.07.

              	
                Purchase
                  of Securities in Open Market.

              	
                26

              
	
                ARTICLE
                  4 REDEMPTION UPON SPECIFIED ACCOUNTING CHANGE

              	
                27

              
	
                Section
                  4.01.

              	
                Right
                  to Redeem

              	
                27

              
	
                Section
                  4.02.

              	
                Notice
                  of Redemption

              	
                27

              

      

       

      
        
           

        

        
          i

          
            

          

        

        
           

        

      

       

       

      
        	
                Section
                  4.03.

              	
                Effective
                  of Specified Accounting Change Redemption Notice

              	
                28

              
	
                Section
                  4.04.

              	
                Deposit
                  of Specified Accounting Change Redemption Price

              	
                28

              
	
                ARTICLE
                  5 CONVERSION

              	
                28

              
	
                Section
                  5.01.

              	
                Conversion
                  Privilege and Conversion Rate.

              	
                28

              
	
                Section
                  5.02.

              	
                Conversion
                  Procedures.

              	
                33

              
	
                Section
                  5.03.

              	
                Fractional
                  Shares.

              	
                35

              
	
                Section
                  5.04.

              	
                Taxes
                  on Conversion

              	
                35

              
	
                Section
                  5.05.

              	
                Company
                  to Provide Stock.

              	
                36

              
	
                Section
                  5.06.

              	
                Adjustment
                  of Conversion Rate.

              	
                36

              
	
                Section
                  5.07.

              	
                No
                  Adjustment

              	
                43

              
	
                Section
                  5.08.

              	
                Notice
                  of Adjustment.

              	
                44

              
	
                Section
                  5.09.

              	
                Notice
                  of Certain Transactions.

              	
                44

              
	
                Section
                  5.10.

              	
                Effect
                  of Recapitalization, Reclassification, Consolidation, Merger or
                  Sale.

              	
                44

              
	
                Section
                  5.11.

              	
                Trustee’s
                  Disclaimer.

              	
                45

              
	
                Section
                  5.12.

              	
                [Intentionally
                  Omitted]

              	
                45

              
	
                Section
                  5.13.

              	
                Settlement
                  of Conversion Obligation.

              	
                45

              
	
                ARTICLE
                  6 SUBORDINATION

              	
                47

              
	
                Section
                  6.01.

              	
                Agreement
                  of Subordination

              	
                47

              
	
                Section
                  6.02.

              	
                Payments
                  to Holders

              	
                47

              
	
                Section
                  6.03.

              	
                Subrogation
                  of Securities

              	
                50

              
	
                Section
                  6.04.

              	
                Authorization
                  to Effect Subordination

              	
                51

              
	
                Section
                  6.05.

              	
                Notice
                  to Trustee

              	
                51

              
	
                Section
                  6.06.

              	
                Trustee’s
                  Relation to Secured Senior Indebtedness

              	
                52

              
	
                Section
                  6.07.

              	
                No
                  Impairment of Subordination

              	
                52

              
	
                Section
                  6.08.

              	
                Certain
                  Conversions Deemed Payment

              	
                52

              
	
                Section
                  6.09.

              	
                Article
                  Applicable to Paying Agents

              	
                53

              
	
                Section
                  6.10.

              	
                Senior
                  Indebtedness Entitled to Rely

              	
                53

              
	
                ARTICLE
                  7 COVENANTS

              	
                53

              
	
                Section
                  7.01.

              	
                Payment
                  of Securities.

              	
                53

              
	
                Section
                  7.02.

              	
                SEC
                  and Other Reports.

              	
                54

              
	
                Section
                  7.03.

              	
                Compliance
                  Certificates.

              	
                54

              
	
                Section
                  7.04.

              	
                Further
                  Instruments and Acts.

              	
                54

              

      

       

      
        
           

        

        
          ii

          
            

          

        

        
           

        

      

       

      
        	
                Section
                  7.05.

              	
                Maintenance
                  of Corporate Existence.

              	
                55

              
	
                Section
                  7.06.

              	
                Rule
                  144A Information Requirement.

              	
                55

              
	
                Section
                  7.07.

              	
                Stay,
                  Extension and Usury Laws.

              	
                55

              
	
                Section
                  7.08.

              	
                Payment
                  of Additional Interest.

              	
                55

              
	
                Section
                  7.09.

              	
                Maintenance
                  of Office or Agency.

              	
                56

              
	
                ARTICLE
                  8 CONSOLIDATION AND MERGER

              	
                56

              
	
                Section
                  8.01.

              	
                Company
                  May Consolidate, Etc., Only on Certain Terms.

              	
                56

              
	
                Section
                  8.02.

              	
                Successor
                  Substituted.

              	
                57

              
	
                ARTICLE
                  9 DEFAULT AND REMEDIES

              	
                57

              
	
                Section
                  9.01.

              	
                Events
                  of Default.

              	
                57

              
	
                Section
                  9.02.

              	
                Acceleration.

              	
                59

              
	
                Section
                  9.03.

              	
                Other
                  Remedies.

              	
                60

              
	
                Section
                  9.04.

              	
                Waiver
                  of Defaults and Events of Default.

              	
                60

              
	
                Section
                  9.05.

              	
                Control
                  by Majority.

              	
                61

              
	
                Section
                  9.06.

              	
                Limitations
                  on Suits.

              	
                61

              
	
                Section
                  9.07.

              	
                Rights
                  of Holders to Receive Payment and to Convert.

              	
                61

              
	
                Section
                  9.08.

              	
                Collection
                  Suit by Trustee.

              	
                62

              
	
                Section
                  9.09.

              	
                Trustee
                  May File Proofs of Claim.

              	
                62

              
	
                Section
                  9.10.

              	
                Priorities.

              	
                62

              
	
                Section
                  9.11.

              	
                Undertaking
                  for Costs.

              	
                63

              
	
                ARTICLE
                  10 TRUSTEE

              	
                63

              
	
                Section
                  10.01.

              	
                Obligations
                  of Trustee.

              	
                63

              
	
                Section
                  10.02.

              	
                Rights
                  of Trustee.

              	
                64

              
	
                Section
                  10.03.

              	
                Individual
                  Rights of Trustee.

              	
                66

              
	
                Section
                  10.04.

              	
                Trustee’s
                  Disclaimer.

              	
                66

              
	
                Section
                  10.05.

              	
                Notice
                  of Default or Events of Default.

              	
                66

              
	
                Section
                  10.06.

              	
                Reports
                  by Trustee to Holders.

              	
                66

              
	
                Section
                  10.07.

              	
                Compensation
                  and Indemnity.

              	
                67

              
	
                Section
                  10.08.

              	
                Replacement
                  of Trustee.

              	
                68

              
	
                Section
                  10.09.

              	
                Successor
                  Trustee by Merger, Etc.

              	
                68

              
	
                Section
                  10.10.

              	
                Eligibility;
                  Disqualification.

              	
                69

              
	
                Section
                  10.11.

              	
                Preferential
                  Collection of Claims Against Company.

              	
                69

              
	
                ARTICLE
                  11 SATISFACTION AND DISCHARGE OF INDENTURE

              	
                69

              

      

       

      
        
           

        

        
          iii

          
            

          

        

        
           

        

      

       

       

      
        	
                Section
                  11.01.

              	
                Satisfaction
                  and Discharge of Indenture.

              	
                69

              
	
                Section
                  11.02.

              	
                Application
                  of Trust Money

              	
                70

              
	
                Section
                  11.03.

              	
                Repayment
                  to Company

              	
                70

              
	
                Section
                  11.04.

              	
                Reinstatement

              	
                70

              
	
                ARTICLE
                  12 AMENDMENTS; SUPPLEMENTS AND WAIVERS

              	
                71

              
	
                Section
                  12.01.

              	
                Without
                  Consent of Holders.

              	
                71

              
	
                Section
                  12.02.

              	
                With
                  Consent of Holders

              	
                71

              
	
                Section
                  12.03.

              	
                Compliance
                  with Trust Indenture Act

              	
                72

              
	
                Section
                  12.04.

              	
                Revocation
                  and Effect of Consents

              	
                73

              
	
                Section
                  12.05.

              	
                Notation
                  on or Exchange of Securities

              	
                73

              
	
                Section
                  12.06.

              	
                Trustee
                  to Sign Amendments, Etc.

              	
                73

              
	
                Section
                  12.07.

              	
                Effect
                  of Supplemental Indentures

              	
                73

              
	
                ARTICLE
                  13 MISCELLANEOUS

              	
                73

              
	
                Section
                  13.01.

              	
                Trust
                  Indenture Act Controls

              	
                73

              
	
                Section
                  13.02.

              	
                Notices

              	
                73

              
	
                Section
                  13.03.

              	
                Communications
                  By Holders with Other Holder

              	
                74

              
	
                Section
                  13.04.

              	
                Certificate
                  and Opinion as to Conditions Precedent

              	
                75

              
	
                Section
                  13.05.

              	
                Record
                  Date for Vote or Consent of Holders of Securities

              	
                75

              
	
                Section
                  13.06.

              	
                Rules
                  by Trustee, Paying Agent, Registrar and Conversion Agent

              	
                75

              
	
                Section
                  13.07.

              	
                Legal
                  Holidays

              	
                76

              
	
                Section
                  13.08.

              	
                Governing
                  Law

              	
                76

              
	
                Section
                  13.09.

              	
                No
                  Adverse Interpretation of Other Agreements

              	
                76

              
	
                Section
                  13.10.

              	
                No
                  Recourse Against Others

              	
                76

              
	
                Section
                  13.11.

              	
                No
                  Security Interest Created

              	
                76

              
	
                Section
                  13.12.

              	
                Successors

              	
                76

              
	
                Section
                  13.13.

              	
                Multiple
                  Counterparts

              	
                76

              
	
                Section
                  13.14.

              	
                Separability

              	
                76

              
	
                Section
                  13.15.

              	
                Table
                  of Contents, Headings, Etc.

              	
                76

              
	
                Section
                  13.16.

              	
                Calculations
                  In Respect of Securities

              	
                76

              
	
                Section
                  13.17.

              	
                Waiver
                  of Jury Trial

              	
                77

              
	
                Section
                  13.18.

              	
                Force
                  Majeure

              	
                77

              
	
                Exhibit

              	 	
                A-1

              
	 	 	 

      

    

     

     

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

     

    CROSS
      REFERENCE TABLE*

     

    
      	
              TIA

              SECTION

            	
              INDENTURE

              SECTION

            
	
              Section  
                310

            	
              13.01

            
	
              310(a)(1)

            	
              10.10

            
	
              (a)(2)

            	
              10.10

            
	
              (a)
                (3)

            	
              N.A.**

            
	
              (a)
                (4)

            	
              N.A.

            
	
              (a)
                (5)

            	
              10.10

            
	
              (b)

            	
              10.10

            
	
              (c)

            	
              N.A.

            
	
              Section  311

            	
              13.01

            
	
              311
                (a)

            	
              10.11

            
	
              (b)

            	
              10.11

            
	
              (c)

            	
              N.A.

            
	
              Section  312

            	
              13.01

            
	
              312(a)

            	
              2.05

            
	
              (b)

            	
              13.03

            
	
              (c)

            	
              13.03

            
	
              Section 313

            	
              13.01

            
	
              313(a)

            	
              10.06(a)

            
	
              (b)(1)

            	
              N.A.

            
	
              (b)(2)

            	
              10.06(a)

            
	
              (c)

            	
              10.06(a)

            
	
              (d)

            	
              10.06(b)

            
	
              Section 
                314

            	
              13.01

            
	
              314(a)

            	
              7.02(a);
                7.03

            
	
              (b)

            	
              N.A.

            
	
              (c)(1)

            	
              2.02;
                11.01; 13.04

            
	
              (c)(2)

            	
              11.01;
                13.04

            
	
              (c)(3)

            	
              N.A.

            
	
              (d)

            	
              N.A.

            
	
              (e)

            	
              13.04

            
	
              (f)

            	
              N.A.

            
	
              Section 
                315

            	
              13.01

            
	
              315(a)

            	
              10.01(b)

            
	
              (b)

            	
              10.05

            
	
              (d)

            	
              10.01(c)

            
	
              (d)(2)

            	
              10.01(c)

            
	
              (d)(3)

            	
              10.01(c)

            
	
              (e)

            	
              9.11

            
	
              Section 
                316

            	
              13.01

            
	
              316
                (a)

            	
              9.05;
                12.02 (b)

            
	
              (b)

            	
              9.07

            
	
              (c)

            	
              13.05

            
	
              Section 
                317

            	
              9.08;
                10.09; 13.01

            
	
              Section 
                318

            	
              13.01

            
	 	 

    

     

    
      	*	
              This
                Cross-Reference Table shall not, for any purpose, be deemed a part
                of this
                Indenture.

            

    

    
      	**	
              N.A.
                means Not Applicable.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    THIS
      INDENTURE dated as of June 20, 2007 is between Iconix Brand Group, Inc., a
      corporation duly organized under the laws of the Delaware (the “Company”), and
      The Bank of New York, a New York banking corporation, as Trustee (the
“Trustee”).

     

    In
      consideration of the purchase of the Securities (as defined herein) by the
      Holders thereof, both parties agree as follows for the benefit of the other
      and
      for the equal and ratable benefit of the Holders of the Securities.

     

     

    ARTICLE
      1

    DEFINITIONS
      AND INCORPORATION BY REFERENCE

     

    Section
      1.01.  Definitions.

     

    “Additional
      Interest” has the meaning specified in the Registration Rights Agreement. All
      references herein to interest accrued or payable as of any date shall include
      any Additional Interest accrued or payable as of such date as provided in the
      Registration Rights Agreement.

     

    “Affiliate”
      means, with respect to any specified person, any other person directly or
      indirectly controlling or controlled by or under direct or indirect common
      control with such specified person. For the purposes of this definition,
“control” when used with respect to any person means the power to direct the
      management and policies of such person, directly or indirectly, whether through
      the ownership of voting securities, by contract or otherwise; and the terms
      “controlling” and “controlled” have meanings correlative to the
      foregoing.

     

    “Agent”
      means any Registrar, Paying Agent or Conversion Agent.

     

    “Aggregate
      Share Cap” means initially 39.4 shares
      of
      Common Stock per $1,000 principal amount of Securities, subject to proportional
      adjustment in the same manner as the Conversion Rate upon the occurrence of
      any
      of the events described under clauses (1) through (6) of Section
      5.06(a).

     

    “Applicable
      Procedures” means, with respect to any transfer or exchange of beneficial
      ownership interests in a Global Security, the rules and procedures of the
      Depositary, to the extent applicable to such transfer or exchange.

     

    “Beneficial
      Ownership” means the definition such term is given in accordance with Rule 13d-3
      promulgated by the SEC under the Exchange Act.

     

    “Board
      of
      Directors” means either the board of directors of the Company or any committee
      of the Board of Directors authorized to act for it with respect to this
      Indenture.

     

    “Business
      Day” means any weekday that is not a day on which banking institutions in The
      City of New York are authorized or obligated to close.

     

    “Capital
      Stock” of any Person means any and all shares, interests, rights to purchase,
      warrants, options, participations or other equivalents of or interests in
      (however designated) equity of such Person, but excluding any debt securities
      convertible into such equity.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Cash”
or
      “cash” means such coin or currency of the United States as at any time of
      payment is legal tender for the payment of public and private
      debts.

     

    “Certificated
      Security” means a Security that is in substantially the form attached as Exhibit
      A but that does not include the first paragraph thereof.

     

    “Change
      of Control” means the occurrence of any of the following after the date hereof:
      (i) the sale, lease, transfer, conveyance or other disposition (other than
      by
      way of merger or consolidation), in one or a series of related transactions,
      of
      all or substantially all of the properties and assets of the Company and its
      subsidiaries taken as a whole to any “person” (as such term is used in Section
      13(d)(3) of the Exchange Act) other than to one or more of the Company’s
      wholly-owned subsidiaries; (ii) the adoption of a plan relating to the
      liquidation or dissolution of the Company; (iii) the consummation of any
      transaction (including, without limitation, any merger or consolidation) the
      result of which is that any “person” or “group” (as such terms are used in
      Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as
      such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except
      that a person shall be deemed to have “beneficial ownership” of all securities
      that such person has the right to acquire, whether such right is currently
      exercisable or is exercisable only upon the occurrence of a subsequent
      condition), directly or indirectly, of more than 50% of the Voting Stock of
      the
      Company (measured by voting power rather than number of shares); (iv) the first
      day on which a majority of the members of the Board of Directors of the Company
      are not Continuing Directors; or (v) the Company consolidates with, or merges
      with or into, any Person, or any Person consolidates with, or merges with or
      into, the Company, in any such event pursuant to a transaction in which any
      of
      the outstanding Voting Stock of the Company is converted into or exchanged
      for
      cash, securities or other property, other than any such transaction where the
      Voting Stock of the Company outstanding immediately prior to such transaction
      is
      converted into or exchanged for Voting Stock of the surviving or transferee
      Person constituting a majority of the outstanding shares of such Voting Stock
      of
      such surviving or transferee Person (immediately after giving effect to such
      issuance). Notwithstanding anything to the contrary set forth herein, it will
      not constitute a Change of Control if 100% of the consideration for the Common
      Stock (excluding cash payments for fractional shares and cash payments made
      in
      respect of dissenters’ appraisal rights) in the transaction or transactions
      otherwise constituting a Change of Control consists of shares of common stock,
      or American Depositary Shares representing shares of common stock, traded on
      a
      U.S. national securities exchange or quoted on an established automated
      over-the-counter trading market in the United States, or which will be so traded
      or quoted when issued or exchanged in connection with the Change of Control,
      and
      as a result of such transaction or transactions the Securities become
      convertible solely into cash in an amount equal to the lesser of $1,000 and
      the
      Conversion Value and, if the Conversion Value is greater than $1,000, payment
      of
      the excess value in the form of such common stock or American Depositary Shares,
      subject to the right to deliver cash in lieu of all or a portion of such
      remaining shares, in substantially the same manner as described under Section
      5.13; provided that, with respect to an entity organized under the laws of
      a
      jurisdiction outside the United States, such entity has a worldwide total market
      capitalization of its equity securities of at least three times the market
      capitalization of the Company before giving effect to the consolidation or
      merger.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    “Closing
      Price” means on any Trading Day, the reported last sale price per share (or if
      no last sale price is reported, the average of the bid and ask prices per share
      or, if more than one in either case, the average of the average bid and the
      average ask prices per share) on such date reported by the Nasdaq Global Market
      or, if the Common Stock (or the applicable security) is not traded on the Nasdaq
      Global Market, as reported by the principal national or regional securities
      exchange on which the Common Stock (or such other security) is listed. If the
      Common Stock (or such other security) is not listed for trading on a United
      States national or regional securities exchange, the “Closing Price” shall be
      the last quoted bid price for the Common Stock (or such other security) in
      the
      over-the-counter market on the relevant date as reported by Pink Sheets LLC
      or
      similar organization. If the Common Stock (or such other security) is not so
      quoted, the “Closing Price” shall be the average of the midpoint of the last bid
      and ask prices for the Common Stock (or such other security) on the relevant
      date from each of at least three independent nationally recognized investment
      banking firms selected by the Company for this purpose.

     

    “Common
      Stock” means the common stock of the Company, without par value, as it exists on
      the date of this Indenture and any shares of any class or classes of Capital
      Stock of the Company resulting from any reclassification or reclassifications
      thereof, or, in the event of a merger, consolidation or other similar
      transaction involving the Company that is otherwise permitted hereunder in
      which
      the Company is not the surviving corporation the common stock, common equity
      interests, ordinary shares or depositary shares or other certificates
      representing common equity interests of such surviving corporation or its direct
      or indirect parent corporation, and which have no preference in respect of
      dividends or of amounts payable in the event of any voluntary or involuntary
      liquidation, dissolution or winding-up of the Company and which are not subject
      to redemption by the Company; provided, however, that if at any time there
      shall
      be more than one such resulting class, the shares of each such class then so
      issuable on conversion of Securities shall be substantially in the proportion
      which the total number of shares of such class resulting from all such
      reclassifications bears to the total number of shares of all such classes
      resulting from all such reclassifications.

     

    “Company”
      means the party named as such in the first paragraph of this Indenture until
      a
      successor replaces it pursuant to the applicable provisions of this Indenture,
      and thereafter “Company” shall mean such successor Company.

     

    “Continuing
      Directors” means, as of any date of determination, any member of the Board of
      Directors of the Company who (i) was a member of such Board of Directors on
      the
      Issue Date or (ii) was nominated for election or elected to such Board of
      Directors with the approval of a majority of the Continuing Directors who were
      members of such Board at the time of such nomination or election.

     

    “Conversion
      Price” per share of Common Stock as of any day means the result obtained by
      dividing (i) $1,000 by (ii) the then applicable Conversion Rate, rounded to
      the
      nearest cent.

     

    “Conversion
      Rate” means initially 36.2845 shares
      of
      Common Stock for each $1,000 principal amount of Securities, as adjusted from
      time to time pursuant to the provisions of this Indenture.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    “Conversion
      Reference Period” means:

     

    (1)  for
      Securities that are converted during the one month period prior to the Final
      Maturity Date of the Securities, the 30 consecutive Trading Days preceding
      and
      ending on the Trading Day prior to the Final Maturity Date, subject to any
      extension due to a Market Disruption Event; and

     

    (2)  for
      Securities that are converted in connection with an optional redemption upon
      a
      Specified Accounting Change, the 30 consecutive Trading Days beginning on the
      Trading Day following the Specified Accounting Change Redemption Date;
      and

     

    (3)  in
      all
      other instances, the 30 consecutive Trading Days beginning on the third Trading
      Day following the Conversion Date.

     

    “Conversion
      Value” means, for each $1,000 principal amount of Securities, the average of the
      Daily Conversion Values for each of the 30 consecutive Trading Days in the
      Conversion Reference Period.

     

    “Corporate
      Trust Office” means the office of the Trustee at which at any time its corporate
      trust business shall be administered, which office at the date hereof is located
      at 101 Barclay Street, Floor 8 West, New York, New York 10286, Attention:
      Corporate Trust Administration, or such other address as the Trustee may
      designate from time to time by notice to the Holders and the Company, or the
      principal corporate trust office of any successor Trustee (or such other address
      as such successor Trustee may designate from time to time by notice to the
      Holders and the Company). 

     

    “Daily
      Conversion Value” means, with respect to any Trading Day, the product of (1) the
      applicable Conversion Rate and (2) the Volume Weighted Average Price per share
      of the Company’s Common Stock on such Trading Day.

     

    “Daily
      Share Amount” means, for each Trading Day in the Conversion Reference Period and
      for each $1,000 principal amount of Securities surrendered for conversion,
      a
      number of shares of Common Stock (but in no event less than zero) determined
      by
      the following formula:

     

    (Volume
      Weighted Average Price per
      share            
       Conversion Rate in
      effect                  

    of
      Common
      Stock for such Trading
      Day             x    
      on the Conversion Date)    -
      $1,000

    ________________________________________________________________________________

    Volume
      Weighted Average Price per share of Common Stock for such Trading Day
      x
      30

     

    “Default”
      means, when used with respect to the Securities, any event that is or, after
      notice or passage of time, or both, would be, an Event of Default.

     

    “Exchange
      Act” means the Securities Exchange Act of 1934, as amended, and the rules and
      regulations promulgated thereunder, as in effect from time to time.

     

    “Final
      Maturity Date” means June 30, 2012.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    “Fundamental
      Change” means the occurrence of a Change of Control or a Termination of Trading
      following the original issuance of the Securities.

     

    “Fundamental
      Change Effective Date” means the date on which any Fundamental Change becomes
      effective.

     

    “Fundamental
      Change Purchase Price” of any Security, means 100% of the principal amount of
      the Security to be purchased plus accrued and unpaid interest, if any, and
      Additional Interest, if any, to, but excluding, the Fundamental Change Purchase
      Date.

     

    “GAAP”
      means generally accepted accounting principles in the United States of America
      as in effect from time to time, including those set forth in (1) the opinions
      and pronouncements of the Accounting Principles Board of the American Institute
      of Certified Public Accountants, (2) the statements and pronouncements of the
      Public Company Accounting Oversight Board and the Financial Accounting Standards
      Board, (3) such other statements by such other entity as approved by a
      significant segment of the accounting profession and (4) the rules and
      regulations of the SEC governing the inclusion of financial statements
      (including pro forma financial statements) in registration statements filed
      under the Securities Act and periodic reports required to be filed pursuant
      to
      Section 13 of the Exchange Act, including opinions and pronouncements in staff
      accounting bulletins and similar written statements from the accounting staff
      of
      the SEC.

     

    “Global
      Security” means a Security in global form that is in substantially the form
      attached as Exhibit A and that includes the first paragraph thereof and which
      is
      deposited with the Depositary or its custodian and registered in the name of
      the
      Depositary or its nominee.

     

    “Holder”
      or “Holder of a Security” means the person in whose name a Security is
      registered on the Registrar’s books.

     

    “Indebtedness”
      means, with respect to any Person, any indebtedness of such Person, whether
      or
      not contingent, in respect of borrowed money or evidenced by bonds, notes,
      debentures or similar instruments or letters of credit (or reimbursement
      agreements in respect thereof) or banker’s acceptances or representing capital
      lease obligations (if and to the extent it would appear as a liability upon
      a
      balance of such Person prepared in accordance with GAAP) or the balance deferred
      and unpaid of the purchase price of any property or representing any hedging
      obligations, except any such balance that constitutes an accrued expense or
      trade payable, as well as all Indebtedness is assumed by such Person; and,
      to
      the extent not otherwise included, the guarantee by such Person of any
      indebtedness of any other Person. The amount of any Indebtedness outstanding
      as
      of any date shall be (1) the accreted value thereof, in the case of any
      Indebtedness issued with original issue discount, and (2) the principal amount
      thereof, together with any interest thereon that is more than 30 days past
      due,
      in the case of any other Indebtedness.

     

    “Indenture”
      means this Indenture as amended or supplemented from time to time pursuant
      to
      the terms of this Indenture, including the provisions of the TIA that are
      automatically deemed to be a part of this Indenture by operation of the
      TIA.

     

    “Initial
      Purchasers” means Merrill Lynch, Pierce, Fenner & Smith Incorporated and
      Lehman Brothers Inc.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    “Interest
      Payment Date” means June 30 and December 31 of each year, commencing
      December 31, 2007.

     

    “Issue
      Date” of any Security means the date on which the Security was originally issued
      or deemed issued as set forth on the face of the Security.

     

    “Market
      Disruption Event” means the occurrence or existence for more than one-half hour
      period in the aggregate on any scheduled Trading Day for the Common Stock of
      any
      suspension or limitation imposed on trading (by reason of movements in price
      exceeding limits permitted by the Nasdaq Global Market or otherwise) in the
      Common Stock or in any options, contracts or future contracts relating to the
      Common Stock, and such suspension or limitation occurs or exists at any time
      before 1:00 p.m., New York City time, on such day.

     

    “Officer”
      means the Chairman of the Board, the Chief Executive Officer, the President,
      any
      Vice President, the Chief Financial Officer, the Controller, the Secretary,
      any
      Assistant Controller or any Assistant Secretary of the Company.

     

    “Officers’
      Certificate” means a certificate signed on behalf of the Company by two
      Officers; provided, however, that for purposes of Sections 5.11 and 7.03,
“Officers’ Certificate” means a certificate signed by (a) the principal
      executive officer, principal financial officer or principal accounting officer
      of the Company and (b) one other Officer.

     

    “Opinion
      of Counsel” means a written opinion from legal counsel. The counsel may be an
      employee of or counsel to the Company.

     

    “Person”
      or “person” means any individual, corporation, partnership, limited liability
      company, joint venture, association, joint-stock company, trust, unincorporated
      organization, government or any agency or political subdivision thereof or
      any
      syndicate or group that would be deemed to be a “person” under Section 13(d)(3)
      of the Exchange Act or any other entity.

     

    “Principal”
      or “principal” of a debt security, including the Securities, means the principal
      of the debt security plus, when appropriate, the premium, if any, on the debt
      security.

     

    “Registration
      Rights Agreement” means the Registration Rights Agreement, dated as of June 20,
      2007, between the Company and the Initial Purchasers, as amended from time
      to
      time in accordance with its terms.

     

    “Regular
      Record Date” means, with respect to each Interest Payment Date, June 15 or
      December 15, as the case may be, next preceding such Interest Payment
      Date.

     

    “Responsible
      Officer” means, when used with respect to the Trustee, any officer within the
      corporate trust services department of the Trustee with direct responsibility
      for the administration of this Indenture and also means, with respect to a
      particular corporate trust matter, any other officer to whom such matter is
      referred because of such person’s knowledge of and familiarity with the
      particular subject.

     

    “Restricted
      Global Security” means a Global Security that is a Restricted
      Security.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    “Restricted
      Security” means a Security required to bear the restricted legend set forth in
      the form of Security annexed as Exhibit A.

     

    “Rule
      144” means Rule 144 under the Securities Act or any successor to such
      Rule.

     

    “Rule
      144A” means Rule 144A under the Securities Act or any successor to such
      Rule.

     

    “SEC”
      means the Securities and Exchange Commission.

     

    “Secured
      Senior Indebtedness” means the principal, premium, if any, interest (including
      all interest accruing subsequent to the commencement of any bankruptcy or
      similar proceeding, whether or not a claim for post-petition interest is
      allowable as a claim in any such proceeding) and rent payable on or in
      connection with, and all fees, costs, expenses and other amounts accrued or
      due
      on or in connection with, the Company’s secured senior Indebtedness, whether
      absolute or contingent , due or to become due, outstanding on the date hereof
      or
      hereinafter created, incurred, assumed, guaranteed or in effect guaranteed
      by
      the Company, including all deferrals, renewals, extensions or refundings of,
      or
      amendments, modifications, or supplements to, the foregoing. Secured Senior
      Indebtedness does not include:

     

    (1)
      secured indebtedness that expressly provides that such indebtedness shall not
      be
      senior in right of payment to the Securities or expressly provides that such
      Indebtedness is on the same basis or junior to the notes;

     

    (2)
      any
      of the Company’s secured Indebtedness to any of the Company’s
      Subsidiaries;

     

    (3)
      any
      Indebtedness that is not secured; and

     

    (4)
      any
      obligation for federal, state, local or other taxes.

     

    “Securities”
      means the up to $287,500,000 aggregate principal amount of 1.875% Convertible
      Senior Subordinated Notes due 2012, or any of them (each a “Security”), as
      amended or supplemented from time to time, that are issued under this
      Indenture.

     

    “Securities
      Act” means the Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder, as in effect from time to time.

     

    “Securities
      Custodian” means the Trustee, as custodian with respect to the Securities in
      global form, or any successor thereto.

     

    “Significant
      Subsidiary” means, in respect of any Person, as of any date of determination, a
      Subsidiary of such Person that would constitute a “significant subsidiary” as
      such term is defined under Rule 1-02(w) of Regulation S-X under the Securities
      Act.

     

    “Specified
      Accounting Change” means any changes in generally accepted accounting principles
      applicable to any net share settled Securities that require the Company to
      separately account for the liability and equity components of the Securities,
      cause the Securities to be remeasured at fair value with changes reported in
      earnings as they occur, cause Securities to be treated under the if-converted
      method for earnings per share or otherwise cause an adverse accounting impact
      on
      the Company’s results of operations solely as a result of having issued the
      Securities, provided that the Company’s board of directors determines, in its
      sole discretion, that such impact is material. 

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    “Subsidiary”
      means, in respect of any Person, any corporation, association, partnership
      or
      other business entity of which more than 50% of the total voting power of shares
      of Capital Stock entitled (without regard to the occurrence of any contingency
      within the control of such Person to satisfy) to vote in the election of
      directors, managers, general partners or trustees thereof is at the time owned
      or controlled, directly or indirectly, by (i) such Person, (ii) such Person
      and
      one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of
      such Person.

     

    “Termination
      of Trading” means the termination (but not the temporary suspension) of trading
      of the Common Stock, which will be deemed to have occurred if the Common Stock
      or other common stock or American Depositary Shares or similar instruments
      into
      which the Securities are convertible is neither listed for trading on a United
      States national securities exchange nor approved for quotation on an established
      automated over-the-counter securities market in the United States or ceases
      to
      be traded or quoted in contemplation of a delisting or withdrawal of
      approval.

     

    “TIA”
      means the Trust Indenture Act of 1939, as amended, and the rules and regulations
      thereunder as in effect on the date of this Indenture, except to the extent
      that
      the Trust Indenture Act or any amendment thereto expressly provides for
      application of the Trust Indenture Act as in effect on another
      date.

     

    “Trading
      Day” means any day on which (i) there is no Marketing Disruption Event and (ii)
      the Nasdaq Global Market or, if the Common Stock is not listed on the Nasdaq
      Global Market, the principal national or regional securities exchange on which
      the Common Stock is listed, is open for trading or, if the Common Stock is
      not
      so listed, admitted for trading or quoted, any Business Day. A Trading Day
      only
      includes those days that have a scheduled closing time of 4:00 p.m. (New York
      City time) or the then standard closing time for regular trading on the relevant
      exchange or trading system.

     

    “Trading
      Price” of the Securities on any date of determination means the average of the
      secondary market bid quotations obtained by the Company for $5.0 million
      principal amount of Securities at approximately 3:30 p.m., New York City time,
      on such determination date from three nationally recognized securities dealers
      the Company selects; provided that if three such bids cannot reasonably be
      obtained by the Company, but two such bids are obtained, then the average of
      the
      two bids shall be used, and if only one such bid can reasonably be obtained
      by
      the Company, that one bid shall be used. If the Company cannot reasonably obtain
      at least one bid for $5.0 million principal amount of Securities from a
      nationally recognized securities dealer, then the Trading Price per $1,000
      principal amount of Securities will be deemed to be less than 98% of the product
      of the Closing Price of the Common Stock and the Conversion Rate per $1,000
      principal amount of Securities.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    “Trustee”
      means the party named as such in the first paragraph of this Indenture until
      a
      successor replaces it in accordance with the provisions of this Indenture,
      and
      thereafter means the successor.

     

    “Unsecured
      Senior Indebtedness” means the principal, premium, if any, interest (including
      all interest accruing subsequent to the commencement of any bankruptcy or
      similar proceeding, whether or not a claim for post-petition interest is
      allowable as a claim in any such proceeding) and rent payable on or in
      connection with, and all fees, costs, expense and other amounts accrued or
      due
      or in connection with, the Company’s unsecured senior Indebtedness, whether
      absolute or contingent, due or to become due, outstanding on the date hereof
      or
      hereinafter created, incurred, assumed, guaranteed or in effect guaranteed
      by
      us, including all deferrals, renewals, extensions or refundings of, or
      amendments, modifications or supplements to, the foregoing, that ranks equal
      in
      right of payment to all of the Company’s unsecured and unsubordinated
      indebtedness including the Securities.

     

    “Vice
      President” when used with respect to the Company or the Trustee, means any vice
      president, whether or not designated by a number or a word or words added before
      or after the title “vice president.”

     

    “Volume
      Weighted Average Price” per share of Common Stock on any Trading Day means such
      price as displayed on Bloomberg (or any successor service) page ICON
<equity> VAP in respect of the period from 9:30 a.m. to 4:00 p.m., New
      York City time, on such Trading Day; or, if such price is not available, the
      Volume Weighted Average Price means the market value per share of Common Stock
      on such day as determined by a nationally recognized independent investment
      banking firm retained for this purpose by the Company.

     

    “Voting
      Stock” of a Person means all classes of Capital Stock or other interests
      (including partnership interests) of such Person then outstanding and normally
      entitled (without regard to the occurrence of any contingency within the control
      of such person to satisfy) to vote in the election of directors, managers or
      trustees thereof.

     

    Section
      1.02.  Other
      Definitions.

     

    
      	
              Term

            	
              Defined
                in Section

            
	
              “Agent
                Members”

            	
              2.01

            
	
              “Average
                Price”

            	
              5.01

            
	
              “Bankruptcy
                Law”

            	
              9.01

            
	
              “Business
                Combination”

            	
              5.10

            
	
              “Cash
                Percentage”

            	
              5.13

            
	
              “Company
                Order”

            	
              2.02

            
	
              “Conversion
                Trigger Price”

            	
              5.01

            
	
              “Conversion
                Agent”

            	
              2.03

            
	
              “Conversion
                Date”

            	
              5.02

            
	
              “Current
                Market Price”

            	
              5.06

            
	
              “DTC”

            	
              2.01

            
	
              “Depositary”

            	
              2.01

            
	
              “Designated
                Financial Institution”

            	
              5.02

            

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

     

    
      	
              Term

            	
              Defined
                in Section

            
	
              “Determination
                Date”

            	
              5.06

            
	
              “Distributed
                Securities”

            	
              5.06

            
	
              “Distribution
                Notice”

            	
              5.01

            
	
              “Event
                of Default”

            	
              9.01

            
	
              “Expiration
                Date”

            	
              5.06

            
	
              “Expiration
                Time”

            	
              5.06

            
	
              “Fundamental
                Change Company Notice”

            	
              3.01

            
	
              “Fundamental
                Change Purchase Date”

            	
              3.01

            
	
              “Fundamental
                Change Purchase Notice”

            	
              3.01

            
	
              “Legal
                Holiday”

            	
              13.07

            
	
              “Legend”

            	
              2.12

            
	
              “Make
                Whole Premium”

            	
              5.01

            
	
              “Notice
                of Default”

            	
              9.01

            
	
              “Paying
                Agent”

            	
              2.03

            
	
              “Payment
                Blockage Notice”

            	
              6.02
                

            
	
              “Primary
                Registrar”

            	
              2.03

            
	
              “Purchase
                Agreement”

            	
              2.01

            
	
              “Purchased
                Shares”

            	
              5.06

            
	
              “record
                date”

            	
              5.06

            
	
              “QIB”

            	
              2.01

            
	
              “Receiver”

            	
              9.01

            
	
              “Registrar”

            	
              2.03

            
	
              “Remaining
                Shares”

            	
              5.13

            
	
              “Rights”

            	
              5.06

            
	
              “Rights
                Plan”

            	
              5.06

            
	
              “Special
                Interest”

            	
              9.02

            
	
              “Specified
                Accounting Change Redemption Notice”

            	
              4.02

            
	
              “Specified
                Accounting Change Redemption Date”

            	
              4.01

            
	
              “Specified
                Accounting Change Redemption Price”

            	
              4.01

            
	
              “Specified
                Event

            	
              5.01

            
	
              “Spinoff
                Securities”

            	
              5.06

            
	
              “Spinoff
                Valuation Period”

            	
              5.06

            
	
              “Stock
                Price”

            	
              5.01

            
	
              “tender
                offer”

            	
              5.06

            
	
              “Triggering
                Distribution”

            	
              5.06

            
	 	 

    

    Section
      1.03.  Trust
      Indenture Act Provisions.
      Whenever this Indenture refers to a provision of the TIA, that provision is
      incorporated by reference in and made a part of this Indenture. This Indenture
      shall also include those provisions of the TIA required to be included herein
      by
      the provisions of the Trust Indenture Reform Act of 1990. The following TIA
      terms used in this Indenture have the following meanings:

     

    “indenture
      securities” means the Securities;

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    “indenture
      security holder” means a Holder of a Security;

     

    “indenture
      to be qualified” means this Indenture;

     

    “indenture
      trustee” or “institutional trustee” means the Trustee; and

     

    “obligor”
      on the indenture securities means the Company or any other obligor on the
      Securities.

     

    All
      other
      terms used in this Indenture that are defined in the TIA, defined by TIA
      reference to another statute or defined by any SEC rule and not otherwise
      defined herein have the meanings assigned to them therein.

     

    Section
      1.04.  Rules
      of Construction.

     

    (a)  Unless
      the context otherwise requires:

     

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

     

    (2)  an
      accounting term not otherwise defined has the meaning assigned to it in
      accordance with GAAP; 

     

    (3)  words
      in
      the singular include the plural, and words in the plural include the singular;
      

     

    (4)  provisions
      apply to successive events and transactions;

     

    (5)  the
      term
“merger” includes a statutory share exchange and the term “merged” has a
      correlative meaning; 

     

    (6)  the
      masculine gender includes the feminine and the neuter;

     

    (7)  references
      to agreements and other instruments include subsequent amendments thereto;
      and

     

    (8)  all
      “Article”, “Exhibit” and “Section” references are to Articles, Exhibits and
      Sections, respectively, of or to this Indenture unless otherwise specified
      herein, and the terms “herein,” “hereof” and other words of similar import refer
      to this Indenture as a whole and not to any particular Article, Section or
      other
      subdivision.

     

    ARTICLE
      2

    THE
      SECURITIES

     

    Section
      2.01.  Form
      and Dating.
      The
      Securities and the Trustee’s certificate of authentication shall be
      substantially in the respective forms set forth in Exhibit A, which Exhibit
      is
      incorporated in and made part of this Indenture. The Securities may have
      notations, legends or endorsements required by law, stock exchange or automated
      quotation system rule or regulation or usage. The Company shall provide any
      such
      notations, legends or endorsements to the Trustee in writing. Each Security
      shall be dated the date of its authentication. The Securities are being offered
      and sold by the Company pursuant to a Purchase Agreement dated June 14, 2007
      (the “Purchase Agreement”) between the Company and the Initial
      Purchasers.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (a)  Restricted
      Global Securities.
      All of
      the Securities are initially being offered and sold to qualified institutional
      buyers as defined in Rule 144A (collectively, “QIBs” or individually, each a
“QIB”) in reliance upon a private placement exemption from registration under
      the Securities Act and shall be issued initially in the form of one or more
      Restricted Global Securities, which shall be deposited on behalf of the
      purchasers of the securities represented thereby with the Trustee, at its
      Corporate Trust Office, as custodian for the depositary, The Depository Trust
      Company (“DTC”, and such depositary, or any successor thereto, being hereinafter
      referred to as the “Depositary”), and registered in the name of its nominee,
      Cede & Co. (or any successor thereto), for the accounts of participants in
      the Depositary, duly executed by the Company and authenticated by the Trustee
      as
      hereinafter provided. The aggregate principal amount of the Restricted Global
      Securities may from time to time be increased or decreased by adjustments made
      on the records of the Securities Custodian as hereinafter provided, subject
      in
      each case to compliance with the Applicable Procedures. 

     

    (b)  Global
      Securities in General.
      Each
      Global Security shall represent such of the outstanding Securities as shall
      be
      specified therein and each shall provide that it shall represent the aggregate
      amount of outstanding Securities from time to time endorsed thereon and that
      the
      aggregate amount of outstanding Securities represented thereby may from time
      to
      time be reduced or increased, as appropriate, to reflect replacements,
      exchanges, purchases, redemptions, or conversions of such Securities. Any
      adjustment of the aggregate principal amount of a Global Security to reflect
      the
      amount of any increase or decrease in the amount of outstanding Securities
      represented thereby shall be made by the Trustee in accordance with instructions
      given by the Holder thereof as required by Section 2.12 and shall be made on
      the
      records of the Trustee and the Depositary.

     

    Members
      of, or participants in, the Depositary (“Agent Members”) shall have no rights
      under this Indenture with respect to any Global Security held on their behalf
      by
      the Depositary or under the Global Security, and the Depositary (including,
      for
      this purpose, its nominee) may be treated by the Company, the Trustee and any
      agent of the Company or the Trustee as the absolute owner and Holder of such
      Global Security for all purposes whatsoever. Notwithstanding the foregoing,
      nothing herein shall (1) prevent the Company, the Trustee or any agent of the
      Company or the Trustee from giving effect to any written certification, proxy
      or
      other authorization furnished by the Depositary or (2) impair, as between the
      Depositary and its Agent Members, the operation of customary practices governing
      the exercise of the rights of a Holder of any Security. 

     

    (c)  Book
      Entry Provisions.
      The
      Company shall execute and the Trustee shall, in accordance with this Section
      2.01(c), authenticate and deliver initially one or more Global Securities that
      (1) shall be registered in the name of the Depositary or its nominee, (2) shall
      be delivered by the Trustee to the Depositary or pursuant to the Depositary’s
      instructions and (3) shall bear legends substantially to the following
      effect:

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    “UNLESS
      THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
      TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
      OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
      THE
      DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO
      SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
      DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
      OR
      OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
      CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY IS A GLOBAL SECURITY
      WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED
      IN
      THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE
      FOR
      SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR
      ITS
      NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS
      AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE
      FORM,
      THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO
      A
      NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
      OR
      ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE
      TO A
      SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.”

     

    Section
      2.02.  Execution
      and Authentication.

     

    (a)  The
      aggregate principal amount of Securities which may be authenticated and
      delivered under this Indenture is limited to $287,500,000 aggregate principal
      amount except as provided in Sections 2.06 and 2.07.

     

    (b)  An
      Officer shall sign the Securities for the Company by manual or facsimile
      signature. Typographic and other minor errors or defects in any such facsimile
      signature shall not affect the validity or enforceability of any Security that
      has been authenticated and delivered by the Trustee.

     

    (c)  If
      an
      officer whose signature is on a Security no longer holds that office at the
      time
      the Trustee authenticates the Security, the Security shall be valid
      nevertheless. 

     

    (d)  A
      Security shall not be valid until an authorized signatory of the Trustee by
      manual signature signs the certificate of authentication on the Security. The
      signature shall be conclusive evidence that the Security has been authenticated
      under this Indenture. 

     

    (e)  The
      Trustee shall authenticate and make available for delivery Securities for
      original issue in the aggregate principal amount of up to $287,500,000 upon
      receipt of a written order or orders of the Company signed by an Officer of
      the
      Company (a “Company Order”). The Company Order shall specify the amount of
      Securities to be authenticated, shall provide that all such securities will
      be
      represented by a Restricted Global Security and the date on which each original
      issue of Securities is to be authenticated. 

     

    
      
         

      

      
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    (f)  The
      Trustee shall act as the initial authenticating agent. Thereafter, the Trustee
      may appoint an authenticating agent acceptable to the Company to authenticate
      Securities. An authenticating agent may authenticate Securities whenever the
      Trustee may do so. Each reference in this Indenture to authentication by the
      Trustee includes authentication by such agent. An authenticating agent shall
      have the same rights as an Agent to deal with the Company or an Affiliate of
      the
      Company. 

     

    (g)  The
      Securities shall be issuable only in registered form without coupons and only
      in
      denominations of $1,000 principal amount and any integral multiple
      thereof.

     

    Section
      2.03.  Registrar,
      Paying Agent and Conversion Agent.

     

    (a)  The
      Company shall maintain one or more offices or agencies where Securities may
      be
      presented for registration of transfer or for exchange (each, a “Registrar”),
      one or more offices or agencies where Securities may be presented for payment
      (each, a “Paying Agent”), one or more offices or agencies where Securities may
      be presented for conversion (each, a “Conversion Agent”) and one or more offices
      or agencies where notices and demands to or upon the Company in respect of
      the
      Securities and this Indenture may be served. The Company will at all times
      maintain a Paying Agent, Conversion Agent, Registrar and an office or agency
      where notices and demands to or upon the Company in respect of the Securities
      and this Indenture may be served in the Borough of Manhattan, The City of New
      York. One of the Registrars (the “Primary Registrar”) shall keep a register of
      the Securities and of their transfer and exchange.

     

    (b)  The
      Company shall enter into an appropriate agency agreement with any Agent not
      a
      party to this Indenture, provided that the Agent may be an Affiliate of the
      Trustee. The agreement shall implement the provisions of this Indenture that
      relate to such Agent. The Company shall notify the Trustee of the name and
      address of any Agent not a party to this Indenture. If the Company fails to
      maintain a Registrar, Paying Agent, Conversion Agent, or agent for service
      of
      notices and demands in any place required by this Indenture, or fails to give
      the foregoing notice, the Trustee shall act as such. The Company or any
      Affiliate of the Company may act as Paying Agent (except for the purposes of
      Section 7.01 and Article 11).

     

    (c)  The
      Company hereby initially designates the Trustee as Paying Agent, Registrar,
      Securities Custodian and Conversion Agent, and initially designates the
      Corporate Trust Office of the Trustee as an office or agency where notices
      and
      demands to or upon the Company in respect of the Securities and this Indenture
      shall be served.

     

    Section
      2.04.  Paying
      Agent to Hold Money in Trust.

     

    Prior
      to
      12:00 p.m. (noon), New York City time, on each due date of the payment of
      principal of, or interest on, any Securities, the Company shall deposit with
      the
      Paying Agent a sum sufficient to pay such principal or interest so becoming
      due.
      Subject to Section 11.02, a Paying Agent shall hold in trust for the benefit
      of
      Holders of Securities or the Trustee all money held by the Paying Agent for
      the
      payment of principal of, or interest on, the Securities, and shall notify the
      Trustee of any failure by the Company (or any other obligor on the Securities)
      to make any such payment. If the Company or an Affiliate of the Company acts
      as
      Paying Agent, it shall, before 12:00 p.m. (noon), New York City time, on each
      due date of the principal of, or interest on, any Securities, segregate the
      money and hold it as a separate trust fund. The Company at any time may require
      a Paying Agent to pay all money held by it to the Trustee, and the Trustee
      may
      at any time during the continuance of any Default, upon written request to
      a
      Paying Agent, require such Paying Agent to pay forthwith to the Trustee all
      sums
      so held in trust by such Paying Agent. Upon doing so, the Paying Agent (other
      than the Company) shall have no further liability for the money.

     

    
      
         

      

      
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    Section
      2.05.  Lists
      of Holders of Securities.

     

    The
      Trustee shall preserve in as current a form as is reasonably practicable the
      most recent list available to it of the names and addresses of Holders of
      Securities. If the Trustee is not the Primary Registrar, the Company shall
      furnish to the Trustee on or before each Interest Payment Date and at such
      other
      times as the Trustee may request in writing, a list in such form and as of
      such
      date as the Trustee may reasonably require of the names and addresses of Holders
      of Securities.

     

    Section
      2.06.  Transfer
      and Exchange.

     

    (a)  Subject
      to compliance with any applicable additional requirements contained in Section
      2.12, when a Security is presented to a Registrar with a request to register
      a
      transfer thereof or to exchange such Security for an equal principal amount
      of
      Securities of other authorized denominations, the Registrar shall register
      the
      transfer or make the exchange as requested; provided, however, that every
      Security presented or surrendered for registration of transfer or exchange
      shall
      be duly endorsed or accompanied by an assignment form and, if applicable, a
      transfer certificate each in the form included in the form of Security attached
      as Exhibit A hereto, and completed in a manner satisfactory to the Registrar
      and
      duly executed by the Holder thereof or its attorney duly authorized in writing.
      To permit registration of transfers and exchanges, upon surrender of any
      Security for registration of transfer or exchange at an office or agency
      maintained pursuant to Section 2.03, the Company shall execute and the Trustee
      shall authenticate Securities of a like aggregate principal amount at the
      Registrar’s request. Any exchange or transfer shall be without charge, except
      that the Company or the Registrar may require payment of a sum sufficient to
      cover any tax or other governmental charge that may be imposed in relation
      thereto; provided that this sentence shall not apply to any exchange pursuant
      to
      Section 2.10, 2.12(a), 3.06, 5.02(e) or 12.05.

     

    (b)  Neither
      the Company, any Registrar nor the Trustee shall be required to exchange or
      register a transfer of (1) any Securities for a period of 15 days next preceding
      mailing of a notice of Securities to be redeemed, or (2) any Securities or
      portions thereof in respect of which a Fundamental Change Purchase Notice has
      been delivered and not withdrawn by the Holder thereof (except, in the case
      of
      the purchase of a Security in part, the portion thereof not to be
      purchased).

     

    
      
         

      

      
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    (c)  All
      Securities issued upon any transfer or exchange of Securities shall be valid
      obligations of the Company, evidencing the same debt and entitled to the same
      benefits under this Indenture, as the Securities surrendered upon such transfer
      or exchange.

     

    (d)  Any
      Registrar appointed pursuant to Section 2.03 shall provide to the Trustee such
      information as the Trustee may reasonably require in connection with the
      delivery by such Registrar of Securities upon transfer or exchange of
      Securities. 

     

    (e)  The
      Trustee shall have no obligation or duty to monitor, determine or inquire as
      to
      compliance with any restrictions on transfer imposed under this Indenture or
      under applicable law with respect to any transfer of any interest in any
      Security (including any transfers between or among Agent Members or other
      beneficial owners of interests in any Global Security) other than to require
      delivery of such certificates and other documentation or evidence as are
      expressly required by, and to do so if and when expressly required by the terms
      of, this Indenture, and to examine the same to determine substantial compliance
      as to form with the express requirements hereof.

     

    Section
      2.07.  Replacement
      Securities.

     

    (a)  If
      any
      mutilated Security is surrendered to the Company, a Registrar or the Trustee,
      or
      the Company, a Registrar and the Trustee receive evidence to their satisfaction
      of the destruction, loss or theft of any Security, and there is delivered to
      the
      Company, the applicable Registrar and the Trustee such security or indemnity
      as
      will be required by them to save each of them harmless, then, in the absence
      of
      notice to the Company, such Registrar or the Trustee that such Security has
      been
      acquired by a bona fide purchaser, the Company shall execute, and upon its
      written request the Trustee shall authenticate and deliver, in exchange for
      any
      such mutilated Security or in lieu of any such destroyed, lost or stolen
      Security, a new Security of like tenor and principal amount, bearing a number
      not contemporaneously outstanding.

     

    (b)  If
      any
      such mutilated, destroyed, lost or stolen Security has become or is about to
      become due and payable, or is about to be purchased by the Company pursuant
      to
      Article 3, or converted pursuant to Article 5, the Company in its discretion
      may, instead of issuing a new Security, pay, purchase or convert such Security,
      as the case may be. 

     

    (c)  Upon
      the
      issuance of any new Securities under this Section 2.07, the Company may require
      the payment of a sum sufficient to cover any tax or other governmental charge
      that may be imposed in relation thereto as a result of any Securities, at the
      request of any Holder, being issued to a Person other than such Holder and
      any
      other reasonable expenses (including the reasonable fees and expenses of the
      Trustee or the Registrar) in connection therewith. 

     

    (d)  Every
      new
      Security issued pursuant to this Section 2.07 in lieu of any mutilated,
      destroyed, lost or stolen Security shall constitute an original additional
      contractual obligation of the Company, whether or not the mutilated, destroyed,
      lost or stolen Security shall be at any time enforceable by anyone, and shall
      be
      entitled to all benefits of this Indenture equally and proportionately with
      any
      and all other Securities duly issued hereunder.

     

    
      
         

      

      
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    (e)  The
      provisions of this Section 2.07 are (to the extent lawful) 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
      Securities.

     

    Section
      2.08.  Outstanding
      Securities.

     

    (a)  Securities
      outstanding at any time are all Securities authenticated by the Trustee, except
      for those canceled by it, those purchased pursuant to Article 3, those converted
      pursuant to Article 5, those delivered to the Trustee for cancellation or
      surrendered for transfer or exchange and those described in this Section 2.08
      as
      not outstanding. 

     

    (b)  If
      a
      Security is replaced pursuant to Section 2.07, it ceases to be outstanding
      unless the Company receives proof satisfactory to it that the replaced Security
      is held by a bona fide purchaser. 

     

    (c)  If
      a
      Paying Agent (other than the Company or an Affiliate of the Company) holds
      in
      respect of the outstanding Securities on a Fundamental Change Purchase Date
      or
      the Final Maturity Date money sufficient to pay the principal of (including
      premium, if any), accrued interest and Additional Interest, if any, on
      Securities (or portions thereof) payable on that date, then on and after such
      Fundamental Change Purchase Date or Final Maturity Date, as the case may be,
      such Securities (or portions thereof, as the case may be) shall cease to be
      outstanding and cash interest and Additional Interest, if any, on them shall
      cease to accrue.

     

    (d)  Subject
      to the restrictions contained in Section 2.09, a Security does not cease to
      be
      outstanding because the Company or an Affiliate of the Company holds the
      Security.

     

    Section
      2.09.  Treasury
      Securities.

     

    In
      determining whether the Holders of the required principal amount of Securities
      have concurred in any notice, direction, waiver or consent, Securities owned
      by
      the Company or any other obligor on the Securities or by any Affiliate of the
      Company or of such other obligor shall be disregarded, except that, for purposes
      of determining whether the Trustee shall be protected in relying on any such
      notice, direction, waiver or consent, only Securities which a Responsible
      Officer of the Trustee with responsibility for this Indenture actually knows
      are
      so owned shall be so disregarded. Securities so owned which have been pledged
      in
      good faith shall not be disregarded if the pledgee establishes to the
      satisfaction of the Trustee the pledgee’s right so to act with respect to the
      Securities and that the pledgee is not the Company or any other obligor on
      the
      Securities or any Affiliate of the Company or of such other
      obligor.

     

    Section
      2.10.  Temporary
      Securities.

     

    Until
      definitive Securities are ready for delivery, the Company may prepare and
      execute, and, upon receipt of a Company Order, the Trustee shall authenticate
      and deliver, temporary Securities. Temporary Securities shall be substantially
      in the form of definitive securities but may have variations that the Company
      with the consent of the Trustee considers appropriate for temporary Securities.
      Without unreasonable delay, the Company shall prepare and the Trustee shall
      authenticate and deliver definitive Securities in exchange for temporary
      Securities.

     

    
      
         

      

      
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    Section
      2.11.  Cancellation.

     

    The
      Company at any time may deliver Securities to the Trustee for cancellation.
      The
      Registrar, the Paying Agent and the Conversion Agent shall forward to the
      Trustee or its agent any Securities surrendered to them for transfer, exchange,
      purchase, payment or conversion. The Trustee and no one else shall cancel,
      in
      accordance with its standard procedures, all Securities surrendered for
      transfer, exchange, purchase, payment, conversion or cancellation and shall
      dispose of the cancelled Securities in accordance with its customary procedures
      or deliver the canceled Securities to the Company upon its request therefor.
      

     

    Section
      2.12.  Legend;
      Additional Transfer and Exchange Requirements.

     

    (a)  If
      Securities are issued upon the transfer, exchange or replacement of Securities
      subject to restrictions on transfer and bearing the legends set forth on the
      form of Securities attached as Exhibit A (collectively, the “Legend”), or if a
      request is made to remove the Legend on a Security, the Securities so issued
      shall bear the Legend, or the Legend shall not be removed, as the case may
      be,
      unless there is delivered to the Company and the Registrar such satisfactory
      evidence, which shall include an Opinion of Counsel if requested by the Company
      or such Registrar, as may be reasonably required by the Company and the
      Registrar, that neither the Legend nor the restrictions on transfer set forth
      therein are required to ensure that transfers thereof comply with the provisions
      of Rule 144A or Rule 144 under the Securities Act or that such Securities are
      not “restricted” within the meaning of Rule 144 under the Securities Act;
      provided that no such evidence need be supplied in connection with the sale
      of
      such Security pursuant to a registration statement that is effective at the
      time
      of such sale. Upon (1) provision of such satisfactory evidence if requested
      or
      (2) notification by the Company to the Trustee and Registrar of the sale of
      such
      Security pursuant to a registration statement that is effective at the time
      of
      such sale, the Trustee, at the written direction of the Company, shall
      authenticate and deliver a Security that does not bear the Legend. If the Legend
      is removed from the face of a Security and the Security is subsequently held
      by
      an Affiliate of the Company, the Legend shall be reinstated. 

     

    (b)  A
      Global
      Security may not be transferred, in whole or in part, to any Person other than
      the Depositary or a nominee or any successor thereof, and no such transfer
      to
      any such other Person may be registered; provided that the foregoing shall
      not
      prohibit any transfer of a Security that is issued in exchange for a Global
      Security but is not itself a Global Security. No transfer of a Security to
      any
      Person shall be effective under this Indenture or the Securities unless and
      until such Security has been registered in the name of such Person.
      Notwithstanding any other provisions of this Indenture or the Securities,
      transfers of a Global Security, in whole or in part, shall be made only in
      accordance with this Section 2.12.

     

    (c)  Subject
      to Section 2.12(b) and in compliance with Section 2.12(d), every Security shall
      be subject to the restrictions on transfer provided in the Legend. Whenever
      any
      Restricted Security other than a Restricted Global Security is presented or
      surrendered for registration of transfer or in exchange for a Security
      registered in a name other than that of the Holder, such Security must be
      accompanied by a certificate in substantially the form set forth in Exhibit
      A
      under the heading “Certificate to be Delivered Upon Exchange or Registration of
      Transfer of Restricted Securities,” dated the date of such surrender and signed
      by the Holder of such Security, as to compliance with such restrictions on
      transfer. The Registrar shall not be required to accept for such registration
      of
      transfer or exchange any Security not so accompanied by a properly completed
      certificate. 

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    (d)  The
      restrictions imposed by the Legend upon the transferability of any Security
      shall cease and terminate when such Security has been sold pursuant to an
      effective registration statement under the Securities Act or transferred in
      compliance with Rule 144 under the Securities Act (or any successor provision
      thereto) or, if earlier, upon the expiration of the holding period applicable
      to
      sales thereof under Rule 144(k) under the Securities Act (or any successor
      provision). Any Security as to which such restrictions on transfer shall have
      expired in accordance with their terms or shall have terminated may, upon a
      surrender of such Security for exchange to the Registrar in accordance with
      the
      provisions of this Section 2.12 (accompanied, in the event that such
      restrictions on transfer have terminated by reason of a transfer in compliance
      with Rule 144 or any successor provision, by, if requested by the Company or
      the
      Registrar, an Opinion of Counsel reasonably acceptable to the Company and the
      Registrar and addressed to the Company and the Registrar, to the effect that
      the
      transfer of such Security has been made in compliance with Rule 144 or such
      successor provision), be exchanged for a new Security, of like tenor and
      aggregate principal amount, which shall not bear the restrictive Legend. The
      Company shall inform the Trustee of the effective date of any registration
      statement registering the offer and sale of the Securities under the Securities
      Act. The Trustee shall not be liable for any action taken or omitted to be
      taken
      by it in good faith in accordance with the aforementioned Opinion of Counsel
      or
      registration statement.

     

    As
      used
      in Sections 2.12(c) and (d), the term “transfer” encompasses any sale, pledge,
      transfer, hypothecation or other disposition of any Security.

     

    (e)  The
      provisions below shall apply only to Global Securities:

     

    (1)  Each
      Global Security authenticated under this Indenture shall be registered in the
      name of the Depositary or a nominee thereof and delivered to such Depositary
      or
      a nominee thereof or custodian therefor, and each such Global Security shall
      constitute a single Security for purposes of this Indenture. 

     

    (2)  Notwithstanding
      any other provisions of this Indenture or the Securities, a Global Security
      shall not be exchanged in whole or in part for a Security registered, and no
      transfer of a Global Security in whole or in part shall be registered in the
      name of any Person other than the Depositary or one or more nominees thereof;
      provided that a Global Security may be exchanged for securities registered
      in
      the names of any person designated by the Depositary in the event that (A)
      the
      Depositary has notified the Company that it is unwilling or unable to continue
      as Depositary for such Global Security or such Depositary has ceased to be
      a
“clearing agency” registered under the Exchange Act, and a successor Depositary
      is not appointed by the Company within 90 days after receiving such notice
      or
      becoming aware that the Depositary has ceased to be a “clearing agency,” or (B)
      an Event of Default has occurred and is continuing with respect to the
      Securities. Any Global Security exchanged pursuant to subclause (A) above shall
      be so exchanged in whole and not in part, and any Global Security exchanged
      pursuant to subclause (B) above may be exchanged in whole or from time to time
      in part as directed by the Depositary. Any Security issued in exchange for
      a
      Global Security or any portion thereof shall be a Global Security; provided
      further that any such Security so issued that is registered in the name of
      a
      Person other than the Depositary or a nominee thereof shall not be a Global
      Security.

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    (3)  Securities
      issued in exchange for a Global Security or any portion thereof shall be issued
      in definitive, fully registered form, without interest coupons, shall have
      an
      aggregate principal amount equal to that of such Global Security or portion
      thereof to be so exchanged, shall be registered in such names and be in such
      authorized denominations as the Depositary shall designate and shall bear the
      applicable legends provided for herein. Any Global Security to be exchanged
      in
      whole shall be surrendered by the Depositary to the Trustee, as Registrar.
      With
      regard to any Global Security to be exchanged in part, either such Global
      Security shall be so surrendered for exchange or, if the Trustee is acting
      as
      custodian for the Depositary or its nominee with respect to such Global
      Security, the principal amount thereof shall be reduced, by an amount equal
      to
      the portion thereof to be so exchanged, by means of an appropriate adjustment
      made on the records of the Trustee. Upon any such surrender or adjustment,
      the
      Trustee shall authenticate and deliver the Security issuable on such exchange
      to
      or upon the order of the Depositary or an authorized representative thereof.
      

     

    (4)  Subject
      to clause (6) of this Section 2.12(e), the registered Holder may grant proxies
      and otherwise authorize any Person, including Agent Members and Persons that
      may
      hold interests through Agent Members, to take any action which a Holder is
      entitled to take under this Indenture or the Securities. 

     

    (5)  In
      the
      event of the occurrence of any of the events specified in clause (2) of this
      Section 2.12(e), the Company will promptly make available to the Trustee a
      reasonable supply of Certificated Securities in definitive, fully registered
      form, without interest coupons. 

     

    (6)  Neither
      Agent Members nor any other Persons on whose behalf Agent Members may act shall
      have any rights under this Indenture with respect to any Global Security
      registered in the name of the Depositary or any nominee thereof, or under any
      such Global Security, and the Depositary or such nominee, as the case may be,
      may be treated by the Company, the Trustee and any agent of the Company or
      the
      Trustee as the absolute owner and holder of such Global Security for all
      purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
      the Company, the Trustee or any agent of the Company or the Trustee from giving
      effect to any written certification, proxy or other authorization furnished
      by
      the Depositary or such nominee, as the case may be, or impair, as between the
      Depositary, its Agent Members and any other Person on whose behalf an Agent
      Member may act, the operation of customary practices of such Persons governing
      the exercise of the rights of a holder of any Security. 

     

    (7)  At
      such
      time as all interests in a Global Security have been converted, canceled or
      exchanged for Securities in certificated form, such Global Security shall,
      upon
      receipt thereof, be cancelled by the Trustee in accordance with standing
      procedures and instructions existing between the Depositary and the Securities
      Custodian, subject to Section 2.11 of this Indenture. At any time prior to
      such
      cancellation, if any interest in a Global Security is converted, canceled or
      exchanged for Securities in certificated form, the principal amount of such
      Global Security shall, in accordance with the standing procedures and
      instructions existing between the Depositary and the Securities Custodian,
      be
      appropriately reduced, and an endorsement shall be made on such Global Security,
      by the Trustee or the Securities Custodian, at the direction of the Trustee,
      to
      reflect such reduction. 

     

    
      
         

      

      
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    (f)  Until
      the
      expiration of the holding period applicable to sales thereof under Rule 144(k)
      under the Securities Act (or any successor provision thereto), any stock
      certificate representing Common Stock issued upon conversion of any Security
      shall bear a legend in substantially the following form, unless such Common
      Stock has been sold pursuant to a registration statement that has been declared
      effective under the Securities Act (and which continues to be effective at
      the
      time of such transfer) or transferred in compliance with Rule 144 under the
      Securities Act (or any successor provision thereto), or such Common Stock has
      been issued upon conversion of Securities that have been transferred pursuant
      to
      a registration statement that has been declared effective under the Securities
      Act or pursuant to Rule 144 under the Securities Act (or any successor provision
      thereto), or unless otherwise agreed by the Company in writing with written
      notice thereof to the transfer agent:

     

    THE
      COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND,
      ACCORDINGLY, MAY NOT BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
      ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
      UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER
      THE SECURITIES ACT.

     

    BY
      ITS
      ACQUISITION HEREOF, THE HOLDER AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
      THE
      COMMON STOCK EVIDENCED HEREBY PRIOR TO THE DATE THAT IS TWO YEARS AFTER THE
      LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH ICONIX BRAND
      GROUP, INC. (THE “COMPANY”) OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THE
      COMMON STOCK EVIDENCED HEREBY (OR ANY PREDECESSOR OF THE COMMON STOCK EVIDENCED
      HEREBY) (THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO THE COMPANY OR
      ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
      BEEN
      DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (C) PURSUANT TO ANY OTHER
      AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
      SUBJECT TO THE COMPANY’S AND THE TRANSFER AGENT’S RIGHT PRIOR TO ANY SUCH OFFER,
      SALE OR TRANSFER PURSUANT TO CLAUSE (C) PRIOR TO THE RESALE RESTRICTION
      TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
      CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN
      EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE
      FORM APPEARING ON THE OTHER SIDE OF THIS CERTIFICATE IS COMPLETED AND DELIVERED
      BY THE TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE
      REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
      DATE.

     

    
      
         

      

      
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    Any
      such
      Common Stock as to which such restrictions on transfer shall have expired in
      accordance with their terms or as to which the conditions for removal of the
      foregoing legend set forth therein have been satisfied may, upon surrender
      of
      the certificates representing such shares of Common Stock for exchange in
      accordance with the procedures of the transfer agent for the Common Stock,
      be
      exchanged for a new certificate or certificates for a like number of shares
      of
      Common Stock, which shall not bear the restrictive legend required by this
      section.

     

    Section
      2.13.  CUSIP
      Numbers.

     

    The
      Company in issuing the Securities may use one or more “CUSIP” numbers (if then
      generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices
      of purchase as a convenience to Holders; provided that any such notice may
      state
      that no representation is made as to the correctness of such numbers either
      as
      printed on the Securities or as contained in any notice of a purchase and that
      reliance may be placed only on the other identification numbers printed on
      the
      Securities, and any such purchase shall not be affected by any defect in or
      omission of such numbers. The Company will promptly notify the Trustee of any
      change in the “CUSIP” numbers.

     

     

    ARTICLE
      3

    PURCHASE
      UPON FUNDAMENTAL CHANGE

     

    Section
      3.01.  Purchase
      at Holders’ Option upon a Fundamental Change.

     

    (a)  If
      a
      Fundamental Change occurs prior to the Final Maturity Date, each Holder of
      a
      Security shall have the right, at the option of the Holder, to require the
      Company to repurchase for cash all or any portion of the Securities of such
      Holder equal to $1,000 principal amount (or an integral multiple thereof) at
      the
      Fundamental Change Purchase Price, on the date (the “Fundamental Change Purchase
      Date”) specified by the Company pursuant to subsection 3.01(b) that is not less
      than 30 days nor more than 45 days after the later of the Fundamental Change
      Effective Date and the Fundamental Change Company Notice.

     

    (b)  As
      promptly as practicable following the date when the Company publicly announces
      a
      Fundamental Change but in no event less than 10 Trading Days prior to the
      anticipated Fundamental Change Effective Date, the Company shall mail a written
      notice of the Fundamental Change and of the resulting repurchase right to the
      Trustee, Paying Agent and to each Holder (and to beneficial owners as required
      by applicable law) (the “Fundamental Change Company Notice”). The Fundamental
      Change Company Notice shall include the form of a Fundamental Change Purchase
      Notice to be completed by the Holder and shall state:

     

    (1)  the
      events causing such Fundamental Change; 

     

    (2)  the
      date
      (or expected date) of such Fundamental Change; 

     

    
      
         

      

      
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    (3)  the
      last
      date by which the Fundamental Change Purchase Notice must be delivered to elect
      the repurchase option pursuant to this Section 3.01; 

     

    (4)  the
      Fundamental Change Purchase Date; 

     

    (5)  the
      Fundamental Change Purchase Price; 

     

    (6)  the
      Holder’s right to require the Company to purchase the Securities; 

     

    (7)  the
      name
      and address of each Paying Agent and Conversion Agent; 

     

    (8)  the
      then
      effective Conversion Rate and any adjustments to the Conversion Rate resulting
      from such Fundamental Change;

     

    (9)  the
      procedures that the Holder must follow to exercise rights under Article 5 and
      that Securities as to which a Fundamental Change Purchase Notice has been given
      may be converted into Common Stock pursuant to Article 5 of this Indenture
      only
      to the extent that the Fundamental Change Purchase Notice has been withdrawn
      in
      accordance with the terms of this Indenture; 

     

    (10)  the
      procedures that the Holder must follow to exercise rights under this Section
      3.01; 

     

    (11)  the
      procedures for withdrawing a Fundamental Change Purchase Notice; 

     

    (12)  that,
      unless the Company fails to pay such Fundamental Change Purchase Price,
      Securities covered by any Fundamental Change Purchase Notice will cease to
      be
      outstanding and interest and Additional Interest, if any, will cease to accrue
      on and after the Fundamental Change Purchase Date; and 

     

    (13)  the
      CUSIP
      number of the Securities.

     

    At
      the
      Company’s request, the Trustee shall give such Fundamental Change Company Notice
      in the Company’s name and at the Company’s expense; provided that, in all cases,
      the text of such Fundamental Change Company Notice shall be prepared by the
      Company. If any of the Securities is in the form of a Global Security, then
      the
      Company shall modify such notice to the extent necessary to accord with the
      Applicable Procedures relating to the purchase of Global
      Securities.

     

    (c)  A
      Holder
      may exercise its rights specified in Section 3.01(a) upon delivery of a written
      notice (which shall be in substantially the form set forth in the form of
      Security attached as Exhibit A under the heading “Fundamental Change Purchase
      Notice” and which may be delivered by letter, overnight courier, hand delivery,
      facsimile transmission or in any other written form and, in the case of Global
      Securities, may be delivered electronically or by other means in accordance
      with
      the Depositary’s Applicable Procedures) of the exercise of such rights (a
“Fundamental Change Purchase Notice”) to the Company or any Paying Agent at any
      time prior to the close of business on the Business Day next preceding the
      Fundamental Change Purchase Date, subject to extension to comply with applicable
      law. 

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    (1)  The
      Fundamental Change Purchase Notice shall state: (A) the certificate number
      (if
      such Security is held other than in global form) of the Security which the
      Holder will deliver to be purchased (or, if the Security is held in global
      form,
      any other items required to comply with the Applicable Procedures), (B) the
      portion of the principal amount of the Security which the Holder will deliver
      to
      be purchased, which portion must be $1,000 or an integral multiple of $1,000
      and
      (C) that such Security shall be purchased as of the Fundamental Change Purchase
      Date pursuant to the terms and conditions specified in the Securities and in
      this Indenture. 

     

    (2)  The
      delivery of a Security for which a Fundamental Change Purchase Notice has been
      timely delivered to any Paying Agent and not validly withdrawn prior to, on
      or
      after the Fundamental Change Purchase Notice (together with all necessary
      endorsements) at the office of such Paying Agent shall be a condition to the
      receipt by the Holder of the Fundamental Change Purchase Price therefor.

     

    (3)  The
      Company shall only be obliged to purchase, pursuant to this Section 3.01, a
      portion of a Security if the principal amount of such portion is $1,000 or
      an
      integral multiple of $1,000 (provisions of this Indenture that apply to the
      purchase of all of a Security also apply to the purchase of such portion of
      such
      Security).

     

    (4)  Notwithstanding
      anything herein to the contrary, any Holder delivering to a Paying Agent the
      Fundamental Change Purchase Notice contemplated by this Section 3.01(c) shall
      have the right to withdraw such Fundamental Change Purchase Notice in whole
      or
      in a portion thereof that is a principal amount of $1,000 or in an integral
      multiple thereof at any time prior to the close of business on the Business
      Day
      prior to the Fundamental Change Purchase Date by delivery of a written notice
      of
      withdrawal to the Paying Agent in accordance with Section 3.02. 

     

    (5)  A
      Paying
      Agent shall promptly notify the Company of the receipt by it of any Fundamental
      Change Purchase Notice or written withdrawal thereof. 

     

    (6)  Anything
      herein to the contrary notwithstanding, in the case of Global Securities, any
      Fundamental Change Purchase Notice may be delivered or withdrawn and such
      Securities may be surrendered or delivered for purchase in accordance with
      the
      Applicable Procedures as in effect from time to time.

     

    Section
      3.02.  Effect
      of Fundamental Change Purchase Notice.

     

    (a)  Upon
      receipt by any Paying Agent of a properly completed Fundamental Change Purchase
      Notice from a Holder, the Holder of the Security in respect of which such
      Fundamental Change Purchase Notice was given shall (unless such Fundamental
      Change Purchase Notice is withdrawn as specified in Section 3.02(b)) thereafter
      be entitled to receive the Fundamental Change Purchase Price with respect to
      such Security, provided that an Event of Default shall not have occurred and
      be
      continuing (other than a Default in the payment of the Fundamental Change
      Purchase Price). Such Fundamental Change Purchase Price shall be paid to such
      Holder promptly following the later of (1) the Fundamental Change Purchase
      Date
      (provided that the conditions in Section 3.01 have been satisfied) and (2)
      the
      time of delivery of such Security to a Paying Agent by the Holder thereof in
      the
      manner required by Section 3.01(c). Securities in respect of which a Fundamental
      Change Purchase Notice has been given by the Holder thereof may not be converted
      into shares of Common Stock pursuant to Article 5 on or after the date of the
      delivery of such Fundamental Change Purchase Notice unless such Fundamental
      Change Purchase Notice has first been validly withdrawn in accordance with
      Section 3.02(b) with respect to the Securities to be converted. 

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    (b)  A
      Fundamental Change Purchase Notice may be withdrawn by means of a written notice
      (which may be delivered by mail, overnight courier, hand delivery, facsimile
      transmission or in any other written form and, in the case of Global Securities,
      may be delivered electronically or by other means in accordance with the
      Applicable Procedures) of withdrawal delivered by the Holder to a Paying Agent
      at any time prior to the close of business on the Business Day immediately
      prior
      to the Fundamental Change Purchase Date, specifying (1) if certificated
      Securities have been issued, the certificate number of the Security being
      withdrawn in whole or in part (or if the Securities are not certificated, such
      written notice must comply with the Applicable Procedures), (2) the principal
      amount of the Security or portion thereof (which must be a principal amount
      of
      $1,000 or an integral multiple of $1,000 in excess thereof) with respect to
      which such notice of withdrawal is being submitted, and (3) the portion of
      the
      principal amount of the Security that will remain subject to the Fundamental
      Change Purchase Notice, which portion must be a principal amount of $1,000
      or an
      integral multiple thereof. 

     

    Section
      3.03.  Deposit
      of Fundamental Change Purchase Price.

     

    (a)  On
      or
      before 12:00 p.m. (noon)., New York City time, on the applicable Fundamental
      Change Purchase Date, the Company shall deposit with the Trustee or with a
      Paying Agent (or if the Company or an Affiliate of the Company is acting as
      the
      Paying Agent, shall segregate and hold in trust as provided in Section 2.04)
      an
      amount of money (in immediately available funds), sufficient to pay the
      aggregate Fundamental Change Purchase Price of all the Securities or portions
      thereof that are to be purchased as of such Fundamental Change Purchase Date.
      

     

    (b)  If
      a
      Paying Agent or the Trustee holds, in accordance with the terms hereof, money
      sufficient to pay the Fundamental Change Purchase Price of any Security for
      which a Fundamental Change Purchase Notice has been tendered and not withdrawn
      in accordance with this Indenture then, immediately after the applicable
      Fundamental Change Purchase Date, such Security will cease to be outstanding,
      whether or not the Security is delivered to the Paying Agent or the Trustee,
      and
      interest and Additional Interest, if any, shall cease to accrue, and the rights
      of the Holder in respect of the Security shall terminate (other than the right
      to receive the Fundamental Change Purchase Price as aforesaid). The Company
      shall publicly announce the principal amount of Securities repurchased on or
      as
      soon as practicable after the Fundamental Change Purchase Date. 

     

    (c)  The
      Paying Agent will promptly return to the respective Holders thereof any
      Securities with respect to which a Fundamental Change Purchase Notice has been
      withdrawn in compliance with this Indenture. 

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    (d)  If
      a
      Fundamental Change Purchase Date falls after a Regular Record Date and on or
      before the related Interest Payment Date, then interest on the Securities
      payable on such Interest Payment Date will be payable to the Holders in whose
      names the Securities are registered at the close of business on such Regular
      Record Date.

     

    Section
      3.04.  Repayment
      to the Company.

     

    To
      the
      extent that the aggregate amount of cash deposited by the Company pursuant
      to
      Section 3.03 exceeds the aggregate Fundamental Change Purchase Price of the
      Securities or portions thereof that the Company is obligated to purchase, then
      promptly after the Fundamental Change Purchase Date the Trustee or a Paying
      Agent, as the case may be, shall return any such excess cash to the
      Company.

     

    Section
      3.05.  Securities
      Purchased in Part.

     

    Any
      Security that is to be purchased only in part shall be surrendered at the office
      of a Paying Agent, and promptly after the Fundamental Change Purchase Date,
      the
      Company shall execute and the Trustee shall authenticate and deliver to the
      Holder of such Security, without service charge, a new Security or Securities,
      of such authorized denomination or denominations as may be requested by such
      Holder (which must be equal to $1,000 principal amount or any integral thereof),
      in aggregate principal amount equal to, and in exchange for, the portion of
      the
      principal amount of the Security so surrendered that is not
      purchased.

     

    Section
      3.06.  Compliance
      with Securities Laws upon Purchase of Securities.

     

    In
      connection with any offer to purchase of Securities under Section 3.01, the
      Company shall (a) comply with Rule 13e-4 and Rule 14e-1 (or any successor to
      either such Rule), and any other tender offer rules, if applicable, under the
      Exchange Act, (b) file the related Schedule TO (or any successor or similar
      schedule, form or report) if required under the Exchange Act, and (c) otherwise
      comply with all federal and state securities laws in connection with such offer
      to purchase or purchase of Securities, all so as to permit the rights of the
      Holders and obligations of the Company under Sections 3.01 through 3.04 to
      be
      exercised in the time and in the manner specified therein. To the extent that
      compliance with any such laws, rules and regulations would result in a conflict
      with any of the terms hereof, this Indenture is hereby modified to the extent
      required for the Company to comply with such laws, rules and
      regulations.

     

    Section
      3.07.  Purchase
      of Securities in Open Market.

     

    The
      Company (a) on or prior to the date that is two years from the latest issuance
      of any Securities and in accordance with Section 2.11, shall surrender any
      Security purchased by the Company pursuant to this Article 3 to the Trustee
      for
      cancellation, and (b) after such date and in accordance with Section 2.11,
      may
      surrender such Security to the Trustee for cancellation. Any securities
      surrendered to the Trustee for cancellation may not be reissued or resold by
      the
      Company and will be canceled promptly in accordance with Section 2.11. The
      Company may repurchase Securities in the open market, by tender at any price
      or
      by negotiated transactions and such Securities may be reissued or resold, to
      the
      extent permitted by applicable law, or may be surrendered to the Trustee for
      cancellation.

     

    
      
         

      

      
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    ARTICLE
      4

    REDEMPTION
      UPON SPECIFIED ACCOUNTING CHANGE

     

    Section
      4.01.  Right
      to Redeem.
      Upon
      the occurrence of a Specified Accounting Change, the Company may redeem the
      Securities in whole for cash on the date (“Specified Accounting Change
      Redemption Date”) specified by the Company that is not more than 90 days after a
      Specified Accounting Change has become effective at a redemption price of 102%
      of the principal amount (the “Specified Accounting Change Redemption Price”),
      together with accrued and unpaid interest, if any, up to, but not including,
      the
      Specified Accounting Change Redemption Date. For purposes of this Section,
      the
      effective date of the Specified Accounting Change shall mean the date the
      standards with respect to such Specified Accounting Change under generally
      accepted accounting principles have been issued. 

     

    Section
      4.02.   Notice
      of Redemption.
      If the
      Company elects to redeem Securities pursuant to Section 4.01, at least 30 days
      but not more than 60 days before the Specified Accounting Redemption Date,
      the
      Company shall mail or cause to be mailed a written notice of redemption to
      the
      Trustee at the Trustee’s address and to each Holder of Securities at such
      Holder’s address as it appears on the Primary Registrar’s books (the “Specified
      Accounting Change Redemption Notice”).

     

    The
      Specified Accounting Change Redemption Notice shall identify the Securities
      (including CUSIP numbers) to be redeemed and shall state:

    

    (1) the
      Specified Accounting Change Redemption Date;

     

    (2) the
      Specified Accounting Change Redemption Price;

     

    (3)
       the
      then
      effective Conversion Rate;

     

    (4)
       the
      name
      and address of each Paying Agent and Conversion Agent;

     

    (5)
       that
      Securities called for redemption must be presented and surrendered to a Paying
      Agent to collect the Specified Accounting Change Redemption Price;

     

    (6)
       that,
      unless the Company fails to make payment of such Specified Accounting Change
      Redemption Price, Securities called for redemption will cease to be outstanding
      and interest and Additional Interest, if any, will cease to accrue on and after
      the Specified Accounting Change Redemption Date; 

     

    (7) the
      procedures that the Holder must follow to exercise rights under Article 5 and
      that Securities as to which a Specified Accounting Change Redemption Notice
      has
      been given may be converted into Common Stock pursuant to Article 5 of this
      Indenture; and

     

    At
      the
      Company’s request, the Trustee shall give such Specified Accounting Change
      Redemption Notice in the Company’s name and at the Company’s expense; provided
      that, in all cases, the text of such Specified Accounting Change Redemption
      Notice shall be prepared by the Company. If any of the Securities is in the
      form
      of a Global Security, then the Company shall modify such notice to the extent
      necessary to accord with the Applicable Procedures relating to the purchase
      of
      Global Securities.

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    Section
      4.03.  Effect
      of Specified Accounting Change Redemption Notice.
      Once
      the Specified Accounting Change Redemption Notice is mailed, Securities called
      for redemption become due and payable on the Specified Accounting Change
      Redemption Date and at the Specified Accounting Change Redemption Price stated
      in the notice, together with accrued and unpaid interest, if any, except for
      Securities that are converted in accordance with the provisions of
      Article 5. On or after the Specified Accounting Change Redemption Date and
      upon presentation and surrender to a Paying Agent, Securities called for
      redemption will be paid at the Specified Accounting Change Redemption Price,
      plus any accrued and unpaid interest, up to but not including the Specified
      Accounting Change Redemption Date; provided that if the Specified Accounting
      Change Redemption Date falls after a Regular Record Date and on or before the
      related Interest Payment Date, then interest on the Securities payable on such
      Interest Payment Date will be payable to the Holders in whose names the
      Securities are registered at the close of business on such Regular Record
      Date.

     

    Section
      4.04.  Deposit
      of Specified Accounting Change Redemption Price.
      On or
      before 12:00 p.m. (noon), New York City time, on the Specified Accounting Change
      Redemption Date, the Company shall deposit with the Trustee or a Paying Agent
      (or, if the Company or an affiliate of the Company is acting as Paying Agent,
      shall segregate and hold in trust as provided in Section 2.04) an amount of
      money (in immediately available funds) sufficient to pay the Specified
      Accounting Change Redemption Price of and any accrued and unpaid interest,
      on
      all Securities to be redeemed on that date, other than Securities or portions
      thereof called for redemption on that date which have been delivered by the
      Company to the Trustee for cancellation or have been converted. The Paying
      Agent
      shall as promptly as practicable return to the Company any money not required
      for that purpose because of the conversion of Securities pursuant to
      Article 5 or, if such money is then held by the Company in trust and is not
      required for such purpose, it shall be discharged from the trust.

     

    ARTICLE
      5

    CONVERSION

     

    Section
      5.01.  Conversion
      Privilege and Conversion Rate.

     

    (a)  Subject
      to the obligation and the right of the Company to pay some or all of the
      conversion consideration in cash in accordance with Section 5.13, and upon
      compliance with the provisions of this Article 5, at the option of the Holder
      thereof, any Security or portion thereof that is an integral multiple of $1,000
      principal amount may be converted into fully paid and nonassessable shares
      (calculated as to each conversion to the nearest 1/100th of a share) of Common
      Stock prior to the close of business on the Business Day immediately preceding
      the Final Maturity Date or such earlier date set forth in this Article 5, unless
      previously purchased by the Company at the Holder’s option upon the occurrence
      of a Fundamental Change or redeemed by the Company upon a Specified Accounting
      Change, at the Conversion Rate in effect at such time, determined as hereinafter
      provided and subject to the adjustments described below, only under the
      following circumstances:

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    (1)  during
      any fiscal quarter beginning after September 30, 2007, and only during such
      fiscal quarter, if, as of the last day of the immediately preceding fiscal
      quarter, the Closing Price per share of the Common Stock for at least 20 Trading
      Days in the period of the 30 consecutive Trading Days ending on the last Trading
      Day of such preceding calendar quarter was more than 130% of the Conversion
      Price (the “Conversion Trigger Price”);

     

    (2)  if
      the
      Company distributes to all holders of Common Stock rights or warrants entitling
      them to purchase, for a period expiring within 45 days of the date of issuance,
      Common Stock at less than the average of the Closing Prices of the Common Stock
      for the five consecutive Trading Days ending on the date immediately preceding
      the first public announcement of such distribution; 

     

    (3)  if
      the
      Company distributes to all holders of Common Stock, assets, debt securities
      or
      rights to purchase the Company’s securities, which distribution has a per share
      value exceeding 10% of the average of the Closing Prices of the Common Stock
      for
      the five consecutive Trading Days ending on the date immediately preceding
      the
      first public announcement of such distribution; 

     

    (4)  if
      a
      Fundamental Change occurs; 

     

    (5)  at
      any
      time during the one month period beginning on June 1, 2012 and ending at
      the close of business on the Business Day immediately preceding the Final
      Maturity Date; 

     

    (6)  during
      any five Business Day period after any five consecutive Trading Day period
      in
      which the Trading Price per $1,000 principal amount of Securities, as determined
      following a request by a Holder in accordance with the procedures described
      below in Section 5.01(e), for each day of that period was less than 98% of
      the
      product of the Closing Price of the Common Stock and the then applicable
      Conversion Rate; 

     

    (7)  from
      and
      after 15 days prior to the anticipated effective date of any transaction or
      event with respect to the Company (including, but not limited to, any
      consolidation, merger or binding share exchange, other than resulting from
      a
      subdivision or combination) pursuant to which all or substantially all shares
      of
      the Common Stock would be converted into cash, securities or other property
      (each, a “Specified Event”) and until the earlier of 15 days after the actual
      date of such Specified Event and the date that we announce that the Specified
      Event will not take place. Notwithstanding this Section 5.01(a)(7), the
      Securities shall not become convertible by reason of a merger, consolidation
      or
      other transaction effected with any Subsidiary of the Company solely for the
      purpose of changing the Company’s state of incorporation to any other state
      within the United States or the District of Columbia; or

     

    (8)  if
      the
      Company elects to redeem the Securities upon the occurrence of a Specified
      Accounting Change.

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    (b)  In
      the
      case of a distribution contemplated by clauses (2) and (3) of Section 5.01(a),
      the Company shall notify Holders and Trustee at least 20 days prior to the
      ex-dividend date for such distribution (the “Distribution Notice”); provided
      that if the Company distributes rights pursuant to a stockholder rights
      agreement, it will notify the Holders of the Securities on the Business Day
      after the Company is required to give notice generally to its stockholders
      pursuant to such stockholder rights agreement if such date is less than 20
      days
      prior to the date of such distribution. Once the Company has given the
      Distribution Notice, Holders may surrender their Securities for conversion
      at
      any time until the earlier of the close of business on the last Business Day
      preceding the ex-dividend date or the Company’s announcement that such
      distribution will not take place. Notwithstanding the provisions of clauses
      (2)
      and (3) of Section 5.01(a), Holders may not convert the Securities if the
      Holders will be entitled to participate in such distribution on an as converted
      basis. The Company will provide written notice to the Conversion Agent as soon
      as reasonably practicable of any anticipated or actual event or transaction
      that
      will cause or causes the Securities to become convertible pursuant to clauses
      (2) or (3) of Section 5.01(a). 

     

    (c)  In
      the
      case of a transaction contemplated by clause (4) of Section 5.01(a), the Company
      will notify the Holders and Trustee at least 10 Trading Days prior to the
      anticipated Fundamental Change Effective Date of any Fundamental Change. Holders
      may surrender Securities for conversion at any time beginning 10 Trading Days
      before the anticipated Fundamental Change Effective Date of a Fundamental Change
      and until the last Trading Day preceding the Fundamental Change Purchase Date.
      

     

    (d)  In
      the
      case of a Specified Event, the Company will notify the Holders and the Trustee
      as promptly as practicable following the date the Company publicly announces
      the
      Specified Event (but in event less than 15 days prior to the effective date
      of
      such transaction, or, if such Specified Event also constitutes a Fundamental
      Change, no later than the date we provide notice of the occurrence of the
      Fundamental Change). If such Specified Event also constitutes a Fundamental
      Change, a Holder shall have the right to require the Company to purchase all
      or
      any portion of such Holder’s Securities as described in Article 3. 

     

    (e)  
      For each
      fiscal quarter of the Company, beginning with the fiscal quarter ending
      September 30, 2007, the Company will determine, on the first Business Day
      following the last Trading Day of such fiscal quarter, whether the Securities
      are convertible pursuant to clause (1) of Section 5.01(a), and, if so, will
      notify the Trustee in writing. Upon request of the Conversion Agent, the Company
      shall provide, or cause to be provided to, the Conversion Agent the Closing
      Price per share of Common Stock for the 30 consecutive Trading Days ending
      on
      the last Trading Day of the preceding fiscal quarter. 

     

    (f)  The
      Company shall have no obligation to determine the Trading Price of the
      Securities and whether the Securities are convertible pursuant to clause (6)
      of
      Section 5.01(a) unless a Holder of Securities provides the Company with
      reasonable evidence that the Trading Price per $1,000 principal amount of
      Securities would be less than 98% of the product of the Closing Price of the
      Common Stock and the Conversion Rate per $1,000 principal amount of Securities.
      At such time, the Company shall determine the Trading Price of the Securities
      beginning on the next Trading Day and on each successive Trading Day until
      the
      Trading Price per $1,000 principal amount of the Securities is greater than
      98%
      of the product of the Closing Price of the Common Stock and the Conversion
      Rate
      per $1,000 principal amount of the Securities. 

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    (g)  In
      the
      event that the Company chooses to redeem the Securities upon a Specified
      Accounting Change in accordance with Article 4, Holders may surrender their
      Securities for conversion at any time beginning on the day of the Specified
      Accounting Change Redemption Notice until the Trading Day prior to the Specified
      Accounting Change Redemption Date.

     

    (h)  The
      conversion rights pursuant to this Article 5 shall commence on the initial
      issuance date of the Securities and expire at the close of business on the
      Business Day immediately preceding the Final Maturity Date, but shall be
      exercisable only during the time periods specified with respect to each
      circumstance pursuant to which the Securities become convertible, subject,
      in
      the case of conversion of any Global Security, to any Applicable Procedures.
      If
      a Security is convertible as a result of a Fundamental Change, such conversion
      right shall commence and terminate as set forth in Section 5.01(c). Securities
      in respect of which a Fundamental Change Purchase Notice has been delivered
      may
      not be surrendered for conversion pursuant to this Article 5 prior to a valid
      withdrawal of such Fundamental Change Notice in accordance with the provisions
      of Article 3.

     

    (i)  Provisions
      of this Indenture that apply to conversion of all of a Security also apply to
      conversion of a portion of a Security.

     

    (j)  A
      Holder
      of Securities is not entitled to any rights of a holder of Common Stock until
      such Holder has converted its Securities into Common Stock, and only to the
      extent such Securities are deemed to have been converted into Common Stock
      pursuant to this Article 5.

     

    (k)  The
      Conversion Rate shall be adjusted in certain instances as provided in Section
      5.01(l), Section 5.01(m) and Section 5.06.

     

    (l)  If
      a
      Fundamental Change occurs as a result of a Termination of Trading or as a result
      of the occurrence of one of the events specified in clause (i), (iii) or (v)
      of
      the definition of the term Change in Control, the Company shall pay, to the
      extent set forth in this Section 5.01(l), a make-whole premium (the “Make Whole
      Premium”) to a Holder who converts its Securities in connection with any such
      transaction by increasing the Conversion Rate applicable to such Securities.
      A
      conversion of Securities will be deemed for the purposes of this Section 5.01(l)
      to be “in connection with” a Fundamental Change if the Conversion Notice set
      forth in the form of Security attached as Exhibit A is received by the
      Conversion Agent on or subsequent to the Fundamental Change Effective Date
      but
      before the close of business on the Business Day immediately preceding the
      related Fundamental Change Purchase Date. Any increase in the applicable
      Conversion Rate shall be determined by reference to the table below and shall
      be
      based on the date on which the Fundamental Change Effective Date occurs and
      the
      price paid, or deemed to be paid, per share of Common Stock in the transaction
      constituting the Fundamental Change (the “Stock Price”). If holders of Common
      Stock receive only cash in the Fundamental Change, the Stock Price shall be
      the
      cash amount paid per share of Common Stock. In all other cases, the Stock Price
      shall be the average of the Closing Prices of the Common Stock for each of
      the
      10 Trading Days immediately prior to but not including the Fundamental Change
      Effective Date.

     

    The
      following table sets forth the amount, if any, by which the applicable
      Conversion Rate shall increase for each Stock Price and Fundamental Change
      Effective Date set forth below.

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    Make
      Whole Premium Upon a Fundamental Change (Increase in Applicable Conversion
      Rate)

     

    
      	
              Stock
                Price on 

              Effective
                Date

            	
              June
                20, 2007*

            	
              June
                30, 2008

            	
              June
                30, 2009

            	
              June
                30, 2010

            	
              June
                30, 2011

            	
              June
                30, 2012

            
	
               
                $21.20

            	
              10.8853

            	
              10.8853

            	
              10.8853

            	
              10.8853

            	
              10.8853

            	
              10.8853

            
	
               
                $25.00

            	
               
                7.8277

            	
               
                7.6734

            	
               
                7.3829

            	
               
                6.8986

            	
               
                5.9690

            	
               
                3.7155

            
	
               
                $27.56

            	
               
                6.4018

            	
               
                6.1674

            	
               
                5.7831

            	
               
                5.1800

            	
               
                4.0763

            	
               
                0.0000

            
	
               
                $30.00

            	
               
                5.3592

            	
               
                5.0800

            	
               
                4.6496

            	
               
                3.9952

            	
               
                2.8499

            	
               
                0.0000

            
	
               
                $40.00

            	
               
                2.8770

            	
               
                2.5727

            	
               
                2.1522

            	
               
                1.5770

            	
               
                0.7514

            	
               
                0.0000

            
	
               
                $50.00

            	
               
                1.7491

            	
               
                1.4976

            	
               
                1.1723

            	
               
                0.7684

            	
               
                0.2884

            	
               
                0.0000

            
	
               
                $60.00

            	
               
                1.1547

            	
               
                0.9603

            	
               
                0.7200

            	
               
                0.4458

            	
               
                0.1687

            	
               
                0.0000

            
	
               
                $70.00

            	
               
                0.8056

            	
               
                0.6575

            	
               
                0.4827

            	
               
                0.2984

            	
               
                0.1215

            	
               
                0.0000

            
	
               
                $80.00

            	
               
                0.5833

            	
               
                0.4724

            	
               
                0.3472

            	
               
                0.2162

            	
               
                0.0944

            	
               
                0.0000

            
	
               
                $90.00

            	
               
                0.4409

            	
               
                0.3537

            	
               
                0.2592

            	
               
                0.1637

            	
               
                0.0751

            	
               
                0.0000

            
	
              $100.00

            	
               
                0.3389

            	
               
                0.2700

            	
               
                0.1984

            	
               
                0.1269

            	
               
                0.0601

            	
               
                0.0000

            
	 	 	 	 	 	 	 

    

    *Original
      issue date of the notes.

     

    The
      actual Stock Price and Fundamental Change Effective Date may not be set forth
      in
      the table, in which case:

     

    (1)  if
      the
      actual Stock Price on the Fundamental Change Effective Date is between two
      Stock
      Prices in the table or the actual Fundamental Change Effective Date is between
      two Fundamental Change Effective Dates in the table, the amount of the
      Conversion Rate adjustment shall be determined by a straight-line interpolation
      between the adjustment amounts set forth for the two Stock Prices and the two
      Fundamental Change Effective Dates set forth in the table;

     

    (2)  if
      the
      Stock Price on the Fundamental Change Effective Date exceeds $100.00 per share,
      subject to adjustment as described in Section 5.06, no adjustment to the
      applicable Conversion Rate will be made; and

     

    (3)  if
      the
      stock price
      on the
      Fundamental Change Effective Date is less than $21.20 per share, subject to
      adjustment as described in Section 5.06, no adjustment to the applicable
      conversion rate will be made.

     

    The
      Stock
      Prices set forth in the first column of the table above will be adjusted as
      of
      any date on which the Conversion Rate of the Securities is adjusted in
      accordance with Section 5.06. The adjusted Stock Prices shall equal the Stock
      Prices applicable immediately prior to such adjustment multiplied by a fraction,
      the numerator of which shall be the Conversion Rate immediately prior to the
      adjustment giving rise to the Stock Price adjustment and the denominator of
      which shall be the Conversion Rate as so adjusted. The Conversion Rate
      adjustment amounts set forth in the table above shall be adjusted in the same
      manner as the Conversion Rate as set forth in Section 5.06, other than by
      operation of an adjustment to the Conversion Rate by virtue of the Make Whole
      Premium described in this 5.01(l).

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    Notwithstanding
      the foregoing paragraph, in no event will the Conversion Rate exceed 47.1698
      per
      $1,000 principal amount of Securities, subject to adjustment in the manner
      set
      forth in clauses (1) through (6) of Section 5.06(a) hereof.

     

    (m)  In
      the
      event that the Company elects to redeem the Securities upon a Specified
      Accounting Change in accordance with Article 4, the Company shall pay, to the
      extent set forth in this Section 5.01(m), the Make Whole Premium to a Holder
      who
      converts its Securities between the date of the Specified Accounting Change
      Notice and the day prior to the Specified Accounting Change Redemption Date
      in
      connection with any such redemption by the Company by increasing the Conversion
      Rate applicable to such Securities. Any increase in the applicable Conversion
      Rate shall be determined by reference to the table set forth in Section 5.01(l)
      and shall be equal to the sum of (a) the number of shares indicated in the
      table
      in Section 5.01(l), where the applicable effective date is the proposed
      Specified Accounting Change Redemption Date and the applicable Stock Price
      is
      the average of the Closing Prices of the Common Stock for each of the 10 Trading
      Days ending on the third Trading Day prior to the Specified Accounting Change
      Redemption Date (the “Average Price”), and (b) an additional number of shares of
      Common Stock equal to $20 per $1,000 principal of Securities divided by the
      Average Price. 

     

    Notwithstanding
      the foregoing paragraph, in no event will the Conversion Rate exceed 47.1698
      per
      $1,000 principal amount of Securities, subject to adjustment in the manner
      set
      forth in clauses (1) through (6) of Section 5.06(a) hereof.

     

    To
      the
      extent the Average Price is not one of the stock prices and/or the Specified
      Accounting Change Redemption Date is not one of the effective dates set forth
      on
      the table in Section 5.01(l) hereof, relevant adjustments shall be made in
      the
      same manner as described in the paragraphs beneath the table in Section
      5.01(l).

     

    (n)  Except
      as
      set forth in Section 5.02(c), by delivering the amount of cash and/or the number
      of shares of Common Stock issuable on conversion to the Trustee, the Company
      will be deemed to have satisfied its obligation to pay the principal amount
      of
      the Securities so converted and its obligation to pay accrued and unpaid
      interest, and Additional Interest if any, attributable to the period from the
      most recent Interest Payment Date through the Conversion Date (which amount
      will
      be deemed paid in full rather than cancelled, extinguished or
      forfeited).

     

    (o)  Notwithstanding
      anything else contained herein, the Securities shall not become subject to
      conversion by reason of a merger, consolidation, or other transaction effected
      with the Company’s direct or indirect Subsidiaries for the sole purpose of
      changing the Company’s state of incorporation to any other state within the
      United States or the District of Columbia.

     

    Section
      5.02.  Conversion
      Procedures.

     

    (a)  To
      convert a Security, the Holder must (1) complete and manually sign the
      Conversion Notice on the reverse of the Security and deliver such notice to
      the
      Conversion Agent, (2) surrender the Security to the Conversion Agent, (3)
      furnish appropriate endorsements and transfer documents if required by the
      Conversion Agent, and (4) pay all transfer or similar taxes, if required
      pursuant to Section 5.04. The date on which the Holder satisfies all of those
      requirements is the “Conversion Date.” Upon the conversion of a Security, the
      Company shall settle its conversion obligation in the manner set forth in
      Section 5.13.

     

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

    (b)  The
      person in whose name the shares of Common Stock, if any, that are issued upon
      conversion shall be deemed to be a holder of record of such shares of Common
      Stock on the date on which such shares, if any, are delivered to the Holder
      in
      accordance with the provisions of Section 5.13. Except as set forth in this
      Indenture, no payment or adjustment will be made for dividends or distributions
      declared or made on shares of Common Stock issued upon conversion of a Security
      prior to the issuance of such shares.

     

    (c)  Holders
      of Securities surrendered for conversion (in whole or in part) during the period
      from the close of business on any Regular Record Date to the opening of business
      on the next succeeding Interest Payment Date will receive the semi-annual
      interest payable on such Securities on the corresponding Interest Payment Date
      notwithstanding the conversion, and such Securities upon surrender must be
      accompanied by funds equal to the amount of such payment, unless (i) such
      Securities have been surrendered following the Regular Record Date and on or
      prior to the Final Maturity Date, (ii) the Company has specified a Fundamental
      Change Effective Date which occurs after the Regular Record Date and on or
      prior
      to the related Interest Payment Date in which case no such payment shall be
      required, or (iii) the Company has specified a redemption date in which case
      no
      such payment shall be required. In addition, no such payment will be required
      to
      the extent of any overdue interest, if any overdue interest exists as of the
      time of conversion. Except as otherwise provided in this Section 5.02(c), no
      payment or adjustment will be made for accrued interest on a converted Security.
      Accrued interest shall be deemed paid by the shares of Common Stock into which
      the Security is convertible (or any cash in lieu thereof), together with any
      cash payment of such Holder’s fractional shares, will thus be deemed to satisfy
      the Company's obligation to pay the principal amount of a Security and to
      satisfy the Company’s obligation to pay accrued and unpaid interest on such a
      Security.

     

    (d)  Subject
      to Section 5.02(c), nothing in this Section shall affect the right of a Holder
      in whose name any Security is registered at the close of business on a Regular
      Record Date to receive the interest payable on such Security on the related
      Interest Payment Date in accordance with the terms of this Indenture, the
      Securities and the Registration Rights Agreement. If a Holder converts more
      than
      one Security at the same time, the amount of cash to be paid and the number
      of
      shares of Common Stock issuable upon the conversion, if any (and the amount
      of
      any cash in lieu of fractional shares pursuant to Section 4.03), shall be based
      on the aggregate principal amount of all Securities so converted. 

     

    Upon
      surrender by a Holder of its Securities for conversion, the Conversion Agent
      may
      first offer the Securities to a financial institution chosen by the Company
      (the
“Designated Financial Institution”) for exchange in lieu of conversion. The
      Designated Financial Institution shall have the option, but not the obligation
      (unless separately agreed to by such Designated Financial Institution and the
      Company at such time), to agree to exchange the Securities for the consideration
      that the holder of those Securities would have been entitled to receive upon
      conversion. The Company may, but will not be obligated to, enter into a separate
      agreement with the Designated Financial Institution which would compensate
      it
      for any such transaction. As soon as practicable following the Conversion Date,
      the Designated Financial Institution or the Company, as the case may be, will
      deliver through the Conversion Agent such consideration that that the Holder
      of
      the Securities would have been entitled to receive upon conversion of the
      Securities. Delivery to the Holder of such full consideration shall be deemed
      to
      satisfy the Company’s obligation to pay the principal amount of the Security at
      maturity whether made by the Company or by the Designated Financial Institution.
      If the Designated Financial Institution agrees to accept any Notes but does
      not
      timely deliver the related consideration determined in accordance with this
      Indenture, or if such Designated Financial Institution does not accept the
      Notes
      as agreed, the Company will, not later than the third Business Day following
      the
      end of the Conversion Reference Period, deliver such consideration.

    

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

    (e)  In
      the
      case of any Security which is converted in part only, upon such conversion
      the
      Company shall execute and the Trustee shall authenticate and deliver to the
      Holder thereof, without service charge, a new Security or Securities of
      authorized denominations in an aggregate principal amount equal to, and in
      exchange for, the unconverted portion of the principal amount of such Security.
      A Security may be converted in part, but only if the principal amount of such
      part is an integral multiple of $1,000 and the principal amount of such Security
      to remain outstanding after such conversion is equal to $1,000 or any integral
      multiple of $1,000 in excess thereof. 

     

    (f)  Upon
      the
      Company’s determination that a Holder is or will be entitled to convert its
      Securities pursuant to this Article 5, the Company will promptly after making
      such determination issue a press release and use reasonable efforts to post
      such
      information on the Company’s website or otherwise publicly disclose such
      information.

     

    Section
      5.03.  Fractional
      Shares.

     

    The
      Company will not issue fractional shares of Common Stock upon conversion of
      Securities. If more than one Security shall be surrendered for conversion at
      one
      time by the same Holder, the number of full shares that shall be issuable upon
      conversion shall be computed on the basis of the aggregate principal amount
      of
      the Securities (or specified portions thereof to the extent permitted hereby)
      so
      surrendered. In lieu of any fractional shares, the Company will pay an amount
      in
      cash for the current market value of the fractional shares. The current market
      value of a fractional share shall be determined (calculated to the nearest
      1/100th of a share) by multiplying the arithmetic average of the Volume Weighted
      Average Price of the Common Stock for each of the 30 consecutive Trading Days
      in
      the Conversion Reference Period by such fractional share and rounding the
      product to the nearest whole cent.

     

    Section
      5.04.  Taxes
      on Conversion.
      If a
      Holder converts a Security, the Company shall pay any transfer, stamp or similar
      taxes or duties related to the issue or delivery of shares of Common Stock,
      if
      any, upon such conversion. The Company shall also pay any such tax with respect
      to cash received in lieu of fractional shares. The Holder shall pay any such
      tax
      which is due because the Holder requests the shares to be issued in a name
      other
      than the Holder’s name. The Conversion Agent may refuse to deliver the
      certificate representing the Common Stock being issued in a name other than
      the
      Holder’s name until the Conversion Agent receives a sum sufficient to pay any
      tax which will be due because the shares are to be issued in a name other than
      the Holder’s name. Nothing herein shall preclude any tax withholding required by
      law or regulation. 

     

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

    Section
      5.05.  Company
      to Provide Stock.

     

    (a)  The
      Company shall, prior to issuance of any Securities hereunder, and from time
      to
      time as may be necessary, reserve, out of its authorized but unissued Common
      Stock, a sufficient number of shares of Common Stock to permit the conversion
      of
      all outstanding Securities into shares of Common Stock. 

     

    (b)  All
      shares of Common Stock delivered upon conversion of the Securities shall be
      duly
      authorized, validly issued, fully paid and nonassessable and shall be free
      from
      preemptive or similar rights of any securityholder of the Company and free
      of
      any lien or adverse claim as the result of any action by the Company.

     

    (c)  The
      Company will endeavor promptly to comply with all federal and state securities
      laws regulating the offer and delivery of shares of Common Stock upon conversion
      of Securities.

     

    Section
      5.06.  Adjustment
      of Conversion Rate.

     

    (a)  The
      Conversion Rate shall be adjusted from time to time by the Company as follows:
      

     

    (1)  If
      the
      Company shall pay a dividend or make a distribution to all holders of
      outstanding Common Stock in shares of Common Stock (other than dividends or
      distributions of shares of Common Stock with respect to which adjustments are
      provided in Section 5.06(a)(2) below), the Conversion Rate in effect immediately
      prior to the ex-dividend date for the determination of stockholders entitled
      to
      receive such dividend or other distribution shall be increased so that the
      same
      shall equal the rate determined by multiplying the Conversion Rate in effect
      immediately prior to such ex-dividend date by a fraction of which the numerator
      shall be the sum of the number of shares of Common Stock outstanding at the
      close of business on such ex-dividend date plus the total number of shares
      of
      Common Stock constituting such dividend or other distribution and of which
      the
      denominator shall be the number of shares of Common Stock outstanding at the
      close of business on such ex-dividend date. Such adjustment shall be made
      successively whenever any such dividend or distribution is made and shall become
      effective immediately after such ex-dividend date. For the purpose of this
      clause (1), the number of shares of Common Stock at any time outstanding shall
      not include shares held in the treasury of the Company (to the extent any shares
      may be held in the treasury of the Company). The Company will not pay any
      dividend or make any distribution on Common Stock held in the treasury of the
      Company (to the extent any shares may be held in the treasury of the Company).
      If any dividend or distribution of the type described in this clause is declared
      but not so paid or made, the Conversion Rate shall again be adjusted to the
      Conversion Rate that would then be in effect if such dividend or distribution
      had not been declared. 

     

    (2)  If
      the
      Company shall subdivide its outstanding Common Stock into a greater number
      of
      shares, or combine or reclassify its outstanding Common Stock into a smaller
      number of shares, or issue by reclassification of the shares of Common Stock
      any
      shares of Capital Stock of the Company, then, and in each such case the
      Conversion Rate in effect immediately prior to the day upon which such
      subdivision or combination becomes effective shall be, in the case of a
      subdivision of Common Stock, proportionately increased and, in the case of
      a
      combination of Common Stock, proportionately reduced. Such adjustment shall
      be
      made successively whenever any such subdivision or combination of the Common
      Stock occurs and shall become effective immediately after the date upon which
      such subdivision or combination becomes effective. 

     

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

    (3)  If
      the
      Company shall issue rights or warrants to all holders of its outstanding Common
      Stock entitling them for a period expiring within 45 days after such issuance
      to
      subscribe for or purchase shares of Common Stock (or securities convertible
      into
      Common Stock) at a price per share (or having a conversion price per share)
      less
      than the Current Market Price per share of Common Stock (as determined in
      accordance with clause (7) of this Section 5.06(a)) on the ex-dividend date
      for
      the determination of stockholders entitled to receive such rights or warrants,
      the Conversion Rate in effect immediately prior thereto shall be adjusted so
      that the same shall equal the rate determined by multiplying the Conversion
      Rate
      in effect immediately prior to such ex-dividend date by a fraction of which
      the
      numerator shall be the number of shares of Common Stock outstanding at the
      close
      of business on such ex-dividend date plus the number of additional shares of
      Common Stock that such rights or warrants entitle holders thereof to subscribe
      for or purchase (or into which such convertible securities are convertible)
      and
      of which the denominator shall be the number of shares of Common Stock
      outstanding at the close of business on such ex-dividend date plus the number
      of
      shares which the aggregate offering price of the total number of shares of
      Common Stock so offered for subscription or purchase (or the aggregate
      conversion price of the convertible securities so offered for subscription
      or
      purchase, which shall be determined by multiplying the number of shares of
      Common Stock issuable upon conversion of such convertible securities by the
      conversion price per share of Common Stock pursuant to the terms of such
      convertible securities) would purchase at the Current Market Price per share
      of
      Common Stock on such ex-dividend date. Such adjustment shall be made
      successively whenever any such rights or warrants are issued, and shall become
      effective immediately after such ex-dividend date. To the extent that shares
      of
      Common Stock (or securities convertible into Common Stock) are not delivered
      after the expiration of such rights or warrants, the Conversion Rate shall
      be
      readjusted to the Conversion Rate that would then be in effect had the
      adjustments made upon the issuance of such rights or warrants been made on
      the
      basis of delivery of only the number of shares of Common Stock (or securities
      convertible into Common Stock) actually delivered. If such rights or warrants
      are not so issued, the Conversion Rate shall again be adjusted to be the
      Conversion Rate that would then be in effect if the ex-dividend date for the
      determination of stockholders entitled to receive such rights or warrants had
      not been fixed. In determining whether any rights or warrants entitle the
      stockholders to subscribe for or purchase shares of Common Stock at a price
      less
      than the Current Market Price per share of Common Stock and in determining
      the
      aggregate offering price of the total number of shares of Common Stock so
      offered, there shall be taken into account any consideration received by the
      Company for such rights or warrants and any amount payable on exercise or
      conversion thereof, the value of such consideration, if other than cash, to
      be
      determined by the Board of Directors. 

     

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

    (4)  If
      the
      Company shall make a dividend or other distribution to all holders of its Common
      Stock of Capital Stock, other than Common Stock, or evidences of indebtedness
      or
      other assets of the Company (excluding (x) any issuance of rights or warrants
      to
      which the provisions of Section 5.06(a)(3) shall apply, (y) dividends or
      distributions in connection with a reclassification, consolidation, merger,
      combination, sale or conveyance resulting in a change in the conversion
      consideration, or pursuant to any stockholder rights plan or (z) any dividend
      or
      distribution paid exclusively in cash to which the provisions of Section
      5.06(a)(7) shall apply) (the “Distributed Securities”), then in each such case
      (unless the Company distributes such Distributed Securities for distribution
      to
      the Holders of Securities on such dividend or distribution date as if each
      Holder had converted such Security into a number of shares of Common Stock
      equal
      to the then applicable Conversion Rate immediately prior to the ex-dividend
      date
      with respect to such distribution) the Conversion Rate in effect immediately
      prior to the ex-dividend date fixed for the determination of stockholders
      entitled to receive such dividend or distribution shall be adjusted so that
      the
      same shall equal the rate determined by multiplying the Conversion Rate in
      effect immediately prior to such ex-dividend date by a fraction of which the
      numerator shall be the Current Market Price per share of the Common Stock on
      such ex-dividend date and of which the denominator shall be Current Market
      Price
      per share on such ex-dividend date less the fair market value (as determined
      in
      good faith by the Board of Directors, whose determination shall be conclusive
      evidence of such fair market value and which shall be evidenced by an Officers’
Certificate delivered to the Trustee) on such ex-dividend date of the portion
      of
      the Distributed Securities so distributed applicable to one share of Common
      Stock (determined on the basis of the number of shares of Common Stock
      outstanding at the close of business on such ex-dividend date). Such adjustment
      shall be made successively whenever any such distribution is made and shall
      become effective immediately after the ex-dividend date for the determination
      of
      stockholders entitled to receive such distribution. In the event that such
      dividend or distribution is not so paid or made, the Conversion Rate shall
      again
      be adjusted to be the Conversion Rate that would then be in effect if such
      dividend or distribution had not been declared.

     

    If
      the
      fair market value (as so determined) of the portion of the Distributed
      Securities so distributed applicable to one share of Common Stock is equal
      to or
      greater than the Current Market Price per share of the Common Stock on such
      ex-dividend date, in lieu of the foregoing adjustment, adequate provision shall
      be made so that each holder of a Security shall have the right to receive upon
      conversion the amount of Distributed Securities so distributed that such Holder
      would have received had such Holder converted each Security on such ex-dividend
      date into a number of shares of Common Stock equal to the Conversion Rate.
      If
      the Board of Directors determines the fair market value of any distribution
      for
      purposes of this Section 5.06(a)(4) by reference to the actual or when issued
      trading market for any securities, it must in doing so consider the prices
      in
      such market over the same period used in computing the Current Market Price
      of
      the Common Stock.

     

    
      
         

      

      
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    Notwithstanding
      the foregoing, if the securities distributed by the Company to all holders
      of
      its Common Stock consist of Capital Stock of, or similar equity interests in,
      a
      Subsidiary or other business unit of the Company (the “Spinoff Securities”), the
      Conversion Rate shall be adjusted so that the same shall be equal to the rate
      determined by multiplying the Conversion Rate in effect on the ex-dividend
      date
      fixed for the determination of stockholders entitled to receive such
      distribution by a fraction, the numerator of which shall be the sum of (A)
      the
      average Closing Price of one share of Common Stock over the ten consecutive
      Trading Day period (the “Spinoff Valuation Period”) commencing on and including
      the fifth Trading Day after the date on which ex-dividend trading commences
      for
      such distribution on the Nasdaq Global Market or such other U.S. national or
      regional exchange or market on which the Common Stock is then listed or quoted
      and (B) the average of the Closing Prices over the Spinoff Valuation Period
      of
      the Spinoff Securities multiplied by the number of Spinoff Securities
      distributed in respect of one share of Common Stock and the denominator of
      which
      shall be the average Closing Price of one share of Common Stock over the Spinoff
      Valuation Period, such adjustment to become effective immediately prior to
      the
      opening of business on the fifteenth Trading Day after the date on which
      ex-dividend trading commences; provided, however, that the Company may in lieu
      of the foregoing adjustment elect to make an equivalent distribution to the
      Holders of the Securities or make adequate provision so that each Holder of
      Securities shall have the right to receive upon conversion thereof the amount
      of
      such Spinoff Securities that such Holder of Securities would have received
      if
      such Securities had been converted on the ex-dividend date with respect to
      such
      distribution. 

     

    With
      respect to any rights or warrants (the “Rights”) that may be issued or
      distributed pursuant to any rights plans implemented by the Company after the
      date of this Indenture (a “Rights Plan”), the Holders of Securities will
      receive, with respect to any shares of Common Stock issued upon conversion,
      the
      Rights described therein (whether or not the Rights have separated from the
      Common Stock at the time of conversion), subject to the limitations set forth
      in
      and in accordance with any such Rights Plan; provided that if at the time of
      conversion the Rights have separated from the shares of Common Stock in
      accordance with the provisions of the Rights Plan so that Holders would not
      be
      entitled to receive any rights in respect of the shares of Common Stock, if
      any,
      issuable upon conversion of the Securities as a result of the timing of the
      Conversion Date, the Conversion Rate will be adjusted as if the Company
      distributed to all holders of Common Stock Distributed Securities constituting
      such rights as provided in the first paragraph of this clause (4) of this
      Section 5.06(a), subject to a corresponding readjustment to the Conversion
      Rate
      on an equitable basis in the event that such Rights are later redeemed,
      repurchased, invalidated or terminated. Other than as specified in this
      paragraph of this clause (4) of this Section 5.06(a), there will not be any
      adjustment to the Conversion Rate as the result of the issuance of any Rights,
      the distribution of separate certificates representing such Rights, the exercise
      or redemption of such Rights in accordance with any Rights Plan or the
      termination or invalidation of any Rights.

     

    
      
         

      

      
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    (5)  If
      the
      Company shall, by dividend or otherwise, at any time distribute (a “Triggering
      Distribution”) to all holders of its Common Stock a payment consisting
      exclusively of cash (excluding any dividend or distribution in connection with
      the liquidation, dissolution or winding up of the Company, whether voluntary
      or
      involuntary) the Conversion Rate shall be increased so that the same shall
      equal
      the rate determined by multiplying such Conversion Rate in effect immediately
      prior to the ex-dividend date for such Triggering Distribution (a “Determination
      Date”) by a fraction of which the numerator shall be such Current Market Price
      per share of the Common Stock on the Determination Date and the denominator
      of
      which shall be the Current Market Price per share of the Common Stock on the
      Determination Date less the amount of such cash dividend or distribution
      applicable to one share of Common Stock (determined on the basis of the number
      of shares of Common Stock outstanding at the close of business on the
      Determination Date), such increase to become effective immediately prior to
      the
      opening of business on the day following the ex-dividend date relating to such
      Triggering Distribution. If the amount of cash dividend or distribution
      applicable to one share of Common Stock is equal to or greater than the Current
      Market Price per share of the Common Stock on the Determination Date, in lieu
      of
      the foregoing adjustment, adequate provision shall be made so that each Holder
      of a Security shall have the right to receive upon conversion the amount of
      cash
      so distributed that such Holder would have received had such Holder converted
      each Security on such Determination Date into a number of shares of Common
      Stock
      equal to the Conversion Rate. In the event that such dividend or distribution
      is
      not so paid or made, the Conversion Rate shall again be adjusted to be the
      Conversion Rate that would then be in effect if such divided or distribution
      had
      not been declared.

     

    (6)  If
      any
      tender offer made by the Company or any of its Subsidiaries for all or any
      portion of Common Stock shall expire, then, if the tender offer shall require
      the payment to stockholders of consideration per share of Common Stock having
      a
      fair market value (determined as provided below) that exceeds the Closing Price
      per share of Common Stock on the Trading Day next succeeding the last date
      (the
“Expiration Date”) tenders could have been made pursuant to such tender offer
      (as it may be amended) (the last time at which such tenders could have been
      made
      on the Expiration Date is hereinafter sometimes called the “Expiration Time”),
      the Conversion Rate shall be increased so that the same shall equal the rate
      determined by multiplying the Conversion Rate in effect immediately prior to
      the
      close of business on the Expiration Date by a fraction of which the numerator
      shall be the sum of (A) the fair market value of the aggregate consideration
      (the fair market value as determined in good faith by the Board of Directors,
      whose determination shall be conclusive evidence of such fair market value
      and
      which shall be evidenced by an Officers’ Certificate delivered to the Trustee)
      payable to stockholders based on the acceptance (up to any maximum specified
      in
      the terms of the tender offer) of all shares validly tendered and not withdrawn
      as of the Expiration Time (the shares deemed so accepted, up to any such
      maximum, being referred to as the “Purchased Shares”) and (B) the product of the
      number of shares of Common Stock outstanding (less any Purchased Shares and
      excluding any shares held in the treasury of the Company) at the Expiration
      Time
      and the Closing Price per share of Common Stock on the Trading Day next
      succeeding the Expiration Date and the denominator of which shall be the product
      of the number of shares of Common Stock outstanding (including Purchased Shares
      but excluding any shares held in the treasury of the Company) at the Expiration
      Time multiplied by the Closing Price per share of the Common Stock on the
      Trading Day next succeeding the Expiration Date, such increase to become
      effective immediately prior to the opening of business on the day following
      the
      Expiration Date. In the event that the Company is obligated to purchase shares
      pursuant to any such tender offer, but the Company is permanently prevented
      by
      applicable law from effecting any or all such purchases or any or all such
      purchases are rescinded, the Conversion Rate shall again be adjusted to be
      the
      Conversion Rate which would have been in effect based upon the number of shares
      actually purchased, if any. If the application of this clause (6) of Section
      5.06(a) to any tender offer would result in a decrease in the Conversion Rate,
      no adjustment shall be made for such tender offer under this clause
      (6).

     

    
      
         

      

      
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    For
      purposes of this clause (6), the term “tender offer” shall mean and include both
      tender offers and exchange offers, all references to “purchases” of shares in
      tender offers (and all similar references) shall mean and include both the
      purchase of shares in tender offers and the acquisition of shares pursuant
      to
      exchange offers, and all references to “tendered shares” (and all similar
      references) shall mean and include shares tendered in both tender offers and
      exchange offers. 

     

    (7)  For
      purposes of any computation under this Section 5.06, “Current Market Price”
shall mean the average of the daily Closing Prices per share of Common Stock
      for
      each of the ten consecutive Trading Days immediately prior to the date in
      question; provided, however, that if 

     

    (A)  the
“ex”
      date (as hereinafter defined) for any event (other than the issuance or
      distribution requiring such computation) that requires an adjustment to the
      Conversion Rate pursuant to Section 5.06(a) (1), (2), (3), (4), (5) or (6)
      occurs during such ten consecutive Trading Days, the Closing Price for each
      Trading Day prior to the “ex” date for such other event shall be adjusted by
      dividing such Closing Price by the same fraction by which the Conversion Rate
      is
      so required to be adjusted as a result of such other event; 

     

    (B)  the
“ex”
      date for any event (other than the issuance or distribution requiring such
      computation) that requires an adjustment to the Conversion Rate pursuant to
      Section 5.06(a) (1), (2), (3), (4), (5) or (6) occurs on or after the “ex” date
      for the issuance or distribution requiring such computation and prior to the
      day
      in question, the Closing Price for each Trading Day on and after the “ex” date
      for such other event shall be adjusted by dividing such Closing Price by the
      reciprocal of the fraction by which the Conversion Rate is so required to be
      adjusted as a result of such other event; and

     

    (C)  the
“ex”
      date for the issuance or distribution requiring such computation is prior to
      the
      day in question, after taking into account any adjustment required pursuant
      to
      the immediately preceding clause (A) or (B) of this Section 5.06(a)(7), the
      Closing Price for each Trading Day on or after such “ex” date shall be adjusted
      by adding thereto the amount of any cash and the fair market value (as
      determined in good faith by the Board of Directors in a manner consistent with
      any determination of such value for purposes of Section 5.06(a)(4) or (6),
      whose
      determination shall be conclusive and set forth in a board resolution of the
      Board of Directors) of the evidences of indebtedness, shares of capital stock
      or
      assets being distributed applicable to one share of Common Stock as of the
      close
      of business on the day before such “ex” date.

     

    
      
         

      

      
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    For
      purposes of any computation under Section 5.06(a)(6), if the “ex” date for any
      event (other than the tender offer that is the subject of the adjustment
      pursuant to Section 5.06(a)(6)) that requires an adjustment to the Conversion
      Rate pursuant to Section 5.06(a)(1), (2), (3), (4), or (5) occurs on the date
      of
      the Expiration Time for the tender or exchange offer requiring such computation
      or on the Trading Day next following the Expiration Time, the Closing Price
      for
      each Trading Day on and after the “ex” date for such other event shall be
      adjusted by dividing such Closing Price by the reciprocal of the fraction by
      which the Conversion Rate is so required to be adjusted as a result of such
      other event. For purposes of this Section 5.06(a)(7) the term “ex” date, when
      used:

     

    (A)  with
      respect to any issuance or distribution, means the first date on which the
      Common Stock trades regular way on the relevant exchange or in the relevant
      market from which the Closing Price was obtained without the right to receive
      such issuance or distribution; 

     

    (B)  with
      respect to any subdivision or combination of shares of Common Stock, means
      the
      first date on which the Common Stock trades regular way on such exchange or
      in
      such market after the time at which such subdivision or combination becomes
      effective, and 

     

    (C)  with
      respect to any tender or exchange offer, means the first date on which the
      Common Stock trades regular way on such exchange or in such market after the
      Expiration Time of such offer.

     

    Notwithstanding
      the foregoing, whenever successive adjustments to the Conversion Rate are called
      for pursuant to this Section 5.06, such adjustments shall be made to the Current
      Market Price as may be necessary or appropriate to effectuate the intent of
      this
      Section 5.06 and to avoid unjust or inequitable results as determined in good
      faith by the Board of Directors.

     

    (8) Subject
      to applicable stock exchange rules and listing standards, the Company shall
      be
      permitted to increase the Conversion Rate by any amount for a period of at
      least
      20 days if the Board of Directors determines that such increase would be in
      the
      Company’s best interest. Subject to applicable stock exchange rules and listing
      standards, the Company may also increase the Conversion Rate to avoid or
      diminish income tax to Holders of the Common Stock in connection with a dividend
      or distribution of Common Stock or similar event.

     

    (b)  In
      any
      case in which this Section 5.06 shall require that an adjustment be made
      following a ex-dividend date, a Determination Date or Expiration Date, as the
      case may be, established for the purposes specified in this Section 5.06, the
      Company may elect to defer (but only until five Business Days following the
      filing by the Company with the Trustee of the certificate described in Section
      5.08) issuing to the Holder of any Security converted after such ex-dividend
      date, Determination Date or Expiration Date the shares of Common Stock and
      other

     

    
      
         

      

      
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    Capital
      Stock of the Company issuable upon such conversion over and above the shares
      of
      Common Stock and other Capital Stock of the Company (or other cash, property
      or
      securities, as applicable) issuable upon such conversion only on the basis
      of
      the Conversion Rate prior to adjustment; and, in lieu of any cash, property
      or
      securities the issuance of which is so deferred, the Company shall issue or
      cause its transfer agents to issue due bills or other appropriate evidence
      prepared by the Company of the right to receive such cash, property or
      securities. If any distribution in respect of which an adjustment to the
      Conversion Rate is required to be made as of the ex-dividend date, Determination
      Date or Expiration Date therefore is not thereafter made or paid by the Company
      for any reason, the Conversion Rate shall be readjusted to the Conversion Rate
      which would then be in effect if such ex-dividend date had not been fixed or
      such ex-dividend date, Determination Date or Expiration Date had not occurred.
      

     

    (c)  For
      purposes of this Section 5.06, “ex-dividend date” shall mean, with respect to
      the same such dividends, distributions or other transactions, the first date
      upon which a sale of the Common Stock does not automatically transfer the right
      to receive the relevant cash, security or other property from the seller of
      the
      Common Stock to its buyer. 

     

    (d)  If
      one or
      more event occurs requiring an adjustment be made to the Conversion Rate for
      a
      particular period, adjustments to the Conversion Rate shall be determined by
      the
      Company’s Board of Directors to reflect the combined impact of such Conversion
      Rate adjustment events, as set out in this Section 5.06, during such period.
      

     

    (e)  Except
      as
      provided in this Section 5.06, the Conversion Rate shall not be adjusted for
      the
      issuance of Common Stock or any securities convertible into or exchangeable
      for
      Common Stock or carrying the right to purchase Common Stock or any such
      security.

     

    (f)  Notwithstanding
      the provisions set forth in Section 5.06(a), in no event shall the Conversion
      Rate exceed 47.1698 per $1,000 principal amount of Securities, subject to
      adjustment in the manner set forth in clauses (1) through (6) of Section
      5.06(a).

     

    Section
      5.07.  No
      Adjustment.
      No
      adjustment in the Conversion Rate shall be required if Holders may participate
      in the transactions set forth in Section 5.06 above (to the same extent as
      if
      the Securities had been converted into Common Stock immediately prior to such
      transactions) without converting the Securities held by such Holders.

     

    (a)  No
      adjustment in the Conversion Rate shall be required unless such adjustment
      would
      require an increase or decrease of at least 1% in the Conversion Rate as last
      adjusted; provided, however, that any adjustments which would be required to
      be
      made but for this Section 5.07(a) shall be carried forward regardless of whether
      the aggregate adjustment is less than 1% within one year of the first such
      adjustment carried forward, upon any conversion of the Securities, upon a
      Fundamental Change or five Business Days prior to the Final Maturity Date.
      Notwithstanding the foregoing, all adjustments not previously made shall have
      effect with respect to any conversion on or after June 1, 2012. All
      calculations under this Article 5 shall be made to the nearest cent or to the
      nearest one-ten thousandth of a share, as the case may be, with one half cent
      and 0.00005 of a share, respectively, being rounded upward.

     

    
      
         

      

      
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    (b)  No
      adjustment in the Conversion Rate shall be required for (1) issuances of
      Common Stock pursuant to any present or future plan of the Company providing
      for
      the reinvestment of dividends or interest and the investment of additional
      optional amounts of Common Stock under any plan, (2) issuances of Common
      Stock or options or rights to purchase Common Stock pursuant to any present
      or
      future employee, director or consultant benefit plan or program of, or assumed
      by, the Company or any of its subsidiaries, (3) issuances of Common Stock
      pursuant to any option, warrant, right or exercisable, exchangeable or
      convertible security not described in clause (2) above and outstanding as of
      the
      Issue Date or (4) for accrued and unpaid interest and Additional Interest
      owed, if any.

     

    (c)  To
      the
      extent that the Securities become convertible into the right to receive cash
      in
      accordance with the provision of Section 5.10, no adjustment need be made
      thereafter as to the cash.

     

    Section
      5.08.  Notice
      of Adjustment.

     

    Whenever
      the Conversion Rate or conversion privilege is required to be adjusted pursuant
      to this Indenture, the Company shall promptly mail to Holders a notice of the
      adjustment and file with the Trustee an Officers’ Certificate briefly stating
      the facts requiring the adjustment and the manner of computing it. Failure
      to
      mail such notice or any defect therein shall not affect the validity of any
      such
      adjustment. Unless and until the Trustee shall receive an Officers’ Certificate
      setting forth an adjustment of the Conversion Rate, the Trustee may assume
      without inquiry that the Conversion Rate has not been adjusted and that the
      last
      Conversion Rate of which it has knowledge remains in effect.

     

    Section
      5.09.  Notice
      of Certain Transactions.

     

    In
      the
      event that there is a dissolution or liquidation of the Company, the Company
      shall mail to Holders and file with the Trustee a notice stating the proposed
      effective date. The Company shall mail such notice at least 10 days before
      such
      proposed effective date. Failure to mail such notice or any defect therein
      shall
      not affect the validity of any transaction referred to in this Section
      5.09.

     

    Section
      5.10.  Effect
      of Recapitalization, Reclassification, Consolidation, Merger or
      Sale.

     

    If
      any of
      following events occur (each, a “Business Combination”):

     

    (1)  any
      recapitalization, reclassification or change of the Common Stock, other than
      changes resulting from a subdivision or a combination, 

     

    (2)  a
      consolidation, merger or combination involving the Company, 

     

    (3)  a
      sale,
      conveyance or lease to another corporation of all or substantially all of the
      property and assets of the Company, other than to one or more of the Company’s
      subsidiaries, or 

     

    (4)  any
      statutory share exchange,

     

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

    in
      each
      case as a result of which holders of Common Stock are entitled to receive stock,
      other securities, other property or assets (including cash or any combination
      thereof) with respect to or in exchange for Common Stock, the Company or the
      successor or purchasing corporation, as the case may be, shall execute with
      the
      Trustee a supplemental indenture (which shall comply with the TIA as in force
      at
      the date of execution of such supplemental indenture if such supplemental
      indenture is then required to so comply) providing that the settlement of the
      Conversion Value will be based on the kind and amount of shares of stock, other
      securities or other property or assets (including cash or any combination
      thereof) which Holders of Common Stock receive in such Business Combination
      in
      respect of each share of Common Stock. In the event holders of Common Stock
      have
      the opportunity to elect the form of consideration to be received in such
      Business Combination, the Company shall make adequate provision whereby the
      Securities shall be convertible from and after the effective date of such
      Business Combination into the form of consideration elected by a majority of
      the
      Company’s stockholders in such Business Combination. Appropriate provisions will
      be made, as determined in good faith by the Company’s Board of Directors, to
      preserve the settlement provisions in Section 5.13 following such Business
      Combination to the extent feasible. The Company may not become a party to any
      such transaction unless its terms are consistent with this Section 5.10. Such
      supplemental indenture shall provide for adjustments which shall be as nearly
      equivalent as may be practicable to the adjustments provided for in this Article
      5. If, in the case of any such Business Combination, the stock or other
      securities and assets receivable thereupon by a holder of shares of Common
      Stock
      includes shares of stock or other securities and assets of a corporation other
      than the successor or purchasing corporation, as the case may be, in such
      Business Combination, then such supplemental indenture shall also be executed
      by
      such other corporation and shall contain a full and unconditional guarantee
      by
      such other corporation of all the Company’s obligations under the Indenture and
      the Securities and such additional provisions to protect the interests of the
      Holders of the Securities as the Board of Directors shall reasonably consider
      necessary by reason of the foregoing, including to the extent practicable the
      provisions providing for the repurchase rights set forth in Article 3 hereof.
      Notwithstanding anything contained in this Section, and for the avoidance of
      doubt, this Section shall not affect the right of a Holder to convert its
      Securities into shares of Common Stock prior to the effective date of the
      Business Combination.

     

    Section
      5.11.  Trustee’s
      Disclaimer.

     

    The
      Trustee shall have no duty to determine when an adjustment under this Article
      5
      should be made, how it should be made or what such adjustment should be, but
      may
      accept as conclusive evidence of that fact or the correctness of any such
      adjustment, and shall be protected in relying upon, an Officers’ Certificate,
      including the Officers’ Certificate with respect thereto which the Company is
      obligated to file with the Trustee pursuant to Section 5.08. The Trustee makes
      no representation as to the validity or value of any securities or assets issued
      upon conversion of Securities. 

     

    Section
      5.12.  [Intentionally
      Omitted] 

     

    Section
      5.13.  Settlement
      of Conversion Obligation.

     

    
      
         

      

      
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    (a)  Holders
      surrendering Securities for conversion shall receive for each $1,000 principal
      amount of Securities surrendered for conversion:

     

    (A)  cash
      in
      an amount equal to the lesser of (1) $1,000 and (2) the Conversion Value;
      and

     

    (B)  if
      the
      Conversion Value is greater than $1,000, a number of shares of Common
      Stock
      (the
“Remaining Shares”) equal to the sum of the Daily Share Amounts for each of the
      30 consecutive Trading Days in the Conversion Reference Period, appropriately
      adjusted to reflect stock splits, stock dividends, combinations or similar
      events occurring during the Conversion Reference Period, subject to the
      Company’s right to deliver cash in lieu of all or a portion of such Remaining
      Shares as set forth in Section 5.13(b);

     

    provided
      that in no event shall the aggregate number of Remaining Shares, per $1,000
      principal amount of Securities, exceed the Aggregate Share Cap. Holders may
      receive such consideration from the Company or from a Designated Financial
      Institution in accordance with Section 5.02(d).

     

    (b)  On
      any
      day prior to the first Trading Day of the applicable Conversion Reference
      Period, the Company may specify a percentage of the Daily Share Amount that
      will
      be settled in cash (the “Cash Percentage”). If the Company elects to specify a
      Cash Percentage, the amount of cash that the Company will deliver in respect
      of
      the daily share amount of each Trading Day in the applicable Conversion
      Reference Period will equal the product of: (1) the Cash Percentage, (2) the
      Daily Share Amount for such Trading Day and (3) the Volume Weighted Average
      Price of the Common Stock for such Trading Day. The number of shares that the
      Company shall deliver in respect of each Trading Day in the applicable
      Conversion Reference Period will be a percentage of the Daily Share Amount
      equal
      to 100% minus the Cash Percentage. Upon making a determination that a percentage
      of the Daily Share Amount will be settled in cash, the Company shall promptly
      issue a press release and disclose such information on its website prior to
      the
      first Trading Day of the applicable Conversion Reference Period. If the Company
      does not specify a Cash Percentage by the start of the applicable Conversion
      Reference Period, the Company shall be required to settle 100% of the Daily
      Share Amount for each Trading Day in the applicable Conversion Reference Period
      with shares of Common Stock; provided, however, that the Company shall pay
      cash
      in lieu of fractional shares otherwise issuable upon conversion of
      Securities.

     

    (c)  The
      Company shall determine the Conversion Value, Daily Share Amount and the number
      of shares of Common Stock, if any, to be issued upon conversion at the end
      of
      the applicable Conversion Reference Period. Upon conversion of a Security,
      the
      Company shall pay the cash and deliver the shares of Common Stock, as
      applicable, as promptly as practicable after the last Trading Day of the
      Conversion Reference Period but in any event not later than the third Trading
      Day following the last Trading Day of the Conversion Reference
      Period.

     

    For
      the
      purposes of Sections 5.13(a) and (b), in the event that any of Conversion Value,
      Daily Share Amounts or Volume Weighted Average Price cannot be determined for
      all portions of the Conversion Reference Period, the Company’s Board of
      Directors shall in good faith determine the values necessary to calculate the
      Conversion Value, Daily Share Amounts and Volume Weighted Average Price, as
      applicable. 

     

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

    Notwithstanding
      the foregoing, in the event of a Fundamental Change in which the consideration
      is comprised entirely of cash, the Conversion Value will be calculated based
      solely on the on the amount of cash which holders of Common Stock are entitled
      to receive in respect of each share of Common Stock upon such Fundamental
      Change, including a Make Whole Premium, if any. In such event, the Company
      shall
      pay Holders in cash, as promptly as practicable but, in any event, not later
      than the later of third Trading Day following the surrender of the Securities
      for conversion and the Fundamental Change Effectiveness Date.

     

    ARTICLE
      6

    SUBORDINATION

     

    Section
      6.01.  Agreement
      of Subordination

     

    (a)  The
      Company covenants and agrees, and each Holder of Securities issued hereunder
      by
      its acceptance thereof likewise covenants and agrees, that all Securities shall
      be issued subject to the provisions of this Article 6; and each Person holding
      any Security, whether upon original issue or upon transfer, assignment or
      exchange thereof, accepts and agrees to be bound by such
      provisions.

     

    (b)  The
      payment of the principal of, premium, if any, and interest on, all Securities
      (including, but not limited to, the Fundamental Change Purchase Price with
      respect to the Securities subject to purchase in accordance with Article 3,
      the
      Specified Redemption Accounting Change Redemption Price with respect to the
      Securities subject to purchase in accordance with Article 4 and any other
      payment in connection with the conversion of the Securities) issued hereunder
      shall, to the extent and in the manner hereinafter set forth, be subordinated
      and subject in right of payment to the prior payment in full to the holders
      of
      all Secured Senior Indebtedness, whether outstanding at the date of this
      Indenture or thereafter incurred. The payment of the principal of, premium,
      if
      any, and any interest amount on the Securities will rank equally in right of
      payment with any future Unsecured Senior Indebtedness.

     

    No
      provision of this Article 6 shall prevent the occurrence of any default or
      Event
      of Default hereunder.

     

    Section
      6.02.  Payments
      to Holders.
      The
      Company shall not make any payment with respect to the principal of, or premium,
      if any, or interest on the Securities (including, but not limited to, the
      Fundamental Change Purchase Price with respect to the Securities subject to
      purchase in accordance with Article 3, the Specified Redemption Accounting
      Change Redemption Price with respect to the Securities subject to purchase
      in
      accordance with Article 4 and any other payment in connection with the
      conversion of the Securities), except payments and distributions made by the
      Trustee and the Paying Agent as permitted by the first or second paragraph
      of
      Section 6.05, and shall not purchase or otherwise acquire for value any
      Securities if:

     

    
      
         

      

      
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    (a)  a
      default
      in the payment of principal, premium, interest, rent or other obligations due
      on
      any Secured Senior Indebtedness occurs and is continuing (or, in the case of
      Secured Senior Indebtedness for which there is a period of grace, in the event
      of such a default that continues beyond the period of grace, if any, specified
      in the instrument or lease evidencing such Secured Senior Indebtedness), unless
      and until such default shall have been cured or waived or shall have ceased
      to
      exist and notice thereof has been given to the Trustee and the Agents;
      or

     

    (b)  a
      default, other than a payment default, on Designated Secured Senior Indebtedness
      occurs and is continuing that then permits holders of such Designated Secured
      Senior Indebtedness to accelerate its maturity and the Trustee and the Agents
      receive a notice of the default (a “Payment Blockage Notice”) from the
      Company.

     

    The
      Company may and shall resume payments on and distributions in respect of the
      Securities upon:

     

    (1)  in
      the
      case of a payment default of Secured Senior Indebtedness, upon the date on
      which
      such default is cured or waived or otherwise ceases to exist; and

     

    (2)  in
      the
      case of a non-payment default on Designated Senior Secured Indebtedness referred
      to in clause (b) above, the earlier of (i) 179 days after the date on which
      a
      Payment Blockage Notice is received by the Trustee and the Agents, and (ii)
      the
      date on which the non-payment default is cured or waived or otherwise ceases
      to
      exist, unless this Article 6 otherwise prohibits the payment or distribution
      at
      the time of such payment or distribution.

     

    No
      nonpayment default that existed or was continuing on the date of delivery of
      any
      Payment Blockage Notice to the Trustee and the Agents (unless such default
      was
      waived, cured or otherwise ceased to exist and thereafter subsequently
      reoccurred) shall be, or be made, the basis for a subsequent Payment Blockage
      Notice.

     

    Upon
      any
      payment by the Company, or distribution of assets of the Company of any kind
      or
      character, whether in cash, property or securities, to creditors upon any
      dissolution or winding-up or liquidation or reorganization of the Company
      (whether voluntary or involuntary) or in bankruptcy, insolvency, receivership
      or
      similar proceedings, all amounts due or to become due upon all Secured Senior
      Indebtedness shall first be paid in full in cash, or other payment satisfactory
      to the holders of Secured Senior Indebtedness (except payments made pursuant
      to
      Article 11 from monies deposited with the Paying Agent pursuant thereto prior
      to
      commencement of proceedings for such dissolution, winding-up, liquidation or
      reorganization); and upon any such dissolution or winding-up or liquidation
      or
      reorganization of the Company or bankruptcy, insolvency, receivership or other
      similar proceeding, any payment by the Company, or distribution of assets of
      the
      Company of any kind or character, whether in cash, property or securities,
      to
      which the Holders of the Securities, the Trustee or any Agents would be
      entitled, except for the provision of this Article 6, shall (except as
      aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy,
      liquidating trustee, agent or other Person making such payment or distribution,
      or by the Holders of the Securities or by the Trustee or any Agents under this
      Indenture if received by them or it, directly to the holders of Secured Senior
      Indebtedness (pro rata to such holders on the basis of the respective amounts
      of
      Secured Senior Indebtedness held by such holders, or as otherwise required
      by
      law or a court order) or their representative or representatives, or to the
      trustee or trustees under any indenture pursuant to which any instruments
      evidencing any Secured Senior Indebtedness may have been issued, as their
      respective interests may appear, to the extent necessary to pay all Secured
      Senior Indebtedness in full in cash, or other payment satisfactory to the
      holders of Secured Senior Indebtedness, after giving effect to any concurrent
      payment or distribution to or for the holders of Secured Senior Indebtedness,
      before any payment or distribution is made to the Holders of the Securities
      or
      to the Trustee or any Agent.

     

    
      
         

      

      
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    In
      the
      event of the acceleration of the Securities because of an Event of Default,
      no
      payment or distribution shall be made to the Trustee, any Agent or any Holder
      of
      Securities in respect of the principal of, premium, if any, or interest on
      the
      Securities (including, but not limited to, the Fundamental Change Purchase
      Price
      with respect to the Securities subject to purchase in accordance with Article
      3
      as provided in this Indenture), except payments and distributions made by the
      Trustee and the Paying Agent as permitted by the first or second paragraph
      of
      Section 6.05, until all Secured Senior Indebtedness has been paid in full in
      cash or other payment satisfactory to the holders of Secured Senior Indebtedness
      or such acceleration is rescinded in accordance with the terms of this
      Indenture. If payment of the Securities is accelerated because of an Event
      of
      Default, the Company shall promptly notify holders of Secured Senior
      Indebtedness of such acceleration.

     

    In
      the
      event that, notwithstanding the foregoing provisions, any payment or
      distribution of assets of the Company of any kind or character, whether in
      cash,
      property or securities (including, without limitation, by way of setoff or
      otherwise), prohibited by the foregoing, shall be received by the Trustee,
      any
      Agent or the Holders of the Securities before all Secured Senior Indebtedness
      is
      paid in full, in cash or other payment satisfactory to the holders of Secured
      Senior Indebtedness, or provision is made for such payment thereof in accordance
      with its terms in cash or other payment satisfactory to the holders of Secured
      Senior Indebtedness, such payment or distribution shall be held in trust for
      the
      benefit of and shall be paid over or delivered to the holders of Secured Senior
      Indebtedness or their representative or representatives, or to the trustee
      or
      trustees under any indenture pursuant to which any instruments evidencing any
      Secured Senior Indebtedness may have been issued, as their respective interests
      may appear, as calculated by the Company, for application to the payment of
      all
      Secured Senior Indebtedness remaining unpaid to the extent necessary to pay
      all
      Secured Senior Indebtedness in full, in cash or other payment satisfactory
      to
      the holders of Secured Senior Indebtedness, after giving effect to any
      concurrent payment or distribution to or for the holders of such Secured Senior
      Indebtedness.

     

    Nothing
      in this Section 6.02 shall apply to claims of, or payments to, the Trustee
      or
      any Agent under or pursuant to Section 10.07. This Section 6.02 shall be subject
      to the further provisions of Section 6.05.

     

    For
      purposes of this Article 6, the words, “cash, property or securities” shall not
      be deemed to include shares or stock of the Company as reorganized or
      readjusted, or securities of the Company or any other corporation provided
      for
      by a plan of reorganization or readjustment, the payment of which is
      subordinated at least to the extent provided in this Article 6 with respect
      to
      the Securities to the payment of all Secured Senior Indebtedness which may
      at
      the time be outstanding; provided
      that (i)
      the Secured Senior Indebtedness is assumed by the new corporation, if any,
      resulting from any reorganization or readjustment, and (ii) the rights of the
      holders of Secured Senior Indebtedness (other than leases which are not assumed
      by the Company or the new corporation, as the case may be) are not, without
      the
      consent of such Holders, altered by such reorganization or readjustment. The
      consolidation of the Company with, or the merger of the Company into, another
      corporation or the liquidation or dissolution of the Company following the
      conveyance or transfer of its property as an entirety, or substantially as
      an
      entirety, to another corporation upon the terms and conditions provided for
      in
      Article 8 shall not be deemed a dissolution, winding-up, liquidation or
      reorganization for the purposes of this Section 6.02 if such other corporation
      shall, as a part of such consolidation, merger, conveyance or transfer, comply
      with the conditions stated in Article 8.

     

    
      
         

      

      
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    Section
      6.03.  Subrogation
      of Securities

     

    (a)  Subject
      to the payment in full, in cash or other payment satisfactory to the holders
      of
      Secured Senior Indebtedness, of all Secured Senior Indebtedness, the rights
      of
      the Holders of the Securities shall be subrogated to the extent of the payments
      or distributions made to the holders of such Secured Senior Indebtedness
      pursuant to the provisions of this Article 6 (equally and ratably with the
      holders of all indebtedness of the Company which by its express terms is
      subordinated to other indebtedness of the Company to substantially the same
      extent as the Securities are subordinated and is entitled to like rights of
      subrogation) to the rights of the holders of Secured Senior Indebtedness to
      receive payments or distributions of cash, property or securities of the Company
      applicable to the Secured Senior Indebtedness until the principal, premium,
      if
      any, and interest on the Securities shall be paid in full in cash or other
      payment satisfactory to the holders of Secured Senior Indebtedness. For the
      purposes of such subrogation, no payments or distributions to the holders of
      the
      Secured Senior Indebtedness of any cash, property or securities to which the
      Holders of the Securities, the Trustee or any Agent would be entitled except
      for
      the provisions of this Article 6, and no payment pursuant to the provisions
      of
      this Article 6, to or for the benefit of the holders of Secured Senior
      Indebtedness by Holders of the Securities or the Trustee, shall, as between
      the
      Company, its creditors other than holders of Secured Senior Indebtedness, and
      the Holders of the Securities, be deemed to be a payment by the Company to
      or on
      account of the Secured Senior Indebtedness. No payments or distributions of
      cash, property or securities to or for the benefit of the Holders of the
      Securities, pursuant to the subrogation provisions of this Article 6, which
      would otherwise have been paid to the holders of Secured Senior Indebtedness
      shall be deemed to be a payment by the Company to or for the account of the
      Securities. It is understood that the provisions of this Article 6 are and
      are
      intended solely for the purposes of defining the relative rights of the Holders
      of the Securities, on the one hand, and the holders of the Secured Senior
      Indebtedness, on the other hand.

     

    (b)  Nothing
      contained in this Article 6 or elsewhere in this Indenture or in the Securities
      is intended to or shall impair, as among the Company, its creditors other than
      the holders of Secured Senior Indebtedness, and the Holders of the Securities,
      the obligation of the Company, which is absolute and unconditional, to pay
      to
      the Holders of the Securities the principal of, and premium, if any, and
      interest on the Securities as and when the same shall become due and payable
      in
      accordance with their terms, or is intended to or shall affect the relative
      rights of the Holders of the Securities and creditors of the Company other
      than
      the holders of the Secured Senior Indebtedness, nor shall anything herein or
      therein prevent the Trustee, any Agent or the Holder of any Security from
      exercising all remedies otherwise permitted by applicable law upon default
      under
      this Indenture, subject to the rights, if any, under this Article 6 of the
      holders of Secured Senior Indebtedness in respect of cash, property or
      securities of the Company received upon the exercise of any such
      remedy.

     

    
      
         

      

      
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    (c)  Upon
      any
      payment or distribution of assets of the Company referred to in this Article
      6,
      the Trustee and the Agents, subject to the provisions of Section 10.01, and
      the
      Holders of the Securities shall be entitled to rely upon any order or decree
      made by any court of competent jurisdiction in which such bankruptcy,
      dissolution, winding-up, liquidation or reorganization proceedings are pending,
      or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
      agent or other person making such payment or distribution, delivered to the
      Trustee, any Agent or to the Holders of the Securities, for the purpose of
      ascertaining the persons entitled to participate in such distribution, the
      holders of the Secured Senior Indebtedness and other indebtedness of the
      Company, the amount thereof or payable thereon and all other facts pertinent
      thereto or to this Article 6.

     

    Section
      6.04.  Authorization
      to Effect Subordination.
      Each
      Holder of a Security by the Holder’s acceptance thereof authorizes and directs
      the Trustee or any Agent on the Holder’s behalf to take such action as may be
      necessary or appropriate to effectuate the subordination as provided in this
      Article 6 and appoints the Trustee to act as the Holder’s attorney-in-fact for
      any and all such purposes. If the Trustee does not file a proper proof of claim
      or proof of debt in the form required in any proceeding referred to in Section
      6.03 hereof at least 30 days before the expiration of the time to file such
      claim, the holders of any Secured Senior Indebtedness or their representatives
      are hereby authorized to file an appropriate claim for and on behalf of the
      Holders of the Securities.

     

    Section
      6.05.  Notice
      to Trustee.
      

     

    (a)  The
      Company shall give prompt written notice in the form of an Officers’ Certificate
      to a Responsible Officer of the Trustee and to any Paying Agent of (a) all
      Secured Senior Indebtedness incurred by the Company, including the names of
      representatives of such holders (if actually known by the Company) of Secured
      Senior Indebtedness and (b) any fact known to the Company which would prohibit
      the making of any payment of monies to or by the Trustee or any Paying Agent
      in
      respect of the Securities pursuant to the provisions of this Article 6.
      Notwithstanding the provisions of this Article 6 or any other provision of
      this
      Indenture, the Trustee and the Agents shall not be charged with knowledge of
      the
      existence of any facts which would prohibit the making of any payment of monies
      to or by the Trustee and the Agents in respect of the Securities pursuant to
      the
      provisions of this Article 6, unless and until a Responsible Officer of the
      Trustee and the Agents shall have received written notice thereof at the
      Corporate Trust Office or at the address for notice set forth in Section 13.02
      hereof, respectively, from the Company (in the form of an Officers’
Certificate); and before the receipt of any such written notice, the Trustee
      and
      the Agents, subject to the provisions of Section 10.01, shall be entitled in
      all
      respects to assume that no such facts exist; provided
      that if
      on a date not fewer than one Business Day prior to the date upon which by the
      terms hereof any such monies may become payable for any purpose (including,
      without limitation, the payment of the principal of, or premium, if any, or
      interest on any Security) the Trustee and the Agents shall not have received,
      with respect to such monies, the notice provided for in this Section 6.05,
      then,
      anything herein contained to the contrary notwithstanding, the Trustee and
      the
      Agents shall have full power and authority to receive such monies and to apply
      the same to the purpose for which they were received, and shall not be affected
      by any notice to the contrary which may be received by it on or after such
      prior
      date. Notwithstanding anything in this Article 6 to the contrary, nothing shall
      prevent any payment by the Trustee and the Agents to the Holders of monies
      deposited with it pursuant to Article 11, and any such payment shall not be
      subject to the provisions of Article 6.

     

    
      
         

      

      
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    (b)  In
      the
      event that the Trustee or any Agent determines in good faith that further
      evidence is required with respect to the right of any person as a holder of
      Secured Senior Indebtedness to participate in any payment or distribution
      pursuant to this Article 6, the Trustee or any Agent may request such Person
      to
      furnish evidence to the reasonable satisfaction of the Trustee or such Agent
      as
      to the amount of Secured Senior Indebtedness held by such Person, the extent
      to
      which such Person is entitled to participate in such payment or distribution
      and
      any other facts pertinent to the rights of such Person under this Article 6,
      and
      if such evidence is not furnished the Trustee or any Agent may defer any payment
      to such Person pending judicial determination as to the right of such Person
      to
      receive such payment.

     

    Section
      6.06.  Trustee’s
      Relation to Secured Senior Indebtedness.
      

     

    (a)  The
      Trustee and the Agents, respectively, in their individual capacities shall
      be
      entitled to all the rights set forth in this Article 6 in respect of any Secured
      Senior Indebtedness at any time held by it, to the same extent as any other
      holder of Secured Senior Indebtedness, and nothing in Section 10.11 or elsewhere
      in this Indenture shall deprive the Trustee or any such Agents of any of its
      rights as such holder.

     

    (b)  With
      respect to the holders of Secured Senior Indebtedness, the Trustee and the
      Agents undertake to perform or to observe only such of its covenants and
      obligations as are specifically set forth in this Article 6, and no implied
      covenants or obligations with respect to the holders of Secured Senior
      Indebtedness shall be read into this Indenture against the Trustee or the
      Agents. Neither the Trustee nor any Agent shall be deemed to owe any fiduciary
      duty to the holders of Secured Senior Indebtedness and neither the Trustee
      nor
      any Agent shall be liable to any holder of Secured Senior Indebtedness if it
      shall pay over or deliver to Holders of Securities, the Company or any other
      person money or assets to which any holder of Secured Senior Indebtedness shall
      be entitled by virtue of this Article 6 or otherwise.

     

    Section
      6.07.  No
      Impairment of Subordination.
      No
      right of any present or future holder of any Secured Senior Indebtedness to
      enforce subordination as herein provided shall at any time in any way be
      prejudiced or impaired by any act or failure to act on the part of the Company
      or by any act or failure to act, in good faith, by any such holder, or by any
      noncompliance by the Company with the terms, provisions and covenants of this
      Indenture, regardless of any knowledge thereof which any such holder may have
      or
      otherwise be charged with.

     

    Section
      6.08.  Certain
      Conversions Deemed Payment.
      For the
      purposes of this Article 6 only, (1) the issuance and delivery of junior
      securities upon conversion of Securities in accordance with Article 6 shall
      not
      be deemed to constitute a payment or distribution on account of the principal
      of
      (or premium, if any) or interest on Securities or on account of the purchase
      or
      other acquisition of Securities, and (2) the payment, issuance or delivery
      of
      cash (except in 

     

    
      
         

      

      
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    satisfaction
      of fractional shares pursuant to Section 5.03), property or securities (other
      than junior securities) upon conversion of a Security shall be deemed to
      constitute payment on account of the principal of such Security. For the
      purposes of this Section 6.08, the term “junior securities” means (a) shares of
      any class of the Company, or (b) securities of the Company which are
      subordinated in right of payment to all Secured Senior Indebtedness which may
      be
      outstanding at the time of issuance or delivery of such securities to
      substantially the same extent as, or to a greater extent than, the Securities
      are so subordinated as provided in this Article. Nothing contained in this
      Article 6 or elsewhere in this Indenture or in the Securities is intended to
      or
      shall impair, as among the Company, its creditors other than holders of Secured
      Senior Indebtedness and the Holders, the right, which is absolute and
      unconditional, of the Holder of any Security to convert such Security in
      accordance with Article 6.

     

    Section
      6.09.  Article
      Applicable to Paying Agents.
      If at
      any time any Paying Agent other than the Trustee shall have been appointed
      by
      the Company and be then acting hereunder, the term “Trustee” as used in this
      Article shall (unless the context otherwise requires) be construed as extending
      to and including such Paying Agent within its meaning as fully for all intents
      and purposes as if such Paying Agent were named in this Article in addition
      to
      or in place of the Trustee; provided,
      however,
      that
      the first paragraph of Section 6.05 shall not apply to the Company or any
      Affiliate of the Company if it or such Affiliate acts as Paying
      Agent.

     

    Section
      6.10.  Senior
      Indebtedness Entitled to Rely.
      The
      holders of Secured Senior Indebtedness (including, without limitation,
      Designated Secured Senior Indebtedness) shall have the right to rely upon this
      Article 6, and no amendment or modification of the provisions contained herein
      shall diminish the rights of such holders unless such holders shall have agreed
      in writing thereto.

     

    ARTICLE
      7

    COVENANTS

     

    Section
      7.01.  Payment
      of Securities.

     

    (a)  The
      Company shall promptly make all payments in respect of the Securities on the
      dates and in the manner provided in the Securities and this Indenture. A payment
      of principal or interest or Additional Interest, if any, shall be considered
      paid on the date it is due if the Paying Agent (other than the Company) holds
      by
      12:00 p.m. (noon), New York City time, on that date money, deposited by or
      on
      behalf of the Company sufficient to make the payment. Subject to Section 5.02,
      accrued and unpaid interest on any Security that is payable, and is punctually
      paid or duly provided for, on any Interest Payment Date shall be paid to the
      Person in whose name that Security is registered at the close of business on
      the
      Regular Record Date for such interest at the office or agency of the Company
      maintained for such purpose. Principal, interest, Fundamental Change Purchase
      Price and Additional Interest, if any, in each case if payable, shall be
      considered paid on the applicable date due if on such date the Trustee or the
      Paying Agent holds, in accordance with this Indenture, money sufficient to
      pay
      all such amounts then due. The Company shall, to the fullest extent permitted
      by
      law, pay interest in immediately available funds on overdue principal amount
      and
      interest at the annual rate borne by the Securities compounded semiannually,
      which interest shall accrue from the date such overdue amount was originally
      due
      to the date payment of such amount, including interest thereon, has been made
      or
      duly provided for. All such interest shall be payable on demand. 

     

    
      
         

      

      
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    (b)  Payment
      of the principal of and interest, if any, on the Securities shall be made at
      the
      office or agency of the Company maintained for that purpose in the Borough
      of
      Manhattan, The City of New York (which shall initially be at the address set
      forth in Section 2.03(c)) or at the Corporate Trust Office of the Trustee 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; provided, however,
      that
      at the option of the Company payment of interest may be made by check mailed
      to
      the address of the Person entitled thereto as such address appears in the
      Register; provided further that a Holder with an aggregate principal amount
      in
      excess of $2,000,000 will be paid by wire transfer in immediately available
      funds at the election of such Holder if such Holder has provided wire transfer
      instructions to the Trustee at least 10 Business Days prior to the payment
      date.
      Any wire transfer instructions received by the Trustee will remain in effect
      until revoked by the Holder.

     

    Section
      7.02.  SEC
      and Other Reports.

     

    (a)  The
      Company shall file all reports and other information and documents which it
      is
      required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
      Act, and within 15 days after it files them with the SEC, the Company shall
      file
      copies of all such reports, information and other documents with the Trustee;
      provided that any such reports, information and documents filed with the SEC
      pursuant to its Electronic Data Gathering, Analysis and Retrieval (or EDGAR)
      system shall be deemed to be filed with the Trustee. The Company also shall
      comply with the provisions of TIA Section 314(a). 

     

    (b)  Delivery
      of such reports, information and documents to the Trustee is for informational
      purposes only and the Trustee’s receipt of such shall not constitute
      constructive notice of any information contained therein or determinable from
      information contained therein, including the Company’s compliance with any of
      its covenants hereunder (as to which the Trustee is entitled to rely exclusively
      on Officers’ Certificates).

     

    Section
      7.03.  Compliance
      Certificates.

     

    The
      Company shall deliver to the Trustee, within 120 days after the end of each
      fiscal year of the Company (beginning with the fiscal year ending on or about
      December 31, 2007), an Officers’ Certificate as to the signer’s knowledge of the
      Company’s compliance with all terms, conditions and covenants on its part
      contained in this Indenture and stating whether or not the signer knows of
      any
      Default or Event of Default. If such signer knows of such a Default or Event
      of
      Default, the Officers’ Certificate shall describe the Default or Event of
      Default and the efforts to remedy the same. For the purposes of this Section
      7.03, compliance shall be determined without regard to any grace period or
      requirement of notice provided pursuant to the terms of this
      Indenture.

     

    Section
      7.04.  Further
      Instruments and Acts.

     

    
      
         

      

      
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    Upon
      request of the Trustee, the Company 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 purposes of this Indenture.

     

    Section
      7.05.  Maintenance
      of Corporate Existence.

     

    Subject
      to Article 8, the Company will do or cause to be done all things necessary
      to
      preserve and keep in full force and effect its corporate existence.

     

    Section
      7.06.  Rule
      144A Information Requirement.

     

    During
      the period prior to the expiration of the holding period applicable to sales
      thereof under Rule 144(k) under the Securities Act (or any successor provision),
      the Company covenants and agrees that it shall, during any period in which
      it is
      not subject to Section 13 or 15(d) under the Exchange Act, upon the request
      of
      any Holder or beneficial holder of the Securities, make available to such Holder
      or beneficial holder of Securities or any Common Stock issued upon conversion
      thereof which continue to be Restricted Securities in connection with any sale
      thereof and any prospective purchaser of Securities or such Common Stock
      designated by such Holder or beneficial holder, the information required
      pursuant to Rule 144A(d)(4) under the Securities Act and it will take such
      further action as any Holder or beneficial holder of such Securities or such
      Common Stock may reasonably request, all to the extent required from time to
      time to enable such Holder or beneficial holder to sell its Securities or Common
      Stock without registration under the Securities Act within the limitation of
      the
      exemption provided by Rule 144A, as such Rule may be amended from time to time.
      Whether a person is a beneficial holder shall be determined by the Company.
      

     

    Section
      7.07.  Stay,
      Extension and Usury Laws.

     

    The
      Company covenants (to the extent that it may lawfully do so) that it shall
      not
      at any time insist upon, plead or in any manner whatsoever claim or take the
      benefit or advantage of, any stay, extension or usury law or other law which
      would prohibit or forgive the Company from paying all or any portion of the
      principal of or accrued but unpaid interest or Additional Interest, if any,
      on
      the Securities as contemplated herein, wherever enacted, now or at any time
      hereafter in force, or which may affect the covenants or the performance of
      this
      Indenture, and the Company (to the extent it may lawfully do so) hereby
      expressly waives all benefit or advantage of any such law and covenants that
      it
      will not, by resort to any such law, hinder, delay or impede the execution
      of
      any power herein granted to the Trustee, but will suffer and permit the
      execution of every such power as though no such law had been
      enacted.

     

    Section
      7.08.  Payment
      of Additional Interest.

     

    If
      Additional Interest is payable by the Company pursuant to the Registration
      Rights Agreement, the Company shall deliver to the Trustee an Officers’
Certificate to that effect stating (i) the amount of such Additional Interest
      that is payable, (ii) the reason why such Additional Interest is payable and
      (iii) the date on which such Additional Interest is payable. Unless and until
      a
      Responsible Officer of the Trustee receives such a certificate, the Trustee
      may
      assume without inquiry that no such Additional Interest is payable. If the
      Company has paid Additional Interest directly to the Persons entitled to such
      Additional Interest, the Company shall deliver to the Trustee a certificate
      setting forth the particulars of such payment.

     

    
      
         

      

      
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    Section
      7.09.  Maintenance
      of Office or Agency.

     

    The
      Company will maintain an office or agency of the Trustee, Registrar and Paying
      Agent where securities may be presented or surrendered for payment, where
      Securities may be surrendered for registration of transfer, purchase or
      redemption and where notices and demands to or upon the Company in respect
      of
      the Securities and this Indenture may be served. The Corporate Trust Office
      shall initially be one such office or agency for all of the aforesaid purposes.
      The Company shall give prompt written notice to the Trustee of the location,
      and
      of any change in the location, of any such office or agency (other than a change
      in the location of the office of the Trustee). If at any time the Company shall
      fail to maintain any such required office or agency or shall fail to furnish
      the
      Trustee with the address thereof, such presentations, surrenders, notices and
      demands may be made or served at the address of the Trustee set forth in Section
      13.02.

     

    The
      Company may also from time to time designate one or more other offices or
      agencies where the Securities may be presented or surrendered for any or all
      such purposes and may from time to time rescind such designations; provided,
      however, that no such designation or rescission shall in any manner relieve
      the
      Company of its obligation to maintain an office or agency.

     

    ARTICLE
      8

    CONSOLIDATION
      AND MERGER

     

    Section
      8.01.  Company
      May Consolidate, Etc., Only on Certain Terms.

     

    The
      Company may not consolidate with or merge into any Person or convey, transfer
      or
      lease the property and assets, substantially as an entirety, of the Company
      to
      another Person, unless: 

     

    (1)  Either
      (A) the Company is the continuing entity or (B) the Person (if other than the
      Company) formed by such consolidation or into which the Company is merged,
      or
      the Person which acquires by conveyance, transfer or lease all or substantially
      all of the properties and assets of the Company, shall (i) be a corporation,
      limited liability company, partnership, trust or other business entity organized
      and existing under the laws of the United States of America or any State thereof
      or the District of Columbia and (ii) such Person (if other than the Company)
      expressly assumes, by an indenture supplemental hereto, executed and delivered
      to the Trustee, in form satisfactory to the Trustee, the obligations of the
      Company under the Securities and this Indenture and the performance or
      observance of every covenant and provision of this Indenture and the Securities
      required on the part of the Company to be performed or observed (including,
      without limitation, the obligation to convert Securities in accordance with
      Article 5), by supplemental indenture satisfactory in form to the Trustee,
      executed and delivered to the Trustee, by the Person (if other than the Company)
      formed by such consolidation or into which the Company shall have been merged
      or
      by the Person which shall have acquired the Company’s assets; 

     

    
      
         

      

      
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    (2)  after
      giving effect to such transaction, no Event of Default, and no event which,
      after notice or lapse of time or both, would become an Event of Default, shall
      have occurred and be continuing; and 

     

    (3)  the
      Company shall have, at or prior to the effective date of such consolidation,
      merger or transfer, delivered to the Trustee an Officers’ Certificate and an
      Opinion of Counsel, each stating that such consolidation, merger or transfer
      complies with this Section 8.01 and, if a supplemental indenture is required
      in
      connection with such transaction, such supplemental indenture complies with
      this
      Article, and that all conditions precedent herein provided for relating to
      such
      transaction have been complied with. 

     

    Section
      8.02.  Successor
      Substituted.

     

    Upon
      any
      consolidation of the Company with, or merger of the Company into, any other
      Person or any conveyance, transfer or lease substantially as an entirety, of
      the
      properties and assets of the Company and its Subsidiaries, taken as a whole,
      in
      accordance with Section 8.01, the successor Person formed by such consolidation
      or into which the Company is merged or to which such conveyance, transfer or
      lease is made shall succeed to, and be substituted for, and may exercise every
      right and power of, the Company under this Indenture with the same effect as
      if
      such successor Person had been named as the Company herein, and thereafter,
      except in the case of a lease, and except for obligations the predecessor Person
      may have under a supplemental indenture, the predecessor Person shall be
      relieved of all obligations and covenants under this Indenture and the
      Securities. 

     

    ARTICLE
      9

    DEFAULT
      AND REMEDIES

     

    Section
      9.01.  Events
      of Default.

     

    (a)  An
“Event
      of Default” shall occur if:

     

    (1)  the
      Company shall fail to pay when due the Principal or Fundamental Change Purchase
      Price of any Security, when the same becomes due and payable whether at the
      Final Maturity Date, upon repurchase, redemption, acceleration or otherwise,
      whether or not such payment is prohibited by the provisions of Article 6;
      or

     

    (2)  the
      Company shall fail to pay an installment of cash interest or Additional
      Interest, if any, on any of the Securities, which failure continues for 30
      days
      after the date when due, whether or not such payment is prohibited by the
      provisions of Article 6; or 

     

    (3)  the
      Company shall fail to deliver when due all cash and shares of Common Stock,
      if
      any, deliverable upon conversion of the Securities, which failure continues
      for
      15 days; or

     

    (4)  the
      Company shall fail to provide a Fundamental Change Company Notice when
      due;

     

    
      
         

      

      
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    (5)  the
      Company shall fail to perform or observe (or obtain a waiver with respect to)
      any other term, covenant or agreement contained in the Securities or this
      Indenture for a period of 60 days after receipt by the Company of a Notice
      of
      Default specifying such failure; or 

     

    (6)  the
      Company shall default in the payment of principal by the end of any applicable
      grace period or resulting in acceleration of other Indebtedness of the Company
      for borrowed money where the aggregate principal amount with respect to which
      the default or acceleration has occurred exceeds $25 million and such
      acceleration has not been rescinded or annulled or such Indebtedness repaid
      within a period of 30 days after receipt of a Notice of Default, provided that
      if any such default is cured, waived, rescinded or annulled, then the Event
      of
      Default by reason thereof would be deemed not to have occurred; or

     

    (7)  the
      Company or any of its Subsidiaries shall fail to pay final judgment aggregating
      in excess of $25 million (excluding therefrom any amount covered by insurance
      as
      to which the insurer has acknowledged in writing its coverage obligation),
      which
      judgments are not paid, discharged or stayed for a period of 60 days;
      or

     

    (8)  the
      Company, or any Significant Subsidiary of the Company, pursuant to or within
      the
      meaning of any Bankruptcy Law:

     

    (A)  commences
      as a debtor a voluntary case or proceeding; 

     

    (B)  consents
      to the entry of an order for relief against it in an involuntary case or
      proceeding or the commencement of any case against it; 

     

    (C)  consents
      to the appointment of a Receiver of it or for all or substantially all of its
      property;

     

    (D)  makes
      a
      general assignment for the benefit of its creditors; 

     

    (E)  files
      a
      petition in bankruptcy or answer or consent seeking reorganization or relief;
      or

     

    (F)  
      consents
      to the filing of such a petition or the appointment of or taking possession
      by a
      Receiver; or 

     

    (9) a
      court
      of competent jurisdiction enters an order or decree under any Bankruptcy Law
      that:

     

    (A)  grants
      relief against the Company or any Significant Subsidiary of the Company in
      an
      involuntary case or proceeding or adjudicates the Company or any Significant
      Subsidiary of the Company insolvent or bankrupt; 

     

    (B)  appoints
      a Receiver of the Company or any Significant Subsidiary of the Company or for
      all or substantially all of the property of the Company or any Significant
      Subsidiary of the Company; or 

     

    
      
         

      

      
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    (C)  orders
      the winding up or liquidation of the Company or any Significant Subsidiary
      of
      the Company;

     

    and
      in
      each case the order or decree remains unstayed and in effect for 60 consecutive
      days.

     

    The
      term
“Bankruptcy Law” means Title 11 of the United States Code (or any successor
      thereto) or any similar federal or state law for the relief of debtors. The
      term
“Receiver” means any receiver, trustee, assignee, liquidator, sequestrator or
      similar official under any Bankruptcy Law.

     

    (b)  Notwithstanding
      Section 9.01(a), no Event of Default under clauses (5) or (6) of Section
      9.01(a) shall occur until the Trustee notifies the Company in writing, or the
      Holders of at least 25% in aggregate principal amount of the Securities then
      outstanding notify the Company and the Trustee in writing, of the Default (a
      “Notice of Default”), and the Company does not cure the Default within the time
      specified in clause (5) or (6) of Section 9.01(a), as applicable, after receipt
      of such notice. A notice given pursuant to this Section 9.01 shall be given
      by
      registered or certified mail, must specify the Default, demand that it be
      remedied and state that the notice is a Notice of Default. When any Default
      under this Section 9.01 is cured, it ceases.

     

    (c)  The
      Company will deliver to the Trustee, within five Business Days after becoming
      aware of the occurrence of a Default or Event of Default, written notice
      thereof.

     

    The
      Trustee shall not be charged with knowledge of any Event of Default unless
      written notice thereof shall have been given to a Responsible Officer with
      responsibility for this Indenture at the Corporate Trust Office of the Trustee
      by the Company, a Paying Agent, any Holder or any agent of any Holder or unless
      a Responsible Officer with responsibility for this Indenture acquires actual
      knowledge of such Event of Default in the course of performing other duties
      pursuant to this Indenture. 

     

    Section
      9.02.  Acceleration.

     

    (a)  If
      an
      Event of Default (other than an Event of Default specified in clause (8) or
      (9)
      of Section 9.01(a)) occurs and is continuing with respect to the Company, the
      Trustee may, by notice to the Company, or the Holders of at least 25% in
      aggregate principal amount of the Securities then outstanding may, by notice
      to
      the Company and the Trustee, declare the principal amount and accrued and unpaid
      interest, if any, and accrued and unpaid Additional Interest, if any, through
      the date of declaration on all the Securities to be immediately due and payable.
      Upon such a declaration, such principal amount and such accrued and unpaid
      interest, if any, and such accrued and unpaid Additional Interest, if any,
      shall
      be due and payable immediately. If an Event of Default specified in Section
      9.01(a)(8) or (9) occurs in respect of the Company and is continuing, the
      principal amount and accrued but unpaid interest, if any, and accrued and unpaid
      Additional Interest, if any, on all the Securities shall become and be
      immediately due and payable without any declaration or other act on the part
      of
      the Trustee or any Holders of Securities. The Holders of a majority in aggregate
      principal amount of the Securities then outstanding by notice to the Trustee
      may
      rescind an acceleration and its consequences if (a) all existing Events of
      Default, other than the nonpayment of the principal of the Securities which
      have
      become due solely by such declaration of acceleration, have been cured or
      waived; (b) to the extent the payment of such interest is lawful, interest
      (calculated at the rate per annum borne by the Securities) on overdue
      installments of interest and overdue principal, which has become due otherwise
      than by such declaration of acceleration, has been paid; (c) the rescission
      would not conflict with any judgment or decree of a court of competent
      jurisdiction; and (d) all payments due to the Trustee and any predecessor
      Trustee under Section 10.07 have been made. No such rescission shall affect
      any
      subsequent Default or impair any right consequent thereto.

     

    
      
         

      

      
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    (b)  Notwithstanding
      Section 9.02(a), to the extent elected by the Company, the sole remedy for
      an
      Event of Default relating to the failure to comply with the provisions of
      Section 7.02 shall, for the first 60 days after the occurrence of such an Event
      of Default, consist exclusively of the right to receive special interest on
      the
      Securities at an annual rate equal to 0.25% of the principal amount of the
      Securities (the “Special Interest”). The Special Interest shall be paid in
      arrears on the first Interest Payment Date following the date on which the
      Special Interest began to accrue with respect to all Special Interest accrued
      on
      or before such Interest Payment Date, and, for any Special Interest accrued
      on
      or after such Payment Date, on the next Interest Payment Date thereafter. The
      Special Interest shall accrue on all outstanding Securities from and including
      the date on which an Event of Default relating to failure to comply with Section
      7.02 first occurs to, but not including, the 60th
      day
      thereafter (or such earlier date on which the Event of Default is cured or
      waived). On such 60th
      day (or
      earlier, if the event of default is cured or waived prior to such 60th
      day),
      such Special Interest will cease to accrued and, if the Event of Default
      relating to the failure to comply with Section 7.02 has not been cured or waived
      prior to such 60th
      day, the
      Securities will be subject to acceleration in accordance with Section 9.02(a).
      This Section 9.02(b) shall not affect the rights of Holders in the event of
      the
      occurrence of any other Event of Default. In the event the Company does not
      elect to pay Special Interest, the Securities will be subject to acceleration
      in
      accordance with Section 9.02(a).

     

    Section
      9.03.  Other
      Remedies.

     

    (a)  Subject
      to Section 10.01(a), if an Event of Default occurs and is continuing, the
      Trustee may, but shall not be obligated to, pursue any available remedy by
      proceeding at law or in equity to collect payment of the principal amount and
      accrued and unpaid interest, if any, and accrued and unpaid Additional Interest,
      if any, on the Securities or to enforce the performance of any provision of
      the
      Securities or this Indenture. 

     

    (b)  The
      Trustee may maintain a proceeding even if it does not possess any of the
      Securities or does not produce any of them in the proceeding. A delay or
      omission by the Trustee or any Holder in exercising any right or remedy accruing
      upon an Event of Default shall not impair the right or remedy or constitute
      a
      waiver of or acquiescence in the Event of Default. No remedy is exclusive of
      any
      other remedy. All available remedies are cumulative to the extent permitted
      by
      applicable law.

     

    Section
      9.04.  Waiver
      of Defaults and Events of Default.

     

    Subject
      to Sections 9.07 and 12.02, the Holders of a majority in aggregate principal
      amount of the Securities then outstanding by notice to the Trustee may waive
      an
      existing Default or Event of Default and its consequences, except an uncured
      Default or Event of Default in the payment of the principal of, premium, if
      any,
      or any accrued but unpaid interest on any Security, an uncured failure by the
      Company to convert any Securities into Common Stock and cash, as applicable,
      or
      any Default or Event of Default in respect of any provision of this Indenture
      or
      the Securities which, under Section 12.02, cannot be modified or amended without
      the consent of the Holder of each Security affected. When a Default or Event
      of
      Default is waived, it is cured and ceases to exist.

     

    
      
         

      

      
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    Section
      9.05.  Control
      by Majority.

     

    The
      Holders of a majority in aggregate principal amount of the Securities then
      outstanding may direct the time method and place of conducting any proceeding
      for any remedy available to the Trustee or exercising any trust or power
      conferred on it. However, the Trustee may refuse to follow any direction that
      conflicts with law or this Indenture, that the Trustee determines may be unduly
      prejudicial to the rights of another Holder or the Trustee, or that may involve
      the Trustee in personal liability unless the Trustee is offered security or
      indemnity satisfactory to it; provided, however, that the Trustee may take
      any
      other action deemed proper by the Trustee which is not inconsistent with such
      direction.

     

    Section
      9.06.  Limitations
      on Suits.

     

    (a)  A
      Holder
      may not pursue any remedy with respect to this Indenture or the Securities
      (except actions for payment of overdue principal, premium, if any, or interest
      or for the conversion of the Securities pursuant to Article 5)
      unless:

     

    (1)  the
      Holder gives to the Trustee written notice of a continuing Event of
      Default;

     

    (2)  the
      Holders of at least 25% in aggregate principal amount of the then outstanding
      Securities make a written request to the Trustee to pursue the remedy;

     

    (3)  such
      Holder or Holders offer to the Trustee reasonable security or indemnity to
      the
      Trustee against any loss, liability or expense; 

     

    (4)  the
      Trustee does not comply with the request within 60 days after receipt of the
      request and the offer of security or indemnity; and 

     

    (5)  no
      direction inconsistent with such written request has been given to the Trustee
      during such 60-day period by the Holders of a majority in aggregate principal
      amount of the Securities then outstanding. 

     

    (b)  No
      Holder
      of a Security shall have any right under any provision of this Indenture or
      the
      Securities to affect, disturb, or prejudice the rights of another Holder of
      a
      Security or to obtain a preference or priority over another Holder of a
      Security.

     

    Section
      9.07.  Rights
      of Holders to Receive Payment and to Convert.

     

    Notwithstanding
      any other provision of this Indenture, the right of any Holder of a Security
      to
      receive payment of the principal amount, interest, Fundamental Change Purchase
      Price, if any, or Additional Interest, if any, in respect of the Securities
      held
      by such Holder, on or after the respective due dates expressed in the Securities
      and this Indenture (whether upon repurchase or otherwise), and to convert such
      Security in accordance with Article 5, and to bring suit for the enforcement
      of
      any such payment on or after such respective due dates or for the right to
      convert in accordance with Article 5, is absolute and unconditional and shall
      not be impaired or affected without the consent of the Holder.

     

    
      
         

      

      
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    Section
      9.08.  Collection
      Suit by Trustee.

     

    If
      an
      Event of Default described in clause (1) or (2) of Section 9.01(a) occurs and
      is
      continuing, the Trustee may recover judgment in its own name and as trustee
      of
      an express trust against the Company or another obligor on the Securities for
      the whole amount owing with respect to the Securities and 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 Trustee,
      its agents and counsel.

     

    Section
      9.09.  Trustee
      May File Proofs of Claim.

     

    The
      Trustee may file such proofs of claim and other papers or documents as may
      be
      necessary or advisable in order to have the claims of the Trustee (including
      any
      claim for the reasonable compensation, expenses, disbursements and advances
      of
      the Trustee, its agents and counsel) and the Holders allowed in any judicial
      proceedings relative to the Company (or any other obligor on the Securities),
      its creditors or its property and shall be entitled and empowered to collect
      and
      receive any money or other property payable or deliverable on any such claims
      and to distribute the same, and any Receiver in any such judicial proceeding
      is
      hereby authorized by each Holder to make such payments to the Trustee and,
      in
      the event that the Trustee shall consent to the making of such payments directly
      to the Holders, to pay to the Trustee any amount due to it for the reasonable
      compensation, expenses, disbursements and advances of the Trustee, its agents
      and counsel, and any other amounts due the Trustee under Section 10.07, and
      to
      the extent that such payment of the reasonable compensation, expenses,
      disbursements and advances in any such proceedings 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 property
      which the Holders may be entitled to receive in such proceedings, whether in
      liquidation or under any plan of reorganization or arrangement or otherwise.
      Nothing herein contained shall be deemed to authorize the Trustee to authorize
      or consent to, or, on behalf of any Holder, to authorize, accept or adopt any
      plan of reorganization, arrangement, adjustment or composition affecting the
      Securities or the rights of any Holder thereof, or to authorize the Trustee
      to
      vote in respect of the claim of any Holder in any such proceeding.

     

    Section
      9.10.  Priorities.

     

    (a)  If
      the
      Trustee collects any money pursuant to this Article 9, it shall pay out the
      money in the following order:

     

    (1)  First,
      to
      the Trustee for amounts due under Section 10.07; 

     

    (2)  Second,
      to Holders for amounts due and unpaid on the Securities for the principal
      amount, interest, and Additional Interest, as applicable, ratably, without
      preference or priority of any kind, according to such respective amounts due
      and
      payable on the Holders’ Securities; 

     

    
      
         

      

      
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    (3)  Third,
      the balance, if any, to the Company.

     

    (b)  The
      Trustee may fix a record date and payment date for any payment to Holders
      pursuant to this Section 9.10.

     

    Section
      9.11.  Undertaking
      for Costs.

     

    In
      any
      suit for the enforcement of any right or remedy under this Indenture or in
      any
      suit against the Trustee for any action taken or omitted by it as Trustee,
      a
      court in its discretion may require the filing by any party litigant in the
      suit
      of an undertaking to pay the costs of the suit, and the court in its discretion
      may assess reasonable costs, including reasonable attorneys’ fees and expenses,
      against any party litigant in the suit, having due regard to the merits and
      good
      faith of the claims or defenses made by the party litigant. This Section 9.11
      does not apply to a suit made by the Trustee, a suit by a Holder pursuant to
      Section 9.07 or a suit by Holders of more than 10% in aggregate principal amount
      of the Securities then outstanding. This Section 9.11 shall be in lieu of
      Section 315(e) of the TIA and such Section 315(e) is hereby expressly excluded
      from this Indenture, as permitted by the TIA.

     

    ARTICLE
      10

    TRUSTEE

     

    Section
      10.01.  Obligations
      of Trustee.

     

    (a)  If
      an
      Event of Default of which a Responsible Officer of the Trustee shall have actual
      knowledge has occurred and is continuing, the Trustee shall exercise such of
      the
      rights and powers vested in it by this Indenture and use the same degree of
      care
      and skill in its exercise as a prudent person would exercise or use under the
      circumstances in the conduct of his or her own affairs. 

     

    (b)  Except
      during the continuance of an Event of Default of which a Responsible Officer
      of
      the Trustee shall have actual knowledge:

     

    (1)  the
      Trustee need perform only those duties as are specifically set forth in this
      Indenture and no others; and 

     

    (2)  in
      the
      absence of bad faith on its part, the 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 Trustee and conforming to the
      requirements of this Indenture. The Trustee, however, shall examine any
      certificates and opinions which by any provision hereof are specifically
      required to be delivered to the Trustee to determine whether or not they conform
      to the requirements of this Indenture, but need not confirm or investigate
      the
      accuracy of mathematical calculations or other facts stated therein.

     

    
      
         

      

      
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    This
      Section 10.01(b) shall be in lieu of Section 315(a) of the TIA and such Section
      315(a) is hereby expressly excluded from this Indenture, as permitted by the
      TIA. 

     

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

     

    (1)  this
      paragraph does not limit the effect of Section 10.01(b); 

     

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

     

    (3)  the
      Trustee shall not be liable in its individual capacity with respect to any
      action it takes or omits to take in good faith in accordance with a direction
      received by it pursuant to Section 9.05. 

     

    This
      Section 10.01(c) shall be in lieu of Sections 315(d)(1), 315(d)(2) and 315(d)(3)
      of the TIA and such Sections are hereby expressly excluded from this Indenture
      as permitted by the TIA. 

     

    (d)  No
      provision of this Indenture shall require the Trustee to expend or risk its
      own
      funds or otherwise incur any financial liability in the performance of any
      of
      its duties hereunder or in the exercise of any of its rights or powers unless
      the Trustee shall have received adequate security or indemnity in its opinion
      against potential costs and liabilities incurred by it relating thereto.

     

    (e)  Every
      provision of this Indenture that in any way relates to the Trustee is subject
      to
      subsections (a), (b), (c) and (d) of this Section 10.01. 

     

    (f)  The
      Trustee shall not be liable for interest on any money received by it except
      as
      the Trustee may agree in writing with the Company. Money held in trust by the
      Trustee need not be segregated from other funds except to the extent required
      by
      law.

     

    Section
      10.02.  Rights
      of Trustee.

     

    (a)  Subject
      to Section 10.01:

     

    (1)  The
      Trustee may rely conclusively and shall be protected in acting or refraining
      from acting upon on any document believed by it to be genuine and to have been
      signed or presented by the proper person. The Trustee need not investigate
      any
      fact or matter stated in the document. 

     

    
      
         

      

      
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    (2)  Before
      the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel, which shall conform to Section 13.04(b).
      The Trustee shall not be liable for any action it takes or omits to take in
      good
      faith in reliance on such Officers’ Certificate or Opinion of Counsel.

     

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

     

    (4)  The
      Trustee shall not be personally 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.
      

     

    (5)  The
      Trustee may consult with counsel of its selection, and the advice or opinion
      of
      such counsel as to matters of law shall be full and complete authorization
      and
      protection in respect of any such action taken, omitted or suffered by it
      hereunder in good faith and in accordance with the advice or opinion of such
      counsel. 

     

    (6)  The
      Trustee shall be under no obligation to exercise any of the rights or powers
      vested in it by this Indenture or to institute, conduct or defend any litigation
      hereunder or in relation hereto at the request or direction of any of the
      Holders pursuant to this Indenture, unless such Holders shall have offered
      to
      the Trustee security or indemnity satisfactory to the Trustee against the costs,
      expenses and liabilities which might be incurred by it in compliance with such
      request or direction. 

     

    (7)  The
      Trustee shall not be bound to make any investigation into the facts or matters
      stated in any resolution, certificate, statement, instrument, opinion, report,
      notice, request, direction, consent, order, bond, debenture, note, other
      evidence of indebtedness or other paper or document, but the Trustee, in its
      discretion, may make such further inquiry or investigation into such facts
      or
      matters as it may see fit, and, if the Trustee shall determine to make such
      further inquiry or investigation, it shall be entitled to examine the books,
      records and premises of the Company, personally or by agent or attorney at
      the
      sole cost of the Company, and shall incur no liability or additional liability
      of any kind by reason of such inquiry or investigation. The reasonable expense
      of every such examination shall be paid by the Company or, if paid by the
      Trustee, shall be repaid by the Company upon demand from the Company’s own
      funds. 

     

    (8)  The
      Trustee shall not be deemed to have notice or knowledge of any Default, Event
      of
      Default, or Fundamental Change unless a Responsible Officer of the Trustee
      has
      actual knowledge thereof or unless written notice of any event which is in
      fact
      such a Default is received by the Trustee at the Corporate Trust Office, and
      such notice references the Securities and this Indenture. In the absence of
      receipt of such notice or actual knowledge, the Trustee may conclusively assume
      that there is no Default, Event of Default, or Fundamental Change. 

     

    
      
         

      

      
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    (9)  The
      rights, privileges, protections, immunities and benefits given to the Trustee,
      including, without limitation, its right to be indemnified, are extended to,
      and
      shall be enforceable by, the Trustee in each of its capacities hereunder,
      including, without limitation as Paying Agent, Registrar and Conversion Agent,
      and to each agent, custodian and other Person employed to act hereunder.

     

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

     

    Section
      10.03.  Individual
      Rights of Trustee.

     

    The
      Trustee in its individual or any other capacity may become the owner or pledgee
      of Securities and may otherwise deal with the Company or an Affiliate of the
      Company with the same rights it would have if it were not Trustee. Any Agent
      may
      do the same with like rights. However, the Trustee is subject to Sections 10.10
      and 10.11.

     

    Section
      10.04.  Trustee’s
      Disclaimer.

     

    The
      Trustee makes no representation as to the validity or adequacy of this Indenture
      or the Securities and the Trustee assumes no responsibility for their
      correctness. It shall not be accountable for the Company’s use of the proceeds
      from the Securities and it shall not be responsible for any statement in the
      Securities other than its certificate of authentication. 

     

    Section
      10.05.  Notice
      of Default or Events of Default.

     

    If
      a
      Default or an Event of Default occurs and is continuing and if it is known
      to
      the Trustee, the Trustee shall mail to each Holder of a Security notice of
      all
      uncured Defaults or Events of Default known to it within 90 days after it occurs
      or, if later, within 15 days after it becomes known to the Trustee. However,
      the
      Trustee may withhold the notice if and for so long as a committee of its
      Responsible Officers in good faith determines that withholding notice is in
      the
      interests of Holders of Securities, except in the case of a Default or an Event
      of Default in payment of the principal of, or premium, if any, or interest
      on
      any Security when due or in the payment of any redemption or purchase
      obligation, or the Company’s failure to convert Securities when obligated to
      convert them. This Section 10.05 is in lieu of section 315(b) of the TIA and
      such provision is expressly excluded from this Indenture as permitted by the
      TIA.

     

    Section
      10.06.  Reports
      by Trustee to Holders.

     

    (a)  If
      a
      report is required by TIA Section 313, within 60 days after each May 15,
      beginning with the May 15 following the date of this Indenture, the Trustee
      shall mail to each Holder of Securities a brief report dated as of such May
      15
      that complies with TIA Section 313(a). If required by TIA Section 313, the
      Trustee also shall comply with TIA Sections 313(b)(2) and (c). 

     

    
      
         

      

      
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    (b)  A
      copy of
      each report at the time of its mailing to Holders of Securities shall be mailed
      to the Company and, to the extent required by the TIA, filed with the SEC,
      and
      each stock exchange, if any, on which the Securities are listed. The Company
      shall notify the Trustee whenever the Securities become listed on any stock
      exchange or listed or admitted to trading on any quotation system and any
      changes in the stock exchanges or quotation systems on which the Securities
      are
      listed or admitted to trading and of any delisting thereof. 

     

    Section
      10.07.  Compensation
      and Indemnity.

     

    (a)  The
      Company shall pay to the Trustee from time to time such compensation (as agreed
      to from time to time by the Company and the Trustee in writing) for its services
      (which compensation shall not be limited by any provision of law in regard
      to
      the compensation of a trustee of an express trust). The Company shall reimburse
      the Trustee upon request for all reasonable disbursements, expenses and advances
      incurred or made by it. Such expenses may include the reasonable compensation,
      disbursements and expenses of the Trustee’s agents and counsel. 

     

    (b)  The
      Company shall indemnify the Trustee or any predecessor Trustee (which for
      purposes of this Section 10.07 shall include its officers, directors, employees
      and agents) for, and hold it harmless against, any and all loss, liability,
      claim, damage or expense including taxes (other than franchise taxes and taxes
      based upon, measured by or determined by the income of the Trustee), incurred
      by
      it arising out of or in connection with the acceptance or administration of
      its
      duties under this Indenture or any action or failure to act as authorized or
      within the discretion or rights or powers conferred upon the Trustee hereunder
      including the reasonable costs and expenses of the Trustee and its counsel
      in
      defending (including reasonable legal fees and expenses) itself against any
      claim or liability in connection with the exercise or performance of any of
      its
      powers or duties hereunder. The Trustee shall notify the Company promptly of
      any
      claim asserted against the Trustee for which it may seek indemnity. The Company
      need not pay for any settlement effected without its prior written consent,
      which shall not be unreasonably withheld. Anything in this Indenture to the
      contrary notwithstanding, in no event shall the Trustee be liable for special,
      indirect or consequential loss or damage of any kind whatsoever (including
      but
      not limited to lost profits), even if the Trustee has been advised of the
      likelihood of such loss or damage and regardless of the form of action.

     

    (c)  The
      Company need not reimburse the Trustee for any expense or indemnify it against
      any loss or liability incurred by it determined to have been caused by its
      own
      gross negligence, willful misconduct or bad faith. 

     

    (d)  The
      Trustee shall have a senior claim to which the Securities are hereby made
      subordinate on all money or property held or collected by the Trustee. The
      obligations of the Company under this Section 10.07 shall survive the
      satisfaction and discharge of this Indenture or the resignation or removal
      of
      the Trustee. 

     

    (e)  When
      the
      Trustee incurs expenses or renders services after an Event of Default specified
      in clause (8) or (9) of Section 9.01(a) occurs, the expenses and the
      compensation for the services are intended to constitute expenses of
      administration under any Bankruptcy Law. The provisions of this Section shall
      survive the termination of this Indenture. 

     

    
      
         

      

      
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    Section
      10.08.  Replacement
      of Trustee.

     

    (a)  The
      Trustee may resign by so notifying the Company. The Holders of a majority in
      aggregate principal amount of the Securities then outstanding may remove the
      Trustee by so notifying the Trustee and the Company and may, with the Company’s
      written consent, appoint a successor Trustee. The Company may remove the Trustee
      at any time, so long as no Default or Event of Default has occurred and is
      continuing, and appoint a Successor Trustee in accordance with this Section
      10.08. 

     

    (b)  If
      the
      Trustee resigns or is removed or if a vacancy exists in the office of Trustee
      for any reason, the Company shall promptly appoint a successor Trustee. If
      the
      Company fails to promptly appoint a successor Trustee, the Trustee shall have
      the right to choose a qualified Trustee as successor, and the Company shall
      appoint such successor as Trustee. The resignation or removal of a Trustee
      shall
      not be effective until a successor Trustee shall have delivered the written
      acceptance of its appointment as described below. 

     

    (c)  If
      a
      successor Trustee does not take office within 30 days after the retiring Trustee
      resigns or is removed, the retiring Trustee, the Company or the Holders of
      10%
      in principal amount of the Securities then outstanding may petition any court
      of
      competent jurisdiction for the appointment of a successor Trustee at the expense
      of the Company. 

     

    (d)  If
      the
      Trustee fails to comply with Section 10.10, any Holder may petition any court
      of
      competent jurisdiction for the removal of the Trustee and the appointment of
      a
      successor Trustee. 

     

    (e)  A
      successor Trustee shall deliver a written acceptance of its appointment to
      the
      retiring Trustee and to the Company. Immediately after that, the retiring
      Trustee shall transfer all property held by it as Trustee to the successor
      Trustee and be released from its obligations (exclusive of any liabilities
      that
      the retiring Trustee may have incurred while acting as Trustee) hereunder,
      the
      resignation or removal of the retiring Trustee shall become effective, and
      the
      successor Trustee shall have all the rights, powers and duties of the Trustee
      under this Indenture. A successor Trustee shall mail notice of its succession
      to
      each Holder. 

     

    (f)  A
      retiring Trustee shall not be liable for the acts or omissions of any successor
      Trustee after its succession. 

     

    (g)  Notwithstanding
      replacement of the Trustee pursuant to this Section 10.08, the Company’s
      obligations under Section 10.07 shall continue for the benefit of the retiring
      Trustee.

     

    Section
      10.09.  Successor
      Trustee by Merger, Etc.

     

    If
      the
      Trustee consolidates with, merges or converts into, or transfers all or
      substantially all of its corporate trust business (including the administration
      of this Indenture) to, another corporation, the resulting, surviving or
      transferee corporation, without any further act, shall be the successor Trustee;
      provided such transferee corporation shall qualify and be eligible under Section
      10.10. Such successor Trustee shall promptly mail notice of its succession
      to
      the Company and each Holder. 

     

    
      
         

      

      
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    Section
      10.10.  Eligibility;
      Disqualification.

     

    The
      Trustee shall always satisfy the requirements of paragraphs (1), (2) and (5)
      of
      TIA Section 310(a). The Trustee (or its parent holding company) 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. If at any time the Trustee shall
      cease to satisfy any such requirements, it shall resign immediately in the
      manner and with the effect specified in this Article 10. The Trustee shall
      be
      subject to the provisions of TIA Section 310(b). Nothing herein shall prevent
      the Trustee from filing with the SEC the application referred to in the
      penultimate paragraph of TIA Section 310(b). 

     

    Section
      10.11.  Preferential
      Collection of Claims Against Company.

     

    The
      Trustee shall comply with TIA Section 311(a), excluding any creditor
      relationship listed in TIA Section 311(b). A Trustee who has resigned or been
      removed shall be subject to TIA Section 311(a) to the extent indicated
      therein.

     

    ARTICLE
      11

    SATISFACTION
      AND DISCHARGE OF INDENTURE

     

    Section
      11.01.  Satisfaction
      and Discharge of Indenture.

     

    (a)  This
      Indenture shall cease to be of further force and effect (except as to any
      surviving rights of conversion, registration of transfer or exchange of
      Securities herein expressly provided for and except as further provided below),
      and the Trustee, on demand of and at the expense of the Company, shall execute
      proper instruments acknowledging satisfaction and discharge of this Indenture,
      when either: 

     

    (A)  all
      Securities theretofore authenticated and delivered (other than (i) Securities
      which have been destroyed, lost or stolen and which have been replaced or paid
      as provided in Section 2.07 and (ii) Securities for whose payment money has
      theretofore been deposited in trust and thereafter repaid to the Company as
      provided in Section 11.03) have been delivered to the Trustee for cancellation;
      or 

     

    (B)  all
      such
      Securities not theretofore delivered to the Trustee for cancellation have become
      due and payable,

     

    provided,
      that

     

    (1)  the
      Company has deposited with the Trustee, a Paying Agent (other than the Company
      or any of its Affiliates) or a Conversion Agent, if applicable, immediately
      available funds in trust for the purpose of and in an amount sufficient to
      pay
      and discharge all indebtedness and obligations related to such Securities not
      theretofore delivered to the Trustee for cancellation, for principal and
      interest (including Additional Interest, if any) to the date of such
      deposit;

     

    
      
         

      

      
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    (2)  the
      Company has paid or caused to be paid all other sums payable hereunder by the
      Company; and 

     

    (3)  the
      Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
      Counsel, each stating that all conditions precedent herein relating to the
      satisfaction and discharge of this Indenture have been complied
      with.

     

    (b)  Notwithstanding
      the satisfaction and discharge of this Indenture, the obligations of the Company
      with respect to the conversion privilege and the Conversion Rate of the
      Securities pursuant to Article 5, the obligations of the Company to the Trustee
      under Section 10.07 and, if money shall have been deposited with the Trustee
      pursuant to clause (2) of Section 11.01(a), the provisions of Sections 2.03,
      2.04, 2.05, 2.06, 2.07, 2.12, 7.01 and 13.05, Article 5, and this Article 11,
      shall survive until the Securities have been paid in full. 

     

    Section
      11.02.  Application
      of Trust Money.
      Subject
      to the provisions of Section 11.03, the Trustee or a Paying Agent shall hold
      in
      trust, for the benefit of the Holders, all money deposited with it pursuant
      to
      Section 11.01 and shall apply the deposited money in accordance with this
      Indenture and the Securities to the payment of the principal of and interest
      on
      the Securities.

     

    Section
      11.03.  Repayment
      to Company.
      The
      Trustee and each Paying Agent shall promptly pay to the Company upon request
      any
      excess money (1) deposited with them pursuant to Section 11.01 and (2) held
      by
      them at any time. 

     

    (a)  The
      Trustee and each Paying Agent shall, subject to applicable abandonment property
      laws, pay to the Company upon request any money held by them for the payment
      of
      principal or interest that remains unclaimed for two years after a right to
      such
      money has matured; provided, however, that the Trustee or such Paying Agent,
      before being required to make any such payment, may at the expense of the
      Company cause to be mailed to each Holder entitled to such money notice that
      such money remains unclaimed and that after a date specified therein, which
      shall be at least 30 days from the date of such mailing, any unclaimed balance
      of such money then remaining will be repaid to the Company. After payment to
      the
      Company, Holders entitled to money must look to the Company for payment as
      general creditors unless an applicable abandoned property law designates another
      person. 

     

    Section
      11.04.  Reinstatement.
      If the
      Trustee or any Paying Agent is unable to apply any money in accordance with
      Section 11.02 by reason of any legal proceeding or by reason of any order or
      judgment of any court or governmental authority enjoining, restraining or
      otherwise prohibiting such application, then the Company’s obligations under
      this Indenture and the Securities shall be revived and reinstated as though
      no
      deposit had occurred pursuant to Section 11.01 until such time as the Trustee
      or
      such Paying Agent is permitted to apply all such money in accordance with
      Section 11.02; provided, however, that if the Company has made any payment
      of
      the principal of or interest on any Securities because of the reinstatement
      of
      its obligations, the Company shall be subrogated to the rights of the Holders
      of
      such Securities to receive any such payment from the money held by the Trustee
      or such Paying Agent.

     

    
      
         

      

      
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    ARTICLE
      12

    AMENDMENTS;
      SUPPLEMENTS AND WAIVERS

     

    Section
      12.01.  Without
      Consent of Holders.

     

    (a)  The
      Company and the Trustee may amend or supplement this Indenture or the Securities
      without notice to or consent of any Holder of a Security for the purpose
      of:

     

    (1)  evidencing
      a successor to the Company and the assumption by that successor of the Company’s
      obligations under this Indenture and the Securities; 

     

    (2)  adding
      to
      the Company’s covenants for the benefit of the Holders or surrendering any right
      or power conferred upon the Company;

     

    (3)  increasing
      the Conversion Rate;

     

    (4)  securing
      the Company’s obligations in respect of the Securities; 

     

    (5)  evidencing
      and providing for the acceptance of the appointment of a successor trustee
      in
      accordance with Article 10; 

     

    (6)  complying
      with the requirements of the SEC in connection with the registration of the
      public offer and sale of the Securities under the Securities Act pursuant to
      the
      Registration Rights Agreement or the qualification of this Indenture under
      the
      TIA;

     

    (7)  adding
      guarantees with respect to the Securities;

     

    (8)  curing
      any ambiguity, omission, inconsistency or correcting or supplementing any
      defective provision contained in this Indenture; or

     

    (9)  modifying
      any other provisions of this Indenture in any manner that will not adversely
      affect the rights of the Holders in any material respect.

     

    Section
      12.02.  With
      Consent of Holders.
      The
      Company and the Trustee may amend or supplement this Indenture or the Securities
      with the written consent of the Holders of not less than a majority in aggregate
      principal amount of the Securities then outstanding. However, subject to Section
      12.04, without the written consent of each Holder affected, an amendment,
      supplement or waiver may not:

     

    (1)  alter
      the
      manner of calculation or rate of accrual of interest on any Security or change
      the time of payment of any installment of interest on, or any Additional
      Interest with respect to, any Security; 

     

    (2)  make
      any
      of the Securities payable in money or securities other than that stated in
      the
      Securities; 

     

    (3)  change
      the stated maturity of any Security; 

     

    
      
         

      

      
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    (4)  reduce
      the principal amount or Fundamental Change Purchase Price (as applicable) with
      respect to any of the Securities;

     

    (5)  reduce
      the amount payable upon repurchase or redemption of any Security or change
      the
      time at which or circumstances under which the Securities may be repurchased
      or
      redeemed;

     

    (6)  reduce
      the Conversion Rate or make any change that adversely affects the conversion
      rights of a Holder in any material respect other than as provided herein;

     

    (7)  make
      any
      change that adversely affects the rights of Holders to require the Company
      to
      purchase Securities at the option of Holders; 

     

    (8)  impair
      the right to institute suit for the enforcement of any payment on or with
      respect to any Security or with respect to the conversion of any Security;
      

     

    (9)  change
      the currency of payment of principal of, or interest on, the Securities;

     

    (10)  modify
      the provisions of Article 6 in a manner adverse to the Holders; or 

     

    (11)  change
      the percentage in aggregate principal amount of Securities outstanding necessary
      to modify or amend this Indenture or to waive any past Default or otherwise
      change the provisions in this Indenture that relate to modifying or amending
      this Indenture. 

     

    (b)  Without
      limiting the provisions of Section 12.02(a) hereof, the Holders of a majority
      in
      principal amount of the Securities then outstanding may, on behalf of all the
      Holders of all Securities, (i) waive compliance by the Company with the
      restrictive provisions of this Indenture, and (ii) waive any past Default or
      Event of Default under this Indenture and its consequences, except a default
      in
      the payment when due of the principal amount, accrued and unpaid interest,
      accrued and unpaid Additional Interest or Fundamental Change Purchase Price
      of
      or in respect of any Security, or in the delivery when due of cash, and, if
      applicable, Common Stock upon conversion of Securities, or in respect of any
      provision which under this Indenture cannot be modified or amended without
      the
      consent of the Holder of each outstanding Security affected. 

     

    (c)  After
      an
      amendment, supplement or waiver under this Section 12.02 becomes effective,
      the
      Company shall promptly mail to the Holders affected thereby a notice briefly
      describing the amendment, supplement or waiver. Any failure of the Company
      to
      mail such notice, or any defect therein, shall not, however, in any way impair
      or affect the validity of any such amendment, supplement or waiver.

     

    Section
      12.03.  Compliance
      with Trust Indenture Act.
      Every
      amendment to or supplement of this Indenture or the Securities shall comply
      with
      the TIA as in effect at the date of such amendment or supplement. 

     

    
      
         

      

      
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    Section
      12.04.  Revocation
      and Effect of Consents.
      Until
      an amendment, supplement or waiver becomes effective, a consent to it by a
      Holder is a continuing consent by the Holder and every subsequent Holder of
      a
      Security or portion of a Security that evidences the same debt as the consenting
      Holder’s Security, even if notation of the consent is not made on any Security.
      However, any such Holder or subsequent Holder may revoke the consent as to
      its
      Security or portion of a Security if the Trustee receives the notice of
      revocation before the date the amendment, supplement or waiver becomes
      effective.

     

    (a)  After
      an
      amendment, supplement or waiver becomes effective, it shall bind every Holder
      of
      a Security. 

     

    Section
      12.05.  Notation
      on or Exchange of Securities.
      If an
      amendment, supplement or waiver changes the terms of a Security, the Trustee
      may
      require the Holder of the Security to deliver it to the Trustee. The Trustee
      may
      place an appropriate notation on the Security about the changed terms and return
      it to the Holder. Alternatively, if the Company or the Trustee so determines,
      the Company in exchange for the Security shall issue and the Trustee shall
      authenticate a new Security that reflects the changed terms. 

     

    Section
      12.06.  Trustee
      to Sign Amendments, Etc.The
      Trustee shall sign any amendment or supplemental indenture authorized pursuant
      to this Article 12 if the amendment or supplemental indenture does not adversely
      affect the rights, duties, liabilities or immunities of the Trustee. If it
      does,
      the Trustee may, in its sole discretion, but need not sign it. In signing or
      refusing to sign such amendment or supplemental indenture, the Trustee shall
      be
      provided with and, subject to Section 10.01, shall be fully protected in relying
      upon, an Opinion of Counsel and an Officers’ Certificate stating that such
      amendment or supplemental indenture is authorized or permitted by this
      Indenture. The Company may not sign an amendment or supplement indenture until
      the Board of Directors approves it. 

     

    Section
      12.07.  Effect
      of Supplemental Indentures.
      Upon
      the execution of any supplemental indenture under this Article 12, this
      Indenture shall be modified in accordance therewith, and such supplemental
      indenture shall form a part of this Indenture for all purposes; and every Holder
      of Securities theretofore or thereafter authenticated and delivered hereunder
      shall be bound thereby.

     

    ARTICLE
      13

    MISCELLANEOUS

     

    Section
      13.01.  Trust
      Indenture Act Controls.
      If any
      provision of this Indenture limits, qualifies or conflicts with the duties
      imposed by any of Sections 310 to 317, inclusive, of the TIA through operation
      of Section 318(c) thereof, such imposed duties shall control.

     

    Section
      13.02.  Notices.
      Any
      demand, authorization notice, request, consent or communication shall be given
      in writing and delivered in person or mailed by first-class mail, postage
      prepaid, addressed as follows or transmitted by facsimile transmission
      (confirmed by delivery in person or mail by first-class mail, postage prepaid,
      or by guaranteed overnight courier) to the following facsimile numbers:

     

    
      
         

      

      
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    If
      to the
      Company, to:

    

    Iconix
      Brand Group, Inc.

    1450
      Broadway

    New
      York,
      NY 10018

    Attention:
      Andrew Tarshis, Senior Vice President and General Counsel

    Fax:
      (212) 391-0127

    

    with
      a
      copy to:

    

    Blank
      Rome LLP

    The
      Chrysler Building

    405
      Lexington Avenue

    New
      York,
      NY 10174

    Attention:
      Robert Mittman

    Fax:
      (212) 885-5001

    

    if
      to the
      Trustee, to:

     

    

     

    The
      Bank
      of New York

     

    101
      Barclay Street, Floor 8W

     

    New
      York,
      NY 10286

     

    Attention:
      Corporate Trust Administration

     

    Fax:
      (212) 815-5707

     

    Such
      notices or communications shall be effective when received.

     

    The
      Company or the Trustee by notice to the other may designate additional or
      different addresses for subsequent notices or communications.

     

    Any
      notice or communication mailed to a Holder of a Security shall be mailed by
      first-class mail or delivered by an overnight delivery service to it at its
      address shown on the register kept by the Primary Registrar.

     

    Failure
      to mail a notice or communication to a Holder of a Security or any defect in
      it
      shall not affect its sufficiency with respect to other Holders of Securities.
      If
      a notice or communication to a Holder of a Security is mailed in the manner
      provided above, it is duly given, whether or not the addressee receives
      it.

     

    If
      the
      Company mails any notice to a Holder of a Security, it shall mail a copy to
      the
      Trustee and each Registrar, Paying Agent and Conversion Agent.

     

    Section
      13.03.  Communications
      By Holders with Other Holder.
      Holders
      of Securities may communicate pursuant to TIA Section 312(b) with other Holders
      of Securities with respect to their rights under this Indenture or the
      Securities. The Company, the Trustee, the Registrar and any other person shall
      have the protection of TIA Section 312(c).

     

    
      
         

      

      
        74

        
          

        

      

      
         

      

    

    Section
      13.04.  Certificate
      and Opinion as to Conditions Precedent.
      Upon
      any request or application by the Company to the Trustee to take any action
      under this Indenture, the Company shall furnish to the Trustee at the request
      of
      the Trustee:

     

    (1)  an
      Officers’ Certificate stating that, in the opinion of the signers, all
      conditions precedent (including any covenants, compliance with which constitutes
      a condition precedent), if any, provided for in this Indenture relating to
      the
      proposed action have been complied with; and 

     

    (2)  an
      Opinion of Counsel stating that, in the opinion of such counsel, all such
      conditions precedent (including any covenants, compliance with which constitutes
      a condition precedent) have been complied with. 

     

    (b)  Each
      Officers’ Certificate and Opinion of Counsel with respect to compliance with a
      condition or covenant provided for in this Indenture shall include:

     

    (1)  a
      statement that the person making such certificate or opinion has read such
      covenant or condition; 

     

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

     

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

     

    (4)  a
      statement as to whether or not, in the opinion of such person, such condition
      or
      covenant has been complied with; provided, however, that with respect to matters
      of fact an Opinion of Counsel may rely on an Officers’ Certificate or
      certificates of public officials. 

     

    Section
      13.05.  Record
      Date for Vote or Consent of Holders of Securities.
      The
      Company (or, in the event deposits have been made pursuant to Section 11.01,
      the
      Trustee) may set a record date for purposes of determining the identity of
      Holders entitled to vote or consent to any action by vote or consent authorized
      or permitted under this Indenture, which record date shall not be more than
      30
      days prior to the date of the commencement of solicitation of such action.
      Notwithstanding the provisions of Section 12.04, if a record date is fixed,
      those persons who were Holders of Securities at the close of business on such
      record date (or their duly designated proxies), and only those persons, shall
      be
      entitled to take such action by vote or consent or to revoke any vote or consent
      previously given, whether or not such persons continue to be Holders after
      such
      record date.

     

    Section
      13.06.  Rules
      by Trustee, Paying Agent, Registrar and Conversion Agent.
      The
      Trustee may make reasonable rules (not inconsistent with the terms of this
      Indenture) for action by or at a meeting of Holders. Any Registrar, Paying
      Agent
      or Conversion Agent may make reasonable rules for its functions.

     

    
      
         

      

      
        75

        
          

        

      

      
         

      

    

    Section
      13.07.  Legal
      Holidays.
      A
“Legal Holiday” is a Saturday, Sunday or a day on which state or federally
      chartered banking institutions in New York, New York are authorized or obligated
      to close. If a payment date is a Legal Holiday, payment shall be made on the
      next succeeding day that is not a Legal Holiday, and no interest shall accrue
      for the intervening period. If a Regular Record Date is a Legal Holiday, the
      record date shall not be affected. 

     

    Section
      13.08.  Governing
      Law.
      This
      Indenture and the Securities shall be governed by, and construed in accordance
      with, the laws of the State of New York.

     

    Section
      13.09.  No
      Adverse Interpretation of Other Agreements.
      This
      Indenture may not be used to interpret another indenture, loan or debt agreement
      of the Company or a Subsidiary of the Company. Any such indenture, loan or
      debt
      agreement may not be used to interpret this Indenture. 

     

    Section
      13.10.  No
      Recourse Against Others.
      All
      liability described in paragraph 15 of the Securities of any director, officer,
      employee or stockholder, as such, of the Company hereby is waived and released
      by each of the Holders. 

     

    Section
      13.11.  No
      Security Interest Created.
      Nothing
      in this Indenture or in the Securities, express or implied, shall be construed
      to constitute a security interest under the Uniform Commercial Code or similar
      legislation, now in effect or hereafter enacted and made effective, in any
      jurisdiction. 

     

    Section
      13.12.  Successors.
      All
      agreements of the Company in this Indenture and the Securities shall bind its
      successor. All agreements of the Trustee in this Indenture shall bind its
      successor. 

     

    Section
      13.13.  Multiple
      Counterparts.
      The
      parties may sign multiple counterparts of this Indenture. Each signed
      counterpart shall be deemed an original, but all of them together represent
      the
      same agreement. 

     

    Section
      13.14.  Separability.
      If any
      provisions in this Indenture or in the Securities 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
      13.15.  Table
      of Contents, Headings, Etc.The
      table
      of contents, cross-reference sheet and headings of the Articles and Sections
      of
      this Indenture have been inserted for convenience of reference only, are not
      to
      be considered a part hereof, and shall in no way modify or restrict any of
      the
      terms or provisions hereof.

     

    Section
      13.16.  Calculations
      In Respect of Securities.
      The
      Company shall be responsible for making all calculations called for under the
      Securities. All calculations made by the Company shall be made in good faith
      and
      be final and binding on the Holders of the Securities absent manifest error.
      The
      Company shall provide a schedule of calculations to the Trustee, and the Trustee
      shall be entitled to conclusively rely upon the accuracy of the calculations
      by
      the Company without independent verification. The Trustee shall forward
      calculations made by the Company to any Holder of Securities upon
      request.

     

    
      
         

      

      
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    Section
      13.17.  Waiver
      of Jury Trial.
      EACH OF
      THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
      PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
      PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE
      TRANSACTION CONTEMPLATED HEREBY.

     

    Section
      13.18.  Force
      Majeure.
      In no
      event shall the Trustee be responsible or liable for any failure or delay in
      the
      performance of its obligations hereunder arising out of or caused by, directly
      or indirectly, forces beyond its control, including, without limitation,
      strikes, work stoppages, accidents, acts of war or terrorism, civil or military
      disturbances, nuclear or natural catastrophes or acts of God, and interruptions,
      loss or malfunctions of utilities, communications or computer (software and
      hardware) services; it being understood that the Trustee shall use reasonable
      efforts which are consistent with accepted practices in the banking industry
      to
      resume performance as soon as practicable under the circumstances.

     

    [SIGNATURE
      PAGE FOLLOWS]

     

     

     

     

     

     

    
      
         

      

      
        77

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the
      date
      and year first above written.

     

     

    ICONIX
      BRAND GROUP, INC.

     

    By: 
      _____________________________________

    Name:
      

    Title:
      

     

    THE
      BANK
      OF NEW YORK,

    as
      Trustee

    

    

    

    By: 
      _____________________________________

            Name:

    Title:
      

     

    

     

    
      
         

      

      
        78

        
          

        

      

      
         

      

    

    EXHIBIT A

     

    [FORM
      OF
      FACE OF SECURITY]

     

    UNLESS
      THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
      TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
      OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
      THE
      DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO
      SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
      DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
      OR
      OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
      CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY IS A GLOBAL SECURITY
      WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED
      IN
      THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE
      FOR
      SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR
      ITS
      NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS
      AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE
      FORM,
      THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO
      A
      NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
      OR
      ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE
      TO A
      SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.1 

     

    THIS
      SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
      SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY, THE
      SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY
      INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
      TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
      SUCH
      REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
      REGISTRATION UNDER THE SECURITIES ACT.2 

     

    BY
      ITS
      ACQUISITION HEREOF, THE HOLDER AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
      SUCH
      SECURITY PRIOR TO THE DATE THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
      ISSUE DATE HEREOF AND THE LAST DATE ON WHICH ICONIX BRAND GROUP, INC. (THE
      “COMPANY”) OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR
      ANY PREDECESSOR OF SUCH SECURITY) (THE “RESALE RESTRICTION TERMINATION DATE”)
      ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A
      REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
      ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
      RULE
      144A, TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
      AS
      DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
      OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
      IS
      BEING MADE IN RELIANCE ON RULE 144A, OR (D) PURSUANT TO ANY OTHER AVAILABLE
      EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
      TO
      THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
      PURSUANT TO CLAUSE (D) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO
      REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER
      INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES,
      TO
      REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE
      OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.
      THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
      RESTRICTION TERMINATION DATE.3 

    
      __________________

      
        1 This
          paragraph should be included only if the Security is a Global
          Security.

      

      
        2 This
          paragraph should be included only if the Security is a Restricted
          Security.

      

      
        3 This
          paragraph should be included only if the Security is a Restricted
          Security.

         

        
          
             

          

          
            A-1

            
              

            

          

          
             

          

        

      

    

    ICONIX
      BRAND GROUP, INC.

     

    1.875%
      Convertible Senior Subordinated Notes due 2012

     

    
      	
              No. 1

            	
              CUSIP:
                [   
                ]

            

    

     

    Iconix
      Brand Group, Inc., a Delaware corporation, promises to pay to Cede & Co. or
      registered assigns the principal amount of one [   ] million dollars
      ($[     ]) on June 30, 2012.

     

    This
      Security shall bear interest as specified on the other side of this Security.
      This Security is convertible as specified on the other side of this
      Security.

     

    Additional
      provisions of this Security are set forth on the other side of this Security.
      

     

    Dated:
      June 20, 2007

     

    [SIGNATURE
      PAGE FOLLOWS]

     

     

     

     

     

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

     

     

    IN
      WITNESS WHEREOF, the Company has caused this instrument to be duly
      executed.

     

    ICONIX
      BRAND GROUP, INC.

     

    By: 
      _____________________________________

    Name:

    Title:

     

    Dated:
      June 20, 2007

     

    Trustee’s
      Certificate of Authentication: This is one of the Securities referred to in
      the
      within-mentioned Indenture.

     

    THE
      BANK
      OF NEW YORK

     

    as
      Trustee

     

    By: 
      _____________________________________

    Authorized
      Signatory

     

     

     

    
      
         

      

      
        A-3

        
          

        

      

      
         

      

    

     

    [FORM
      OF
      REVERSE SIDE OF SECURITY]

     

    ICONIX
      BRAND GROUP, INC.

    1.875%
      CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2012 

     

    1.  INTEREST

     

    Iconix
      Brand Group, Inc., a Delaware corporation (the “Company”, which term shall
      include any successor corporation under the Indenture hereinafter referred
      to),
      promises to pay interest on the principal amount of this Security at the rate
      of
      1.875% per annum. The Company shall pay interest semiannually on June 30
      and December 31 of each year (each, an “Interest Payment Date”), commencing
      December 31, 2007. Each payment of interest will include interest accrued
      through the day before the relevant Interest Payment Date (or purchase date).
      Cash interest will be computed on the basis of a 360-day year comprised of
      twelve 30-day months. Any payment required to be made on a day that is not
      a
      Business Day shall be made on the next succeeding Business Day. Any reference
      herein to interest accrued or payable as of any date shall include any
      Additional Interest accrued or payable on such date as provided in the
      Registration Rights Agreement.

     

    No
      sinking fund is provided for the Securities.

     

    2.  METHOD
      OF
      PAYMENT

     

    The
      Company shall pay interest on this Security (except defaulted interest) to
      the
      person who is the Holder of this Security at the close of business on
      June 15 or December 15, as the case may be (each, a “Regular Record
      Date”), next preceding the related Interest Payment Date. The Holder must
      surrender this Security to a Paying Agent to collect payment of principal.
      The
      Company will pay principal and interest in money of the United States that
      at
      the time of payment is legal tender for payment of public and private debts.
      The
      Company may pay principal and interest in respect of any Certificated Security
      by check or wire payable in such money; provided, however, that a Holder with
      an
      aggregate principal amount in excess of $2,000,000 will be paid by wire transfer
      in immediately available funds at the election of such Holder if such Holder
      has
      provided wire transfer instructions to the Trustee at least 10 Business Days
      prior to the Payment Date. The Company may mail an interest check to the
      Holder’s registered address. Notwithstanding the foregoing, so long as this
      Security is registered in the name of a Depositary or its nominee, all payments
      hereon shall be made by wire transfer of immediately available funds to the
      account of the Depositary or its nominee.

     

    Any
      wire
      transfer instructions received by the Trustee will remain in effect until
      revoked by the Holder.

     

    3.  PAYING
      AGENT, REGISTRAR AND CONVERSION AGENT

     

    Initially,
      The Bank of New York (the “Trustee”, which term shall include any successor
      trustee under the Indenture hereinafter referred to) will act as Paying Agent,
      Registrar and Conversion Agent. The Company may change any Paying Agent,
      Registrar or Conversion Agent without notice to the Holder. The Company or
      any
      of its Subsidiaries may, subject to certain limitations set forth in the
      Indenture, act as Paying Agent or Registrar. 

     

    
      
         

      

      
        A-4

        
          

        

      

      
         

      

    

    4.  INDENTURE,
      LIMITATIONS

     

    This
      Security is one of a duly authorized issue of Securities of the Company
      designated as its 1.875% Convertible Senior Subordinated Notes Due 2012 (the
      “Securities”), issued under an Indenture dated as of June 20, 2007
      (together with any supplemental indentures thereto, the “Indenture”), between
      the Company and the Trustee. The terms of this Security include those stated
      in
      the Indenture and those required by or made part of the Indenture by reference
      to the Trust Indenture Act of 1939, as amended, as in effect on the date of
      the
      Indenture. This Security is subject to all such terms, and the Holder of this
      security is referred to the Indenture and said Act for a statement of them.
      Capitalized terms not otherwise defined herein have the meaning ascribed to
      such
      terms in the Indenture.

     

    The
      Securities are unsecured obligations of the Company limited to $287,500,000
      aggregate principal amount. The Indenture does not limit other debt of the
      Company, secured or unsecured. 

     

    5.  PURCHASE
      OF SECURITIES AT HOLDERS’ OPTION UPON A FUNDAMENTAL CHANGE

     

    If
      a
      Fundamental Change occurs prior to the Final Maturity Date, at the option of
      the
      Holder and subject to the terms and conditions of the Indenture, the Company
      shall become obligated to purchase for cash, all or any part specified by the
      Holder (so long as the principal amount of such part is $1,000 or an integral
      multiple of $1,000) of the Securities held by such Holder on a date specified
      by
      the Company that is not less than 30 nor more than 45 days after the later
      of
      the Fundamental Change Effective Date and the Fundamental Change Company Notice,
      at a purchase price equal to 100% of the principal amount thereof together
      with
      accrued and unpaid interest, if any, and accrued and unpaid Additional Interest,
      if any, to, but excluding, the Fundamental Change Purchase Date. The Holder
      shall have the right to withdraw any Fundamental Change Purchase Notice (in
      whole or in a portion thereof that is $1,000 or an integral multiple of $1,000)
      at any time prior to the close of business on the Business Day next preceding
      the Fundamental Change Purchase Date by delivering a written notice of
      withdrawal to the Paying Agent in accordance with the terms of the Indenture.
      

     

    6.  PURCHASE
      OF SECURITIES UPON A SPECIFIED ACCOUNTING CHANGE

     

    Upon
      a
      Specified Accounting Change, subject to the terms and conditions of the
      Indenture, the Company may purchase for cash all of the Securities held by
      the
      Holder on a date specified by the Company that is not more than 90 days after
      a
      Specified Accounting Change has become effective, at a purchase price equal
      to
      102% of the principal amount thereof together with accrued and unpaid interest,
      if any, to, but excluding, the Specified Accounting Change Redemption Date.
      

     

    7.  CONVERSION

     

    Subject
      to and upon compliance with the provisions of the Indenture and upon the
      occurrence of the events specified in the Indenture, a Holder may surrender
      for
      conversion any Security that is $1,000 principal amount or integral multiples
      thereof. In lieu of receiving shares of Common Stock, a Holder will receive,
      for
      each $1,000 principal amount of Securities surrendered for
      conversion:

     

    
      
         

      

      
        A-5

        
          

        

      

      
         

      

    

     

    	·  
              	
            cash
              in an amount equal to the lesser of (1) $1,000 and (2) the Conversion
              Value; and

          

     

    	·  
              	
            if
              the Conversion Value is greater than $1,000, a number of shares of
              Common
              Stock equal to the sum of the Daily Share Amounts, for each of the
              thirty
              consecutive Trading Days in the Conversion Reference Period, appropriately
              adjusted to reflect stock splits, stock dividends, combinations or
              similar
              events occurring during the Conversion Reference Period, subject to
              the
              Company’s right to deliver cash in lieu of all or a portion of such shares
              as described in the Indenture;

          

     

    provided
      that in no event shall the aggregate number of shares of Common Stock to be
      issued pursuant to the foregoing clause, per $1,000 principal amount of
      Securities, exceed the Aggregate Share Cap, as defined in the
      Indenture.

     

    The
      Conversion Rate on any Securities surrendered in connection with a Fundamental
      Change may be increased by an amount, if any, determined in accordance with
      Section 5.01(j) of the Indenture. 

     

    8.  DENOMINATIONS,
      TRANSFER, EXCHANGE

     

    The
      Securities are in registered form, without coupons, in denominations of $1,000
      principal amount and integral multiples of $1,000 principal amount. A Holder
      may
      register the transfer of or exchange Securities in accordance with the
      Indenture. The Registrar may require a Holder, among other things, to furnish
      appropriate endorsements and transfer documents.

     

    9.  PERSONS
      DEEMED OWNERS

     

    The
      Holder of a Security may be treated as the owner of it for all purposes.

     

    10.  UNCLAIMED
      MONEY

     

    If
      money
      for the payment of principal or interest remains unclaimed for two years, the
      Trustee and any Paying Agent will pay the money back to the Company at its
      written request, subject to applicable unclaimed property law and the provisions
      of the Indenture. After that, Holders entitled to money must look to the Company
      for payment as general creditors unless an applicable abandoned property law
      designates another person. 

     

    11.  AMENDMENT,
      SUPPLEMENT AND WAIVER

     

    Subject
      to certain exceptions, the Indenture or the Securities may be amended or
      supplemented with the consent of the Holders of at least a majority in aggregate
      principal amount of the Securities then outstanding, and an existing Default
      or
      Event of Default and its consequence or compliance with any provision of the
      Indenture or the Securities may be waived in a particular instance with the
      consent of the Holders of a majority in aggregate principal amount of the
      Securities then outstanding. Without the consent of or notice to any Holder,
      the
      Company and the Trustee may amend or supplement the Indenture or the Securities
      to, among other things, cure any ambiguity, defect or inconsistency or make
      any
      other change that does not adversely affect the rights of the Holders in any
      material respect. 

     

    
      
         

      

      
        A-6

        
          

        

      

      
         

      

    

    12.  SUCCESSOR
      ENTITY

     

    When
      a
      successor corporation assumes all the obligations of its predecessor under
      the
      Securities and the Indenture in accordance with the terms and conditions of
      the
      Indenture, the predecessor corporation (except in certain circumstances
      specified in the Indenture) shall be released from those
      obligations.

     

    13.  DEFAULTS
      AND REMEDIES

     

    An
      Event
      of Default shall occur upon the occurrence of any of the events specified in
      Section 9.01 of the Indenture. Upon the occurrence of an Event of Default,
      the
      principal amount of this Security and accrued and unpaid interest shall be
      subject to becoming due and payable on the terms set forth in the Indenture.
      Holders of Securities may, on the terms set forth in the Indenture, rescind
      and
      annul the consequences of any such acceleration. 

     

    Holders
      may not enforce the Indenture or the Securities except as provided in the
      Indenture. The Trustee may require indemnity satisfactory to it before it
      enforces the Indenture or the Securities. Subject to certain limitations,
      Holders of a majority in aggregate principal amount of the Securities then
      outstanding may direct the Trustee in its exercise of any trust or power. The
      Trustee may withhold from Holders notice of any continuing Default (except
      a
      Default in payment of principal or interest or in the payment of any redemption
      or purchase obligation or the Company’s failure to convert Securities) if and so
      long as it determines that withholding notice is in their interests. The Company
      is required to file periodic certificates with the Trustee as to the Company’s
      compliance with the Indenture and knowledge or status of any
      Default.

     

    14.  TRUSTEE
      DEALINGS WITH THE COMPANY

     

    The
      Bank
      of New York, the initial Trustee under the Indenture, in its individual or
      any
      other capacity, may make loans to, accept deposits from and perform services
      for
      the Company or an Affiliate of the Company, and may otherwise deal with the
      Company or an Affiliate of the Company, as if it were not the
      Trustee.

     

    15.  NO
      RECOURSE AGAINST OTHERS

     

    A
      director, officer, employee or stockholder, as such, of the Company shall not
      have any liability for any obligations of the Company under the Securities
      or
      the Indenture nor for any claim based on, in respect of or by reason of such
      obligations or their creation. The Holder of this Security by accepting this
      Security waives and releases all such liability. The waiver and release are
      part
      of the consideration for the issuance of this Security.

     

    
      
         

      

      
        A-7

        
          

        

      

      
         

      

    

    16.  AUTHENTICATION

     

    This
      Security shall not be valid until the Trustee or an authenticating agent
      manually signs the certificate of authentication on the other side of this
      Security.

     

    17.  ABBREVIATIONS
      AND DEFINITIONS

     

    Customary
      abbreviations may be used in the name of the Holder or an assignee, such as:
      TEN
      COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (=
      joint tenants with right of survivorship and not as tenants in common), CUST
      (=
      Custodian) and UGMA (= Uniform Gifts to Minors Act).

     

    All
      terms
      defined in the Indenture and used in this Security but not specifically defined
      herein are defined in the Indenture and are used herein as so
      defined.

     

    18.  INDENTURE
      TO CONTROL; GOVERNING LAW

     

    In
      the
      case of any conflict between the provisions of this Security and the Indenture,
      the provisions of the Indenture shall control. This Security and the Indenture
      shall be governed by, and construed in accordance with, the laws of the State
      of
      New York.

     

    The
      Company will furnish to any Holder, upon written request and without charge,
      a
      copy of the Indenture. Requests may be made to: Iconix Brand Group, Inc., 1450
      Broadway, New York, NY 10018, Attention: Andrew Tarshis, Senior Vice President
      and General Counsel, facsimile: (212) 391-0127.

     

     

     

     

     

    
      
         

      

      
        A-8

        
          

        

      

      
         

      

    

     

    ASSIGNMENT
      FORM

     

    To
      assign
      this Security, fill in the form below:

     

    I
      or we
      assign and transfer this Security to 

     

     

      
        

      

    

    (Insert
      assignee’s soc. sec. or tax I.D. no.)

     

    
      

      

      
(Print
      or
      type assignee’s name, address and zip code)

     

    and
      irrevocably appoint

     

    
      

    

    agent
      to
      transfer this Security on the books of the Company. The agent may substitute
      another to act for him or her.

     

    Your
      Signature

     

    Date:
      _________________________                                         
________________________________________

    (Sign
      exactly as your name appears on the 

    other
      side of this Security)

     

    *
      Signature guaranteed by:

     

    By:
      ________________________________  

     

    _______________

    
      	*	
              The
                signature must be guaranteed by an institution which is a member
                of one of
                the following recognized signature guaranty programs: (i) the Securities
                Transfer Agent Medallion Program (STAMP); (ii) the New York Stock
                Exchange
                Medallion Program (MSP); (iii) the Stock Exchange Medallion Program
                (SEMP); or (iv) such other guaranty program acceptable to the
                Trustee.

            

    

     

     

    
      
         

      

      
        A-9

        
          

        

      

      
         

      

    

     

    CONVERSION
      NOTICE

     

    To
      convert this Security into Common Stock of the Company, check the box:
 ̈

     

    To
      convert only part of this Security, state the principal amount to be converted
      (must be $1,000 or an integral multiple of $1,000):
      $              .

     

    With
      respect to any shares of Common Stock that may be issuable upon conversion,
      if
      you want the stock certificate made out in another person’s name, fill in the
      form below:

     

    
      
(Insert
      assignee’s soc. sec. or tax I.D. no.)

     

    
      

      

      

    

    (Print
      or
      type assignee’s name, address and zip code)

     

    Your
      Signature

     

    Date:
      _________________________                                         
________________________________________ 

    (Sign
      exactly as your name appears on the 

    other
      side of this Security)

     

    *
      Signature guaranteed by:

     

    By: 
      ________________________________

     

    ______________

    
      	*	
              The
                signature must be guaranteed by an institution which is a member
                of one of
                the following recognized signature guaranty programs: (i) the Securities
                Transfer Agent Medallion Program (STAMP); (ii) the New York Stock
                Exchange
                Medallion Program (MSP); (iii) the Stock Exchange Medallion Program
                (SEMP); or (iv) such other guaranty program acceptable to the
                Trustee.

            

    

     

     

     

     

    
      
         

      

      
        A-10

        
          

        

      

      
         

      

    

    FUNDAMENTAL
      CHANGE REPURCHASE NOTICE

     

    To: Iconix
      Brand Group, Inc.

     

    The
      undersigned registered owner of this Security hereby irrevocably acknowledges
      receipt of a notice from Iconix Brand Group, Inc. (the “Company”) as to the
      occurrence of a Fundamental Change with respect to the Company and requests
      and
      instructs the Company to purchase the entire principal amount of this Security,
      or the portion thereof (which is $1,000 or an integral multiple thereof) below
      designated, in accordance with the terms of the Security and the Indenture
      referred to in the Security at the Fundamental Change Purchase Price, together
      with accrued and unpaid interest and Additional Interest, if any, to, but
      excluding, such date, to the registered Holder hereof.

     

    Date:
       _________________________                                         
_______________________________________

    Signature
      (s)

     

    Signature(s)
      must be guaranteed by a 

    qualified
      guarantor institution with 

    membership
      in an approved signature 

    guarantee
      program pursuant to Rule 17Ad-15 

    under
      the
      Securities Exchange Act of 1934.

     

    _______________________________________

    Signature
      Guaranty

     

    Principal
      amount to be redeemed (in an integral

    multiple
      of $1,000, if less than all):

     

    ______________________

    NOTICE:
      The signature to the foregoing Election must correspond to the Name as written
      upon the face of this Security in every particular, without any alteration
      or
      change whatsoever.

     

     

     

    
      
         

      

      
        A-11

        
          

        

      

      
         

      

    

     

    SPECIFIED
      ACCOUNTING CHANGE REDEMPTION NOTICE

     

    

     

    To: Iconix
      Brand Group, Inc.

     

    The
      undersigned registered owner of this Security hereby irrevocably acknowledges
      receipt of a notice from Iconix Brand Group, Inc. (the “Company”) as to the
      occurrence of a Specified Accounting Change with respect to the Company and
      hereby tenders the entire principal amount of this Security, in accordance
      with
      the terms of the Security and the Indenture referred to in the Security, to
      be
      redeemed by the Company at the Specified Accounting Change Purchase Price,
      together with accrued and unpaid interest, to, but excluding, the redemption
      date set forth in such notice.

     

    Date: 
      _________________________                                         
_______________________________________

    Signature
      (s)

     

    Signature(s)
      must be guaranteed by a 

    qualified
      guarantor institution with 

    membership
      in an approved signature 

    guarantee
      program pursuant to Rule 17Ad-15 

    under
      the
      Securities Exchange Act of 1934.

     

    _______________________________________

    Signature
      Guaranty

     

    Principal
      amount to be redeemed:

     

    _________________

    NOTICE:
      The signature to the foregoing Election must correspond to the Name as written
      upon the face of this Security in every particular, without any alteration
      or
      change whatsoever.

     

    

    
      
         

      

      
        A-12

        
          

        

      

      
         

      

    

     

    SCHEDULE
      OF EXCHANGES OF SECURITIES(1)

     

    The
      following exchanges, purchase, redemptions, purchases or conversions of a part
      of this Global Security have been made:

     

    
      	
              Principal
                Amount of this 

              Global
                Note Following 

              Such
                Decrease Date of 

              Exchange
                (or Increase)

            	
              Authorized
                Signatory of 

              Securities
                Custodian

            	
              Amount
                of Decrease in 

              Principal
                Amount of this 

              Global
                Note

            	
              Amount
                of Increase in 

              Principal
                Amount of this 

              Global
                Note

            
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

    

     

    __________________

    1. This
      schedule should be included only if the Security is a Global
      Security.

     

     

     

    
      
         

      

      
        A-13

        
          

        

      

      
         

      

    

     

    CERTIFICATE
      TO BE DELIVERED UPON EXCHANGE OR REGISTRATION

     

    OF
      TRANSFER OF RESTRICTED SECURITIES

     

    Re: 1.875%
      Convertible Senior Subordinated Notes Due 2012 (the “Securities”) of Iconix
      Brand Group, Inc.

     

    This
      certificate relates to $        
principal amount of Securities owned in (check applicable box) 

    o   
      book-entry or  o    definitive
      form by
                          
(the “Transferor”).

     

    The
      Transferor has requested a Registrar or the Trustee to exchange or register
      the
      transfer of such Securities.

     

    In
      connection with such request and in respect of each such Security, the
      Transferor does hereby certify that the Transferor is familiar with transfer
      restrictions relating to the Securities as provided in Section 2.12 of the
      Indenture dated as of June 20, 2007 between Iconix Brand Group, Inc. and
      The Bank of New York, as trustee (the “Indenture”), and the transfer of such
      Security is being made pursuant to an effective registration statement under
      the
      Securities Act of 1933, as amended (the “Securities Act”), or the transfer or
      exchange, as the case may be, of such Security does not require registration
      under the Securities Act because (check applicable box): 

     

    
      	______	
              Such
                Security is being acquired for the Transferor’s own account, without
                transfer.

            

      	 	 

      	______	
              Such
                Security is being transferred to the Company or a Subsidiary (as
                defined
                in the Indenture) of the Company.

            

      	 	 

      	______	
              Such
                security is being transferred to a person the Transferor reasonably
                believes is a “qualified institutional buyer” (as defined in Rule 144A or
                any successor provision thereto (“Rule 144A”) under the Securities Act)
                that is purchasing for its own account or for the account of a “qualified
                institutional buyer”, in each case to whom notice has been given that the
                transfer is being made in reliance on such Rule 144A, and in each
                case in
                reliance on Rule 144A.

            

      	 	 

      	______	
              Such
                Security is being transferred pursuant to and in compliance with
                an
                exemption from the registration requirements under the Securities
                Act in
                accordance with Rule 144 (or any successor thereto) (“Rule 144”) under the
                Securities Act.

            

      	 	 

      	______	
              Such
                Security is being transferred to a non-U.S. Person in an offshore
                transaction in compliance with Rule 904 of Regulation S under the
                Securities Act (or any successor
                thereto).

            

      	 	 

      	______	
              Such
                Security is being transferred pursuant to and in compliance with
                an
                exemption from the registration requirements of the Securities Act
                (other
                than an exemption referred to above) and as a result of which such
                Security will, upon such transfer, cease to be a “restricted security”
                within the meaning of Rule 144 under the Securities
                Act.

            

    

     

     

    
      
         

      

      
        A-14

        
          

        

      

      
         

      

    

     

    The
      Transferor acknowledges and agrees that, if the transferee will hold any such
      Securities in the form of beneficial interests in a Global Note which is a
      “restricted security” within the meaning of Rule 144 under the Securities Act,
      then such transfer can only be made pursuant to (i) Rule 144A under the
      Securities Act and such transferee must be a “qualified institutional buyer” (as
      defined in Rule 144A) or (ii) Regulation S under the Securities
      Act.

     

    Date:
      ____________________                                                      
_________________________________________

    (Insert
      Name of Transferor)

     

    

     

    
      
         

      

      
        A-15

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