Document:

PEPL Form 8K 031507

    EXHIBIT
      10.1

    

    

    

    CREDIT
      AGREEMENT

     

    dated
      as of March 15, 2007

     

    by
      and among

     

    TRUNKLINE
      LNG HOLDINGS LLC

     

    as
      the Borrower

     

    PANHANDLE
      EASTERN PIPE LINE COMPANY, LP

     

    as
      a Guarantor

     

    TRUNKLINE
      LNG COMPANY, LLC

     

    as
      a Guarantor

     

    THE
      BANKS NAMED HEREIN

     

    as
      the Banks

     

    and

     

    BAYERISCHE
      HYPO- UND VEREINSBANK AG, NEW YORK BRANCH

     

    as
      the Administrative Agent

     

    UNICREDIT
      MARKETS & INVESTMENT BANKING, acting 

     

    through
      BAYERISCHE HYPO- UND VEREINSBANK AG

     

    and

     

    WACHOVIA
      CAPITAL MARKETS, LLC

     

    as
      the Joint Book Managers and the Joint Lead Arrangers

     

    THE
      BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH

     

    and

     

    WACHOVIA
      BANK, NATIONAL ASSOCIATION

     

    as
      the Documentation Agents

     

    BANK
      OF AMERICA, N.A.

     

    as
      the Syndication Agent

     

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    TABLE
      OF CONTENTS

    

       

      

       

      
        	
                 

                1.

                 

              	
                 

                CERTAIN DEFINITIONS

                 

              	
                 

                 1

              
	
                1.1

              	
                Defined Terms

              	
                 1
               
	
                1.2

              	
                Computation of Time Periods; Other Definitional Provisions

              	
                 14

              
	
                1.3

              	
                Accounting Terms

              	 15
	
                 

                2.

                 

              	
                 

                AMOUNTS AND TERMS OF THE LOANS

                 

              	
                 

                 15

              
	
                2.1

              	
                The Loans

              	 15
	
                2.2

              	
                Making of the Loans

              	 15
	
                2.3

              	
                Repayment of Loans

              	 16
	
                2.4

              	
                Termination of the Commitments

              	 16
	
                2.5

              	
                Prepayments

              	 16
	
                2.6

              	
                Interest

              	 16
	
                2.7

              	
                Fees

              	 17
	
                2.8

              	
                Conversion of Loans

              	 17
	
                2.9

              	
                Increased Costs, Etc.

              	 18
	
                2.10

              	
                Payments and Computations

              	 19
	
                2.11

              	
                Taxes

              	 20
	
                2.12

              	
                Sharing of Payments, Etc.

              	 24
	
                2.13

              	
                Use of Proceeds

              	 24
	
                2.14

              	
                Evidence of Debt

              	 24
	
                2.15

              	
                Replacement of Banks

              	 25
	
                 

                3.

                 

              	
                 

                REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES

                 

              	
                 

                 25

              
	
                3.1

              	
                Organization and Qualification. Such Loan Party:

              	 25
	
                3.2

              	
                Authorization, Validity, Etc.

              	 26
	
                3.3

              	
                Conflicting or Adverse Agreements or Restrictions

              	 26
	
                3.4

              	
                No Consents Required

              	 26
	
                3.5

              	
                Financial Statements.

              	 26
	
                3.6

              	
                Litigation

              	 27
	
                3.7

              	
                Default

              	 27
	
                3.8

              	
                Compliance

              	 27
	
                3.9

              	
                Title to Assets

              	 27
	
                3.10

              	
                Payment of Taxes

              	 28
	
                3.11

              	
                Investment Company Act Not Applicable

              	 28
	
                3.12

              	
                Regulations G, T, U and X

              	 28
	
                3.13

              	
                ERISA

              	 28
	
                3.14

              	
                No Financing of Certain Security Acquisitions

              	 28
	
                3.15

              	
                Franchises, Co-Licenses, Etc.

              	 29
	
                3.16

              	
                Environmental Matters

              	 29
	
                3.17

              	
                Disclosure

              	 29
	
                3.18

              	
                Insurance

              	 29
	
                3.19

              	
                Subsidiaries.

              	 29
	
                 

                4.

                 

              	
                 

                CONDITIONS TO FUNDING

                 

              	
                 

                 29

              
	
                4.1

              	
                Representations True and No Defaults

              	 29
	
                4.2

              	
                Intentionally Omitted

              	 30
	
                4.3

              	
                Compliance With Law

              	 30
	
                4.4

              	
                Notice of Borrowing and Other Documents.

              	 30
	
                4.5

              	
                Payment of Fees and Expenses

              	 30
	
                4.6

              	
                Repayment of Debt

              	 30
	
                4.7

              	
                Loan Documents Satisfactory

              	 30
	
                4.8

              	
                Loan Documents, Opinions and Other Instruments

              	 
	
                 

                5.

                 

              	
                 

                AFFIRMATIVE COVENANTS OF THE LOAN PARTIES

                 

              	
                 

                 31

              
	
                5.1

              	
                Financial Statements and Information. Deliver to the Banks

              	 31
	
                5.2

              	
                Books and Records

              	 32
	
                5.3

              	
                Insurance

              	 32
	
                5.4

              	
                Maintenance of Property

              	 32
	
                5.5

              	
                Inspection of Property and Records.

              	 32
	
                5.6

              	
                Existence, Laws, Obligations, Taxes

              	 33
	
                5.7

              	
                Notice of Certain Matters

              	 33
	
                5.8

              	
                ERISA

              	 33
	
                5.9

              	
                Compliance with Environmental Laws

              	 34
	
                 

                6.

                 

              	
                 

                NEGATIVE COVENANTS OF PANHANDLE EASTERN

                 

              	
                 

                 34

              
	
                6.1

              	
                Financial Covenant

              	 34
	
                6.2

              	
                Liens, Etc.

              	 35
	
                6.3

              	
                Debt

              	 35
	
                6.4

              	
                Change in Nature of Business

              	 35
	
                6.5

              	
                Mergers, Consolidation

              	 35
	
                6.6

              	
                Sale of Assets

              	 36
	
                6.7

              	
                Restricted Payments

              	 36
	
                6.8

              	
                Sales and Leasebacks

              	 36
	
                6.9

              	
                Transactions with Related Parties

              	 37
	
                6.10

              	
                Hazardous Materials

              	 37
	
                 

                7.

                 

              	
                 

                NEGATIVE COVENANTS OF THE BORROWER

              	
                 

                 37

              
	
                7.1

              	
                Liens, Etc.

              	 37
	
                7.2

              	
                Debt

              	 38
	
                7.3

              	
                Merger, Consolidation

              	 38
	
                7.4

              	
                Sale of Assets

              	 38
	
                7.5

              	
                Restricted Payment

              	 39
	
                7.6

              	
                Securities Credit Regulations

              	 39
	
                7.7

              	
                Nature of Business

              	 39
	
                7.8

              	
                Transactions with Related Parties

              	 39
	
                7.9

              	
                Hazardous Materials

              	 39
	
                7.10

              	
                Use of Proceeds

              	 40
	
                7.11

              	
                Other Documents

              	 40
	
                 

                8.

                 

              	
                 

                EVENTS OF DEFAULT; REMEDIES

                 

              	
                 

                 40

              
	
                8.1

              	
                Failure to Pay Obligations When Due

              	 40
	
                8.2

              	
                Intentionally Omitted.

              	 40
	
                8.3

              	
                Failure to Pay Other Debt

              	 40
	
                8.4

              	
                Misrepresentation or Breach of Warranty

              	 41
	
                8.5

              	
                Violation of Certain Covenants

              	 41
	
                8.6

              	
                Violation of Other Covenants, Etc.

              	 41
	
                8.7

              	
                Bankruptcy and Other Matters

              	 41
	
                8.8

              	
                Dissolution.

              	 41
	
                8.9

              	
                Undischarged Judgment

              	 42
	
                8.10

              	
                Loan Documents

              	 42
	
                8.11

              	
                Change of Control.

              	 42
	
                8.12

              	
                Other Remedies

              	 42
	
                8.13

              	
                Remedies Cumulative.

              	 42
	
                 

                9.

                 

              	
                 

                THE AGENT

                 

              	
                 

                 42

                 

              
	
                9.1

              	
                Authorization and Action

              	 43
	
                9.2

              	
                Agent’s Reliance, Etc.

              	 43
	
                9.3

              	
                Defaults

              	 43
	
                9.4

              	
                HVB and Affiliates

              	 44
	
                9.5

              	
                Non-Reliance on Agent and Other Banks

              	 44
	
                9.6

              	
                Indemnification

              	 44
	
                8.7

              	
                Successor Agent

              	 45
	
                9.8

              	
                Agent’s Reliance

              	 45
	
                 

                10.

                 

              	
                 

                GUARANTY

                 

              	
                 

                 45

                 

              
	
                10.1

              	
                Guaranty

              	 45
	
                10.2

              	
                Guaranty Absolute

              	 46
	
                10.3

              	
                Waivers and Acknowledgments

              	 47
	
                10.4

              	
                Subrogation

              	 48
	
                10.5

              	
                Subordination

              	 48
	
                10.6

              	
                Continuing Guaranty

              	 49
	
                10.7

              	
                General Limitation on Guarantee Obligations

              	 49
	
                 

                11.

                 

              	
                 

                MISCELLANEOUS

                 

              	
                 

                 49

              
	
                11.1

              	
                Amendments, Waivers, Etc.

              	 48
	
                11.2

              	
                Reimbursement of Expenses

              	 50
	
                11.3

              	
                Notices

              	 51
	
                11.4

              	
                Governing Law

              	 53
	
                11.5

              	
                Waiver of Jury Trial

              	 53
	
                11.6

              	
                Consent to Jurisdiction

              	 54
	
                11.7

              	
                Survival of Representations, Warranties and Covenants

              	 54
	
                11.8

              	
                Counterparts

              	 54
	
                11.9

              	
                Severability

              	 54
	
                11.10

              	
                Descriptive Headings

              	 54
	
                11.11

              	
                Accounting Terms

              	 54
	
                11.12

              	
                Limitation of Liability

              	 54
	
                11.13

              	
                Set-Off

              	 55
	
                11.14

              	
                Sale or Assignment

              	 55
	
                11.15

              	
                Interest

              	 59
	
                11.16

              	
                Indemnification

              	 60
	
                11.17

              	
                Payments Set Aside

              	 61
	
                11.18

              	
                Loan Agreement Controls

              	 61
	
                11.19

              	
                Obligations Several

              	 61
	
                11.20

              	
                Final Agreement

              	 61
	
                11.21

              	
                PATRIOT Act

              	 61

      

    

     

               
      Annex I  Commitments

     

    Exhibit
      A  Note

    Exhibit
      B  Assignment
      and Acceptance

    

    Schedule
      3.1  Subsidiaries

    Schedule
      3.10  Tax
      Matters

    Schedule
      3.13  ERISA
      Matters

    Schedule
      3.16  Environmental
      Matters

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    CREDIT
      AGREEMENT

     

    CREDIT
      AGREEMENT dated as of March 15, 2007 among TRUNKLINE LNG HOLDINGS LLC, a limited
      liability company organized under the laws of Delaware (the “Borrower”),
      PANHANDLE EASTERN PIPE LINE COMPANY, LP, a limited partnership organized under
      the laws of Delaware (“Panhandle
      Eastern”),
      TRUNKLINE LNG COMPANY, LLC, a limited liability company organized under the
      laws
      of Delaware (“TLNG”),
      the
      financial institutions listed on the signature pages hereof and any other Person
      that shall have become a party hereto pursuant to an Assignment and Acceptance,
      other than any such Person that ceases to be a party hereto pursuant to an
      Assignment and Acceptance (collectively, the “Banks”
and,
      individually, a “Bank”),
      and
      BAYERISCHE HYPO- UND VEREINSBANK AG, NEW YORK BRANCH (“HVB”),
      in
      its capacity as administrative agent (the “Agent”)
      for
      the Banks hereunder:

     

    PRELIMINARY
      STATEMENTS:

     

    1. The
      Borrower desires to obtain from the Banks a senior term loan financing (the
      “Financing”)
      in an
      aggregate principal amount of $455,000,000,
      the
      proceeds of which will be used by the Borrower solely to repay in full the
      April
      2005 Credit Agreement (as defined below) and to make a distribution to Panhandle
      Eastern. Panhandle Eastern will use the proceeds of such distribution to repay
      in full the Panhandle Eastern 2.75% Senior Notes (as defined below).

     

    2. The
      Banks
      have indicated their willingness to provide the Financing, but only on and
      subject to the terms and conditions of this Agreement, including the guaranty
      set forth herein.

     

    NOW,
      THEREFORE, in consideration of the premises and of the mutual covenants and
      agreements contained herein, the parties hereto hereby agree as
      follows:

     

    1.  CERTAIN
      DEFINITIONS.

     

    1.1  Defined
      Terms.
      As used
      in this Agreement, the following terms shall have the following
      meanings:

     

    “Administrative
      Questionnaire”
shall
      mean an administrative questionnaire in a form supplied by the
      Agent.

     

    “Affiliate”
shall
      mean any Person controlling, controlled by or under common control with any
      other Person. For purposes of this definition, “control” (including “controlled
      by” and “under common control with”) shall mean the possession, directly or
      indirectly, of the power to direct or cause the direction of the management
      and
      policies of such Person, whether through the ownership of voting securities
      or
      otherwise. If any Person shall own, directly or indirectly, beneficially or
      of
      record, twenty percent (20%) or more of the voting equity (whether outstanding
      capital stock, partnership interests or otherwise) of another Person, such
      Person shall be deemed to be an Affiliate.

     

    “Agent”
shall
      have the meaning set forth in the preamble hereto.

     

    “Agreement”
      shall
      mean
      this
      Credit Agreement, as the same may be amended, modified, supplemented or restated
      from time to time.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Alternate
      Base Rate”
shall
      mean, for any day, a rate per annum equal to the greater of: (a) the Prime
      Rate
      in effect on such day and (b) 1/2 of 1% per annum above the Federal Funds Rate
      in effect on such day. The Alternate Base Rate is an index rate and is not
      necessarily intended to be the lowest or best rate of interest charged to other
      customers in connection with extensions of credit or to other banks. Any change
      in the Alternate Base Rate due to a change in the Prime Rate or the Federal
      Funds Rate shall be effective from and including the effective date of such
      change in the Prime Rate or the Federal Funds Rate, respectively.

     

    “Alternate
      Base Rate Loan”
shall
      mean any Loan which bears interest as described in Section 2.6(a)(i)
      (Interest).

     

    “Applicable
      Lending Office”
shall
      mean, with respect to each Bank, such Bank’s (a) Domestic Lending Office in the
      case of an Alternate Base Rate Loan; and (b) Eurodollar Lending Office in the
      case of a Eurodollar Rate Loan.

     

    “Applicable
      Margin”
shall
      mean with respect to (a) Alternate Base Rate Loans, a percentage per annum
      set
      forth below under the caption “Alternate Base Rate Loans” and
      (b) Eurodollar Rate Loans, subject to the provisos set forth below, a
      percentage per annum set forth below under the caption “Eurodollar Rate Loans,”
in each case determined by reference to the rating of Panhandle Eastern’s
      unsecured, non-credit enhanced Senior Funded Debt (effective from and after
      the
      date the applicable change of such a debt rating is first announced by the
      applicable rating agency):

     

    
      	
              Rating
                of Panhandle Eastern’s unsecured, non-credit enhanced Senior Funded
                Debt

            	
              Eurodollar
                Rate Loan

            	
              Alternate
                Base Rate Loan

            
	
              Equal
                to or higher than Baa1 by Moody’s Investor Service, Inc. / Equal to or
                higher than BBB+ by Standard and Poor’s Ratings Group

            	
              0.350%

            	
              0%

            
	
              Baa2
                by Moody’s Investor Service, Inc. / BBB by Standard and Poor’s Ratings
                Group

            	
              0.450%

            	
              0%

            
	
              Baa3
                by Moody’s Investor Service, Inc. / BBB- by Standard and Poor’s Ratings
                Group

            	
              0.625%

            	
              0%

            
	
              Ba1
                by Moody’s Investor Service, Inc. / BB+ by Standard and Poor’s Ratings
                Group

            	
              0.875%

            	
              0%

            
	
              Below
                Ba1 by Moody’s Investor Service, Inc. / Below BB+ by Standard and Poor’s
                Ratings Group

            	
              1.125%

            	
              0.125%

            
	 	 	 

    

    provided
      that
      upon the occurrence of an SUG Change of Control, the Applicable Margin for
      Eurodollar Rate Loans and for Base Rate Loans shall be increased by 1.00% above
      the Applicable Margin otherwise in effect at such time with respect to all
      interest periods or portions of interest periods on or before April 4, 2008
      and
      1.50% above the Applicable Margin otherwise in effect at such time with respect
      to all interest periods or portions of interest periods after April 4, 2008,
      commencing 10 Business Days after the occurrence of the SUG Change of Control,
      unless such increase in Applicable Margin shall have been waived in writing
      by
      Required Banks.

     

    Notwithstanding
      the foregoing provisions, in the event that ratings of Panhandle Eastern’s
      unsecured, non-credit enhanced Senior Funded Debt under Standard & Poor’s
      Ratings Group and under Moody’s Investor Service, Inc. fall within different
      rating categories which are not functional equivalents, the Applicable Margin
      shall be based on the higher of such ratings if there is only one category
      differential between the functional equivalents of such ratings, and if there
      is
      a two category differential between the functional equivalents of such ratings,
      the component of pricing from the grid set forth above shall be based on the
      rating category which is then in the middle of or between the two category
      ratings which are then in effect, and if there is greater than a two category
      differential between the functional equivalents of such ratings, the component
      of pricing from the grid set forth above shall be based on the rating category
      which is then one rating category below the higher of the two category ratings
      which are then in effect. Additionally, in the event that Panhandle Eastern
      withdraws from having its unsecured, non-credit enhanced Senior Funded Debt
      being rated by Moody’s Investor Service, Inc. or Standard and Poor’s Ratings
      Group, so that one or both of such ratings services fails to rate Panhandle
      Eastern’s unsecured, non-credit enhanced Senior Funded Debt, (a) the Applicable
      Margin for all Eurodollar Rate Loans for all Interest Periods commencing
      thereafter shall be 1.125% and (b) the Applicable Margin for all Alternate
      Base
      Rate Loans shall be 0.125% effective immediately, in each case continuing until
      such time as Panhandle Eastern subsequently causes its unsecured, non-credit
      enhanced Senior Funded Debt to be rated by both of said ratings
      services.

    
       

      
        
           

          
            
              
              

            

            
              -2-

              
                

              

            

            
              
              

            

          

        

      

    

    “Approved
      Fund”
shall
      mean any Person (other than a natural person) that is engaged in making,
      purchasing, holding or investing in bank loans and similar extensions of credit
      in the ordinary course of its business and that is administered or managed
      by
      (a) a Bank, (b) an Affiliate of a Bank or (c) an entity or an Affiliate of
      an
      entity that administers or manages a Bank.

     

    “April
      2005 Credit Agreement”
shall
      mean the Credit Agreement, dated as of April 26, 2005, by and among the
      Borrower, as the borrower, Panhandle Eastern, as a guarantor, Trunkline LNG
      Company, LLC, as a guarantor, the financial institutions party thereto, and
      HVB,
      as the administrative agent, the sole book runner and the sole lead arranger,
      as
      amended, restated, amended and restated or otherwise modified and in effect
      on
      the Funding Date.

     

    “Assignment
      and Acceptance”
shall
      mean an Assignment and Acceptance substantially in the form of Exhibit B hereto
      or any other form approved by the Agent.

     

    “Attributable
      Indebtedness”
shall
      mean, with respect to any Sale-Leaseback Transaction, the present value
      (discounted at the rate set forth or implicit in the terms of the lease included
      in such Sale-Leaseback Transaction) of the total obligations of the lessee
      for
      rental payments (other than amounts required to be paid on account of taxes,
      maintenance, repairs, insurance, assessments, utilities, operating and labor
      costs and other items that do not constitute payments for property rights)
      during the remaining term of the lease included in such Sale-Leaseback
      Transaction (including any period for which such lease has been extended).
      In
      the case of any lease that is terminable by the lessee upon payment of a
      penalty, the Attributable Indebtedness shall be the lesser of the (a)
      Attributable Indebtedness determined assuming termination on the first date
      such
      lease may be terminated (in which case the Attributable Indebtedness shall
      also
      include the amount of the penalty, but no rent shall be considered as required
      to be paid under such lease subsequent to the first date on which it may be
      so
      terminated) and (b) the Attributable Indebtedness determined assuming no such
      termination.

     

    “Bank”
shall
      have the meaning set forth in the preamble hereto and shall include the Agent,
      in its individual capacity.

     

    “Borrower”
shall
      have the meaning set forth in the preamble hereto.

     

    “Borrowing”
shall
      mean the borrowing of Loans on the Funding Date pursuant to Section 2.1 (The
      Loans).

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    “Business
      Day”
shall
      mean a day when the Agent is open for business, provided
      that, if
      the applicable Business Day relates to any Eurodollar Rate Loan, it shall mean
      a
      day when the Agent is open for business and banks are open for business in
      the
      London interbank market and in New York City.

     

    “Capital
      Lease”
shall
      mean any lease of any Property (whether real, personal, or mixed) which, in
      conformity with GAAP, is accounted for as a capital lease on the balance sheet
      of the lessee.

     

    “Capitalized
      Lease Obligations”
shall
      mean, for any Person, any of their obligations that should, in accordance with
      GAAP, be recorded as Capital Leases.

     

    “CCC”
shall
      mean CrossCountry Citrus, LLC.

     

    “CERCLA”
shall
      mean the Comprehensive Environmental Response, Compensation and Liability Act
      of
      1980 (as amended by the Superfund Amendments and Reauthorization Act of 1986,
      42
      U.S.C.A. § 9601 et
      seq.),
      as
      amended from time to time, and any and all rules and regulations issued or
      promulgated thereunder.

     

    “Change
      in Law”
shall
      mean (a) the adoption of any law, rule or regulation after the date of this
      Agreement, (b) any change in any law, rule or regulation or in the
      interpretation or application thereof by any Governmental Authority after such
      date or (c) compliance by any Bank with any request, guideline or directive
      (whether or not having the force of law) of any Governmental Authority made
      or
      issued after such date.

     

    “Citrus
      Corp.”
shall
      mean Citrus Corp., a Delaware corporation.

     

    “Citrus
      Investment”
shall
      mean (i) any Investment by Panhandle Eastern or any of its Subsidiaries in,
      to
      or with respect to CCC or Citrus Corp. and (ii) any accounts receivable owing
      from CCC or Citrus Corp. to Panhandle Eastern or any of its
      Subsidiaries.

     

    “Closing
      Date”
shall
      mean the date hereof.

     

    “Code”
shall
      mean the Internal Revenue Code of 1986, as amended, as now or hereafter in
      effect, together with all regulations, rulings and interpretations thereof
      or
      thereunder issued by the Internal Revenue Service.

     

    “Commitment”
shall
      mean, with respect to any Bank, the commitment of such Bank to make a Loan
      on
      the Funding Date, in the amount set forth opposite such Bank’s name on Annex I
      hereto, and the aggregate amount of all the Commitments is
      $455,000,000.

     

    “Consolidated”
shall
      refer to the consolidation of accounts in accordance with GAAP.

     

    “Consolidated
      Net Tangible Assets”
shall
      mean, at any date of determination, the total amount of assets of Panhandle
      Eastern and its Subsidiaries after deducting therefrom:

     

    (a) all
      current liabilities (excluding (i) any current liabilities that by their terms
      are extendable or renewable at the option of the obligor thereon to a time
      more
      than 12 months after the time as of which the amount thereof is being computed,
      and (ii) current maturities of Long-Term Debt); and

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    (b) the
      value
      (net of any applicable reserves) of all goodwill, trade names, trademarks,
      patents and other like intangible assets,

     

    all
      as
      set forth on the Consolidated balance sheet of Panhandle Eastern and its
      Subsidiaries for Panhandle Eastern’s most recently completed fiscal quarter,
      prepared in accordance with GAAP.

     

    “Consolidated
      Total Capitalization”
shall
      mean, at any time, an amount equal to the sum of (a) Consolidated Debt for
      Borrowed Money of Panhandle Eastern and its Subsidiaries at such time
plus
      (b) an
      amount equal to the sum of all amounts which, in accordance with GAAP, would
      be
      included under owner’s equity on a Consolidated balance sheet of Panhandle
      Eastern and its Subsidiaries; provided
      that
      consistent with past practice, any loans made to Southern Union by Panhandle
      Eastern up to but not exceeding $50,000,000 in the aggregate at any time
      outstanding shall not be deemed to reduce owner’s equity for purposes of this
      definition.

     

    “Conversion”,
      “Convert”
and
      “Converted”
each
      shall refer to a conversion of Loans of one Type into Loans of the other Type
      pursuant to Section 2.8 (Conversion of Loans).

     

    “Debt”
shall
      mean (without duplication), for any Person, indebtedness for money borrowed
      determined in accordance with GAAP but in any event including (a) indebtedness
      of such Person for borrowed money or arising out of any extension of credit
      to
      or for the account of such Person (including, without limitation, extensions
      of
      credit in the form of reimbursement or payment obligations of such Person
      relating to letters of credit issued for the account of such Person) or for
      the
      deferred purchase price of property or services, except indebtedness which
      is
      owing to trade creditors in the ordinary course of business; (b) indebtedness
      of
      the kind described in clause (a) of this definition which is secured by (or
      for
      which the holder of such Debt has any existing right, contingent or otherwise,
      to be secured by) any Lien upon or in Property (including, without limitation,
      accounts and contract rights) owned by such Person, whether or not such Person
      has assumed or become liable for the payment of such indebtedness or
      obligations; (c) Capitalized Lease Obligations of such Person; and (d)
      obligations under direct or indirect Guaranties. Whenever the definition of
      Debt
      is being used herein in order to compute a financial ratio or covenant
      applicable to the consolidated business of Panhandle Eastern and its
      Subsidiaries, Debt which is already included in such computation by virtue
      of
      the fact that it is owed by a Subsidiary of Panhandle Eastern will not also
      be
      added by virtue of the fact that Panhandle Eastern has executed a guaranty
      with
      respect to such Debt that would otherwise require such guaranteed indebtedness
      to be considered Debt hereunder. Nothing contained in the foregoing sentence
      is
      intended to limit the other provisions of this Agreement which contain
      limitations on the amount and types of Debt which may be incurred by any Loan
      Party.

     

    “Debt
      for Borrowed Money”
of
      any
      Person shall mean, at any date of determination, the sum without duplication
      of
      (i) all items that, in accordance with GAAP, would be classified as indebtedness
      on a Consolidated balance sheet of such Person, (ii) all Guarantees by such
      Person of Debt of another Person and (iii) all letter of credit reimbursement
      obligations of such Person.

     

    “Debt/Capitalization
      Ratio”
shall
      mean, as of any date of determination, the ratio of (a) the aggregate amount
      of
      outstanding Consolidated Debt for Borrowed Money of Panhandle Eastern and its
      Subsidiaries as of such date to (b) Consolidated Total Capitalization of
      Panhandle Eastern and its Subsidiaries as of such date.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    “Debtor
      Laws”
shall
      mean all applicable liquidation, conservatorship, bankruptcy, moratorium,
      arrangement, receivership, insolvency, reorganization, or similar laws, or
      general equitable principles from time to time in effect affecting the rights
      of
      creditors generally.

     

    “Default”
shall
      mean any of the events specified in Section 8 (Events of Default; Remedies),
      whether or not there has been satisfied any requirement in connection with
      such
      event for the giving of notice, or the lapse of time, or the happening of any
      further condition, event or act.

     

    “Dollars”
and
      “$”
shall
      mean lawful currency of the United States of America.

     

    “Domestic
      Lending Office”
shall
      mean, with respect to each Bank, such office of such Bank as shall be specified
      in its Administrative Questionnaire or such other office of such Bank as such
      Bank may from time to time specify to the Borrower and the Agent.

     

    “Eligible
      Assignee”
shall
      mean: (i) any Bank, or any Affiliate of any Bank, any Approved Fund, or any
      institution 100% of the voting stock of which is directly or indirectly owned
      by
      such Bank or by the immediate or remote parent of such Bank; or (ii) a
      commercial bank, a foreign branch of a United States commercial bank, a domestic
      branch of a foreign commercial bank or other financial institution having in
      each case assets in excess of $1,000,000,000.

     

    “Environmental
      Law”
shall
      mean (a) CERCLA; (b) the Resource Conservation and Recovery Act (as amended
      by
      the Hazardous and Solid Waste Amendment of 1984, 42 U.S.C.A. § 6901 et
      seq.),
      as
      amended from time to time, and any and all rules and regulations promulgated
      thereunder (“RCRA”); (c) the Clean Air Act, 42 U.S.C.A. § 7401 et
      seq.,
      as
      amended from time to time, and any and all rules and regulations promulgated
      thereunder; (d) the Clean Water Act of 1977, 33 U.S.CA § 1251 et
      seq.,
      as
      amended from time to time, and any and all rules and regulations promulgated
      thereunder; (e) the Toxic Substances Control Act, 15 U.S.C.A. § 2601
et
      seq.,
      as
      amended from time to time, and any and all rules and regulations promulgated
      thereunder; or (f) any other federal or state law, statute, rule, or emulation
      enacted in connection with or relating to the protection or regulation of the
      environment (including, without limitation, those laws, statutes, rules, and
      regulations regulating the disposal, removal, production, storing, refining,
      handling, transferring, processing, or transporting of Hazardous Materials)
      and
      any rules and regulations issued or promulgated in connection with any of the
      foregoing by any governmental authority, and “Environmental
      Laws”
shall
      mean each of the foregoing.

     

    “EPA”
shall
      mean the Environmental Protection Agency or any successor
      organization.

     

    “Equity
      Interests”
shall
      mean, with respect to any Person, shares of capital stock of (or other ownership
      or profit interests in) such Person, warrants, options or other rights for
      the
      purchase or other acquisition from such Person of shares of capital stock of
      (or
      other ownership or profit interests in) such Person, securities convertible
      into
      or exchangeable for shares of capital stock of (or other ownership or profit
      interests in) such Person or warrants, rights or options for the purchase or
      other acquisition from such Person of such shares (or such other interests),
      and
      other ownership or profit interests in such Person (including, without
      limitation, partnership, member or trust interests therein), whether voting
      or
      non-voting, and whether or not such shares, warrants, options, rights or other
      interests are authorized or otherwise existing on any date of
      determination.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    “ERISA”
shall
      mean the Employee Retirement Income Security Act of 1974, as amended from time
      to time, and all rules, regulations, rulings and interpretations thereof issued
      by the Internal Revenue Service or the Department of Labor
      thereunder.

     

    “Eurocurrency
      Liabilities”
shall
      have the meaning assigned to that term in Regulation D of the Board of Governors
      of the Federal Reserve System, as in effect from time to time.

     

    “Eurodollar
      Lending Office”
shall
      mean, with respect to each Bank, such office of such Bank as shall be specified
      in its Administrative Questionnaire or such other office of such Bank as such
      Bank may from time to time specify to the Borrower and the Agent.

     

    “Eurodollar
      Rate”
shall
      mean, for any Interest Period in effect for each Eurodollar Rate Loan, an
      interest rate per annum equal to the rate determined by the Agent to be the
      offered rate which appears on the display designated as page “BBAM1” on the
      Bloomberg service (or on any successor or substitute page of such display,
      or
      any successor to or substitute for such display, providing rate quotations
      comparable to those currently provided on such page of such screen, as
      determined by the Agent from time to time for purposes of providing quotations
      of interest rates applicable to dollar deposits in the London interbank market)
      at approximately 11:00 a.m., London time, two Business Days prior to the
      commencement of such Interest Period, as the rate for dollar deposits with
      a
      maturity comparable to such Interest Period. In the event that such rate is
      not
      available at such time for any reason, then the “Eurodollar Rate” with respect
      to such Eurodollar Rate Loans for such Interest Period shall be the rate at
      which dollar deposits of $5,000,000 and for a maturity comparable to such
      Interest Period are offered by the principal London office of the Agent in
      immediately available funds in the London interbank market at approximately
      11:00 a.m., London time, two Business Days prior to the commencement of such
      Interest Period.

     

    “Eurodollar
      Rate Loan”
shall
      mean a Loan that bears interest as provided in Section 2.6(a)(ii)
      (Interest).

     

    “Event
      of Default”
shall
      mean any of the events specified in Section 8 (Events of Default; Remedies),
      provided
      that
      there has been satisfied any requirement in connection with such event for
      the
      giving of notice, or the lapse of time, or the happening of any further
      condition, event or act.

     

    “Federal
      Funds Rate”
shall
      mean, for any day, the weighted average (rounded upwards, if necessary, to
      the
      next 1/100 of 1%) of the rates on overnight federal funds transactions with
      members of the Federal Reserve System arranged by federal funds brokers, as
      published on the next succeeding Business Day by the Federal Reserve Bank of
      New
      York, or, if such rate is not so published for any day that is a Business Day,
      the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
      quotations for such day for such transactions received by the Agent from three
      federal funds brokers of recognized standing selected by it.

     

    “Fee
      Letter”
shall
      mean that certain fee letter dated as of February 27, 2007 by and among the
      Borrower, the Guarantors, HVB, Wachovia and the Lead Arrangers.

     

    “Funded
      Debt”
shall
      mean all Debt of a Person which matures more than one year from the date of
      creation or matures within one year from such date but is renewable or
      extendible, at the option of such Person, by its terms or by the terms of any
      instrument or agreement relating thereto, to a date more than one year from
      such
      date or arises under a revolving credit or similar agreement which obligates
      Banks to extend credit during a period of more than one year from such date,
      including, without limitation, all amounts of any Funded Debt required to be
      paid or prepaid within one year from the date of determination of the existence
      of any such Funded Debt.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    “Funding
      Date”
shall
      mean the date on which each of the conditions precedent set forth in Section
      4
      (Conditions to Funding) shall have been satisfied or waived by the
      Banks.

     

    “GAAP”
has
      the
      meaning specified in Section 1.3 (Accounting Terms).

     

    “Governmental
      Authority”
shall
      mean any (domestic or foreign) federal, state, county, municipal, parish,
      provincial, or other government, or any department, commission, board, court,
      agency (including, without limitation, the EPA), or any other instrumentality
      of
      any of them or any other political subdivision thereof, and any entity
      exercising executive, legislative, judicial, regulatory, or administrative
      functions of, or pertaining to, government, including, without limitation,
      any
      arbitration panel, any court, or any commission.

     

    “Governmental
      Requirement”
shall
      mean any order, permit, law, statute (including, without limitation, any
      Environmental Protection Statute), code, ordinance, rule, regulation,
      certificate, or other direction or requirement of any Governmental
      Authority.

     

    “Guaranteed
      Obligations” shall
      have the meaning set forth in Section 10.1.

     

    “Guarantor”
shall
      mean each of Panhandle Eastern and TLNG.

     

    “Guaranty”
shall
      mean, with respect to any Person, any obligation, contingent or otherwise,
      of
      such Person directly or indirectly guaranteeing any Debt of another Person,
      including, without limitation, by means of an agreement to purchase or pay
      (or
      advance or supply funds for the purchase or payment of) such Debt or to maintain
      financial covenants, or to assure the payment of such Debt by an agreement
      to
      make payments in respect of goods or services regardless of whether delivered
      or
      to purchase or acquire the Debt of another, or otherwise, provided
      that the
      term “Guaranty” shall not include endorsements for deposit or collection in the
      ordinary course of business.

     

    “Hazardous
      Materials”
shall
      mean any substance which, pursuant to any Environmental Laws, requires special
      handling in its collection, use, storage, treatment or disposal, including
      but
      not limited to any of the following: (a) any “hazardous waste” as defined by
      RCRA; (b) any “hazardous substance” as defined by CERCLA; (c) asbestos; (d)
      polychlorinated biphenyls; (e) any flammables, explosives or radioactive
      materials; and (f) any substance, the presence of which on any of Loan Parties’
properties is prohibited by any Governmental Authority.

     

    “Highest
      Lawful Rate”
shall
      mean, with respect to each Bank, the maximum non-usurious interest rate, if
      any,
      that at any time or from time to time may be contracted for, taken, reserved,
      charged, or received with respect to the Notes or on other amounts, if any,
      due
      to such Bank pursuant to this Agreement, under laws applicable to such Bank
      which are presently in effect, or, to the extent allowed by law, under such
      applicable laws which may hereafter be in effect and which allow a higher
      maximum non-usurious interest rate than applicable laws now allow.

     

    “HVB”
shall
      have the meaning set forth in the preamble.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    “Indemnified
      Parties”
shall
      have the meaning set forth in Section 11.16 (Indemnification).

     

    “Interest
      Period”
shall
      mean, for each Eurodollar Rate Loan, the period commencing on the date of such
      Eurodollar Rate Loan or the date of the Conversion of any Alternate Base Rate
      Loan into such Eurodollar Rate Loan, and ending on the last day of the period
      selected by the Borrower pursuant to the provisions below and, thereafter,
      each
      subsequent period commencing on the last day of the immediately preceding
      Interest Period and ending on the last day of the period selected by the
      Borrower pursuant to the provisions below. The duration of each such Interest
      Period shall be one, two, three or six months (or, if available to each Bank,
      nine or twelve months), as the Borrower may, upon notice received by the Agent
      not later than 11:00 A.M. (New York City time) on the third Business Day prior
      to the first day of such Interest Period, select;
      provided
      that:

     

    (a) whenever
      the last day of any Interest Period would otherwise occur on a day other than
      a
      Business Day, the last day of such Interest Period shall be extended to occur
      on
      the next succeeding Business Day, provided
      that, if
      such extension would cause the last day of such Interest Period to occur in
      the
      next following calendar month, the last day of such Interest Period shall occur
      on the next preceding Business Day; and

     

    (b) whenever
      the first day of any Interest Period occurs on a day of an initial calendar
      month for which there is no numerically corresponding day in the calendar month
      that succeeds such initial calendar month by the number of months equal to
      the
      number of months in such Interest Period, such Interest Period shall end on
      the
      last Business Day of such succeeding calendar month.

     

    “Inventory”
shall
      mean, with respect to the Borrower or any Subsidiary, all of such Person’s now
      owned or hereafter acquired or created inventory in all of its forms and of
      every nature, wherever located, whether acquired by purchase, merger, or
      otherwise, and all raw materials, work in process therefor and finished goods
      thereof, and all supplies, materials, and products of every nature and
      description used, usable, or consumed in connection with the manufacture,
      packing, shipping, advertising, selling, leasing, furnishing, or production
      of
      such goods, and shall include, in any event, all “inventory” (within the meaning
      of such term in the Uniform Commercial Code in effect in any applicable
      jurisdiction), whether in mass or joint, or other interest or right of any
      kind
      in goods which are returned to, repossessed by, or stopped in transit by such
      Person, and all accessions to any of the foregoing and all products of any
      of
      the foregoing.

     

    “Investment”
of
      any
      Person shall mean any investment so classified under GAAP, and, whether or
      not
      so classified, includes (a) any direct or indirect loan advance made by it
      to
      any other Person; (b) any direct or indirect Guaranty for the benefit of such
      Person; (c) any capital contribution to any other Person; and (d) any ownership
      or similar interest in any other Person; and the amount of any Investment shall
      be the original principal or capital amount thereof (plus
      any
      subsequent principal or capital amount) minus
      all cash
      returns of principal or capital thereof.

     

    “Lead
      Arrangers”
shall
      mean UniCredit Markets & Investment Banking, acting through Bayerische Hypo-
      und Vereinsbank AG and Wachovia Capital Markets, LLC.

     

    “Lien”
shall
      mean any mortgage, deed of trust, pledge, security interest, encumbrance, lien
      (including, without limitation, any such interest arising under any
      Environmental Law), or similar charge of any kind (including, without
      limitation, any agreement to give any of the foregoing, any conditional sale
      or
      other title retention agreement or any lease in the nature thereof), or the
      interest of the lessor under any Capital Lease.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    “Loan”
or
      “Loans”
shall
      mean a loan or loans, respectively, from the Banks to the Borrower made under
      Section 2.1 (The Loans).

     

    “Loan
      Document” shall
      mean this Agreement, any Note, the Fee Letter and any other document, agreement
      or instrument now or hereafter executed and delivered by any Loan Party in
      connection with any of the transactions contemplated by any of the foregoing,
      as
      any of the foregoing may hereafter be amended, modified, or supplemented, and
      “Loan
      Documents”
shall
      mean, collectively, each of the foregoing.

     

    “Loan
      Party”
shall
      mean TLNG, Panhandle Eastern, the Borrower and its Subsidiaries.

     

    “Long-Term
      Debt”
shall
      mean any Debt that, in accordance with GAAP, constitutes (or, when incurred,
      constituted) a long-term liability.

     

    “Majority
      Banks”
shall
      mean at any time Banks holding more than 50% of the unpaid principal amounts
      outstanding under the Loans, or, if no such amounts are outstanding, more than
      50% of the Pro Rata Percentages.

     

    “Material
      Adverse Change”
shall
      mean, for any Person, any material adverse change in the business, operations,
      financial condition or assets of such Person and its Subsidiaries, taken as
      a
      whole.

     

    “Material
      Adverse Effect”
shall
      mean any material adverse effect on (a) the financial condition, business,
      properties, assets or operations of Panhandle Eastern and its Subsidiaries,
      taken as a whole, or (b) the ability of Panhandle Eastern, the Borrower or
      TLNG
      to perform its obligations under this Agreement, any Note or any other Loan
      Document on a timely basis.

     

    “Maturity
      Date”
shall
      mean March 13, 2012.

     

    “Note” or
      “Notes”
shall
      mean a promissory note or notes, respectively, of the Borrower, executed and
      delivered under this Agreement.

     

    “Notice
      of Borrowing”
shall
      have the meaning set forth in Section 2.2(a) (Making the Loans).

     

    “Obligations”
shall
      mean all obligations of Panhandle Eastern, the Borrower and TLNG to the Banks
      under this Agreement, the Notes and all other Loan Documents to which any of
      them is a party.

     

    “Officer’s
      Certificate”
shall
      mean a certificate signed in the name of the applicable Loan Party, by either
      its President, one of its Vice Presidents, its Treasurer, its Secretary, or
      one
      of its Assistant Treasurers or Assistant Secretaries.

     

    “Other
      Taxes”
shall
      have the meaning set forth in Section 2.11(b) (Taxes).

     

    “Panhandle
      Eastern”
shall
      have the meaning set forth in the preamble hereto.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    “Panhandle
      Eastern 2.75% Senior Notes”
shall
      mean the senior notes issued by Panhandle Eastern pursuant to the Fourth
      Supplemental Indenture, dated as of March 12, 2004, between Panhandle Eastern
      and J.P. Morgan Trust Company, National Association, as trustee, to the
      Indenture, dated as of March 29, 1999, among Panhandle Eastern, CMS Panhandle
      Holding Company and NBD Bank.

     

    “Permitted
      Liens”
shall
      mean any of the following Liens:

     

    (a) Any
      Lien:

     

    (i) arising
      by reason of deposits with or the giving of any form of security to any
      Governmental Authority in connection with the financing of the acquisition
      or
      construction of property to be used in the business of a Loan
      Party;

     

    (ii) for
      current taxes and assessments or taxes and assessments not at the time
      delinquent and for which adequate reserves have been established to the extent
      required by GAAP; or

     

    (iii) for
      taxes
      and assessments which are delinquent but the validity of which is being
      contested at the time by a Loan Party in good faith and by appropriate
      proceedings and for which adequate reserves have been established to the extent
      required by GAAP;

     

    (b) Leases,
      whether now or hereafter existing, in the ordinary course of business, of
      property and assets now and hereafter owned by a Loan Party (excluding
      Capitalized Leases) and any renewals or extensions thereof;

     

    (c) Liens
      reserved in leases, or arising by operation of law, for rent and for compliance
      with the terms of the lease in the case of the leasehold estates;

     

    (d) Liens
      arising by reason of deposits with or the giving of any form of security to
      any
      Governmental Authority or any other governmental body created or approved by
      law
      or governmental regulation for any purpose at any time as required by law or
      governmental regulation as a condition to the transaction of any business or
      the
      exercise of any privilege or license, or to enable a Loan Party to maintain
      self-insurance or to participate in any fund for liability on any insurance
      risks or in connection with workmen’s compensation, unemployment insurance, old
      age pensions or other social security or to share in the privileges or benefits
      required for companies participating in such arrangements;

     

    (e) 
      (i)
      Mechanics’, materialmen’s, warehousemen’s, landlord’s or similar Liens or any
      Lien arising by reason of pledges or deposits to secure payment of workmen’s
      compensation or other insurance or social security legislation, (ii) good faith
      deposits or downpayments in connection with tenders or leases of real estate,
      bids or contracts (other than contracts for the payment of money), including
      contracts for the acquisition of machinery and equipment, (iii) deposits to
      secure public or statutory obligations, (iv) deposits to secure or in lieu
      of
      surety, stay or appeal bonds, (v) margin deposits (provided
      that all
      such margin deposits shall not exceed $2,000,000 in the aggregate at any time)
      and (vi) deposits as security for the payment of taxes or assessments or other
      similar charges;

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (f) Liens
      of
      any judgments not constituting an Event of Default under Section 8.9
      (Undischarged Judgment);

     

    (g) Any
      obligation or duties, affecting the property of a Loan Party, to any
      Governmental Authority with respect to any franchise, grant, lease, license,
      permit or similar arrangement with such Governmental Authority;

     

    (h) Rights
      reserved to or vested in any Governmental Authority by the terms of any right,
      power, franchise, grant, license or permit or by any provision of law, to
      terminate or to require annual or other periodic payments as a condition to
      the
      continuance of such right, power, franchise, grant, license or
      permit;

     

    (i) Rights
      reserved to or vested in any Governmental Authority to control or regulate
      any
      property of a Loan Party, or to use such property in any manner which does
      not
      materially impair the use of such property for the purpose for which it is
      held
      by a Loan Party;

     

    (j) Zoning
      laws and ordinances;

     

    (k) Restrictive
      covenants, easements on, exceptions to or reservations in respect of any
      property of a Loan Party granted or reserved for the purpose of electric lines,
      fiber optic lines, water and sewer lines, pipelines, other utilities, roads,
      streets, alleys, highways, railroad purposes, the removal of oil, gas,
      hydrocarbon, coal or other minerals, and other like purposes, or for the use
      of
      real property or interests therein, facilities and equipment, which do not
      materially impair the use thereof for the purposes for which it is held by
      a
      Loan Party, and any and all rents, royalties, reservations, Liens and rights
      or
      interests of third parties, in each case not securing any Debt, arising in
      the
      ordinary course of business of a Loan Party by virtue of any lease or
      exploration, development, drilling, unitization, communitization or operating
      agreement relating to or affecting any oil, gas, hydrocarbon, coal or other
      mineral properties in which a Loan Party has an interest;

     

    (l) Defects
      or irregularities of title, and inaccuracies of legal descriptions, affecting
      any portion of the property of a Loan Party or any of its Subsidiaries that
      individually or in the aggregate do not materially interfere with the operation,
      value of use of the properties of such Loan Party or such Subsidiaries taken
      as
      a whole;

     

    (m) Liens
      securing Debt with respect to Debt of any Person that becomes a Subsidiary
      of a
      Loan Party, provided
      that
      such Liens were in existence prior to the date on which such Person becomes
      a
      Subsidiary of such Loan Party and were not created in contemplation of such
      Person becoming a Subsidiary of such Loan Party; 

     

    (n) Liens
      on
      any office equipment, data processing equipment (including computer and computer
      peripheral equipment), or motor vehicles purchased in the ordinary course of
      the
      applicable Loan Party’s business; and

     

    (o) Liens
      created in the ordinary course of business in favor of banks and other financial
      institutions over credit balances or any bank accounts of a Loan Party held
      at
      such banks or financial institutions.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    “Person”
shall
      mean an individual, partnership, joint venture, corporation, joint stock
      company, bank, trust, unincorporated organization and/or a government or any
      department or agency thereof.

     

    “Plan”
shall
      mean any plan subject to Title IV of ERISA and maintained for employees of
      any
      Loan Party or of any member of a “controlled group of corporations,” as such
      term is defined in the Code, of which a Loan Party is a member, or any such
      plan
      to which a Loan Party thereof is required to contribute on behalf of its
      employees.

     

    “Prime
      Rate”
shall
      mean, on any day, the rate determined by the Agent and announced to its
      customers as being its prime rate for that day. Without notice to the Borrower
      or any other Person, the Prime Rate shall change automatically from time to
      time
      as and in the amount by which said Prime Rate shall fluctuate, with each such
      change to be effective as of the date of each change in such Prime Rate. The
      Prime Rate is a reference rate and does not necessarily represent the lowest
      or
      best rate actually charged to any customer. The Agent may make commercial or
      other loans at rates of interest at, above or below the Prime Rate.

     

    “Priority
      Obligations Amount”
shall
      mean the sum (without duplication) of (i) all Attributable Indebtedness with
      respect to any Sale-Leaseback Transaction entered into by Panhandle Eastern
      or
      any of its Subsidiaries, (ii) all Debt of Panhandle Eastern or any of its
      Subsidiaries secured by a Lien (other than Liens permitted by clauses (a)
      through (c) of Section 6.2 (Liens, Etc.)) and (iii) all Debt of Subsidiaries
      of
      Panhandle Eastern (other than the Borrower or TLNG), other than such Debt owed
      to Panhandle Eastern or another Subsidiary. 

     

    “Pro-Rata
      Percentage”
shall
      mean with respect to any Bank, a fraction (expressed as a percentage), the
      numerator of which shall be the amount of such Bank’s outstanding Loans (or
      Commitment) and the denominator of which shall be the aggregate amount of all
      the outstanding Loans (or Commitments) of the Banks, as adjusted from time
      to
      time in accordance herewith.

     

    “Property”
shall
      mean any interest or right in any kind of property or asset, whether real,
      personal, or mixed, owned or leased, tangible or intangible, and whether now
      held or hereafter acquired.

     

    “Register”
shall
      have the meaning set forth in Section 11.14(d).

     

    “Release”
shall
      mean a “release”, as such term is defined in CERCLA.

     

    “Restricted
      Payment”
shall
      mean a Person’s declaration or payment of any dividends, the purchase,
      redemption, retirement, defeasance or other acquisition for value of any of
      its
      Equity Interests now or hereafter outstanding, return any capital to its
      stockholders, partners or members (or the equivalent Persons thereof) as such,
      making any distribution of assets, Equity Interests, obligations or securities
      to its stockholders, partners or members (or the equivalent Persons thereof)
      as
      such or making of any interest payment on any Debt owing to its direct or
      indirect parent (or any equity owner thereof).

     

    “Required
      Banks”
shall
      mean at any time Banks holding more than 66-2/3% of the unpaid principal amounts
      outstanding under the Loans, or, if no such amounts are outstanding, more than
      66-2/3% of the Pro Rata Percentages.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    “Sale-Leaseback
      Transaction”
has
      the
      meaning set forth in Section 6.8 (Sales and Leasebacks).

     

    “Senior
      Funded Debt”
shall
      mean Funded Debt of Panhandle Eastern excluding Debt that is contractually
      subordinated in right of payment to any other Debt of Panhandle
      Eastern.

     

    “Southern
      Union”
shall
      mean Southern Union Company.

     

    “Subsidiary”
of
      any
      Person shall mean any corporation, partnership, joint venture, limited liability
      company, trust or estate of which (or in which) more than 50% of (a) the issued
      and outstanding capital stock having ordinary voting power to elect a majority
      of the Board of Directors (or similar board) of such Person (irrespective of
      whether at the time capital stock of any other class or classes of such Person
      shall or might have voting power upon the occurrence of any contingency), (b)
      the interest in the capital or profits of such partnership, joint venture or
      limited liability company or (c) the beneficial interest in such trust or estate
      is at the time directly or indirectly owned or controlled by such Person, by
      such Person and one or more of its other Subsidiaries or by one or more of
      such
      Person’s other Subsidiaries.

     

    “SUG
      Change of Control”
shall
      occur if any Person or “group” (within the meaning of Rules 13d-3 and 13d-5
      under the Securities Exchange Act of 1934, as amended from time to time, and
      any
      successor statute) shall have acquired beneficial ownership of 50% or more
      on a
      fully diluted basis of the voting and/or economic interest in Southern
      Union.

     

    “Taxes”
shall
      have the meaning set forth in Section 2.11(a) (Taxes).

     

    “TLNG”
shall
      have the meaning set forth in the preamble hereto.

     

    “Type” shall
      mean, with respect to any Loan, any Alternate Base Rate Loan or any Eurodollar
      Rate Loan.

     

    “Wachovia”
shall
      mean Wachovia Bank, National Association.

     

    1.2  Computation
      of Time Periods; Other Definitional Provisions.
      In this
      Agreement and the other Loan Documents in the computation of periods of time
      from a specified date to a later specified date, the word “from”
shall
      mean “from and including” and the words “to”
and
      “until”
each
      shall mean “to but excluding”. References in the Loan Documents to any agreement
      or contract “as
      amended”
shall
      mean and be a reference to such agreement or contract as amended, amended and
      restated, supplemented or otherwise modified from time to time in accordance
      with its terms.

     

    1.3  Accounting
      Terms.
      All
      accounting terms not specifically defined herein shall be construed in
      accordance with generally accepted accounting principles in effect from time
      to
      time in the United States of America (“GAAP”).
      If,
      at any time after the date of this Agreement, any material change is made to
      GAAP or Panhandle Eastern’s or the Borrower’s accounting practices that would
      affect in any material respect the determination of compliance with the
      covenants set forth in this Agreement, the Borrower and the Agent shall
      negotiate in good faith to amend any such covenant to restore the Borrower
      and
      the Banks to the position they occupied before the implementation of such
      material change in GAAP or accounting practices if the Borrower notifies the
      Agent of such change (or if the Agent notifies the Borrower that the Required
      Banks request an amendment to any such covenant for such purpose); provided
      that,
      until so amended, such covenant shall continue to be computed on the basis
      of
      GAAP as in effect and applied immediately before such change shall have become
      effective.

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    2.  AMOUNTS
      AND TERMS OF THE LOANS 

     

    2.1  The
      Loans.
      Each
      Bank severally agrees, on the terms and conditions hereinafter set forth, to
      make a single Loan (a “Loan”)
      to the
      Borrower on the Funding Date in an amount equal to such Bank’s Commitment at
      such time. The Borrowing shall consist of Loans made simultaneously by the
      Banks
      ratably according to their Commitments. Amounts borrowed under this Section
      2.1
      and repaid or prepaid may not be reborrowed.

     

    2.2  Making
      of the Loans.

     

    (a) The
      Borrowing shall be made on notice, given not later than 11:00 A.M. (New York
      City time) on the third Business Day prior to the date of the Borrowing if
      the
      Borrowing consists of Eurodollar Rate Loans, or not later than 9:00 A.M. (New
      York City time) on the date of the Borrowing if Borrowing consists of Alternate
      Base Rate Loans, by the Borrower to the Agent, which shall give to each Bank
      prompt notice thereof. The notice of the Borrowing (the “Notice
      of Borrowing”)
      shall
      be in writing, in form and substance satisfactory to the Agent, specifying
      therein the requested (i) date of the Borrowing, (ii) Type of Loans comprising
      the Borrowing, (iii) aggregate amount of the Borrowing, which shall not exceed
      the aggregate amount of the Commitments and (iv) if the Borrowing consists
      of
      Eurodollar Rate Loans, initial Interest Period for each such Loan. Each Bank
      shall, before 11:00 A.M. (New York City time) on the date of the Borrowing,
      make
      available for the account of its Applicable Lending Office to the Agent at
      the
      Agent’s account, in same day funds, such Bank’s portion of the Borrowing in
      accordance with Section 2.1 (The Loans). After the Agent’s receipt of such funds
      and upon fulfillment of the applicable conditions set forth in Section 4
      (Conditions to Funding), the Agent will make such funds available to the
      Borrower by electronic transfer of same day funds to the Borrower’s account.

     

    (b) The
      Notice of Borrowing shall be irrevocable and binding on the Borrower. If the
      Notice of Borrowing specifies the Borrowing is to be comprised of Eurodollar
      Rate Loans, the Borrower shall indemnify each Bank against any loss, cost or
      expense incurred by such Bank as a result of any failure to fulfill on or before
      the date specified in the Notice of Borrowing the applicable conditions set
      forth in Section 4 (Conditions to Funding), including, without limitation,
      any
      loss, cost or expense incurred by reason of the liquidation or reemployment
      of
      deposits or other funds acquired by such Bank to fund the Loan to be made by
      such Bank as part of the Borrowing when such Loan, as a result of such failure,
      is not made on such date.

     

    (c) Unless
      the Agent shall have received written notice from a Bank prior to the date
      of
      the Borrowing that such Bank will not make available to the Agent such Bank’s
      ratable portion of the Borrowing, the Agent may assume that such Bank has made
      such portion available to the Agent on the date of the Borrowing in accordance
      with clause (a) of this Section 2.2 and the Agent may, in reliance upon such
      assumption, make available to the Borrower on such date a corresponding amount.
      If and to the extent that such Bank shall not have so made such ratable portion
      available to the Agent, such Bank and the Borrower severally agree to repay
      or
      pay to the Agent forthwith on demand such corresponding amount and to pay
      interest thereon, for each day from the date such amount is made available
      to
      the Borrower until the date such amount is repaid or paid to the Agent, at
      (i)
      in the case of the Borrower, the interest rate applicable at such time under
      Section 2.6 (Interest) to Loans comprising the Borrowing and (ii) in the case
      of
      such Bank, the Federal Funds Rate. If such Bank shall pay to the Agent such
      corresponding amount, such amount so paid shall constitute such Bank’s Loan as
      part of the Borrowing for all purposes.

     

    (d) The
      failure of any Bank to make the Loan to be made by it as part of the Borrowing
      shall not relieve any other Bank of its obligation, if any, hereunder to make
      its Loan on the date of the Borrowing, but no Bank shall be responsible for
      the
      failure of any other Bank to make the Loan to be made by such other Bank on
      the
      date of the Borrowing.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    2.3  Repayment
      of Loans.
      The
      Borrower shall repay to the Agent for the ratable account of the Banks the
      aggregate outstanding principal amount of the Loans on the Maturity
      Date.

     

    2.4  Termination
      of the Commitments.
      The
      Commitment of each Bank shall be automatically and permanently reduced to $0
      on
      the Funding Date.

     

    2.5  Prepayments.
      The
      Borrower may, upon at least three Business Days’ notice in the case of
      Eurodollar Rate Loans and at least one Business Day’s notice in the case of
      Alternate Base Rate Loans, in each case to the Agent stating the proposed date
      and aggregate principal amount of the prepayment, and if such notice is given
      the Borrower shall, prepay the outstanding aggregate principal amount of the
      Loans in whole or ratably in part, together with accrued interest to the date
      of
      such prepayment on the aggregate principal amount prepaid; provided
      that (i)
      each partial prepayment shall be in an aggregate principal amount of $1,000,000
      in the case of Eurodollar Rate Loans and $1,000,000 in the case of Alternate
      Base Rate Loans, or in each case an integral multiple of $1,000,000 in excess
      thereof and (ii) if any prepayment of a Eurodollar Rate Loan is made on a date
      other than the last day of an Interest Period for such Loan, the Borrower shall
      also pay any amounts owing pursuant to Section 11.2(b) (Reimbursement of
      Expenses-breakage expenses). The Agent shall promptly notify each Bank of any
      notice received from the Borrower pursuant to this Section 2.5.

     

    2.6  Interest.

     

    (a) The
      Borrower shall pay interest on the unpaid principal amount of each Loan owing
      to
      each Bank from the date of such Loan until such principal amount shall be paid
      in full, at the following rates per annum:

     

    (i) During
      such periods as such Loan is an Alternate Base Rate Loan, a rate per annum
      equal
      at all times to the sum of (a) the Alternate Base Rate in effect from time
      to
      time plus
      (b) the
      Applicable Margin in effect from time to time, payable in arrears quarterly
      on
      the last day of each March, June, September and December during such periods
      and
      on the date such Alternate Base Rate Loan shall be Converted or paid in
      full.

     

    (ii) During
      such periods as such Loan is a Eurodollar Rate Loan, a rate per annum equal
      at
      all times during each Interest Period for such Loan to the sum of (a) the
      Eurodollar Rate for such Interest Period for such Loan plus
      (b) the
      Applicable Margin in effect from time to time, payable in arrears on the last
      day of such Interest Period and, if such Interest Period has a duration of
      more
      than three months, on each day that occurs during such Interest Period every
      three months from the first day of such Interest Period and on the date such
      Eurodollar Rate Loan shall be Converted or paid in full.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    (b) To
      the
      fullest extent permitted by applicable law, the amount of any principal,
      interest, fee or other amount payable under this Agreement or any other Loan
      Document to any Agent or any Bank that is not paid when due, from the date
      such
      amount shall be due until such amount shall be paid in full, payable in arrears
      on the date such amount shall be paid in full and on demand, at a rate per
      annum
      equal at all times to 2% per annum above the rate per annum required to be
      paid,
      in the case of principal or interest, on the Type of Loan relating to such
      principal or interest pursuant to clause (i) or (ii) of clause (a) above, as
      applicable, and, in all other cases, on Alternate Base Rate Loans pursuant
      to
      clause (i) of clause (a) above.

     

    (c) Promptly
      after receipt of the Notice of Borrowing pursuant to Section 2.2(a) (Making
      of
      the Loans), a notice of Conversion pursuant to Section 2.8 (Conversion of Loans)
      or a notice of selection of an Interest Period pursuant to the terms of the
      definition of “Interest Period”, the Agent shall give notice to the Borrower and
      each Bank of the applicable Interest Period and the applicable interest rate
      determined by the Agent for purposes of clause (a)(i) or (a)(ii) above. If
      the
      Borrower shall fail to select the duration of any Interest Period for any
      Eurodollar Rate Loans in accordance with the provisions contained in the
      definition of “Interest Period”, the Agent will forthwith so notify the Borrower
      and the Banks, whereupon the Borrower shall be deemed to have selected a
      one-month Interest Period for each such Eurodollar Rate Loan.

     

    2.7  Fees.

     

    (a) Each
      of
      the Borrower and the Guarantors agrees, jointly and severally, to pay to the
      Agent and the Lead Arrangers fees in such amounts and at such times as are
      specified in the Fee Letter.

     

    (b) All
      fees
      payable hereunder shall be paid on the dates due, in immediately available
      funds, to the Agent. Fees paid shall not be refundable under any
      circumstances.

     

    2.8  Conversion
      of Loans.

     

    (a) The
      Borrower may on any Business Day, upon notice given to the Agent not later
      than
      11:00 A.M. (New York City time) on the third Business Day prior to the date
      of
      the proposed Conversion and subject to the provisions of Section 2.6 (Interest)
      and 2.9 (Increased Costs), Convert all or any portion of the Loans of one Type
      into Loans of the other Type; provided
      that any
      Conversion of Eurodollar Rate Loans into Alternate Base Rate Loans shall be
      made
      only on the last day of an Interest Period for such Eurodollar Rate Loans and
      each Conversion of Loans shall be made ratably among the Banks in accordance
      with their Pro Rata Percentages; and also provided
      that,
      upon giving effect to such Conversions, no more than five Interest Periods
      shall
      be in effect. Each such notice of Conversion shall, within the restrictions
      specified above, specify (i) the date of such Conversion, (ii) the Loans to
      be
      Converted and (iii) if such Conversion is into Eurodollar Rate Loans, the
      duration of the initial Interest Period for such Loans. Each notice of
      Conversion shall be in writing and shall be irrevocable and binding on the
      Borrower. The Agent shall promptly notify each Bank of any notice received
      from
      the Borrower pursuant to this Section 2.8.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    (b) Upon
      the
      occurrence and during the continuation of any Default and if the Required Banks
      shall so direct, (i) each Eurodollar Rate Loan will automatically, on the last
      day of the then existing Interest Period therefor, Convert into an Alternate
      Base Rate Loan and (ii) the obligation of the Banks to make, or to Convert
      Loans
      into, Eurodollar Rate Loans shall be suspended.

     

    2.9  Increased
      Costs, Etc.

     

    (a) If,
      due
      to a Change in Law, there shall be any increase in the cost to any Bank of
      agreeing to make or of making, funding or maintaining Eurodollar Rate Loans
      (excluding, for purposes of this Section 2.9, any such increased costs resulting
      from (i) Taxes or Other Taxes (as to which Section 2.11 (Taxes) shall govern),
      (ii) changes in the rate of taxation or basis of taxation of overall net income
      or overall gross income by the United States or by the foreign jurisdiction
      or
      state under the laws of which such Bank is organized or has its principal office
      or Applicable Lending Office or any political subdivision thereof and (iii)
      reserve requirements contemplated by clause (b) of this Section 2.9), then
      the
      Borrower shall from time to time, within 10 days of receipt of a certificate
      from such Bank setting forth in reasonable detail a calculation of the amount
      necessary to compensate such Bank (with a copy of such certificate to the
      Agent), pay to the Agent for the account of such Bank additional amounts
      sufficient to compensate such Bank for such increased cost; provided
      that a
      Bank claiming additional amounts under this Section 2.9(a) agrees to use
      reasonable efforts (consistent with its internal policy and legal and regulatory
      restrictions) to designate a different Applicable Lending Office if the making
      of such a designation would avoid the need for, or reduce the amount of, such
      increased cost that may thereafter accrue and would not, in the reasonable
      judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate
      as to the amount of such increased cost, submitted to the Borrower by such
      Bank,
      shall be conclusive and binding for all purposes, absent manifest
      error.

     

    (b) The
      Borrower shall pay to each Bank, as long as such Bank shall be required to
      maintain reserves with respect to liabilities or assets consisting of or
      including Eurocurrency funds or deposits (currently known as “Eurocurrency
      Liabilities”),
      additional interest on the unpaid principal amount of each Eurodollar Rate
      Loan
      equal to the actual costs of such reserves allocated to such Loan by such Bank
      (as determined by such Bank in good faith, which determination shall be
      conclusive), which shall be due and payable on each date on which interest
      is
      payable on such Loan, provided
      that the
      Borrower shall have received at least 10 days’ prior notice (with a copy to the
      Agent) of such additional interest from such Bank (which notice shall contain
      a
      calculation of such additional interest in reasonable detail). If a Bank fails
      to give notice 10 days prior to the relevant date on which interest is payable,
      such additional interest shall be due and payable 10 days from receipt of such
      notice.

     

    (c) If,
      with
      respect to any Eurodollar Rate Loans, the Majority Banks notify the Agent that
      the Eurodollar Rate for any Interest Period for such Loans will not adequately
      reflect the cost to the Banks of making, funding or maintaining their Eurodollar
      Rate Loans for such Interest Period, the Agent shall forthwith so notify the
      Borrower and the Banks, whereupon (i) each such Eurodollar Rate Loan will
      automatically, on the last day of the then existing Interest Period therefor,
      Convert into an Alternate Base Rate Loan and (ii) the obligation of the Banks
      to
      make, or to Convert Loans into, Eurodollar Rate Loans shall be suspended until
      the Agent shall notify the Borrower that the Banks have determined that the
      circumstances causing such suspension no longer exist.

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    (d) Notwithstanding
      any other provision of this Agreement, if the introduction or effectiveness
      of
      or any change in or in the interpretation of any law or regulation shall make
      it
      unlawful, or any central bank or other Governmental Authority shall assert
      that
      it is unlawful, for any Bank or its Eurodollar Lending Office to perform its
      obligations hereunder to make Eurodollar Rate Loans or to continue to fund
      or
      maintain Eurodollar Rate Loans hereunder, then, on notice thereof and demand
      therefor by such Bank to the Borrower through the Agent, (i) each Eurodollar
      Rate Loan will automatically, upon such demand, Convert into an Alternate Base
      Rate Loan and (ii) the obligation of the Banks to make, or to Convert Loans
      into, Eurodollar Rate Loans shall be suspended until the Agent shall notify
      the
      Borrower that such Bank has determined that the circumstances causing such
      suspension no longer exist; provided
      that,
      before making any such demand, such Bank agrees to use reasonable efforts
      (consistent with its internal policy and legal and regulatory restrictions)
      to
      designate a different Eurodollar Lending Office if the making of such a
      designation would allow such Bank or its Eurodollar Lending Office to continue
      to perform its obligations to make Eurodollar Rate Loans or to continue to
      fund
      or maintain Eurodollar Rate Loans and would not, in the judgment of such Bank,
      be otherwise disadvantageous to such Bank.

     

    (e) A
      Bank
      shall only be entitled to recover increased costs pursuant to this Section
      2.9
      to the extent such costs were incurred during any time or period commencing
      not
      more than 120 days prior to the date on which such Bank notifies the Agent
      and
      the Borrower that it proposes to demand such compensation and identifies to
      the
      Agent and the Borrower the statute, regulation or other basis upon which the
      claimed compensation is or will be based; provided
      that, if
      the Change in Law giving rise to such increased costs is retroactive, then
      the
      120-day period referred to above shall be extended to include the period of
      retroactive effect thereof. 

     

    2.10  Payments
      and Computations.

     

    (a) The
      Borrower shall make each payment hereunder and under the Notes, irrespective
      of
      any right of counterclaim or set-off, not later than 12:00 P.M. (New York City
      time) on the day when due in U.S. dollars to the Agent at the Agent’s account in
      same day funds, with payments being received by the Agent after such time being
      deemed to have been received on the next succeeding Business Day. The Agent
      will
      promptly thereafter cause like funds to be distributed (x) if such payment
      by
      the Borrower is in respect of principal, interest or any other Obligation then
      payable hereunder and under the Notes to more than one Bank, to such Banks
      for
      the account of their respective Applicable Lending Offices ratably in accordance
      with the amounts of such respective Obligations then payable to such Banks
      and
      (y) if such payment by the Borrower is in respect of any Obligation then payable
      hereunder to one Bank, to such Bank for the account of its Applicable Lending
      Office, in each case to be applied in accordance with the terms of this
      Agreement. Upon its acceptance of an Assignment and Acceptance and recording
      of
      the information contained therein in the Register pursuant to Section 11.14(d)
      (Sale or Assignment), from and after the effective date of such Assignment
      and
      Acceptance, the Agent shall make all payments hereunder and under the Notes
      in
      respect of the interest assigned thereby to the Bank assignee thereunder, and
      the parties to such Assignment and Acceptance shall make all appropriate
      adjustments in such payments for periods prior to such effective date directly
      between themselves.

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    (b) The
      Borrower hereby authorizes each Bank and each of its Affiliates, if and to
      the
      extent payment owed to such Bank is not made when due hereunder or, in the
      case
      of a Bank, under the Note held by such Bank, to charge from time to time, to
      the
      fullest extent permitted by law, against any or all of the Borrower’s accounts
      with such Bank or such Affiliate any amount so due.

     

    (c) All
      computations of interest based on the Prime Rate shall be made by the Agent
      on
      the basis of a year of 365 or 366 days, as the case may be, and all computations
      of interest based on the Eurodollar Rate or the Federal Funds Rate shall be
      made
      by the Agent on the basis of a year of 360 days, in each case for the actual
      number of days (including the first day but excluding the last day) occurring
      in
      the period for which such interest is payable. Each determination by the Agent
      of an interest rate hereunder shall be conclusive and binding for all purposes,
      absent manifest error.

     

    (d) Whenever
      any payment hereunder or under the Notes shall be stated to be due on a day
      other than a Business Day, such payment shall be made on the next succeeding
      Business Day, and such extension of time shall in such case be included in
      the
      computation of payment of interest; provided
      that if
      such extension would cause payment of interest on or principal of Eurodollar
      Rate Loans to be made in the next following calendar month, such payment shall
      be made on the next preceding Business Day.

     

    (e) Unless
      the Agent shall have received notice from the Borrower prior to the date on
      which any payment is due to any Bank hereunder that the Borrower will not make
      such payment in full, the Agent may assume that the Borrower has made such
      payment in full to the Agent on such date and the Agent may, in reliance upon
      such assumption, cause to be distributed to each such Bank on such due date
      an
      amount equal to the amount then due such Bank. If and to the extent the Borrower
      shall not have so made such payment in full to the Agent, each such Bank shall
      repay to the Agent forthwith on demand such amount distributed to such Bank
      together with interest thereon, for each day from the date such amount is
      distributed to such Bank until the date such Bank repays such amount to the
      Agent, at the Federal Funds Rate.

     

    (f) If
      the
      Agent receives funds for application to the Obligations of the Loan Parties
      under or in respect of the Loan Documents under circumstances for which the
      Loan
      Documents do not specify the Loans to which, or the manner in which, such funds
      are to be applied, the Agent may, but shall not be obligated to, elect to
      distribute such funds to each of the Banks in accordance with such Bank’s pro
      rata share of the aggregate principal amount of all Loans outstanding at such
      time.

     

    2.11  Taxes.

     

    (a) Any
      and
      all payments by any Loan Party to or for the account of any Bank or any Agent
      hereunder or under the Notes or any other Loan Document shall be made, in
      accordance with Section 2.10 (Payments and Computations) or the applicable
      provisions of such other Loan Document, if any, free and clear of and without
      deduction for any and all present or future taxes, levies, imposts, deductions,
      charges or withholdings, and all liabilities with respect thereto, excluding,
      in the
      case of each Bank and each Agent, taxes that are imposed on its overall net
      income by the United States (and franchise taxes imposed in lieu thereof) and
      taxes that are imposed on its overall net income (and franchise taxes imposed
      in
      lieu thereof) by the state or foreign jurisdiction under the laws of which
      such
      Bank or such Agent, as the case may be, is organized or any political
      subdivision thereof and, in the case of each Bank, taxes that are imposed on
      its
      overall net income (and franchise taxes imposed in lieu thereof) by the state
      or
      foreign jurisdiction of such Bank’s principal office or Applicable Lending
      Office or any political subdivision thereof (all such non-excluded taxes,
      levies, imposts, deductions, charges, withholdings and liabilities in respect
      of
      payments hereunder or under the Notes being hereinafter referred to as
“Taxes”).
      If
      any Loan Party shall be required by law to deduct any Taxes from or in respect
      of any sum payable hereunder or under any Note or any other Loan Document to
      any
      Bank or any Agent, (i) the sum payable by such Loan Party shall be increased
      as
      may be necessary so that after such Loan Party and the Agent have made all
      required deductions (including deductions applicable to additional sums payable
      under this Section 2.11) such Bank or such Agent, as the case may be, receives
      an amount equal to the sum it would have received had no such deductions been
      made, (ii) such Loan Party shall make all such deductions and (iii) such Loan
      Party shall pay the full amount deducted to the relevant taxation authority
      or
      other authority in accordance with applicable law.

     

    
      
        
        

      

      
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    (b) In
      addition, a Loan Party shall pay any present or future stamp, documentary,
      excise, property or similar taxes, charges or levies that arise from any payment
      made by such Loan Party hereunder or under any Notes or any other Loan Documents
      or from the execution, delivery or registration of, performance under, or
      otherwise with respect to, this Agreement, the Notes or the other Loan Documents
      (hereinafter referred to as “Other
      Taxes”).

     

    (c) Panhandle
      Eastern, the Borrower and TLNG shall indemnify each Bank and each Agent for
      and
      hold them harmless against the full amount of Taxes and Other Taxes, imposed
      on
      or paid by such Bank or such Agent (as the case may be) with respect to any
      payment by or on account of any obligation of the Loan Parties hereunder
      (including Taxes or Other Taxes imposed or asserted by any jurisdiction on
      amounts payable under this Section 2.11) and any liability (including penalties,
      additions to tax, interest and expenses) arising therefrom or with respect
      thereto. This indemnification shall be made within 30 days from the date such
      Bank or such Agent (as the case may be) makes written demand
      therefor.

     

    (d) Within
      30
      days after the date of any payment of Taxes, the appropriate Loan Party shall
      furnish to the Agent, at its address referred to in Section 11.3 (Notices),
      the
      original or a certified copy of a receipt evidencing such payment, to the extent
      such a receipt is issued therefor, or other written proof of payment thereof
      that is reasonably satisfactory to the Agent. In the case of any payment
      hereunder or under the Notes or the other Loan Documents by or on behalf of
      a
      Loan Party through an account or branch outside the United States or by or
      on
      behalf of a Loan Party by a payor that is not a United States person, if such
      Loan Party determines that no Taxes are payable in respect thereof, such Loan
      Party shall furnish, or shall cause such payor to furnish, to the Agent, at
      such
      address, an opinion of counsel reasonably acceptable to the Agent stating that
      such payment is exempt from Taxes. For purposes of subsections (d) and (e)
      of
      this Section 2.11, the terms “United
      States”
and
      “United
      States person”
shall
      have the meanings specified in Section 7701 of the Internal Revenue
      Code.

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    (e) Each
      Bank
      organized under the laws of a jurisdiction outside the United States shall,
      on
      or prior to the date of its execution and delivery of this Agreement or on
      the
      date of the Assignment and Acceptance pursuant to which it becomes a Bank,
      as
      the case may be, and from time to time thereafter as reasonably requested in
      writing by a Loan Party (but only so long thereafter as such Bank remains
      lawfully able to do so), or upon the obsolescence or invalidity of any form
      previously provided provide each of the Agent and such Loan Party with two
      original Internal Revenue Service Forms W-8BEN or W-8ECI, as appropriate, or
      any
      other form prescribed by the Internal Revenue Service, certifying that such
      Bank
      is exempt from or entitled to a reduced rate of United States withholding tax
      on
      payments pursuant to this Agreement or the Notes or any other Loan Document,
      or
      (in the case of a Bank that is claiming exemption from U.S. federal withholding
      with respect to payments of “portfolio interest” and has certified in writing to
      the Agent that it is not (i) a “bank” as defined in Section 881(c)(3)(A) of the
      Internal Revenue Code, (ii) a 10-percent shareholder (within the meaning of
      Section 871(h)(3)(B) of the Internal Revenue Code) of such Loan Party or (iii)
      a
      controlled foreign corporation related to such Loan Party (within the meaning
      of
      Section 864(d)(4) of the Internal Revenue Code)) Internal Revenue Service Form
      W-8BEN, or any successor or other form prescribed by the Internal Revenue
      Service, or, in the case of a Bank that has certified that it is not a “bank” as
      described above, certifying that such Bank is a foreign corporation,
      partnership, estate or trust. If the forms provided by a Bank at the time such
      Bank first becomes a party to this Agreement indicate a United States interest
      withholding tax rate in excess of zero, withholding tax at such rate shall
      be
      considered excluded from Taxes unless and until such Bank provides the
      appropriate forms certifying that a lesser rate applies, whereupon withholding
      tax at such lesser rate only shall be considered excluded from Taxes for periods
      governed by such forms; provided
      that if,
      at the effective date of the Assignment and Acceptance pursuant to which a
      Bank
      becomes a party to this Agreement, the Bank assignor was entitled to payments
      under subsection (a) of this Section 2.11 in respect of United States
      withholding tax with respect to interest paid at such date, then, to such
      extent, the term Taxes shall include (in addition to withholding taxes that
      may
      be imposed in the future or other amounts otherwise includable in Taxes) United
      States withholding tax, if any, applicable with respect to the Bank assignee
      on
      such date. If any form or document referred to in this subsection (e) requires
      the disclosure of information, other than information necessary to compute
      the
      tax payable and information required on the date hereof by Internal Revenue
      Service Form W-8BEN or W-8ECI or the related certificate described above, that
      the applicable Bank reasonably considers to be confidential, such Bank shall
      give notice thereof to the applicable Loan Party and shall not be obligated
      to
      include in such form or document such confidential information.

     

    (f) For
      any
      period with respect to which a Bank has failed to provide a Loan Party with
      the
      appropriate form, certificate or other document described in subsection (e)
      above (other
      than if
      such
      failure is due to a change in law, or in the interpretation or application
      thereof, occurring after the date on which a form, certificate or other document
      originally was required to be provided or if such form, certificate or other
      document otherwise is not required under subsection (e) above), such Bank shall
      not be entitled to indemnification under subsection (a) or (c) of this Section
      2.11 with respect to Taxes imposed by the United States by reason of such
      failure; provided
      that
      should a Bank become subject to Taxes because of its failure to deliver a form,
      certificate or other document required hereunder, the Loan Parties shall, at
      the
      sole expense of such Bank, take such steps as such Bank shall reasonably request
      to assist such Bank to recover such Taxes.

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    (g) Any
      Bank
      claiming any additional amounts payable pursuant to this Section 2.11 agrees
      to
      use reasonable efforts (consistent with its internal policy and legal and
      regulatory restrictions) to change the jurisdiction of its Applicable Lending
      Office or assign its rights and obligations under this Agreement to another
      of
      its offices, branches or Affiliates if the making of such a change or assignment
      would avoid the need for, or reduce the amount of, any such additional amounts
      that may thereafter accrue and would not, in the reasonable judgment of such
      Bank, be otherwise disadvantageous to such Bank.

     

    (h) If
      a Bank
      or Agent actually receives a refund of any Taxes or Other Taxes as to which
      it
      has been indemnified by a Loan Party or with respect to which a Loan Party
      has
      paid additional amounts pursuant to this Section 2.11, it shall pay over such
      refund to the Loan Party (but only to the extent of indemnity payments made,
      or
      additional amounts paid, by the Loan Party under this Section 2.11 with respect
      to the Taxes or Other Taxes giving rise to such refund), net of all
      out-of-pocket expenses of the Agent or such Bank or Agent and without interest
      (other than any interest paid by the relevant Governmental Authority with
      respect to such refund); provided
      that the
      Loan Party, upon the request of the Agent or such Bank or Agent, agrees to
      repay
      the amount paid over to the Loan Party (plus any penalties, interest or other
      charges imposed by the relevant Governmental Authority) to the Agent or such
      Bank or Agent in the event the Agent or such Bank or Agent is required to repay
      such refund to such Governmental Authority. This Section 2.11(h) shall not
      be
      construed to require the Agent or any Bank or Agent to claim a refund or make
      available its tax returns (or any other information relating to its taxes which
      it deems confidential) to the Loan Parties or any other Person.

     

    2.12  Sharing
      of Payments, Etc.
      If any
      Bank shall obtain at any time any payment (whether voluntary, involuntary,
      through the exercise of any right of set-off, or otherwise, other than as a
      result of an assignment pursuant to Section 11.14 (Sale and Assignment)) (a)
      on
      account of Obligations due and payable to such Bank hereunder and under the
      Notes and the other Loan Documents at such time in excess of its ratable share
      (according to the proportion of (i) the amount of such Obligations due and
      payable to such Bank at such time to
      (ii) the
      aggregate amount of the Obligations due and payable to all Banks hereunder
      and
      under the Notes and the other Loan Documents at such time) of payments on
      account of the Obligations due and payable to all Banks hereunder and under
      the
      Notes at such time obtained by all the Banks at such time or (b) on account
      of
      Obligations owing (but not due and payable) to such Bank hereunder and under
      the
      Notes and the other Loan Documents at such time in excess of its ratable share
      (according to the proportion of (i) the amount of such Obligations owing to
      such
      Bank at such time to
      (ii) the
      aggregate amount of the Obligations owing (but not due and payable) to all
      Banks
      hereunder and under the Notes and the other Loan Documents at such time) of
      payments on account of the Obligations owing (but not due and payable) to all
      Banks hereunder and under the Notes at such time obtained by all of the Banks
      at
      such time, such Bank shall forthwith purchase from the other Banks such
      interests or participating interests in the Obligations due and payable or
      owing
      to them, as the case may be, as shall be necessary to cause such purchasing
      Bank
      to share the excess payment ratably with each of them; provided
      that if
      all or any portion of such excess payment is thereafter recovered from such
      purchasing Bank, such purchase from each other Bank shall be rescinded and
      such
      other Bank shall repay to the purchasing Bank the purchase price to the extent
      of such Bank’s ratable share (according to the proportion of (i) the purchase
      price paid to such Bank to
      (ii) the
      aggregate purchase price paid to all Banks) of such recovery together with
      an
      amount equal to such Bank’s ratable share (according to the proportion of (i)
      the amount of such other Bank’s required repayment to
      (ii) the
      total amount so recovered from the purchasing Bank) of any interest or other
      amount paid or payable by the purchasing Bank in respect of the total amount
      so
      recovered; provided,
      further
      that, so
      long as the Obligations under the Loan Documents shall not have been
      accelerated, any excess payment received by any Bank shall be shared on a pro
      rata basis only with other Banks. The Borrower agrees that any Bank so
      purchasing an interest or participating interest from another Bank pursuant
      to
      this Section 2.12 may, to the fullest extent permitted by law, exercise all
      its
      rights of payment (including the right of set-off) with respect to such interest
      or participating interest, as the case may be, as fully as if such Bank were
      the
      direct creditor of the Borrower in the amount of such interest or participating
      interest, as the case may be.

     

    
      
        
        

      

      
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    2.13  Use
      of Proceeds.
      The
      Borrower agrees that the proceeds of the Loans shall be used by it solely to
      repay in full the April 2005 Credit Agreement and to make a distribution to
      Panhandle Eastern, in each case on the Funding Date. Panhandle Eastern will
      use
      the proceeds of such distribution solely to repay in full the Panhandle Eastern
      2.75% Senior Notes on the Funding Date.

     

    2.14  Evidence
      of Debt.

     

    (a) (i)
      Each
      Bank shall maintain in accordance with its usual practice an account or accounts
      evidencing the indebtedness of the Borrower to such Bank resulting from each
      Loan owing to such Bank from time to time, including the amounts of principal
      and interest payable and paid to such Bank from time to time hereunder. The
      Borrower agrees that upon request by any Bank to the Borrower (with a copy
      of
      such request to the Agent) to the effect that a promissory note or other
      evidence of indebtedness is required or appropriate in order for such Bank
      to
      evidence (whether for purposes of pledge, enforcement or otherwise) the Loans
      owing to, or to be made by, such Bank, the Borrower shall promptly execute
      and
      deliver to such Bank, with a copy to the Agent, a Note payable to the order
      of
      such Bank in a principal amount equal to the Loans of such Bank. All references
      to Notes in the Loan Documents shall mean Notes, if any, to the extent issued
      hereunder.

     

    (b) The
      Register maintained by the Agent pursuant to Section 11.14(d) (Sale and
      Assignment) shall include a control account, and a subsidiary account for each
      Bank, in which accounts (taken together) shall be recorded (i) the date and
      amount of the Borrowing, the Type of Loans comprising the Borrowing and, if
      appropriate, the Interest Period applicable thereto, (ii) the terms of each
      Assignment and Acceptance delivered to and accepted by it, (iii) the amount
      of
      any principal or interest due and payable or to become due and payable from
      the
      Borrower to each Bank hereunder, and (iv) the amount of any sum received by
      the
      Agent from the Borrower hereunder and each Bank’s share thereof.

     

    (c) Entries
      made in good faith by the Agent in the Register pursuant to subsection (b)
      above, and by each Bank in its account or accounts pursuant to subsection (a)
      above, shall be prima
      facie
      evidence
      of the amount of principal and interest due and payable or to become due and
      payable from the Borrower to, in the case of the Register, each Bank and, in
      the
      case of such account or accounts, such Bank, under this Agreement, absent
      manifest error; provided
      that the
      failure of the Agent or such Bank to make an entry, or any finding that an
      entry
      is incorrect, in the Register or such account or accounts shall not limit or
      otherwise affect the obligations of the Borrower under this
      Agreement.

     

    
      
        
        

      

      
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    2.15  Replacement
      of Banks.
      If (a)
      any Bank requests compensation under Section 2.9 (Increased Costs) or asserts,
      pursuant to Section 2.9(d) that it is unlawful for such Bank to make Eurodollar
      Rate Loans, (b) the Borrower is required to pay any additional amount to any
      Bank or any Governmental Authority for the account of any Bank pursuant to
      Section 2.11 (Taxes), (c) any Bank defaults in its obligation to fund Loans
      hereunder, or (d) with respect of any Bank that does not approve any amendment
      or waiver of any provision of any Loan Document that requires the unanimous
      consent of all of the Banks pursuant to Section 11.1 (Amendments; Waivers,
      Etc.), if such amendment or waiver is agreed to by the Required Banks, then
      the
      Borrower may, at its sole expense, upon prior notice to such Bank and the Agent,
      require such Bank to assign and delegate, without recourse (in accordance with
      and subject to the restrictions contained in Section 11.14 (Sale and
      Assignment)), all its interests, rights and obligations under this Agreement
      to
      an assignee that shall assume such obligations (which assignee may be another
      Bank, if a Bank accepts such assignment); provided
      that (i)
      to the extent required under Section 11.14 (Sale and Assignment), the Borrower
      shall have received the prior written consent of the Agent, which consent shall
      not unreasonably be withheld, (ii) such Bank shall have received payment of
      an
      amount equal to the outstanding principal of its Loans, accrued interest
      thereon, accrued fees and all other amounts payable to it hereunder, from the
      assignee (to the extent of such outstanding principal and accrued interest
      and
      fees) or the Borrower (in the case of all other amounts) and (iii) in the case
      of any such assignment resulting from a claim for compensation under Section
      2.9
      (Increased Costs) or payments required to be made pursuant to Section 2.11
      (Taxes), such assignment will result in a reduction in such compensation or
      payments. A Bank shall not be required to make any such assignment and
      delegation if, prior thereto, as a result of a waiver by such Bank or otherwise,
      the circumstances entitling the Borrower to require such assignment and
      delegation cease to apply.

     

    3.  REPRESENTATIONS
      AND WARRANTIES OF THE LOAN PARTIES

     

    Each
      of
      Panhandle Eastern, the Borrower and TLNG represents and warrants that:

     

    3.1  Organization
      and Qualification.
      Such
      Loan Party: 

     

    (a) is
      duly
      organized, validly existing, and in good standing under the laws of its state
      of
      organization; 

     

    (b) has
      the
      corporate or organizational power to own its properties and to carry on its
      respective businesses as now conducted; and 

     

    (c) is
      duly
      qualified as a foreign limited partnership or limited liability company, as
      applicable, to do business and is in good standing in every jurisdiction where
      such qualification is necessary except when the failure to so qualify would
      not
      or does not have a Material Adverse Effect. 

     

    
      
        
        

      

      
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    The
      Borrower has the Subsidiaries as applicable listed on Schedule
      3.1
      attached
      hereto and made a part hereof for all purposes, and no others, each of which
      is
      a Delaware limited liability company unless otherwise noted on Schedule
      3.1.

     

    3.2  Authorization,
      Validity, Etc.
      Each
      such Loan Party has the limited liability company or limited partnership power
      and authority to make, execute, deliver and perform under this Agreement and
      the
      other Loan Documents to which it is a party and the transactions contemplated
      herein and therein, and all such action has been duly authorized by all
      necessary limited partnership or limited liability company proceedings on its
      part. Each Loan Document to which a Loan Party is a party has been duly and
      validly executed and delivered by such Loan Party and constitutes the valid
      and
      legally binding agreement of such Loan Party enforceable against such Loan
      Party
      in accordance with its terms, except as limited by Debtor Laws.

     

    3.3  Conflicting
      or Adverse Agreements or Restrictions.
      No Loan
      Party is a party to any contract or agreement or subject to any restriction
      which would materially adversely affect the ability of any Loan Party to perform
      its obligations under the Loan Documents to which it is a party. Neither the
      execution and delivery of this Agreement or any other Loan Document by any
      Loan
      Party that is or is to become a party thereto, nor the consummation of the
      transactions contemplated hereby or thereby, nor the fulfillment of and
      compliance with the respective terms, conditions and provisions hereof or
      thereof or of any instruments required hereby will conflict with or result
      in a
      breach of any of the terms, conditions or provisions of, or constitute a default
      under, or result in any violation of, or result in the creation or imposition
      of
      any lien (other than as contemplated or permitted by this Agreement) on any
      of
      the property of such Loan Party pursuant to (a) the charter or bylaws or similar
      organizational documents applicable to such Loan Party; (b) any law or any
      regulation of any Government Authority; (c) any order, writ, injunction or
      decree of any court; or (d) the terms, conditions or provisions of any agreement
      or instrument to which such Loan Party is a party or by which it is bound or
      to
      which it is subject, except in the case of clauses (b), (c) and (d) for
      conflicts, breaches, defaults, violations or the creation or imposition of
      liens
      that could not be reasonably expected to have a Material Adverse
      Effect.

     

    3.4  No
      Consents Required.
      No
      action, approval, consent, waiver, exemption, variance, franchise, order,
      permit, authorization, right or license of or from a Governmental Authority,
      and
      no notice to or filing with, any Governmental Authority or any other third
      party
      is required for (a) the due execution, delivery or performance by any Loan
      Party
      of any Loan Document to which it is or is to be a party, or for the consummation
      of the transactions contemplated hereby, including without limitation the
      incurrence of Debt under this Agreement and the borrowing and repayment of
      Loans
      hereunder; or (b) the exercise by any Agent or any Bank of its rights under
      the
      Loan Documents, except for those authorizations, approvals, actions, notices
      and
      filings (A) which have been duly obtained or made or which are not required
      under the terms of the Loan Documents to have been obtained or made on or prior
      to such date or (B) with respect to the consummation of the transactions
      contemplated hereby, the failure of which to be obtained or made could not
      reasonably be expected to have a Material Adverse Effect.

     

    3.5  Financial
      Statements.

     

    (a) Panhandle
      Eastern has furnished the Banks with its audited financial report as of the
      fiscal year ending December 31, 2006. These statements are complete and correct
      and present fairly, in all material respects, in accordance with GAAP,
      consistently applied throughout the periods involved, the Consolidated financial
      position of Panhandle Eastern and its Subsidiaries and the results of their
      operations as at the dates and for the periods indicated.

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    (b) The
      Borrower has furnished the Banks with the Borrower’s unaudited financial report
      as of the fiscal year ending December 31, 2006. These statements are complete
      and correct and present fairly, in all material respects, in accordance with
      GAAP, consistently applied throughout the periods involved, the Consolidated
      financial position of the Borrower and its Subsidiaries and the results of
      their
      operations as at the dates and for the periods indicated. 

     

    (c) Since
      December 31, 2006, there has not occurred any event or condition which,
      individually or in the aggregate, has resulted in, or could reasonably be
      expected to result in, a Material Adverse Change respecting Panhandle Eastern,
      the Borrower or TLNG.

     

    3.6  Litigation.
      Except
      as disclosed pursuant to Section 3.16 (Environmental Matters), there is no:
      (a)
      action or proceeding pending or, to the knowledge of Panhandle Eastern, the
      Borrower or TLNG, threatened against any Loan Party before any court,
      administrative agency or arbitrator which is reasonably expected to have a
      Material Adverse Effect; (b) unsatisfied judgment outstanding against such
      Loan
      Party for the payment of money; or (c) other outstanding judgment, order or
      decree affecting such Loan Party before or by any administrative or governmental
      authority, compliance with or satisfaction of which may reasonably be expected
      to have a Material Adverse Effect. 

     

    3.7  Default.
      No Loan
      Party is in default under or in violation of the provisions of any instrument
      evidencing any Debt or of any agreement relating thereto or any judgment, order,
      writ, injunction or decree of any court or any order, regulation or demand
      of
      any administrative or governmental instrumentality, which default or violation
      could reasonably be expected to have a Material Adverse Effect.

     

    3.8  Compliance.
      Each
      Loan Party is in compliance with all laws, regulations and orders of any
      Governmental Authority applicable to it or its property, except where the
      failure to do so, individually or in the aggregate, could not reasonably be
      expected to result in a Material Adverse Effect.

     

    3.9  Title
      to Assets.
      Each
      Loan Party has good title to its respective assets, subject to no Liens except
      those permitted in Section 6.2 (Liens, Etc.), Section 7.1 (Liens, Etc.) and
      Permitted Encumbrances. For purposes of this Section 3.9, “Permitted
      Encumbrances”
shall
      mean easements, rights-of-way, restrictions, minor defects or irregularities
      in
      title and other similar charges or encumbrances not interfering in any material
      respect with the ordinary conduct of the business of such Loan
      Party.

     

    3.10  Payment
      of Taxes.
      Each
      Loan Party has filed all material tax returns required to be filed and has
      paid
      all taxes shown on said returns and all assessments which are due and payable
      (except such as are being contested in good faith by appropriate proceedings
      for
      which adequate reserves for their payment have been provided in a manner
      consistent with the accounting practices followed by the applicable Loan Party
      as of December 31, 2006). No Loan Party is aware of any pending investigation
      by
      any taxing authority or of any claims by any Governmental Authority for any
      unpaid taxes. Except as disclosed on Schedule
      3.10,
      no Loan
      Party is party to any tax sharing agreement or arrangement.

     

    
      
        
        

      

      
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    3.11  Investment
      Company Act Not Applicable.
      No Loan
      Party is an “investment company” or a company “controlled” by an “investment
      company”, within the meaning of the Investment Company Act of 1940, as
      amended.

     

    3.12  Regulations
      T, U and X.
      No Loan
      shall be a “purpose credit secured directly or indirectly by margin stock”
within the meaning of Regulation U of the Board of Governors of the Federal
      Reserve System (“margin stock”); none of the proceeds of any Loan will be used
      by any Loan Party to extend credit to others for the purpose of purchasing
      or
      carrying any margin stock, or for any other purpose which would constitute
      this
      transaction a “purpose credit secured directly or indirectly by margin stock”
within the meaning of said Regulation U, as now in effect or as the same may
      hereafter be in effect. No Loan Party will take or permit any action which
      would
      involve the Banks in a violation of Regulation T, Regulation U, Regulation
      X or
      any other regulation of the Board of Governors of the Federal Reserve System
      or
      a violation of the Securities Exchange Act of 1934, in each case as now or
      hereafter in effect. 

     

    3.13  ERISA.
      Except
      as
      provided in Schedule
      3.13,
      (i)
      no
      Reportable Event (as defined in § 4043(c) of ERISA) has occurred with respect to
      any Plan, (ii) each
      Plan
      complies in all material respects with applicable provisions of ERISA, and
      each
      Loan Party has filed all reports required by ERISA and the Code to be filed
      with
      respect to each Plan, (iii) no Loan Party has any knowledge of any event which
      could result in a liability of a Loan Party to the Pension Benefit Guaranty
      Corporation and (iv) each Loan Party has met all requirements with respect
      to
      funding the Plans imposed by ERISA or the Code. Since the effective date of
      Title IV of ERISA, there have not been any, nor are there now existing any,
      events or conditions that would permit any Plan to be terminated under
      circumstances which would cause the lien provided under § 4068 of ERISA to
      attach to any property of a Loan Party.

     

    3.14  No
      Financing of Certain Security Acquisitions.
      None of
      the proceeds of any Loan will be used to acquire any security in any transaction
      that is subject to §13 or §14 of the Securities Exchange Act of 1934, as
      amended.

     

    3.15  Franchises,
      Co-Licenses, Etc.
      Each
      Loan Party owns or has obtained all the material governmental permits,
      certificates of authority, leases, patents, trademarks, service marks, trade
      names, copyrights, franchises and licenses, and rights with respect thereto,
      required or necessary (or, in the sole and independent judgment of the Borrower,
      prudent) in connection with the conduct of their respective businesses as
      presently conducted or as proposed to be conducted, except where the failure
      to
      have any of the foregoing could not be reasonably expected to have a Material
      Adverse Effect.

     

    3.16  Environmental
      Matters.
      Except
      as disclosed in Schedule
      3.16,
      (a) all
      facilities and property owned or leased by a Loan Party have been and continue
      to be, owned or leased and operated by such Loan Party in material compliance
      with all Environmental Laws; (b) there has not been (during the period of
      such Loan Party’s ownership or lease) any Release of Hazardous Materials at, on,
      under or from any property now (or, to such Loan Party’s knowledge, previously)
      owned or leased by such Loan Party (i) that required, or may reasonably be
      expected to require, such Loan Party to expend funds on remediation or cleanup
      activities pursuant to any Environmental Law except for remediation or clean-up
      activities that would not be reasonably expected to have a Material Adverse
      Effect, or (ii) that otherwise, singly or in the aggregate, has, or may
      reasonably be expected to have, a Material Adverse Effect; (c) each Loan Party
      has been issued and is in material compliance with all permits, certificates,
      approvals, orders, licenses and other authorizations relating to environmental
      matters necessary for the conduct of its businesses; (d) there are no
      polychlorinated biphenyls (PCB’s) or asbestos-containing materials or surface
      impoundments in any of the facilities now (or, to the knowledge of such Loan
      Party, previously) owned or leased by such Loan Party, except for PCB’s and
      asbestos-containing materials of the type and in quantities that, to the
      knowledge of such Loan Party, do not currently require remediation, and if
      remediation of such PCB’s and asbestos-containing materials is hereafter
      required for any reason, such remediation activities would not reasonably be
      expected to have a Material Adverse Effect; (e) Hazardous Materials have not
      been generated, used, treated, recycled, stored or disposed of at, on, under
      or
      from any of the facilities or property now (or, to the knowledge of such Loan
      Party, previously) owned or leased by such Loan Party during the time of such
      Loan Party’s ownership or lease of such property that may require remediation or
      clean-up activities that would be reasonably expected to have a Material Adverse
      Effect; and (f) all underground storage tanks located on the property now (or,
      to the knowledge of such Loan Party, previously) owned or leased by such Loan
      Party have been (and to the extent currently owned or leased are) operated
      in
      material compliance with all applicable Environmental Laws. 

     

    
      
        
        

      

      
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    3.17  Disclosure.
      No
      written information (other than any projections) concerning any Loan Party
      and
      the transactions contemplated hereby furnished by or on behalf of such Loan
      Party to the Agent or any Bank in connection with the negotiation of this
      Agreement or delivered hereunder (as modified or supplemented by other
      information so furnished), taken as a whole, contains any untrue statement
      of a
      material fact or omits to state a material fact necessary in order to make
      the
      statements contained therein not misleading in any material respect in light
      of
      the circumstances under which such statements were or are made. The projections
      were prepared by or on behalf of each Loan Party in good faith based upon
      assumptions that such Loan Party believes to be reasonable as of the Closing
      Date and the Funding Date (it being understood that such projections are subject
      to significant uncertainties and contingencies, many of which are beyond such
      Loan Party’s control, and accordingly no assurance can be given and no
      representations are made that the assumptions are correct or that the
      projections will be realized).

     

    3.18  Insurance.
      Each
      Loan Party has insurance with a responsible and reputable insurer covering
      its
      assets against loss or damage of the kinds customarily insured against by
      companies similarly situated in the industry in which such Person conducts
      its
      business, in such amounts and with such deductibles as are customary for
      similarly situated companies; and such Person (a) has not received notice from
      any insurer or agent of such insurer that any material capital improvements
      or
      other material expenditures are required or necessary to be made in order to
      continue such insurance or (b) does not have any reason to believe that it
      will
      not be able to renew its existing insurance coverage as and when such coverage
      expires or to obtain similar coverage at commercially available rates from
      similar insurers as may be necessary to continue its business.

     

    3.19  Subsidiaries.
      TLNG is
      wholly owned by the Borrower. The Borrower is wholly owned, directly or
      indirectly, by Panhandle Eastern.

     

    4.  CONDITIONS
      TO FUNDING

     

    The
      obligation of the Banks to make any Loans is subject to the following
      conditions:

     

    4.1  Representations
      True and No Defaults.

     

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

    (a) The
      representations and warranties contained in Section 3 (Representations and
      Warranties of the Loan Parties) shall be true and correct on and as of the
      Funding Date as though made on and as of such date;

     

    (b) None
      of
      Panhandle Eastern, the Borrower or TLNG shall be in default in the due
      performance of any covenant on its part contained in this
      Agreement;

     

    (c) No
      Material Adverse Change shall have occurred with respect to (i) Panhandle
      Eastern reflected in the Consolidated annual financial statements of Panhandle
      Eastern dated December 31, 2006, or (ii) the Borrower reflected in the
      Consolidated annual financial statements of the Borrower dated December 31,
      2006; and

     

    (d) At
      the
      time of and immediately after giving effect to the Borrowing, no Event of
      Default or Default shall have occurred and be continuing.

     

    4.2  Intentionally
      Omitted.
      

     

    4.3  Compliance
      With Law.
      The
      business and operations of each Loan Party as conducted at all times relevant
      to
      the transactions contemplated by this Agreement to and including the close
      of
      business on the Funding Date shall have been and shall be in compliance in
      all
      material respects with all applicable State and Federal laws, regulations and
      orders affecting such Loan Party and the business and operations of any of
      them.

     

    4.4  Notice
      of Borrowing and Other Documents.
      The
      Banks shall have received (a) the Notice of Borrowing; and (b) such other
      documents and certificates relating to the transactions herein contemplated
      as
      the Banks may reasonably request.

     

    4.5  Payment
      of Fees and Expenses.
      The
      Borrower shall have paid (a) all expenses of the type described in Section
      11.2
      (Reimbursement of Expenses) through the date of such Loan and (b) all closing,
      structuring and other invoiced fees owed as of the Funding Date to the Agent
      or
      any of the Banks by the Borrower under this Agreement or any other written
      agreement between a Loan Party and the Agent, the applicable Bank(s), or any
      of
      their Affiliates.

     

    4.6  Repayment
      of Debt.
      Simultaneously with the funding of the Loans, (i) the Borrower shall cause
      to be repaid in full all of the obligations under the April 2005 Credit
      Agreement and the obligations of the Borrower thereunder shall be extinguished
      and (ii) Panhandle Eastern shall cause to be repaid in full all of the
      obligations under the Panhandle Eastern 2.75% Senior Notes and the obligations
      of Panhandle Eastern thereunder shall be extinguished.

     

    4.7  Loan
      Documents Satisfactory.
      The
      Agent shall have received a copy of each of the Loan Documents, each of which
      shall be in form and substance reasonably satisfactory to the
      Agent.

     

    4.8  Loan
      Documents, Opinions and Other Instruments.
      As of
      the Funding Date, the Loan Parties shall have delivered to the Agent the
      following: 

     

    (a) this
      Agreement, each of the Notes and all other Loan Documents required by the Agent
      and the Banks to be executed and delivered by the applicable Loan Parties in
      connection with this Agreement; 

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

    (b) a
      certificate from the Secretary of State of the State of Delaware as to the
      continued existence and good standing of Panhandle Eastern, the Borrower and
      TLNG in the State of Delaware; 

     

    (c) a
      certificate from Secretary of State of each State in which such certification
      is
      necessary as to the good standing of TLNG and each Loan Party as a foreign
      entity to do business in such State; 

     

    (d) a
      Secretary’s Certificate executed by the duly elected Secretary or a duly elected
      Assistant Secretary of Panhandle Eastern, the Borrower and TLNG, in a form
      acceptable to the Agent, whereby such Secretary or Assistant Secretary certifies
      that one or more resolutions adopted by the Board of Managers of such Loan
      Party
      (or, in the case of Panhandle Eastern, the Board of Managers of its general
      partner) remain in full force and effect authorizing such Loan Party to enter
      into the transactions contemplated hereby and perform its obligations under
      the
      Loan Documents; and

     

    (e) a
      legal
      opinion from in house counsel for the Borrower and each Guarantor, and New
      York
      counsel to HVB and Wachovia, each dated as of the Funding Date, addressed to
      the
      Agent and the Banks and otherwise acceptable in all respects to the Agent in
      its
      discretion.

     

    5.  AFFIRMATIVE
      COVENANTS OF THE LOAN PARTIES

     

    Each
      of
      Panhandle Eastern, the Borrower and TLNG covenants and agrees that, so long
      as
      the Borrower may borrow hereunder and until payment in full of the Obligations,
      each of Panhandle Eastern, the Borrower and TLNG, as applicable,
      will:

     

    5.1  Financial
      Statements and Information. 

     

    Deliver
      to the Banks:

     

    (a) as
      soon
      as available, and in any event within 120 days after the end of each fiscal
      year
      of Panhandle Eastern, a copy of the annual audit report of Panhandle Eastern
      and
      its Subsidiaries for such fiscal year containing a balance sheet, statement
      of
      income and stockholders equity and a cash flow statement, all in reasonable
      detail and certified by PriceWaterhouseCoopers or another independent certified
      public accountant of recognized standing reasonably satisfactory to the Banks;
      and

     

    (b) as
      soon
      as available, and in any event within 120 days after the end of each fiscal
      year
      of the Borrower, an unaudited financial report of the Borrower and its
      Subsidiaries for such fiscal year containing a balance sheet, statement of
      income and stockholders equity and cash flow statement, all in reasonable detail
      and certified by a financial officer of such Loan Party to have been prepared
      in
      accordance with GAAP, except as may be explained in such certificate; and

     

    (c) as
      soon
      as available, and in any event within 60 days after the end of each quarterly
      accounting period in each fiscal year of Panhandle Eastern and the Borrower
      (excluding the fourth quarter), an unaudited financial report of Panhandle
      Eastern and its Subsidiaries and the Borrower and its Subsidiaries as at the
      end
      of such quarter and for the period then ended, containing a balance sheet,
      statements of income and stockholders equity and a cash flow statement, all
      in
      reasonable detail and certified by a financial officer of such Loan Party to
      have been prepared in accordance with GAAP, except as may be explained in such
      certificate; 

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

    (d) such
      additional financial or other information as the Banks may reasonably request;
      and 

     

    (e) copies
      of
      all regular, periodic and special reports, and all registration statements,
      that
      such Loan Party files with the SEC or any governmental authority that may be
      substituted therefor, or with any national securities exchange.

     

    All
      financial statements specified in clauses (a), (b) and (c) above shall be
      furnished in Consolidated form for Panhandle Eastern and its Subsidiaries and
      the Borrower and its Subsidiaries with comparative Consolidated figures for
      the
      corresponding period in the preceding year. Together with each delivery of
      financial statements required by clauses (a), (b) and (c) above, each of
      Panhandle Eastern and the Borrower, as applicable, will deliver to the Banks
      an
      Officer’s Certificate stating that there exists no Event of Default or Default,
      or, if any such Event of Default or Default exists, stating the nature thereof,
      the period of existence thereof and what action the Borrower has taken or
      proposes to take with respect thereto. Together with each delivery of financial
      statements required by clauses (a) and (c) above, Panhandle Eastern will deliver
      to the Banks an Officer’s Certificate demonstrating compliance with the covenant
      set forth in Section 6.1 (Financial Covenant). The Banks are authorized to
      deliver a copy of any financial statement delivered to it to any regulatory
      body
      having jurisdiction over them, and to disclose same to any prospective assignees
      or participant Banks.

     

    5.2  Books
      and Records.
      Maintain, and cause each of its Subsidiaries to maintain, proper books of record
      and account in accordance with sound accounting practices in which true, full
      and correct entries will be made of all their respective dealings and business
      affairs.

     

    5.3  Insurance.
      Maintain, and cause each of its Subsidiaries to maintain, insurance with
      financially sound, responsible and reputable companies in such types and amounts
      and against such casualties, risks and contingencies as is customarily carried
      by owners of similar businesses and properties.

     

    5.4  Maintenance
      of Property.
      Maintain and preserve, and cause each of its Subsidiaries to maintain and
      preserve, all of its properties that are used or useful in the conduct of its
      business in accordance with such Loan Party’s established maintenance plan as in
      effect from time to time consistent with past practices.

     

    5.5  Inspection
      of Property and Records.
      Permit
      any officer, director or agent of the Agent or any Bank, on written notice
      and
      at such Bank’s expense, to visit and inspect during normal business hours any of
      the properties, corporate books and financial records of each Loan Party and
      discuss their respective affairs and finances with their principal officers,
      all
      at such times as the Agent or any Bank may reasonably request.

     

    5.6  Existence,
      Laws, Obligations, Taxes.
      Maintain, and cause each of its Subsidiaries to maintain, its corporate
      existence and franchises, and any license agreements and tariffs that permit
      the
      recovery of a return that such Loan Party considers to be fair (and as to
      licenses, franchises, and tariffs that are subject to regulatory determinations
      of recovery of returns, such Loan Party has presented or is presenting favorable
      defense thereof); and to comply, and cause each of its Subsidiaries to comply,
      with all statutes and governmental regulations noncompliance with which might
      have a Material Adverse Effect, and pay, and cause each of its Subsidiaries
      to
      pay, all taxes, assessments, governmental charges, claims for labor, supplies,
      rent and other obligations which if unpaid might become a lien against the
      property of such Loan Party and its Subsidiaries except liabilities being
      contested in good faith. 

     

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

    5.7  Notice
      of Certain Matters.
      Notify
      the Agent promptly upon acquiring knowledge of the occurrence of any of the
      following events: 

     

    (a) the
      institution or threatened institution of any lawsuit or administrative
      proceeding affecting a Loan Party that is not covered by insurance (less
      applicable deductible amounts) and which, if determined adversely to such Loan
      Party, could reasonably be expected to have a Material Adverse Effect;

     

    (b) the
      occurrence of any Material Adverse Change, or of any event that in the good
      faith opinion of such Loan Party is likely to result in a Material Adverse
      Change, affecting such Loan Party; 

     

    (c) the
      occurrence of any Event of Default or any Default; 

     

    (d) a
      change
      by Moody’s Investors Service, Inc. or by Standard and Poor’s Ratings Group in
      the rating of the Funded Debt of Panhandle Eastern; and

     

    (e) such
      other information respecting the business, financial condition, operations
      or
      assets of the Loan Parties as any Agent, or any Bank through the Agent, may
      from
      time to time reasonably request.

     

                
      5.8      ERISA. At all
      times:

    
       

                  (a) to
        the
        extent required of a Loan Party under applicable law, maintain and keep in
        full
        force and effect each Plan, subject to Southern Union’s right, in accordance
        with applicable legal requirements, (i) to amend any such Plans, (ii) to
        merge
        any such Plans, and to (iii) cease benefit accruals under any such
        Plans;

       

              
 (b) to
        the extent required of a Loan Party under applicable law, make contributions
        to
        each Plan in a timely manner and in an amount sufficient to comply with the
        minimum funding standards requirements of ERISA;

       

      (c) promptly
        after acquiring
        knowledge of any “reportable event” or of any “prohibited transaction” (as such
        terms are defined in § 4043 and § 406 of ERISA) in connection with any
        Plan, furnish the Banks with a statement executed by the president or chief
        financial officer of a Loan Party setting forth the details thereof and the
        action which the Borrower proposes to take with respect thereto and, when
        known,
        any action taken by the Internal Revenue Service with respect
        thereto;

       

      (d) notify
        the Banks promptly upon receipt by a Loan Party or any Subsidiary of any
        notice
        of the institution of any proceeding or other action which may result in
        the
        termination of any Plan and furnish to the Banks copies of such
        notice;

       

      
        
          
          

        

        
          -33-

          
            

          

        

        
          
          

        

      

      (d) to
        the
        extent required of a Loan Party under applicable law,
        acquire
        and maintain Pension Benefit Guaranty Corporation employer liability coverage
        insurance required under ERISA;

       

      (e) furnish
        the Banks with copies of the summary annual report for each Plan filed with
        the
        Internal Revenue Service as the Agent or the Banks may request; and

       

      (f) furnish
        the Banks with copies of any request for waiver of the funding standards
        or
        extension of the amortization periods required by § 303 and § 304 of ERISA or §
412 of the Code promptly after the request is submitted to the Secretary
        of the
        Treasury, the Department of Labor or the Internal Revenue Service, as the
        case
        may be.

       

    

        5.9  Compliance
      with Environmental Laws.
      At all
      times:

     

    (a) 
      (i) use
      and operate, and cause each of its Subsidiaries to use and operate, all of
      their
      respective facilities and properties in material compliance with all
      Environmental Laws; (ii) keep, and cause each of its Subsidiaries to keep,
      all
      necessary permits, approvals, orders, certificates, licenses and other
      authorizations relating to environmental matters in effect and remain in
      material compliance therewith; (iii) handle, and cause each of its Subsidiaries
      to handle, all Hazardous Materials in material compliance with all applicable
      Environmental Laws; and (iv) dispose, and cause each of its Subsidiaries to
      dispose, of all Hazardous Materials with carriers that maintain valid permits,
      approvals, certificates, licenses or other authorizations for such disposal
      in
      material compliance with applicable Environmental Laws;

     

    (b) promptly
      notify the Agent and provide copies upon receipt of all written claims,
      complaints, notices or inquiries relating to the condition of the facilities
      and
      properties of such Loan Party under, or their respective compliance with,
      applicable Environmental Laws wherein the condition or the noncompliance that
      is
      the subject of such claim, complaint, notice, or inquiry involves, or could
      reasonably be expected to involve, liability of or expenditures of (1) in the
      case of the Borrower or any of its Subsidiaries, $10,000,000 or more, and (2)
      in
      the case of Panhandle Eastern and its Subsidiaries taken as a whole, $30,000,000
      or more, to the extent in each case that such matters are not reflected in
      the
      financial statements provided pursuant to Sections 3.5 (a) and (b) hereof for
      the period ended December 31, 2006; and

     

    (c) provide
      such information and certifications which the Banks may reasonably request
      from
      time to time to evidence compliance with this Section 5.9.

     

     6.  NEGATIVE
      COVENANTS OF PANHANDLE EASTERN

     

    So
      long
      as the Borrower may borrow hereunder and until payment in full of the
      Obligations, except with the written consent of the Banks:

     

    6.1  Financial
      Covenant.
      Panhandle Eastern will not permit its Debt/Capitalization Ratio as of the last
      day of any fiscal quarter to be greater than 65.0%.

     

    6.2  Liens,
      Etc.
      Panhandle Eastern will not, and will not permit any of its Subsidiaries to,
      create, incur, assume or suffer to exist any Lien on or with respect to any
      of
      its Property, or sign or file or suffer to exist, under the Uniform Commercial
      Code of any jurisdiction, a financing statement that names Panhandle Eastern
      or
      any of its Subsidiaries as debtor, or sign or suffer to exist any security
      agreement authorizing any secured party thereunder to file such financing
      statement, or assign any accounts or other right to receive income,
      except:

     

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

    (a) Permitted
      Liens for Panhandle Eastern and its Subsidiaries; 

     

    (b) Liens
      existing on the date hereof and any replacement, extension or renewal of the
      indebtedness secured by such Lien, provided
      that the
      amount of Debt or other obligations secured thereby is not increased and is
      not
      secured by any additional assets; and 

     

    (c) Liens
      arising in connection with Capitalized Leases, provided
      that no
      such Lien shall extend to or cover any assets other than the assets subject
      to
      such Capitalized Leases, and purchase money Liens upon or in real property,
      equipment or other fixed or capital assets acquired or held by Panhandle Eastern
      or any of its Subsidiaries to secure the purchase price of such property,
      equipment or other fixed or capital assets or to secure Debt incurred for the
      purpose of financing the acquisition, construction or improvement of any such
      property, equipment or other fixed or capital assets, or Liens existing on
      any
      such property, equipment or other fixed or capital assets at the time of
      acquisition, or extensions, renewals or replacements of any of the foregoing
      for
      the same or a lesser amount (provided
      that no
      such Lien shall extend to or cover any property other than the property,
      equipment or other fixed or capital assets being acquired, constructed or
      improved, and no such extension, renewal or replacement shall extend to or
      cover
      any property not theretofore subject to the Lien being extended, renewed or
      replaced); provided
      that the
      aggregate principal amount of the Debt secured by Liens permitted by this clause
      (c) shall not exceed $50,000,000 at any time outstanding; 

     

    provided
      that
      Panhandle Eastern or any of its Subsidiaries may create or assume any other
      Lien
      securing Debt if, after giving effect to such Debt, the Priority Obligations
      Amount does not exceed 10% of the Consolidated Net Tangible Assets.

     

    6.3  Debt.
      Panhandle Eastern will not, and will not permit any Subsidiary (other than
      the
      Borrower or TLNG) to, create, incur, assume or suffer to exist any Debt, unless
      if after giving effect to such Debt, the Priority Obligations Amount does not
      exceed 10% of the Consolidated Net Tangible Assets. 

     

    6.4  Change
      in Nature of Business.
      Panhandle Eastern will not make any material change in the nature of Panhandle
      Eastern’s business as carried on at the date hereof.

     

    6.5  Mergers,
      Consolidation.
      Panhandle Eastern will not merge into or consolidate with any Person or permit
      any Person to merge into it, or liquidate, wind up or dissolve itself (or suffer
      any liquidation or dissolution), or permit any of its Subsidiaries to do so,
      except that:

     

    (a) any
      Subsidiary of Panhandle Eastern may merge into or consolidate with Panhandle
      Eastern, provided
      that
      Panhandle Eastern is the continuing or surviving Person;

     

    (b) any
      Subsidiary of Panhandle Eastern may merge into or consolidate with any other
      Subsidiary of Panhandle Eastern; provided
      that if
      such Subsidiary is the Borrower, such transaction shall comply with Section
      7.3(c);

     

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

    (c) any
      Subsidiary of Panhandle Eastern may be liquidated or dissolved if Panhandle
      Eastern determines in good faith that such liquidation or dissolution is in
      the
      best interest of Panhandle Eastern and is not materially disadvantageous to
      the
      Banks;

     

    (d) any
      Subsidiary of Panhandle Eastern may merge into or consolidate with any other
      Person or permit any other Person to merge into or consolidate with it;
provided
      that
      either (i) the Person surviving such merger shall be a Subsidiary of Panhandle
      Eastern or (ii) such transaction complies with Sections 6.6(b), 7.3 and 7.4;
      and

     

    (e) Panhandle
      Eastern may merge with any Person; provided
      that
      if
      Panhandle Eastern is not the surviving entity, the surviving entity agrees
      to
      assume and be bound by the terms and conditions of this Agreement pursuant
      to
      documentation satisfactory to the Agent to such effect;

     

    provided
      that in
      each case, immediately before and after giving effect thereto, no Default or
      Event of Default shall have occurred and be continuing and such transaction
      shall not cause or have caused a Material Adverse Effect.

     

    6.6  Sale
      of Assets.
      Panhandle Eastern will not, and will not permit any of its Subsidiaries to,
      sell, lease, transfer or otherwise dispose of, in one transaction or in a series
      of transactions, assets representing all or substantially all of the
      Consolidated assets of Panhandle Eastern, except:

     

    (a) in
      a
      transaction authorized by Section 6.5 (Mergers); and

     

    (b) sales,
      transfers or other dispositions of assets among Panhandle Eastern and its
      Subsidiaries.

     

    6.7  Restricted
      Payments.
      Panhandle Eastern will not, and will not permit any of its Subsidiaries to,
      pay
      or declare any Restricted Payment, except that, (a) any of its Subsidiaries
      may
      make Restricted Payments to Panhandle Eastern or another Subsidiary of Panhandle
      Eastern (except that the Borrower may not make any such payment to any Person
      other than Panhandle Eastern and Subsidiaries of the Borrower may not make
      any
      such payment to any Person other than the Borrower or Panhandle Eastern) and
      (b)
      so long as no Event of Default has occurred and is continuing and Panhandle
      Eastern is in pro forma compliance with Section 6.1 (Financial Covenant) after
      giving effect to such Restricted Payments, Panhandle Eastern may make
      distributions to Southern Union and Southern Union Panhandle, LLC.

     

    6.8  Sales
      and Leasebacks.
      Panhandle Eastern will not enter into any arrangement with any Person (other
      than Subsidiaries of Panhandle Eastern) providing for the leasing by Panhandle
      Eastern or any Subsidiary of real or personal property that has been or is
      to be
      sold or transferred by Panhandle Eastern or such Subsidiary to such Person
      or to
      any other Person to whom funds have been or are to be advanced by such Person
      on
      the security of such property or rental obligations of Panhandle Eastern or
      such
      Subsidiary (each a “Sale-Leaseback
      Transaction”),
      unless if after giving effect to such Sale-Leaseback Transaction, the Priority
      Obligations Amount does not exceed 10% of the Consolidated Net Tangible
      Assets.

     

    6.9  Transactions
      with Related Parties.
      Panhandle Eastern will not, and will not permit any Subsidiary to, enter into
      any transaction or agreement with any officer, director or holder (other than
      Southern Union and its Subsidiaries) of ten percent (10%) or more of any class
      of the outstanding capital stock of Panhandle Eastern or any Subsidiary (or
      any
      Affiliate of any such Person) unless the same is upon terms substantially
      similar to those obtainable from wholly unrelated sources. 

     

    
      
        
        

      

      
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    6.10  Hazardous
      Materials.
      Panhandle Eastern will not, and will not permit any Subsidiary to, (a) cause
      or
      permit any Hazardous Materials to be placed, held, used, located, or disposed
      of
      on, under or at any of such Person’s property or any part thereof by any Person
      in a manner which could reasonably be expected to have a Material Adverse
      Effect; (b) cause or permit any part of any of such Person’s property to be used
      as a manufacturing, storage, treatment or disposal site for Hazardous Materials,
      where such action could reasonably be expected to have a Material Adverse
      Effect; or (c) cause or suffer any liens to be recorded against any of such
      Person’s property as a consequence of, or in any way related to, the presence,
      remediation, or disposal of Hazardous Materials in or about any of such Person’s
      property, including any so-called state, federal or local “superfund” lien
      relating to such matters, where such recordation could reasonably be expected
      to
      have a Material Adverse Effect.

     

    7.  NEGATIVE
      COVENANTS OF THE BORROWER

     

    So
      long
      as the Borrower may borrow hereunder and until payment in full of the
      Obligations, except with the written consent of the Banks:

     

    7.1  Liens,
      Etc.
      The
      Borrower will not, and will not permit any Subsidiary to, create, incur, assume
      or suffer to exist any Lien on or with respect to any of its Property, or sign
      or file or suffer to exist, under the Uniform Commercial Code of any
      jurisdiction, a financing statement that names the Borrower or any of its
      Subsidiaries as debtor, or sign or suffer to exist any security agreement
      authorizing any secured party thereunder to file such financing statement,
      or
      assign any accounts or other right to receive income, except:

     

    (a) Permitted
      Liens for the Borrower and its Subsidiaries; 

     

    (b) Liens
      existing on the date hereof and any replacement, extension or renewal of the
      indebtedness secured by such Lien, provided
      that the
      amount of Debt or other obligations secured thereby is not increased and is
      not
      secured by any additional assets; and 

     

    (c) Liens
      arising in connection with Capitalized Leases, provided
      that no
      such Lien shall extend to or cover any assets other than the assets subject
      to
      such Capitalized Leases, and purchase money Liens upon or in real property,
      equipment or other fixed or capital assets acquired or held by the Borrower
      or
      any of its Subsidiaries to secure the purchase price of such property, equipment
      or other fixed or capital assets or to secure Debt incurred for the purpose
      of
      financing the acquisition, construction or improvement of any such property,
      equipment or other fixed or capital assets, or Liens existing on any such
      property, equipment or other fixed or capital assets at the time of acquisition,
      or extensions, renewals or replacements of any of the foregoing for the same
      or
      a lesser amount (provided
      that no
      such Lien shall extend to or cover any property other than the property,
      equipment or other fixed or capital assets being acquired, constructed or
      improved, and no such extension, renewal or replacement shall extend to or
      cover
      any property not theretofore subject to the Lien being extended, renewed or
      replaced); provided
      that the
      aggregate principal amount of the Debt secured by Liens permitted by this clause
      (c) shall not exceed $10,000,000 at any time outstanding.

     

    
      
        
        

      

      
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    7.2  Debt.
      The
      Borrower will not, and will not permit any Subsidiary to, incur or permit to
      exist any Debt, except: 

     

    (a) Debt
      under this Agreement;

     

    (b) Debt
      of
      TLNG to the Borrower; 

     

    (c) endorsements
      in the ordinary course of business of negotiable instruments in the course
      of
      collection;

     

    (d) Debt
      of
      TLNG or any other Subsidiary of the Borrower subordinated to the Loans on terms
      and pursuant to documentation satisfactory to the Agent;

     

    (e) Unsecured
      Debt of the Borrower; and

     

    (f) Capitalized
      Leases of the Borrower with Subsidiaries as permitted pursuant to
      7.1(c).

     

    7.3  Merger,
      Consolidation.
      The
      Borrower will not, and will not permit any Subsidiary to, merge or consolidate
      with any other Person or sell, lease, transfer or otherwise dispose of (whether
      in one transaction or a series of transactions) all or a substantial part of
      its
      assets or acquire (whether in one transaction or a series of transactions)
      all
      or a substantial part of the assets of any Person, except that:

     

    (a) any
      Subsidiary of the Borrower may merge or consolidate with the Borrower
      (provided
      that the
      Borrower shall be the continuing or surviving corporation) or with any one
      or
      more Subsidiaries of the Borrower;

     

    (b) any
      Subsidiary of the Borrower may sell, lease, transfer or otherwise dispose of
      any
      of its assets to the Borrower or another Subsidiary of the
      Borrower;

     

    (c) the
      Borrower may acquire the assets of or merge with any Person, provided
      that if
      the Borrower is not the surviving entity, the surviving entity agrees to assume
      and be bound by the terms and conditions of this Agreement pursuant to
      documentation satisfactory to the Agent; and 

     

    (d) the
      Borrower or any Subsidiary of the Borrower may sell, lease, assign or otherwise
      dispose of assets as otherwise permitted under Section 7.4 (Sale of Assets),
      which shall include without limitation the transfer of assets to a Subsidiary
      and the subsequent sale of the equity interests in such Subsidiary;

     

    provided
      that,
      after giving effect to any such transaction, no Default or Event of Default
      shall have occurred and be continuing and such transaction shall not cause
      or
      have caused a Material Adverse Effect.

     

    7.4  Sale
      of Assets.
      The
      Borrower will not, and will not permit any Subsidiary to, except as permitted
      under this Section 7.4, sell, assign, lease, or otherwise dispose of (whether
      in
      one transaction or in a series of transactions) all or any part of its Property
      (whether now owned or hereafter acquired); provided
      that

     

    
      
        
        

      

      
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    (a) the
      Borrower or any Subsidiary may in the ordinary course of business dispose of
      (i)
      Property consisting of Inventory; and (ii) Property consisting of goods or
      equipment that are, in the opinion of the Borrower or any Subsidiary of the
      Borrower, obsolete or unproductive, but if in the good faith judgment of the
      Borrower or any Subsidiary of the Borrower such disposition without replacement
      thereof would have a Material Adverse Effect, such goods and equipment shall
      be
      replaced, or their utility and function substituted, by new or existing goods
      or
      equipment; and

     

    (b) the
      Borrower or any Subsidiary may dispose of Property other than Inventory (in
      consideration of such amount as in the good faith judgment of the Borrower
      or
      such Subsidiary represents a fair consideration therefor), provided
      that the
      aggregate value of such property disposed of (determined after depreciation
      and
      in accordance with GAAP) after the Funding Date does not exceed ten percent
      (10%) of the aggregate value of all of the Borrower’s and its Subsidiaries’ real
      property and tangible personal property other than Inventory considered on
      a
      Consolidated basis and determined after depreciation and in accordance with
      GAAP, as of December 31, 2006. 

     

    7.5  Restricted
      Payment.
      The
      Borrower will not pay or declare any Restricted Payment to any Person other
      than
      to Panhandle Eastern. The Borrower will not permit any Subsidiary to pay or
      declare any Restricted Payment to any Person other than the
      Borrower.

     

    7.6  Securities
      Credit Regulations.
      Neither
      the Borrower nor any Subsidiary will take or permit any action which might
      cause
      the Loans or this Agreement to violate Regulation T, Regulation U, Regulation
      X
      or any other regulation of the Board of Governors of the Federal Reserve System
      or a violation of the Securities Exchange Act of 1934, in each case as now
      or
      hereafter in effect.

     

    7.7  Nature
      of Business.
      The
      Borrower will not, and will not permit any Subsidiary, to, make any material
      change in the nature of the Borrower’s business as carried on at the date
      hereof.

     

    7.8  Transactions
      with Related Parties.
      The
      Borrower will not, and will not permit any Subsidiary to, enter into any
      transaction or agreement with any officer, director or holder (other than
      Southern Union and its Subsidiaries) of ten percent (10%) or more of any class
      of the outstanding capital stock of the Borrower or any Subsidiary (or any
      Affiliate of any such Person) unless the same is upon terms substantially
      similar to those obtainable from wholly unrelated sources.

     

    7.9  Hazardous
      Materials.
      The
      Borrower will not, and will not permit any Subsidiary to, (a) cause or permit
      any Hazardous Materials to be placed, held, used, located, or disposed of on,
      under or at any of such Person’s property or any part thereof by any Person in a
      manner which could reasonably be expected to have a Material Adverse Effect;
      (b)
      cause or permit any part of any of such Person’s property to be used as a
      manufacturing, storage, treatment or disposal site for Hazardous Materials,
      where such action could reasonably be expected to have a Material Adverse
      Effect; or (c) cause or suffer any liens to be recorded against any of such
      Person’s property as a consequence of, or in any way related to, the presence,
      remediation, or disposal of Hazardous Materials in or about any of such Person’s
      property, including any so-called state, federal or local “superfund” lien
      relating to such matters, where such recordation could reasonably be expected
      to
      have a Material Adverse Effect.

     

    
      
        
        

      

      
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    7.10  Use
      of Proceeds.
      The
      Borrower will not, and will not permit any Subsidiary to, use the proceeds
      of
      any Loan for any purpose other than for purposes set forth in Section 2.13
      (Use
      of Proceeds); or use any such proceeds in a manner which violates or results
      in
      a violation of any law or regulation.

     

    7.11  Other
      Documents.
      The
      Borrower will not, and will not permit any Subsidiary to, amend, restate or
      otherwise modify or waive any provision or condition of any instrument or
      agreement relating to any secured Debt of such Person if the effect of such
      modification or waiver is to increase the obligations of such Person in a manner
      that is adverse to the Banks without the consent of the Majority Banks.

     

    8.  EVENTS
      OF DEFAULT; REMEDIES

     

    If
      any of
      the following events shall occur, then the Agent shall at the request, or may
      with the consent, of the Majority Banks, declare the Notes and all interest
      accrued and unpaid thereon, and all other amounts payable under the Notes,
      this
      Agreement and the other Loan Documents, to be forthwith due and payable,
      whereupon the Notes, all such interest and all such other amounts, shall become
      and be forthwith due and payable without presentment, demand, protest, or
      further notice of any kind (including, without limitation, notice of default,
      notice of intent to accelerate and notice of acceleration), all of which are
      hereby expressly waived by the Borrower; provided
      that
      with respect to any Event of Default described in Sections 8.7 (Bankruptcy)
      or
      8.8 (Dissolution) hereof, the entire unpaid principal amount of the Notes,
      all
      interest accrued and unpaid thereon, and all such other amounts payable under
      the Notes, this Agreement and the other Loan Documents, shall automatically
      become immediately due and payable, without presentment, demand, protest, or
      any
      notice of any kind (including, without limitation, notice of default, notice
      of
      intent to accelerate and notice of acceleration), all of which are hereby
      expressly waived by the Borrower:

     

    8.1  Failure
      to Pay Obligations When Due.
      The
      Borrower fails to pay, repay or prepay any principal on the date when due,
      or
      any other Obligation within five Business Days after the date when
      due.

     

    8.2  Intentionally
      Omitted.
      

     

    8.3  Failure
      to Pay Other Debt.
      (a) The
      Borrower or any Subsidiary of the Borrower fails to pay principal or interest
      on
      any unsecured Debt aggregating more than $10,000,000 or any secured Debt when
      due and any related grace period has expired, or the holder of any of such
      Debt
      declares such Debt due prior to its stated maturity because of the Borrower’s or
      any Subsidiary’s default thereunder and the expiration of any related grace
      period; (b) Panhandle Eastern or any of its Subsidiaries fails to pay principal
      or interest on any Debt aggregating more than $50,000,000 when due and any
      related grace period has expired, or the holder of any of such Debt declares
      such Debt due prior to its stated maturity because of Panhandle Eastern’s or any
      such Subsidiary’s default thereunder and the expiration of any related grace
      period; (c) at any time that the aggregate amount of all Citrus Investments
      exceeds $10,000,000, CCC or any of its Subsidiaries fails to pay principal
      or
      interest on any Debt aggregating more than $10,000,000 when due and any related
      grace period has expired, or the holder of any of such Debt declares such Debt
      due prior to its stated maturity because of CCC’s or any such Subsidiary’s
      default thereunder and the expiration of any related grace period; or
      (d) at any time that the aggregate amount of all Citrus Investments exceeds
      $10,000,000, the holder of any Debt aggregating more than $10,000,000 of Citrus
      Corp. declares such Debt due prior to its stated maturity because of Citrus
      Corp.’s default thereunder and the expiration of any related grace period.

     

    
      
        
        

      

      
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    8.4  Misrepresentation
      or Breach of Warranty.
      Any
      representation or warranty made by any Loan Party herein or otherwise furnished
      to the Bank in connection with this Agreement or any other Loan Document shall
      be incorrect, false or misleading in any material respect when
      made.

     

    8.5  Violation
      of Certain Covenants.
      Any
      Loan Party violates any covenant, agreement or condition contained in Sections
      5.6 (Existence), 5.7(c) (Notice of Defaults), 6.1 (Financial Covenant), 6.2
      (Liens), 6.3 (Debt), 6.5 (Merger), 6.6 (Sale of Assets), 6.7 (Restricted
      Payments), 7.1 (Liens), 7.2 (Debt), 7.3 (Merger, Consolidation), 7.4 (Sale
      of
      Assets) or 7.5 (Restricted Payments).

     

    8.6  Violation
      of Other Covenants, Etc.
      Any Loan
      Party violates any other covenant, agreement or condition contained herein
      (other than the covenants, agreements and conditions set forth or described
      in
      Sections 8.1 (Failure to Pay Obligations When Due), 8.3 (Cross Default), 8.4
      (Representations), and 8.5 (Certain Covenants) above) or in any other Loan
      Document and such violation shall not have been remedied within (30) days after
      the earlier of (i) actual discovery by a Loan Party of such violation or (ii)
      written notice has been received by the Borrower from the Bank or the holder
      of
      the Note.

     

    8.7  Bankruptcy
      and Other Matters.
      Any
      Loan Party or Southern Union (a) makes an assignment for the benefit of
      creditors; or (b) admits in writing its inability to pay its debts generally
      as
      they become due; or (c) generally fails to pay its debts as they become due;
      or
      (d) files a petition or answer seeking for itself, or consenting to or
      acquiescing in, any reorganization, arrangement, composition, readjustment,
      liquidation, dissolution, or similar relief under any applicable Debtor Law
      (including, without limitation, the Federal Bankruptcy Code); there is appointed
      a receiver, custodian, liquidator, fiscal agent, or trustee of any Loan Party
      or
      Southern Union or of the whole or any substantial part of their respective
      assets; or any court enters an order, judgment or decree approving a petition
      filed against any Loan Party or Southern Union seeking reorganization,
      arrangement, composition, readjustment, liquidation, dissolution, or similar
      relief under any Debtor Law and either such order, decree or judgment so filed
      against it is not dismissed or stayed (unless and until such stay is no longer
      in effect) within thirty (30) days of entry thereof or an order for relief
      is
      entered pursuant to any such law.

     

    8.8  Dissolution.
      Any
      order is entered in any proceeding against any Loan Party or Southern Union
      decreeing the dissolution, liquidation, winding-up or split-up of any Loan
      Party
      or Southern Union, and such order remains in effect for thirty (30)
      days.

     

    8.9  Undischarged
      Judgment.
      (a) A
      final judgment or judgments in the aggregate, that might be or give rise to
      Liens on any property of the Borrower or any of its Subsidiaries, for the
      payment of money in excess of $10,000,000 shall be rendered against the Borrower
      or any of its Subsidiaries and the same shall remain undischarged for a period
      of sixty (60) days during which execution shall not be effectively stayed,
      (b) a
      final judgment or judgments in the aggregate, that might be or give rise to
      Liens on any property of Panhandle Eastern or any of its Subsidiaries, for
      the
      payment of money in excess of $50,000,000 shall be rendered against Panhandle
      Eastern or any of its Subsidiaries and the same shall remain undischarged for
      a
      period of sixty (60) days during which execution shall not be effectively stayed
      or (c)  at any time that the aggregate amount of all Citrus Investments
      exceeds $10,000,000, a final judgment or judgments in the aggregate, that might
      be or give rise to Liens on any property of CCC or any of its Subsidiaries,
      for
      the payment of money in excess of $10,000,000 shall be rendered against CCC
      or
      any of its Subsidiaries and the same shall remain undischarged for a period
      of
      sixty (60) days during which execution shall not be effectively
      stayed.

     

    
      
        
        

      

      
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    8.10  Loan
      Documents.
      Any
      material provision in any Loan Document shall for any reason cease to be valid
      and binding on any party thereto except upon fulfillment of such party’s
      obligations thereunder (or any such party shall so state in writing), or shall
      be declared null and void, or the validity or enforceability thereof shall
      be
      contested by any party thereto (other than the Agent and the Banks) or any
      Governmental Authority, or any such party shall deny in writing that it has
      any
      liability or obligation thereunder, except upon fulfillment of its obligations
      thereunder.

     

    8.11  Change
      of Control. Any
      of
      the following events shall occur:

     

    (a) Panhandle
      Eastern shall cease to own or control, directly or indirectly, 100% of the
      Equity Interests and voting power of each of the Borrower and TLNG;

     

    (b) Southern
      Union shall cease to own, or control, directly or indirectly, at least 51%
      of
      the Equity Interests and voting power of Panhandle Eastern; or

     

    (c)  at
      any time that the aggregate amount of all Citrus Investments exceeds
      $10,000,000, (i) Southern Union shall cease to own or control, directly or
      indirectly, 51% of the Equity Interests and voting power of CCC, (ii) CCC shall
      cease to own or control, directly or indirectly, at least 50% of the Equity
      Interests and voting power of Citrus Corp., or (iii) CCC shall cease to own
      or
      control, directly or indirectly, at least 40% of the Equity Interests and voting
      power of Florida Gas Transmission Company.

     

    8.12  Other
      Remedies.
      In
      addition to and cumulative of any rights or remedies expressly provided for
      in
      this Section 8, if any one or more Events of Default shall have occurred, the
      Agent shall at the request, and may with the consent, of the Majority Banks
      proceed to protect and enforce the rights of the Banks hereunder by any
      appropriate proceedings. The Agent shall at the request, and may with the
      consent, of the Majority Banks also proceed either by the specific performance
      of any covenant or agreement contained in this Agreement or by enforcing the
      payment of the Notes or by enforcing any other legal or equitable right provided
      under this Agreement or the Notes or otherwise existing under any law in favor
      of the holder of the Notes.

     

    8.13  Remedies
      Cumulative.
      No
      remedy, right or power conferred upon the Banks is intended to be exclusive
      of
      any other remedy, right or power given hereunder or now or hereafter existing
      at
      law, in equity, or otherwise, and all such remedies, rights and powers shall
      be
      cumulative.

     

    9.  THE
      AGENT

     

    9.1  Authorization
      and Action.
      Each
      Bank hereby appoints HVB as its Agent under and irrevocably authorizes the
      Agent
      (subject to this Section 9.1 and Section 9.7 (Successor Agent)) to take such
      action as the Agent on its behalf and to exercise such powers under this
      Agreement, the Loan Documents and the Notes as are delegated to the Agent by
      the
      terms thereof, together with such powers as are reasonably incidental thereto.
      Without limitation of the foregoing, each Bank expressly authorizes the Agent
      to
      execute, deliver, and perform its obligations under this Agreement and the
      Loan
      Documents, and to exercise all rights, powers, and remedies that the Agent
      may
      have hereunder and thereunder. As to any matters not expressly provided for
      by
      this Agreement (including, without limitation, enforcement or collection of
      the
      Notes), the Agent shall not be required to exercise any discretion or take
      any
      action, but shall be required to act, or to refrain from acting (and shall
      be
      fully protected in so acting or refraining from acting), upon the instructions
      of the Majority Banks, and such instructions shall be binding upon all the
      Banks
      and all holders of any Note; provided
      that the
      Agent shall not be required to take any action which exposes the Agent to
      personal liability or which is contrary to this Agreement or applicable law.
      The
      Agent agrees to give to each Bank prompt notice of each notice given to it
      by
      the Borrower pursuant to the terms of this Agreement.

     

    
      
        
        

      

      
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    9.2  Agent’s
      Reliance, Etc.
      Neither
      the Agent nor any of its directors, officers, agents, or employees shall be
      liable to any Bank for any action taken or omitted to be taken by it or them
      under or in connection with this Agreement, the Notes and the other Loan
      Documents, except for its or their own gross negligence or willful misconduct.
      Without limitation of the generality of the foregoing, the Agent: (a) may treat
      the original or any successor holder of any Note as the holder thereof until
      the
      Agent receives notice from the Bank which is the payee of such Note concerning
      the assignment of such Note; (b) may employ and consult with legal counsel
      (including counsel for the Borrower), independent public accountants, and other
      experts selected by it and shall not be liable to any Bank for any action taken,
      or omitted to be taken, in good faith by it or them in accordance with the
      advice of such counsel, accountants, or experts received in such consultations
      and shall not be liable for any negligence or misconduct of any such counsel,
      accountants, or other experts; (c) makes no warranty or representation to any
      Bank and shall not be responsible to any Bank for any opinions, certifications,
      statements, warranties, or representations made in or in connection with this
      Agreement; (d) shall not have any duty to any Bank to ascertain or to inquire
      as
      to the performance or observance of any of the terms, covenants, or conditions
      of this Agreement or any other instrument or document furnished pursuant thereto
      or to satisfy itself that all conditions to and requirements for any Loan have
      been met or that the Borrower is entitled to any Loan or to inspect the property
      (including the books and records) of the Borrower or any Subsidiary; (e) shall
      not be responsible to any Bank for the due execution, legality, validity,
      enforceability, genuineness, sufficiency, or value of this Agreement or any
      other instrument or document furnished pursuant thereto; and (f) shall incur
      no
      liability under or in respect of this Agreement by acting upon any notice,
      consent, certificate, or other instrument or writing believed by it to be
      genuine and signed or sent by the proper party or parties.

     

    9.3  Defaults.
      The
      Agent shall not be deemed to have knowledge of the occurrence of a Default
      (other than the nonpayment of principal of or interest hereunder) unless the
      Agent has received notice from a Bank or the Borrower specifying such Default
      and stating that such notice is a Notice of Default. In the event that the
      Agent
      receives such a notice of the occurrence of a Default, the Agent shall give
      prompt notice thereof to the Banks (and shall give each Bank prompt notice
      of
      each such nonpayment). The Agent shall (subject to Section 9.7 (Successor
      Agent)) take such action with respect to such Default as shall be instructed
      by
      the Majority Banks; provided
      that,
      unless and until the Agent shall have received the directions referred to in
      Sections 9.1 (Authorization and Action) or 9.7 (Successor Agent), the Agent
      may
      (but shall not be obligated to) take such action, or refrain from taking such
      action, with respect to such Default as it shall deem advisable and in the
      best
      interest of the Banks.

     

    
      
        
        

      

      
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    9.4  HVB
      and Affiliates.
      With
      respect to its Commitment, any Loan made by it, and the Note issued to it,
      HVB
      shall have the same rights and powers under this Agreement as any other Bank
      and
      may exercise the same as though it were not the Agent; and the term “Bank” or
“Banks” shall, unless otherwise expressly indicated, include HVB in its
      individual capacity. HVB and its respective Affiliates may accept deposits
      from,
      lend money to, act as trustee under indentures of, and generally engage in
      any
      kind of business with, the Borrower, any of its respective Affiliates and any
      Person who may do business with or own securities of the Borrower or any such
      Affiliate, all as if HVB were not the Agent and without any duty to account
      therefor to the Banks.

     

    9.5  Non-Reliance
      on Agent and Other Banks.
      Each
      Bank agrees that it has, independently and without reliance on the Agent or
      any
      other Bank, and based on such documents and information as it has deemed
      appropriate, made its own credit analysis of the Borrower and each Subsidiary
      and its decision to enter into the transactions contemplated by this Agreement
      and that it will, independently and without reliance upon the Agent or any
      other
      Bank, and based on such documents and information as it shall deem appropriate
      at the time, continue to make its own analysis and decisions in taking or not
      taking action under this Agreement. The Agent shall not be required to keep
      itself informed as to the performance or observance by the Borrower of this
      Agreement or to inspect the properties or books of Panhandle Eastern, the
      Borrower or any Subsidiary. Except for notices, reports, and other documents
      and
      information expressly required to be furnished to the Banks by the Agent
      hereunder, the Agent shall not have any duty or responsibility to provide any
      Bank with any credit or other information concerning the affairs, financial
      condition, or business of Southern Union, Panhandle Eastern, the Borrower or
      any
      Subsidiary (or any of their Affiliates) which may come into the possession
      of
      the Agent or any of its Affiliates.

     

    9.6  Indemnification.
      Notwithstanding anything to the contrary herein contained, the Agent shall
      be
      fully justified in failing or refusing to take any action hereunder unless
      it
      shall first be indemnified to its satisfaction by the Banks against any and
      all
      liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
      costs, expenses, and disbursements of any kind or nature whatsoever which may
      be
      imposed on, incurred by or asserted against the Agent in any way relating to
      or
      arising out of its taking or continuing to take any action. Each Bank agrees
      to
      indemnify the Agent (to the extent not reimbursed by the Borrower), according
      to
      such Bank’s Pro Rata Percentage, from and against any and all liabilities,
      obligations, losses, damages, penalties, actions, judgments, suits, costs,
      expenses, and disbursements of any kind or nature whatsoever which may be
      imposed on, incurred by, or asserted against the Agent in any way relating
      to or
      arising out of this Agreement or the Notes or any action taken or omitted by
      the
      Agent under this Agreement or the Notes; provided
      that no
      Bank shall be liable for any portion of such liabilities, obligations, losses,
      damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
      resulting from the gross negligence or willful misconduct of the person being
      indemnified; and provided,
      further,
      that it
      is the intention of each Bank to indemnify the Agent against the consequences
      of
      the Agent’s own negligence, whether such negligence be sole, joint, concurrent,
      active or passive. Without limitation of the foregoing, each Bank agrees to
      reimburse the Agent promptly upon demand for its Pro Rata Percentage of any
      out-of-pocket expenses (including attorneys’ fees) incurred by the Agent in
      connection with the preparation, administration, or enforcement of, or legal
      advice in respect of rights or responsibilities under, this Agreement and the
      Notes, to the extent that the Agent is not reimbursed for such expenses by
      the
      Borrower.

     

    
      
        
        

      

      
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    9.7  Successor
      Agent.
      The
      Agent may resign at any time as Agent under this Agreement by giving written
      notice thereof to the Banks and the Borrower and may be removed at any time
      with
      or without cause by the Majority Banks. Upon any such resignation or removal,
      the Majority Banks shall have the right to appoint a successor Agent. If no
      successor Agent shall have been so appointed by the Majority Banks or shall
      have
      accepted such appointment within thirty (30) days after the retiring Agent’s
      giving of notice of resignation or the Majority Banks’ removal of the retiring
      Agent, then the retiring Agent may, on behalf of the Banks, appoint a successor
      Agent, which shall be a commercial bank organized under the laws of the United
      States of America or of any State thereof and having a combined capital and
      surplus of at least $500,000,000. Upon the acceptance of any appointment as
      Agent hereunder by a successor Agent, such successor Agent shall thereupon
      succeed to and become vested with all the rights, powers, privileges and duties
      of the retiring Agent, and the retiring Agent shall be discharged from its
      duties and obligations under this Agreement. After any retiring Agent’s
      resignation or removal hereunder as Agent, the provisions of this Section 9
      shall inure to its benefit as to any actions taken or omitted to be taken by
      it
      while it was Agent under this Agreement.

     

    9.8  Agent’s
      Reliance.
      The
      Borrower shall notify the Agent in writing of the names of its officers and
      employees authorized to request a Loan on behalf of the Borrower and shall
      provide the Agent with a specimen signature of each such officer or employee.
      The Agent shall be entitled to rely conclusively on such officer’s or employee’s
      authority to request a Loan on behalf of the Borrower until the Agent receives
      written notice from the Borrower to the contrary. The Agent shall have no duty
      to verify the authenticity of the signature appearing on any Notice of
      Borrowing, and, with respect to any oral request for a Loan, the Agent shall
      have no duty to verify the identity of any Person representing himself as one
      of
      the officers or employees authorized to make such request on behalf of the
      Borrower. Neither the Agent nor any Bank shall incur any liability to the
      Borrower in acting upon any telephonic notice referred to above which the Agent
      or such Bank believes in good faith to have been given by a duly authorized
      officer or other Person authorized to borrow on behalf of the Borrower or for
      otherwise acting in good faith. 

     

    10.  GUARANTY

     

    10.1  Guaranty.
      Each
      Guarantor hereby absolutely, unconditionally and irrevocably guarantees the
      punctual payment when due, whether at scheduled maturity or by acceleration,
      demand or otherwise, of all Obligations of the Borrower now or hereafter
      existing under or in respect of the Loan Documents (including, without
      limitation, any extensions, modifications, substitutions, amendments or renewals
      of any or all of the foregoing Obligations), whether direct or indirect,
      absolute or contingent, and whether for principal, interest, premiums, fees,
      indemnities, contract causes of action, costs, expenses or otherwise (such
      Obligations being the “Guaranteed
      Obligations”).

     

    10.2  Guaranty
      Absolute.
      Each
      Guarantor guarantees that the Guaranteed Obligations will be paid strictly
      in
      accordance with the terms of the Loan Documents, regardless of any law,
      regulation or order now or hereafter in effect in any jurisdiction affecting
      any
      of such terms or the rights of any Bank with respect thereto. The Obligations
      of
      each Guarantor under or in respect of this Guaranty are independent of any
      Obligations of the Borrower under or in respect of the Loan Documents, and
      a
      separate action or actions may be brought and prosecuted against each Guarantor
      to enforce this Guaranty, irrespective of whether any action is brought against
      the Borrower or whether the Borrower is joined in any such action or actions.
      The liability of each Guarantor under this Guaranty shall be irrevocable,
      absolute and unconditional irrespective of, and each Guarantor hereby
      irrevocably waives any defenses it may now have or hereafter acquire in any
      way
      relating to, any or all of the following:

     

    
      
        
        

      

      
        -45-

        
          

        

      

      
        
        

      

    

    (a) any
      lack
      of validity or enforceability of any Loan Document or any agreement or
      instrument relating thereto;

     

    (b) any
      change in the time, manner or place of payment of, or in any other term of,
      all
      or any of the Guaranteed Obligations or any other Obligations of the Borrower
      under or in respect of the Loan Documents, or any other amendment or waiver
      of
      or any consent to departure from any Loan Document, including, without
      limitation, any increase in the Guaranteed Obligations resulting from the
      extension of additional credit to any Loan Party or any of its Subsidiaries
      or
      otherwise;

     

    (c) any
      taking, exchange, release or non-perfection of any collateral, or any taking,
      release or amendment or waiver of, or consent to departure from, any other
      guaranty, for all or any of the Guaranteed Obligations;

     

    (d) any
      manner of application of any collateral, or proceeds thereof, to all or any
      of
      the Guaranteed Obligations, or any manner of sale or other disposition of any
      collateral for all or any of the Guaranteed Obligations or any other Obligations
      of any Loan Party under the Loan Documents or any other assets of any Loan
      Party
      or any of its Subsidiaries;

     

    (e) any
      change, restructuring or termination of the corporate structure or existence
      of
      any Loan Party or any of its Subsidiaries;

     

    (f) any
      failure of any Bank to disclose to any Loan Party any information relating
      to
      the business, operations, financial condition, assets or prospects of any other
      Loan Party now or hereafter known to such Bank (each Guarantor waiving any
      duty
      on the part of the Banks to disclose such information);

     

    (g) the
      failure of any other Person to execute or deliver any other guaranty or
      agreement or the release or reduction of liability of any other guarantor or
      surety with respect to the Guaranteed Obligations; or

     

    (h) any
      other
      circumstance (including, without limitation, any statute of limitations) or
      any
      existence of or reliance on any representation by any Bank that might otherwise
      constitute a defense available to, or a discharge of, any Loan Party or any
      other guarantor or surety.

     

    This
      Guaranty shall continue to be effective or be reinstated, as the case may be,
      if
      at any time any payment of any of the Guaranteed Obligations is rescinded or
      must otherwise be returned by any Bank or any other Person upon the insolvency,
      bankruptcy or reorganization of the Borrower or otherwise, all as though such
      payment had not been made.

     

    
      
        
        

      

      
        -46-

        
          

        

      

      
        
        

      

    

    10.3  Waivers
      and Acknowledgments.

     

    (a) Each
      Guarantor hereby unconditionally and irrevocably waives promptness, diligence,
      notice of acceptance, presentment, demand for performance, notice of
      nonperformance, default, acceleration, protest or dishonor and any other notice
      with respect to any of the Guaranteed Obligations and this Guaranty and any
      requirement that any Bank protect, secure, perfect or insure any Lien or any
      property subject thereto or exhaust any right or take any action against any
      Loan Party or any other Person or any collateral.

     

    (b) Each
      Guarantor hereby unconditionally and irrevocably waives any right to revoke
      this
      Guaranty and acknowledges that this Guaranty is continuing in nature and applies
      to all Guaranteed Obligations, whether existing now or in the
      future.

     

    (c) Each
      Guarantor hereby unconditionally and irrevocably waives (i) any defense arising
      by reason of any claim or defense based upon an election of remedies by any
      Bank
      that in any manner impairs, reduces, releases or otherwise adversely affects
      the
      subrogation, reimbursement, exoneration, contribution or indemnification rights
      of each Guarantor or other rights of such Guarantor to proceed against the
      Borrower, any other guarantor or any other Person and (ii) any defense based
      on
      any right of set-off or counterclaim against or in respect of the Obligations
      of
      such Guarantor hereunder.

     

    (d) Each
      Guarantor hereby unconditionally and irrevocably waives any duty on the part
      of
      any Bank to disclose to any Guarantor any matter, fact or thing relating to
      the
      business, operations, financial condition, assets or prospects of the Borrower
      or any of its Subsidiaries now or hereafter known by such Bank.

     

    (e) Each
      Guarantor acknowledges that it will receive substantial direct and indirect
      benefits from the financing arrangements contemplated by the Loan Documents
      and
      that the waivers set forth in Section 10.2 (Guaranty Absolute) and this Section
      10.3 are knowingly made in contemplation of such benefits.

     

    10.4  Subrogation.
      Each
      Guarantor hereby unconditionally and irrevocably agrees not to exercise any
      rights that it may now have or hereafter acquire against the Borrower that
      arise
      from the existence, payment, performance or enforcement of such Guarantor’s
      Obligations under or in respect of this Guaranty or any other Loan Document,
      including, without limitation, any right of subrogation, reimbursement,
      exoneration, contribution or indemnification and any right to participate in
      any
      claim or remedy of any Bank against the Borrower or any other insider guarantor,
      whether or not such claim, remedy or right arises in equity or under contract,
      statute or common law, including, without limitation, the right to take or
      receive from the Borrower, directly or indirectly, in cash or other property
      or
      by set-off or in any other manner, payment or security on account of such claim,
      remedy or right, unless and until all of the Guaranteed Obligations and all
      other amounts payable under this Guaranty shall have been paid in full in cash
      and the Commitments shall have expired or been terminated. If any amount shall
      be paid to any Guarantor in violation of the immediately preceding sentence
      at
      any time prior to the later of (a) the payment in full in cash of the Guaranteed
      Obligations and all other amounts payable under this Guaranty and (b) the
      Maturity Date, such amount shall be received and held in trust for the benefit
      of the Banks, shall be segregated from other property and funds of such
      Guarantor and shall forthwith be paid or delivered to the Agent in the same
      form
      as so received (with any necessary endorsement or assignment) to be credited
      and
      applied to the Guaranteed Obligations and all other amounts payable under this
      Guaranty, whether matured or unmatured, in accordance with the terms of the
      Loan
      Documents or other amounts payable under this Guaranty thereafter arising.
      If
      (i) any Guarantor shall make payment to any Bank of all or any part of the
      Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other
      amounts payable under this Guaranty shall have been paid in full in cash and
      (iii) the Maturity Date shall have occurred, the Banks will, at such Guarantor’s
      request and expense, execute and deliver to such Guarantor appropriate
      documents, without recourse and without representation or warranty, necessary
      to
      evidence the transfer by subrogation to such Guarantor of an interest in the
      Guaranteed Obligations resulting from such payment made by such Guarantor
      pursuant to this Guaranty.

     

    
      
        
        

      

      
        -47-

        
          

        

      

      
        
        

      

    

    10.5  Subordination.
      Each
      Guarantor hereby subordinates any and all debts, liabilities and other
      Obligations owed to such Guarantor by the Borrower (the “Subordinated
      Obligations”)
      to the
      Guaranteed Obligations to the extent and in the manner hereinafter set forth
      in
      this Section 10.5:

     

    (a) Except
      during the continuance of a Default (including the commencement and continuation
      of any proceeding under any Debtor Law relating to the Borrower), a Guarantor
      may receive regularly scheduled payments from the Borrower on account of the
      Subordinated Obligations. After the occurrence and during the continuance of
      any
      Default (including the commencement and continuation of any proceeding under
      any
      Debtor Law relating to the Borrower), however, unless the Agent otherwise
      agrees, no Guarantor shall demand, accept or take any action to collect any
      payment on account of the Subordinated Obligations.

     

    (b) In
      any
      proceeding under any Debtor Law relating to the Borrower, each Guarantor agrees
      that the Banks shall be entitled to receive payment in full in cash of all
      Guaranteed Obligations (including all interest and expenses accruing after
      the
      commencement of a proceeding under any Debtor Law, whether or not constituting
      an allowed claim in such proceeding (“Post
      Petition Interest”))
      before any Guarantor receives payment of any Subordinated
      Obligations.

     

    (c) After
      the
      occurrence and during the continuance of any Default (including the commencement
      and continuation of any proceeding under any Debtor Law relating to the
      Borrower), each Guarantor shall, if the Agent so requests, collect, enforce
      and
      receive payments on account of the Subordinated Obligations as trustee for
      the
      Banks and deliver such payments to the Agent on account of the Guaranteed
      Obligations (including all Post Petition Interest), together with any necessary
      endorsements or other instruments of transfer, but without reducing or affecting
      in any manner the liability of such Guarantor under the other provisions of
      this
      Guaranty.

     

    (d) After
      the
      occurrence and during the continuance of any Default (including the commencement
      and continuation of any proceeding under any Debtor Law relating to the
      Borrower), the Agent is authorized and empowered (but without any obligation
      to
      so do), in its discretion, (i) in the name of a Guarantor, to collect and
      enforce, and to submit claims in respect of, Subordinated Obligations and to
      apply any amounts received thereon to the Guaranteed Obligations (including
      any
      and all Post Petition Interest), and (ii) to require each Guarantor (A) to
      collect and enforce, and to submit claims in respect of, Subordinated
      Obligations and (B) to pay any amounts received on such obligations to the
      Agent
      for application to the Guaranteed Obligations (including any and all Post
      Petition Interest).

     

    
      
        
        

      

      
        -48-

        
          

        

      

      
        
        

      

    

    10.6  Continuing
      Guaranty.
      This
      Guaranty is a continuing guaranty and shall remain in full force and effect
      until the later of (a) the payment in full in cash of the Guaranteed Obligations
      and all other amounts payable under this Guaranty and (b) the Maturity
      Date.

     

    10.7  General
      Limitation on Guaranteed Obligations.
      In any
      action or proceeding involving any state corporate law, or any state or Federal
      bankruptcy, insolvency, reorganization or other law affecting the rights of
      creditors generally, if the obligations of TLNG under Section 10.1
      (Guaranty) would otherwise be held or determined to be void, invalid or
      unenforceable, or subordinated to the claims of any other creditors, on account
      of the amount of its liability under Section 10.1 (Guaranty), then,
      notwithstanding any other provision hereof to the contrary, the amount of such
      liability shall, without any further action by TLNG, any Bank or any other
      Person, be automatically limited and reduced to the highest amount that is
      valid
      and enforceable and not subordinated to the claims of other creditors as
      determined in such action or proceeding.

     

    11.  MISCELLANEOUS

     

    11.1  Amendments,
      Waivers, Etc.
      No
      amendment or waiver of any provision of any Loan Document, nor consent to any
      departure by a Loan Party therefrom, shall in any event be effective unless
      the
      same shall be in writing and signed by the Borrower, the Guarantors and the
      Majority Banks, and then such waiver or consent shall be effective only in
      the
      specific instance and for the specific purpose for which given; provided
      that no
      amendment, waiver or consent shall, unless in writing and signed by each Bank,
      do any of the following: 

     

    (a) waive
      any
      of the conditions specified in Section 4 (Conditions to Funding); 

     

    (b) increase
      the Commitment of any Bank or alter the term thereof, or subject any Bank to
      any
      additional or extended obligations; 

     

    (c) change
      the principal of, or decrease the rate of interest on, the Loans or any Note,
      or
      any fees or other amounts payable hereunder (except that the Required Banks
      may
      waive in writing the increase in Applicable Margin resulting from the occurrence
      of an SUG Change of Control); 

     

    (d) postpone
      any date fixed for any payment of principal of, or interest on, the Loans or
      any
      Note, or any fees (including, without limitation, any fee) or other amounts
      payable hereunder; 

     

    (e) change
      the definition of “Majority Banks” or the number of Banks which shall be
      required for Banks, or any of them, to take any action hereunder; 

     

    (f) amend
      this Section 11.1; or

     

    (g) reduce
      or
      limit the obligations of any Guarantor under the Loan Documents or release
      any
      Guarantor from its obligations under the Loan Documents;

     

    
      
        
        

      

      
        -49-

        
          

        

      

      
        
        

      

    

    and
      provided,
      further,
      that
      (I) no amendment, waiver or consent shall, unless in writing and signed by
      the
      Agent in addition to each Bank, affect the rights or duties of the Agent under
      any Loan Document and (II) at any time after the occurrence of an SUG Change
      of
      Control, the approval of the Required Banks shall be required in order to (a)
      amend or waive, or consent to any departure from, Section 6.1 (Financial
      Covenant), Section 6.2 (Liens, Etc.), Section 6.7 (Restricted Payments), Section
      7.1 (Liens, Etc.) or Section 7.5 (Restricted Payments) or (b) to amend
      any
      defined term relating to any such provision if the effect of any such amendment
      contemplated in this clause (b) would be to cause such provision to be less
      onerous on the relevant Loan Party.
      No
      failure or delay on the part of any Bank or the Agent in exercising any power
      or
      right hereunder shall operate as a waiver thereof nor shall any single or
      partial exercise of any such right or power, or any abandonment or
      discontinuance of steps to enforce such a right or power, preclude any other
      or
      further exercise thereof or the exercise of any other right or power. No course
      of dealing between the Borrower and any Bank or the Agent shall operate as
      a
      waiver of any right of any Bank or the Agent. No modification or waiver of
      any
      provision of this Agreement or the Note nor consent to any departure by the
      Borrower therefrom shall in any event be effective unless the same shall be
      in
      writing, and then such waiver or consent shall be effective only in the specific
      instance and for the purpose for which given. No notice to or demand on the
      Borrower in any case shall entitle the Borrower to any other or further notice
      or demand in similar or other circumstances.

     

    11.2  Reimbursement
      of Expenses.

     

    (a) The
      Borrower agrees to pay on demand (and whether or not the Funding Date occurs)
      (1) all reasonable and documented out-of-pocket costs and expenses of the Agent
      and the Lead Arrangers, including reasonable and documented fees and expenses
      of
      a single counsel for the Agent and the Lead Arrangers, in connection with the
      syndication of the credit facilities provided for herein, the preparation and
      administration of this Agreement or any amendments, modifications or waivers
      of
      the provisions hereof, and (2) all costs and expenses of the Agent and each
      Bank
      in connection with the enforcement of the Loan Documents, whether in any action,
      suit or litigation, or any bankruptcy, insolvency or other similar proceeding
      affecting creditors’ rights generally (including, without limitation, the
      reasonable fees and expenses of counsel for the Agent and each Bank with respect
      thereto). The Borrower further agrees to pay any stamp or other taxes that
      may
      be payable in connection with the execution or delivery of any Loan
      Document.

     

    (b) If
      any
      payment of principal of, or Conversion of, any Eurodollar Rate Loan is made
      by
      the Borrower to or for the account of a Bank other than on the last day of
      the
      Interest Period for such Loan, as a result of a payment or Conversion pursuant
      to Section 2.5 (Prepayments), 2.8 (Conversion of Loans) or 2.9(d) (Increased
      Costs, Etc.), acceleration of the maturity of the Notes pursuant to Section
      8
      (Events of Default; Remedies) or for any other reason, or by an Eligible
      Assignee to a Bank other than on the last day of the Interest Period for such
      Loan upon an assignment of rights and obligations under this Agreement pursuant
      to Section 11.14 (Sale or Assignment) as a result of a demand by the Borrower
      pursuant to Section 11.14(a), or if the Borrower fails to make any payment
      or
      prepayment of a Loan for which a notice of prepayment has been given, whether
      pursuant to Section 2.3 (Repayment of Loans), 2.5 (Prepayments) or Section
      8
      (Events of Default; Remedies) or otherwise, the Borrower shall, upon demand
      by
      such Bank (with a copy of such demand to the Agent), pay to the Agent for the
      account of such Bank any amounts required to compensate such Bank for any
      additional losses, costs or expenses reasonably incurred by such Bank as a
      result of such payment or Conversion or such failure to pay or prepay, as the
      case may be, including, without limitation, any loss, cost or expense incurred
      by reason of the liquidation or reemployment of deposits or other funds acquired
      by any Bank to fund or maintain such Loan.

     

    
      
        
        

      

      
        -50-

        
          

        

      

      
        
        

      

    

    (c) The
      obligations of the Borrower under this Section 11.2 shall survive the
      termination of this Agreement and/or the payment of the Notes.

     

    11.3  Notices.
      Any
      communications between the parties hereto or notices provided herein to be
      given
      shall be given to the following addresses:

     

    (a) If
      to
      Panhandle Eastern, to: Panhandle
      Eastern Pipe Line Company, LP

    c/o
      Southern Union Company

    5444
      Westheimer Road

    Houston,
      Texas 77056

    
      	 	
              Attn:

            	
              Richard
                N. Marshall,

            

    

    Senior
      Vice President and

    Chief
      Financial Officer

    Phone:
      (713) 989-7000

    Fax:
      (713) 989-1213

     

    with
      copies to: Southern
      Union Company

    5444
      Westheimer Road

    Houston,
      Texas 77056

    
      	 	
              Attn:

            	
              Monica
                M. Gaudiosi,

            

    

    Senior
      Vice President and

    Associate
      General Counsel

    Phone:
      (713) 989-7567

    Fax:
      (713) 989-1213

     

    and

     

    Fleischman
      and Walsh, L.L.P.

    1919
      Pennsylvania Avenue, N.W.

    Suite
      600

    Washington,
      D.C. 20006

    Attn:
      Seth M. Warner

    Phone:
      (202) 939-7945

    Fax:
      (202) 265-5706

     

    (b) If
      to the
      Borrower, to: Trunkline
      LNG Holdings LLC

    c/o
      Southern Union Company

    5444
      Westheimer Road

    Houston,
      Texas 77056

    
      	 	
              Attn:

            	
              Richard
                N. Marshall,

            

    

    Senior
      Vice President and

    Chief
      Financial Officer

    Phone:
      (713) 989-7000

    Fax:
      (713) 989-1213

     

    
      
        
        

      

      
        -51-

        
          

        

      

      
        
        

      

    

    with
      copies to: Southern
      Union Company

    5444
      Westheimer Road

    Houston,
      Texas 77056

    
      	 	
              Attn:

            	
              Monica
                M. Gaudiosi,

            

    

    Senior
      Vice President and

    Associate
      General Counsel

    Phone:
      (713) 989-7567

    Fax:
      (713) 989-1213

     

    and

     

    Fleischman
      and Walsh, L.L.P.

    1919
      Pennsylvania Avenue, N.W.

    Suite
      600

    Washington,
      D.C. 20006

    Attn:
      Seth M. Warner

    Phone:
      (202) 939-7945

    Fax:
      (202) 265-5706

     

    (c) If
      to
      TLNG, to: Trunkline
      LNG Company, LLC

    c/o
      Southern Union Company

    5444
      Westheimer Road

    Houston,
      Texas 77056

    
      	 	
              Attn:

            	
              Richard
                N. Marshall,

            

    

    Senior
      Vice President and

    Chief
      Financial Officer

    Phone:
      (713) 989-7000

    Fax:
      (713) 989-1213

     

    with
      copies to: Southern
      Union Company

    5444
      Westheimer Road

    Houston,
      Texas 77056

    
      	 	
              Attn:

            	
              Monica
                M. Gaudiosi,

            

    

    Senior
      Vice President and

    Associate
      General Counsel

    Phone:
      (713) 989-7567

    Fax:
      (713) 989-1213

     

    and

     

    Fleischman
      and Walsh, L.L.P.

    1919
      Pennsylvania Avenue, N.W.

    Suite
      600

    Washington,
      D.C. 20006

    Attn:
      Seth M. Warner

    Phone:
      (202) 939-7945

    Fax:
      (202) 265-5706

     

    If
      to the
      Agent, to: Bayerische
      Hypo- und Vereinsbank AG, New York  Branch

    150
      East
      42nd Street

    New
      York,
      NY 10017-4679

     

    
      
        
        

      

      
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    Attn:
      Agency Services, Wayne Miller

    Tel:
      212-672-5930

    Fax:
      212-672-6025

     

    and
      if to
      any Bank, at the address specified in its Administrative Questionnaire, or
      as to
      the Borrower or the Agent, to such other address as shall be designated by
      such
      party in a written notice to the other party and, as to each other party, at
      such other address as shall be designated by such party in a written notice
      to
      the Borrower and the Agent. All notices or other communications required or
      permitted to be given hereunder shall be in writing and shall be considered
      as
      properly given (a) if delivered in person, (b) if sent by overnight delivery
      service (including Federal Express, UPS, ETA, Emery, DHL, AirBorne and other
      similar overnight delivery services), (c) if mailed by first class United States
      Mail, postage prepaid, registered or certified with return receipt requested
      or
      (d) if sent by facsimile or other electronic transmission. Notice so given
      shall
      be effective upon receipt by the addressee, except that communication or notice
      so transmitted by direct written electronic means shall be deemed to have been
      validly and effectively given on the day (if a Business Day and, if not, on
      the
      next following Business Day) on which it is transmitted if transmitted before
      4:00 p.m. (New York time), recipient’s time, and if transmitted after that time,
      on the next following Business Day; provided
      that if
      any notice is tendered to an addressee and the delivery thereof is refused
      by
      such addressee, such notice shall be effective upon such tender. Any party
      shall
      have the right to change its address for notice hereunder to any other location
      within the continental United States by giving of 30 days’ notice to the other
      parties in the manner set forth above.

     

    11.4  Governing
      Law.
      This
      Agreement, and any instrument or agreement required hereunder (to the extent
      not
      otherwise expressly provided for therein), shall be governed by, and construed
      under, the laws of the State of New York, without reference to conflicts of
      laws
      (other than Section 5-1401 and Section 5-1402 of the New York General
      Obligations Law).

     

    11.5  Waiver
      of Jury Trial.
      THE
      AGENT, THE BANKS AND EACH LOAN PARTY HEREBY KNOWINGLY, VOLUNTARILY, AND
      INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
      OF
      ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
      THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OR CONDUCT, COURSE
      OF
      DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS, OF THE AGENT,
      THE
      BANKS OR THE LOAN PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
      BANKS
      TO ENTER INTO THIS AGREEMENT.

     

    11.6  Consent
      to Jurisdiction.
      The
      Agent, the Banks and each Loan Party agree that any legal action or proceeding
      by or against any Loan Party or with respect to or arising out of this Agreement
      or any other Loan Document may be brought in or removed to the Supreme Court
      of
      the State of New York, in and for the County of New York, or the United States
      District Court for the Southern District of New York, and any court of appeals
      from either therefrom as the Agent may elect. By execution and delivery of
      the
      Agreement, each of the Banks, the Agent and each Loan Party accepts, for
      themselves and in respect of their property, generally and unconditionally,
      the
      jurisdiction of the aforesaid courts. The Agent, the Banks and each Loan Party
      irrevocably consent to the service of process out of any of the aforementioned
      courts in any manner permitted by law. Nothing herein shall affect the right
      of
      the Agent and the Banks to bring legal action or proceedings in any other
      competent jurisdiction. The Agent, the Banks and each Loan Party further agree
      that the aforesaid courts of the State of New York and of the United States
      of
      America shall have exclusive jurisdiction with respect to any claim or
      counterclaim of any Loan Party based upon the assertion that the rate of
      interest charged by the Banks on or under this Agreement, the Loans and/or
      the
      other Loan Documents is usurious. The Agent, the Banks and each Loan Party
      hereby waive any right to stay or dismiss any action or proceeding under or
      in
      connection with this Agreement or any other Loan Document brought before the
      foregoing courts on the basis of an inconvenient forum. 

     

    
      
        
        

      

      
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    11.7  Survival
      of Representations, Warranties and Covenants.
      All
      representations, warranties and covenants contained herein or made in writing
      by
      any Loan Party in connection herewith shall survive the execution and delivery
      of the Loan Documents and the Notes, and will bind and inure to the benefit
      of
      the respective successors and assigns of the parties hereto, whether so
      expressed or not, provided
      that the
      undertaking of the Banks to make the Loans to the Borrower shall not inure
      to
      the benefit of any successor or assign of the Borrower. No investigation at
      any
      time made by or on behalf of the Banks shall diminish the Banks’ rights to rely
      on any representations made herein or in connection herewith. All statements
      contained in any certificate or other written instrument delivered by any Loan
      Party or by any Person authorized by the Borrower under or pursuant to this
      Agreement or in connection with the transactions contemplated hereby shall
      constitute representations and warranties hereunder as of the time made by
      such
      Loan Party.

     

    11.8  Counterparts.
      This
      Agreement may be executed in several counterparts, and by the parties hereto
      on
      separate counterparts, and each counterpart, when so executed and delivered,
      shall constitute an original instrument and all such separate counterparts
      shall
      constitute but one and the same instrument.

     

    11.9  Severability.
      Should
      any clause, sentence, paragraph or section of this Agreement be judicially
      declared to be invalid, unenforceable or void, such decision shall not have
      the
      effect of invalidating or voiding the remainder of this Agreement, and the
      parties hereto agree that the part or parts of this Agreement so held to be
      invalid, unenforceable or void will be deemed to have been stricken herefrom
      and
      the remainder will have the same force and effectiveness as if such part or
      parts had never been included herein. Each covenant contained in this Agreement
      shall be construed (absent an express contrary provision herein) as being
      independent of each other covenant contained herein, and compliance with any
      one
      covenant shall not (absent such an express contrary provision) be deemed to
      excuse compliance with one or more other covenants.

     

    11.10  Descriptive
      Headings.
      The
      section headings in this Agreement have been inserted for convenience only
      and
      shall be given no substantive meaning or significance whatsoever in construing
      the terms and provisions of this Agreement.

     

    11.11  Accounting
      Terms.
      All
      accounting terms used herein which are not expressly defined in the Agreement,
      or the respective meanings of which are not otherwise qualified, shall have
      the
      respective meanings given to them in accordance with GAAP.

     

    11.12  Limitation
      of Liability.
      No
      claim may be made by any Person for any special, indirect, consequential, or
      punitive damages in respect to any claim for breach of contract arising out
      of
      or related to the transactions contemplated by this Agreement, or any act,
      omission, or event occurring in connection herewith and the parties hereto
      hereby waive, release, and agree not to sue upon any claim for any such damages,
      whether or not accrued and whether or not known or suspected to exist in its
      favor.

     

    
      
        
        

      

      
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    11.13  Set-Off.
      Each
      Loan Party hereby gives and confirms to each Bank a right of set-off of all
      moneys, securities and other property of such Loan Party (whether special,
      general or limited) and the proceeds thereof, now or hereafter delivered to
      remain with or in transit in any manner to such Bank, its Affiliates,
      correspondents or agents from or for such Loan Party, whether for safekeeping,
      custody, pledge, transmission, collection or otherwise or coming into possession
      of such Bank, its Affiliates, correspondents or agents in any way, and also,
      any
      balance of any deposit accounts and credits of such Loan Party with, and any
      and
      all claims of security for the payment of the Loans and of all other liabilities
      and obligations now or hereafter owed by any Loan Party to such Bank, contracted
      with or acquired by such Bank, whether such liabilities and obligations be
      joint, several, absolute, contingent, secured, unsecured, matured or unmatured,
      and each Loan Party hereby authorizes each Bank, its Affiliates, correspondents
      or agents at any time or times, without prior notice, to apply such money,
      securities, other property, proceeds, balances, credits of claims, or any part
      of the foregoing, to such liabilities in such amounts as it may select, whether
      such liabilities be contingent, unmatured or otherwise, and whether any
      collateral security therefor is deemed adequate or not. The rights described
      herein shall be in addition to any collateral security, if any, described in
      any
      separate agreement executed by any Loan Party.

     

    11.14  Sale
      or Assignment.

     

    (a) Each
      Bank
      may assign and, so long as no Default shall have occurred and be continuing
      pursuant to Section 8.1 (Failure to Pay Obligations When Due) or 8.7 (Bankruptcy
      and Other Matters), if demanded by the Borrower (pursuant to Section 2.15
      (Replacement of Banks)) upon at least five Business Days’ notice to such Bank
      and the Agent, a Bank will assign, to one or more Eligible Assignees all or
      a
      portion of its rights and obligations under this Agreement and the other Loan
      Documents (including, without limitation, all or a portion of the Loans owing
      to
      it and the Note or Notes held by it); provided
      that

     

    (i) each
      such
      assignment shall be of a uniform, and not a varying, percentage of all rights
      and obligations under and in respect of the Loan Agreement;

     

    (ii) except
      in
      the case of an assignment of all of a Bank’s rights and obligations under this
      Agreement or any assignment to any Bank, an Affiliate of any Bank or an Approved
      Fund, the aggregate amount of the Loans being assigned to such assignee pursuant
      to such assignment (determined as of the date of the Assignment and Acceptance
      with respect to such assignment) shall in no event be less than
      $5,000,000;

     

    (iii) except
      in
      the case of an assignment to a Person that, immediately prior to such
      assignment, was a Bank, an Affiliate of any Bank or an Approved Fund, such
      assignment shall be approved by the Agent, and so long as no Default shall
      have
      occurred and be continuing pursuant to Section 8.1 (Failure to Pay Obligations
      When Due) or 8.7 (Bankruptcy and Other Matters) at the time of effectiveness
      of
      such assignment, the Borrower (in each case such approvals not to be
      unreasonably withheld or delayed); provided
      that no
      Borrower approval shall be required for any assignment made by HVB or Wachovia
      to any Eligible Assignee from the Closing Date through and including the
      two-month anniversary of the Funding Date;

     

    
      
        
        

      

      
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    (iv) each
      such
      assignment made as a result of a demand by the Borrower pursuant to this Section
      11.14 shall be made in accordance with Section 2.15 (Replacement of
      Banks);

     

    (v) no
      Bank
      shall be obligated to make any such assignment as a result of a demand by the
      Borrower pursuant to this Section 11.14 unless and until such Bank shall have
      received one or more payments from either the Borrower or one or more assignees
      in an aggregate amount at least equal to the aggregate outstanding principal
      amount of the Loans owing to such Bank, together with accrued interest thereon
      to the date of payment of such principal amount and all other amounts payable
      to
      such Bank under this Agreement;

     

    (vi) the
      parties to each such assignment shall execute and deliver to the Agent, for
      its
      acceptance and recording in the Register, an Assignment and Acceptance, together
      with any Note or Notes subject to such assignment and a processing and
      recordation fee of $3,500 (provided
      that for
      each such assignment made as a result of a demand by the Borrower pursuant
      to
      this Section 11.14, the Borrower shall pay to the Agent the applicable
      processing and recordation fee); and 

     

    (vii) the
      assignee, if it shall not be a Bank, shall deliver to the Agent an
      Administrative Questionnaire.

     

    (b) Upon
      such
      execution, delivery, acceptance and recording, from and after the effective
      date
      specified in such Assignment and Acceptance, 

     

    (i) the
      assignee thereunder shall be a party hereto and, to the extent that rights
      and
      obligations hereunder have been assigned to it pursuant to such Assignment
      and
      Acceptance, have the rights and obligations of a Bank hereunder, and

     

    (ii) the
      Bank
      assignor thereunder shall, to the extent that rights and obligations hereunder
      have been assigned by it pursuant to such Assignment and Acceptance, relinquish
      its rights (other than its rights under Sections 2.9 (Increased Costs), 2.11
      (Taxes) and 11.2 (Reimbursement of Expenses)) to the extent any claim thereunder
      relates to an event arising prior to such assignment) and be released from
      its
      obligations under this Agreement (and, in the case of an Assignment and
      Acceptance covering all of the remaining portion of an assigning Bank’s rights
      and obligations under this Agreement, such Bank shall cease to be a party
      hereto).

     

    (c) By
      executing and delivering an Assignment and Acceptance, each Bank assignor
      thereunder and each assignee thereunder confirm to and agree with each other
      and
      the other parties thereto and hereto as follows: 

     

    (i) other
      than as provided in such Assignment and Acceptance, such assigning Bank makes
      no
      representation or warranty and assumes no responsibility with respect to any
      statements, warranties or representations made in or in connection with any
      Loan
      Document or the execution, legality, validity, enforceability, genuineness,
      sufficiency or value of, or the perfection or priority of any lien or security
      interest created or purported to be created under or in connection with, any
      Loan Document or any other instrument or document furnished pursuant
      thereto;

     

    
      
        
        

      

      
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    (ii) such
      assigning Bank makes no representation or warranty and assumes no responsibility
      with respect to the financial condition of any Loan Party or the performance
      or
      observance by any Loan Party of any of its obligations under any Loan Document
      or any other instrument or document furnished pursuant thereto; 

     

    (iii) such
      assignee confirms that it has received a copy of this Agreement, together with
      copies of the financial statements most recently delivered hereunder and such
      other documents and information as it has deemed appropriate to make its own
      credit analysis and decision to enter into such Assignment and Acceptance;
      

     

    (iv) such
      assignee will, independently and without reliance upon any Agent, such assigning
      Bank or any other Bank and based on such documents and information as it shall
      deem appropriate at the time, continue to make its own credit decisions in
      taking or not taking action under this Agreement; 

     

    (v) such
      assignee confirms that it is an Eligible Assignee; 

     

    (vi) such
      assignee appoints and authorizes the Agent to take such action as agent on
      its
      behalf and to exercise such powers and discretion under the Loan Documents
      as
      are delegated to such Agent by the terms hereof and thereof, together with
      such
      powers and discretion as are reasonably incidental thereto; and 

     

    (vii) such
      assignee agrees that it will perform in accordance with their terms all of
      the
      obligations that by the terms of this Agreement are required to be performed
      by
      it as a Bank.

     

    (d) The
      Agent
      shall maintain at its address a copy of each Assignment and Acceptance delivered
      to and accepted by it and a register for the recordation of the names and
      addresses of the Banks and the principal amount of the Loans owing to, each
      Bank
      from time to time (the “Register”).
      The
      entries in the Register shall be conclusive and binding for all purposes, absent
      manifest error, and the Borrower, the Agent and the Banks may treat each Person
      whose name is recorded in the Register as a Bank hereunder for all purposes
      of
      this Agreement. The Register shall be available for inspection by the Borrower
      or any Agent or any Bank at any reasonable time and from time to time upon
      reasonable prior notice.

     

    (e) Upon
      its
      receipt of an Assignment and Acceptance executed by an assigning Bank and an
      assignee, together with any Note or Notes subject to such assignment, the Agent
      shall, if such Assignment and Acceptance has been completed and is in
      substantially the form of Exhibit C hereto, (1) accept such Assignment and
      Acceptance, (2) record the information contained therein in the Register and
      (3)
      give prompt notice thereof to the Borrower. In the case of any assignment by
      a
      Bank, within five Business Days after its receipt of such notice, the Borrower,
      at its own expense, shall execute and deliver to the Agent in exchange for
      the
      surrendered Note or Notes a new Note to the order of such Eligible Assignee
      in
      an amount equal to the Loans assumed by it pursuant to such Assignment and
      Acceptance and, if any assigning Bank has retained any Loans hereunder, a new
      Note to the order of such assigning Bank in an amount equal to the Loans
      retained by it hereunder. Such new Note or Notes shall be in an aggregate
      principal amount equal to the aggregate principal amount of such surrendered
      Note or Notes and shall be dated the effective date of such Assignment and
      Acceptance. No assignment shall be effective for purposes of this Agreement
      unless it has been recorded in the Register as provided in this Section
      11.14.

     

    
      
        
        

      

      
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    (f) Each
      Bank
      may sell participations to one or more Persons (other than any Loan Party or
      any
      of its Affiliates) in or to all or a portion of its rights and obligations
      under
      this Agreement (including, without limitation, all or a portion of its
      Commitments, the Loans owing to it and the Note or Notes (if any) held by it);
      provided
      that (1)
      such Bank’s obligations under this Agreement shall remain unchanged, (2) such
      Bank shall remain solely responsible to the other parties hereto for the
      performance of such obligations, (3) such Bank shall remain the holder of any
      such Note for all purposes of this Agreement, (4) the Borrower, the Agent and
      the other Banks shall continue to deal solely and directly with such Bank in
      connection with such Bank’s rights and obligations under this Agreement and (5)
      no participant under any such participation shall have any right to approve
      any
      amendment or waiver of any provision of any Loan Document, or any consent to
      any
      departure by any Loan Party therefrom, except to the extent that such amendment,
      waiver or consent would reduce the principal of, or interest on, the Notes
      or
      any fees or other amounts payable hereunder, in each case to the extent subject
      to such participation, postpone any date fixed for any payment of principal
      of,
      or interest on, the Notes or any fees or other amounts payable hereunder, in
      each case to the extent subject to such participation, or release any Guarantor.
      Subject to the last two sentences of this clause (f), the Borrower agrees that
      each participant shall be entitled to the benefits of Section 2.9 (Increased
      Costs), 2.11 (Taxes) and 11.2(b) (Breakage Expenses) to the same extent as
      if it
      were a Bank and had acquired its interest by assignment. To the extent permitted
      by law, each participant also shall be entitled to the benefits of Section
      11.13
      (Set-Off) as though it were a Bank, provided
      that
      such participant agrees to be subject to Section 2.12 (Sharing of Payments,
      Etc.) as though it were a Bank. A participant shall not be entitled to receive
      any greater payment under Section 2.9 (Increased Costs) or 2.11 (Taxes) than
      the
      applicable Bank would have been entitled to receive with respect to the
      participation sold to such participant, unless the sale of the participation
      to
      such participant is made with the Borrower’s prior written consent. A
      participant that is organized under the laws of a jurisdiction outside the
      United States shall not be entitled to the benefits of Section 2.11 (Taxes)
      unless the Borrower is notified of the participation sold to such participant
      and such participant agrees, for the benefit of the Borrower, to comply with
      Section 2.11(e) as though it were a Bank.

     

    (g) Any
      Bank
      may, in connection with any assignment or participation or proposed assignment
      or participation pursuant to this Section 11.14, disclose to the assignee or
      participant or proposed assignee or participant any information relating to
      the
      Borrower furnished to such Bank by or on behalf of the Borrower; provided
      that,
      prior to any such disclosure, the assignee or participant or proposed assignee
      or participant shall agree to preserve the confidentiality of any Confidential
      Information received by it from such Bank.

     

    
      
        
        

      

      
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    (h) Notwithstanding
      any other provision to the contrary set forth in this Agreement, any Bank may
      at
      any time create a security interest in all or any portion of its rights under
      this Agreement and the other Loan Documents (including, without limitation,
      the
      Loans owing to it and the Note or Notes held by it) in favor of any Federal
      Reserve Bank.

     

    (i) Notwithstanding
      anything to the contrary contained herein, any Bank that is a fund that invests
      in bank loans may create a security interest in all or any portion of the Loans
      owing to it and the Note or Notes held by it to the trustee for holders of
      obligations owed, or securities issued, by such fund as security for such
      obligations or securities, provided
      that
      unless and until such trustee actually becomes a Bank in compliance with the
      other provisions of this Section 11.14, (1) no such pledge shall release the
      pledging Bank from any of its obligations under the Loan Documents and (2)
      such
      trustee shall not be entitled to exercise any of the rights of a Bank under
      the
      Loan Documents even though such trustee may have acquired ownership rights
      with
      respect to the pledged interest through foreclosure or otherwise.

     

    11.15  Interest.
      All
      agreements between a Loan Party, the Agent or any Bank, whether now existing
      or
      hereafter arising and whether written or oral, are hereby expressly limited
      so
      that in no contingency or event whatsoever, whether by reason of demand being
      made on any Note or otherwise, shall the amount paid, or agreed to be paid,
      to
      the Agent or any Bank for the use, forbearance, or detention of the money to
      be
      loaned under this Agreement or otherwise or for the payment or performance
      of
      any covenant or obligation contained herein or in any document related hereto
      exceed the amount permissible at the Highest Lawful Rate. If, as a result of
      any
      circumstances whatsoever, fulfillment of any provision hereof or of any of
      such
      documents, at the time performance of such provision shall be due, shall involve
      transcending the limit of validity prescribed by applicable usury law, then,
      ipso
      facto,
      the
      obligation to be filled shall be reduced to the limit of such validity, and
      if,
      from any such circumstance, the Agent or any Bank shall ever receive interest
      or
      anything which might be deemed interest under applicable law which would exceed
      the amount permissible at the Highest Lawful Rate, such amount which would
      be
      excessive interest shall be applied to the reduction of the principal amount
      owing on account of the Notes or the amounts owing on other obligations of
      the
      Borrower to the Agent or any Bank under this Agreement or any document related
      hereto and not to the payment of interest, or if such excessive interest exceeds
      the unpaid principal balance of the Notes and the amounts owing on other
      obligations of the Borrower to the Agent or any Bank under this Agreement or
      any
      document related hereto, as the case may be, such excess shall be refunded
      to
      the Borrower. All sums paid or agreed to be paid to the Agent or any Bank for
      the use, forbearance, or detention of the indebtedness of the Borrower to the
      Agent or any Bank shall, to the extent permitted by applicable law, be
      amortized, prorated, allocated, and spread throughout the full term of such
      indebtedness until payment in full of the principal thereof (including the
      period of any renewal or extension thereof) so that the interest on account
      of
      such indebtedness shall not exceed the Highest Lawful Rate. The terms and
      provisions of this Section 11.15 shall control and supersede every other
      provision of all agreements between the Borrower and the Banks.

     

    11.16  Indemnification.
      THE
      BORROWER AGREES TO INDEMNIFY, DEFEND, AND SAVE HARMLESS THE AGENT, EACH BANK
      AND
      THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, AND ATTORNEYS, AND
      EACH
      OF THEM (THE “INDEMNIFIED
      PARTIES”),
      FROM
      AND AGAINST ALL CLAIMS, ACTIONS, SUITS, AND OTHER LEGAL PROCEEDINGS, DAMAGES,
      COSTS, INTEREST, CHARGES, TAXES, COUNSEL FEES, AND OTHER EXPENSES AND PENALTIES
      (INCLUDING WITHOUT LIMITATION ALL ATTORNEY FEES AND COSTS OR EXPENSES OF
      SETTLEMENT) WHICH ANY OF THE INDEMNIFIED PARTIES MAY 

     

    
      
        
        

      

      
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SUSTAIN
        OR INCUR BY REASON OF OR ARISING OUT OF (a) THE MAKING OF ANY LOAN HEREUNDER,
        THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE NOTES AND THE CONSUMMATION
        OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THE EXERCISE OF ANY OF THE BANKS’
RIGHTS UNDER THIS AGREEMENT AND THE NOTES OR OTHERWISE, INCLUDING, WITHOUT
        LIMITATION, DAMAGES, COSTS, AND EXPENSES INCURRED BY ANY OF THE INDEMNIFIED
        PARTIES IN INVESTIGATING, PREPARING FOR, DEFENDING AGAINST, OR PROVIDING
        EVIDENCE, PRODUCING DOCUMENTS, OR TAKING ANY OTHER ACTION IN RESPECT OF ANY
        COMMENCED OR THREATENED LITIGATION UNDER ANY FEDERAL SECURITIES LAW OR ANY
        SIMILAR LAW OF ANY JURISDICTION OR AT COMMON LAW OR (b) ANY AND ALL CLAIMS
        OR
        PROCEEDINGS (WHETHER BROUGHT BY A PRIVATE PARTY, GOVERNMENTAL AUTHORITY OR
        OTHERWISE) FOR BODILY INJURY, PROPERTY DAMAGE, ABATEMENT, REMEDIATION,
        ENVIRONMENTAL DAMAGE, OR IMPAIRMENT OR ANY OTHER INJURY OR DAMAGE RESULTING
        FROM
        OR RELATING TO THE RELEASE OF ANY HAZARDOUS MATERIALS LOCATED UPON, MIGRATING
        INTO, FROM, OR THROUGH OR OTHERWISE RELATING TO ANY PROPERTY OWNED OR LEASED
        BY
        THE BORROWER OR ANY SUBSIDIARY (WHETHER OR NOT THE RELEASE OF SUCH HAZARDOUS
        MATERIALS WAS CAUSED BY THE BORROWER, ANY SUBSIDIARY, A TENANT, OR SUBTENANT
        OF
        THE BORROWER OR ANY SUBSIDIARY, A PRIOR OWNER, A TENANT, OR SUBTENANT OF
        ANY
        PRIOR OWNER OR ANY OTHER PARTY AND WHETHER OR NOT THE ALLEGED LIABILITY IS
        ATTRIBUTABLE TO THE HANDLING, STORAGE, GENERATION, TRANSPORTATION, OR DISPOSAL
        OF ANY HAZARDOUS MATERIALS OR THE MERE PRESENCE OF ANY HAZARDOUS MATERIALS
        ON
        SUCH PROPERTY; PROVIDED
        THAT THE
        BORROWER SHALL NOT BE LIABLE TO THE INDEMNIFIED PARTIES WHERE THE RELEASE
        OF
        SUCH HAZARDOUS MATERIALS OCCURS AT ANY TIME AT WHICH THE BORROWER OR ANY
        SUBSIDIARY CEASES TO OWN OR LEASE SUCH PROPERTY); AND PROVIDED,
        FURTHER,
        THAT NO
        INDEMNIFIED PARTY SHALL BE ENTITLED TO THE BENEFITS OF THIS SECTION 11.16
        TO THE
        EXTENT ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT CONTRIBUTED TO ITS
        LOSS;
        AND PROVIDED,
        FURTHER,
        THAT IT
        IS THE INTENTION OF THE BORROWER TO INDEMNIFY THE INDEMNIFIED PARTIES AGAINST
        THE CONSEQUENCES OF THEIR OWN NEGLIGENCE. THIS AGREEMENT IS INTENDED TO PROTECT
        AND INDEMNIFY THE INDEMNIFIED PARTIES AGAINST ALL RISKS HEREBY ASSUMED BY
        THE
        BORROWER. THE OBLIGATIONS OF THE BORROWER UNDER THIS SECTION 11.16 SHALL
        SURVIVE
        ANY TERMINATION OF THIS AGREEMENT AND THE REPAYMENT OF THE
        NOTES.

    

     

    11.17  Payments
      Set Aside.
      To the
      extent that the Borrower makes a payment or payments to the Agent or any Bank
      or
      the Agent or any Bank exercises its right of set off, and such payment or
      payments or the proceeds of such set off or any part thereof are subsequently
      invalidated, declared to be fraudulent or preferential, set aside and/or
      required to be repaid to a trustee, receiver or any other Person under any
      Debtor Law or equitable cause, then, to the extent of such recovery, the
      obligation or part thereof originally intended to be satisfied, and all rights
      and remedies therefor, shall be revived and shall continue in full force and
      effect as if such payment had not been made or set off had not
      occurred.

     

    
      
        
        

      

      
        -60-

        
          

        

      

      
        
        

      

    

    11.18  Loan
      Agreement Controls.
      If
      there are any conflicts or inconsistencies among this Agreement and any other
      document executed in connection with the transactions connected herewith, the
      provisions of this Agreement shall prevail and control.

     

    11.19  Obligations
      Several.
      The
      obligations of each Bank under this Agreement and the Note to which it is a
      party are several, and no Bank shall be responsible for any obligation or
      Commitment of any other Bank under this Agreement and the Note to which it
      is a
      party. Nothing contained in this Agreement or the Note to which it is a party,
      and no action taken by any Bank pursuant thereto, shall be deemed to constitute
      the Banks to be a partnership, an association, a joint venture, or any other
      kind of entity.

     

    11.20  Final
      Agreement.
      THIS
      WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
      NOT
      BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
      AGREEMENT’S OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
      PARTIES.

     

    11.21  PATRIOT
      Act.
      Each
      Bank hereby notifies the Loan Parties that pursuant to the requirements of
      the
      USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law
      October 26, 2001)), such Bank may be required to obtain, verify and record
      information that identifies the Loan Parties, which information includes the
      name and address of the Loan Parties and other information that will allow
      such
      Bank to identify the Loan Parties in accordance with said Act.

     

    

     

    
      
        
          NY3:#7408959v8 

        

        
        

      

      
        -61-

        
          

        

      

      
        
        

        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto, by their respective officers thereunto
      duly
      authorized, have executed this Agreement on the dates set forth below to be
      effective as of the date hereof.

     

    TRUNKLINE
      LNG HOLDINGS LLC

    As
      the
      Borrower

     

    By:_________________________

     

    Name:

     

    Title:

     

    

     

    PANHANDLE
      EASTERN PIPE LINE COMPANY, LP 

     

    As
      a
      Guarantor

     

    By:_________________________

     

    Name:

     

    Title:
      

     

    

     

    TRUNKLINE
      LNG COMPANY, LLC 

     

    As
      a
      Guarantor

     

    By:_________________________

     

    Name:

     

    Title:

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    BAYERISCHE
      HYPO- UND VEREINSBANK AG, NEW YORK
      BRANCH

    For
      itself and as Agent for the Banks

    

    By:_________________________

    Name:

    Title:

    

    By:_________________________

    Name:

    Title:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    BANKS: 

    

    WACHOVIA
      BANK, NATIONAL ASSOCIATION

    

    By:_________________________

    Name:

    Title:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    BANK
      OF
      AMERICA, N.A.

    

    By:_________________________

    Name:

    Title:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    THE
      BANK
      OF TOKYO-MITSUBISHI UFJ, LTD., NEW       YORK
      BRANCH

    

    By:_________________________

    Name:

    Title:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    BAYERISCHE
      LANDESBANK, NEW YORK BRANCH

    

    By:_________________________

    Name:

    Title:

    

    By:_________________________

    Name:

    Title:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    CREDIT
      SUISSE, CAYMAN ISLANDS BRANCH

    

    By:_________________________

    Name:

    Title:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    GOLDMAN
      SACHS CREDIT PARTNERS L.P.

    

    By:_________________________

    Name:

    Title:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    MIZUHO
      CORPORATE BANK, LTD.

    

    By:_________________________

    Name:

    Title:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    JPMORGAN
      CHASE BANK, N.A.

    

    By:_________________________

    Name:

    Title:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    KBC
      BANK
      N.V.

    

    By:_________________________

    Name:

    Title:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    ROYAL
      BANK OF CANADA

    

    By:_________________________

    Name:

    Title:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    SUNTRUST
      BANK

    

    By:_________________________

    Name:

    Title:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    UNION
      BANK OF CALIFORNIA, N.A.

    

    By:_________________________

    Name:

    Title:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    BANK
      HAPOALIM B.M.

    

    By:_________________________

    Name:

    Title:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    BANK
      OF
      CHINA, NEW YORK BRANCH

    

    By:_________________________

    Name:

    Title:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    COMMERZBANK
      AG, NEW YORK AND GRAND CAYMAN
      BRANCHES

    

    By:_________________________

    Name:

    Title:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    FIRST
      COMMERCIAL BANK, NEW YORK AGENCY

    

    By:_________________________

    Name:

    Title:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    NATIONAL
      BANK OF EGYPT

    

    By:_________________________

    Name:

    Title:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    PNC
      BANK,
      NATIONAL ASSOCIATION

    

    By:_________________________

    Name:

    Title:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    WELLS
      FARGO BANK, NATIONAL ASSOCIATION

    

    By:_________________________

    Name:

    Title:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    THE
      BANK
      OF EAST ASIA, LTD., LOS ANGELES BRANCH

    

    By:_________________________

    Name:

    Title:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    UMB
      BANK,
      N.A.

    

    By:_________________________

    Name:

    Title:

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    BANK
      OF
      COMMUNICATIONS, NEW YORK BRANCH

    

    By:_________________________

    Name:

    Title:

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ANNEX
      I

    

    

    COMMITMENTS

    

    [See
      definition of “Commitment” in Section 1.1 (Definitions)]

     

    

      
        	
                Name
                  of Lender

              	
                Commitment
                  ($)

              
	 	 
	
                Bayerische
                  Hypo- und Vereinsbank AG, New York Branch

              	
                $29,250,000

              
	
                Wachovia
                  Bank, National Association

              	
                $29,250,000

              
	
                Bank
                  of America, N.A.

              	
                $26,500,000

              
	
                The
                  Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

              	
                $26,500,000

              
	
                Bayerische
                  Landesbank, New York Branch

              	
                $26,500,000

              
	
                Credit
                  Suisse, Cayman Islands Branch

              	
                $26,500,000

              
	
                Goldman
                  Sachs Credit Partners L.P.

              	
                $26,500,000

              
	
                Mizuho
                  Corporate Bank, Ltd.

              	
                $26,500,000

              
	
                JPMorgan
                  Chase Bank, N.A.

              	
                $21,500,000

              
	
                KBC
                  Bank N.V.

              	
                $21,500,000

              
	
                Royal
                  Bank of Canada

              	
                $21,500,000

              
	
                SunTrust
                  Bank 

              	
                $21,500,000

              
	
                Union
                  Bank of California, N.A.

              	
                $21,500,000

              
	
                Bank
                  Hapoalim B.M.

              	
                $15,000,000

              
	
                Bank
                  of China, New York Branch

              	
                $15,000,000

              
	
                Commerzbank
                  AG, New York and Grand Cayman Branches

              	
                $15,000,000

              
	
                First
                  Commercial Bank, New York Agency

              	
                $15,000,000

              
	
                National
                  Bank of Egypt

              	
                $15,000,000

              
	
                PNC
                  Bank, National Association

              	
                $15,000,000

              
	
                Wells
                  Fargo Bank, National Association

              	
                $15,000,000

              
	
                The
                  Bank of East Asia, Ltd., Los Angeles Branch

              	
                $10,000,000

              
	
                UMB
                  Bank, N.A.

              	
                $10,000,000

              
	
                Bank
                  of Communications, New York Branch

              	
                $5,000,000

              
	 	 
	
                TOTAL
                  

              	
                $455,000,000

              

      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

     

    NOTE

     

    $_______________________,
      20__

     

    FOR
      VALUE
      RECEIVED, the undersigned, TRUNKLINE LNG HOLDINGS LLC, a limited liability
      company organized under the laws of Delaware (the “Borrower”),
      HEREBY PROMISES TO PAY to the order of ___________________________________
      (the
“Bank”),
      on or
      before the Maturity Date, the principal sum of ________________ Million and
      No/
      100ths Dollars ($_,000,000) in accordance with the terms and provisions of
      that
      certain Credit Agreement dated as of March 13, 2007, by and among the Borrower,
      Panhandle Eastern Pipe Line Company, LP and Trunkline LNG Company, LLC, as
      Guarantors, the Bank, the other banks parties thereto, and BAYERISCHE HYPO-
      UND
      VEREINSBANK AG, NEW YORK BRANCH, as Agent (as same may be amended, modified,
      increased, supplemented and/or restated from time to time, the “Credit
      Agreement”).
      Capitalized terms used herein and not otherwise defined shall have the meanings
      ascribed to such terms in the Credit Agreement.

     

    The
      outstanding principal balance of this Note shall be payable at the Maturity
      Date. The Borrower promises to pay interest on the unpaid principal balance
      of
      this Note from the date of any Loan evidenced by this Note until the principal
      balance thereof is paid in full. Interest shall accrue on the outstanding
      principal balance of this Note from and including the date of any Loan evidenced
      by this Note to but not including the Maturity Date at the rate or rates, and
      shall be due and payable on the dates, set forth in the Credit Agreement. Any
      amount not paid when due with respect to principal (whether at stated maturity,
      by acceleration or otherwise), costs or expenses, or, to the extent permitted
      by
      applicable law, interest, shall bear interest from the date when due to and
      excluding the date the same is paid in full, payable on demand, at the rate
      provided for in Section 2.6(b) of the Credit Agreement.

     

    Payments
      of principal and interest, and all amounts due with respect to costs and
      expenses, shall be made in lawful money of the United States of America in
      immediately available funds, without deduction, set off or counterclaim to
      the
      account of the Agent at the principal office of Bayerische Hypo- und Vereinsbank
      AG, New York Branch in New York, New York (or such other address as the Agent
      under the Credit Agreement may specify) not later than noon (New York time)
      on
      the dates on which such payments shall become due pursuant to the terms and
      provisions set forth in the Credit Agreement.

     

    If
      any
      payment of interest or principal herein provided for is not paid when due,
      then
      the owner or holder of this Note may at its option, by notice to the Borrower,
      declare the unpaid, principal balance of this Note, all accrued and unpaid
      interest thereon and all other amounts payable under this Note to be forthwith
      due and payable, whereupon this Note, all such interest and all such amounts
      shall become and be forthwith due and payable in full, without presentment,
      demand, protest, notice of intent to accelerate, notice of actual acceleration
      or further notice of any kind, all of which are hereby expressly waived by
      the
      Borrower.

     

    If
      any
      payment of principal or interest on this Note shall become due on a Saturday,
      Sunday, or public holiday on which the Agent is not open for business, such
      payment shall be made on the next succeeding Business Day and such extension
      of
      time shall in such case be included in computing interest in connection with
      such payment.

     

    In
      addition to all principal and accrued interest on this Note, the Borrower agrees
      to pay (a) all reasonable costs and expenses incurred by the Agent and all
      owners and holders of this Note in collecting this Note through any probate,
      reorganization bankruptcy or any other proceeding and (b) reasonable attorneys’
fees when and if this Note is placed in the hands of an attorney for collection
      after default.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    All
      agreements between the Borrower and the Bank, whether now existing or hereafter
      arising and whether written or oral, are hereby expressly limited so that in
      no
      contingency or event whatsoever, whether by reason of demand being made on
      this
      Note or otherwise, shall the amount paid, or agreed to be paid, to the Bank
      for
      the use, forbearance, or detention of the money to be loaned under the Credit
      Agreement and evidenced by this Note or otherwise or for the payment or
      performance of any covenant or obligation contained in the Credit Agreement
      or
      this Note exceed the amount permissible at Highest Lawful Rate. If as a result
      of any circumstances whatsoever, fulfillment of any provision hereof or of
      the
      Credit Agreement at the time performance of such provision shall be due, shall
      involve transcending the limit of validity prescribed by applicable usury law,
      then, ipso
      facto,
      the
      obligation to be fulfilled shall be reduced to the limit of such validity,
      and
      if from any such circumstance, the Bank shall ever receive interest or anything
      which might be deemed interest under applicable law which would exceed the
      amount permissible at the Highest Lawful Rate, such amount which would be
      excessive interest shall be applied to the reduction of the principal amount
      owing on account of this Note or the amounts owing on other obligations of
      the
      Borrower to the Bank under the Credit Agreement and not to the payment of
      interest, or if such excessive interest exceeds the unpaid principal balance
      of
      this Note and the amounts owing on other obligations of the Borrower to the
      Bank
      under the Credit Agreement, as the case may be, such excess shall be refunded
      to
      the Borrower. In determining whether or not the interest paid or payable under
      any specific contingencies exceeds the Highest Lawful Rate, the Borrower and
      the
      Bank shall, to the maximum extent permitted under applicable law, (a)
      characterize any nonprincipal payment as an expense, fee or premium rather
      than
      as interest, (b) exclude voluntary prepayments and the effects thereof and
      (c)
      prorate, allocate and spread in equal parts during the period of the full stated
      term of this Note, all interest at any time contracted for, charged, received
      or
      reserved in connection with the indebtedness evidenced by this
      Note.

     

    This
      Note
      is one of the Notes provided for in, and is entitled to the benefits of, the
      Credit Agreement, which Credit Agreement, among other things, contains
      provisions for acceleration of the maturity hereof upon the happening of certain
      stated events, for prepayments on account of principal hereof prior to the
      maturity hereof upon the terms and conditions and with the effect therein
      specified, and provisions to the effect that no provision of the Credit
      Agreement or this Note shall require the payment or permit the collection of
      interest in excess of the Highest Lawful Rate. It is contemplated that by reason
      of prepayments or repayments hereon prior to the Maturity Date, there may be
      times when no indebtedness is owing hereunder prior to such date; but
      notwithstanding such occurrence this Note shall remain valid and shall be in
      full force and effect as to Loans made pursuant to the Credit Agreement
      subsequent to each such occurrence.

     

    Except
      as
      otherwise specifically provided for in the Credit Agreement, the Borrower and
      any and all endorsers, guarantors and sureties severally waive grace, demand,
      presentment for payment, notice of dishonor or default, protest, notice of
      protest, notice of intent to accelerate, notice of acceleration and diligence
      in
      collecting and bringing of suit against any party hereto, and agree to all
      renewals, extensions or partial payments hereon and to any release or
      substitution of security hereof, in whole or in part, with or without notice,
      before or after maturity.

     

    THIS
      NOTE
      SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
      OF
      NEW YORK AND APPLICABLE FEDERAL LAW.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered
      by its officer thereunto duly authorized effective as of the date first above
      written.

     

    
      	 	
              TRUNKLINE
                LNG HOLDINGS LLC

            
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 
	 	 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    ASSIGNMENT
      AND ACCEPTANCE

     

    [NAME
      AND
      ADDRESS OF

    ASSIGNING
      BANK]

     

    _______________,
      20__

    ________________

    ________________

    ________________

    ________________

     

    Re: Trunkline
      LNG Holdings Credit Agreement

     

    Ladies
      and Gentlemen:

     

    We
      have
      entered into a Credit Agreement dated as of March 13, 2007 (as same may be
      amended, modified, increased, supplemented and/or restated from time to time,
      the “Credit
      Agreement”),
      among
      certain banks (including us), Bayerische Hypo- und Vereinsbank AG, New York
      Branch (the “Agent”),
      Trunkline LNG Holdings LLC (the “Company”)
      and
      the Guarantors parties thereto. Capitalized terms used herein and not otherwise
      defined shall have the meanings ascribed to such terms in the Credit
      Agreement.

     

    Each
      reference to the Credit Agreement, the Notes or any other document evidencing
      or
      governing the Loans (all such documents collectively, the “Financing
      Documents”)
      includes each such document as amended, modified, extended or replaced from
      time
      to time. All times are New York times.

     

    1.  Assignment.
      We
      hereby sell and assign to you without recourse, and you hereby unconditionally
      and irrevocably acquire for your own account and risk, a ___ percent (__%)
      undivided interest (“your assigned share”) in our Note and all Loans and
      interest thereon as provided in Section 2 of the Credit Agreement [, except
      that
      interest shall accrue on your assigned share in the principal of Alternate
      Base
      Rate Loans and Eurodollar Rate Loans at an annual rate equal to the rate
      provided in the Credit Agreement minus
      _____%]
      (collectively, the “Assigned
      Obligations”)

     

    2.  Materials
      Provided Assignee

     

    a.  We
      will
      promptly request that the Company issue new Notes to us and to you in
      substitution for our Note to reflect the assignment set forth herein. Upon
      issuance of such substitute Notes, (i) you will become a Bank under the Credit
      Agreement, (ii) you will assume our obligations under the Credit Agreement
      to
      the extent of your assigned share, and (iii) the Company will release us from
      our obligations under the Credit Agreement to the extent, but only to the
      extent, of your assigned share. [The Company consents to such release by signing
      this Agreement where indicated below.] As a Bank, you will be entitled to the
      benefits and subject to the obligations of a “Bank”, as set forth in the Credit
      Agreement, and your rights and liabilities with respect to the other Banks
      and
      the Agent will be governed by the Credit Agreement, including without limitation
      Section 9 (The Agent) thereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    b.  We
      have
      furnished you copies of the Credit Agreement, our Note and each other Financing
      Document you have requested. We do not represent or warrant (i) the priority,
      legality, validity, binding effect or enforceability of any Loan Document or
      any
      security interest created thereunder, (ii) the truthfulness and accuracy of
      any
      representation contained in any Loan Document, (iii) the filing or recording
      of
      any Loan Document necessary to perfect any security interest created thereunder,
      (iv) the financial condition of the Company or any other Person obligated under
      any Loan Document, any financial or other information, certificate, receipt
      or
      other document furnished or to be furnished under any Loan Document or (v)
      any
      other matter not specifically set forth herein having any relation to any Loan
      Document, your interest in one Note, the Company or any other Person. You
      represent to us that you are able to make, and have made, your own independent
      investigation and determination of the foregoing matters, including, without
      limitation, the creditworthiness of the Company and the structure of the
      transaction.

     

    3.  Governing
      Law; Jurisdiction.
      This
      Agreement, and any instrument or agreement required hereunder (to the
      extent
      not otherwise expressly provided for therein), shall be governed by, and
      construed under, the laws of the State of New York, without reference to
      conflicts of laws (other than Section 5-1401 and Section 5-1402 of the New
      York
      General Obligations Law).

     

    4.  Notices.
      All
      notices and other communications given hereunder to a party shall be given
      in
      writing (including bank wire, telecopy, telex or similar writing) at such
      party’s address set forth on the signature pages hereof or such other address as
      such party may hereafter specify by notice to the other party. Notice may also
      be given by telephone to the Person, or any other officer in the office, listed
      on the signature pages hereof if confirmed promptly by telex or telecopy.
      Notices shall be effective immediately, if given by telephone; upon
      transmission, if given by bank wire, electronic mail, telecopy; five days after
      deposit in the mails, if mailed; and when delivered, if given by other
      means.

     

    5.  Authority.
      Each of
      us represents and warrants that the execution and delivery of this Agreement
      have been validly authorized by all necessary corporate action and that this
      Agreement constitutes a valid and legally binding obligation enforceable against
      it in accordance with its terms.

     

    6.  Counterparts.
      This
      Agreement may be executed in one or more counterparts, and by each party on
      separate counterparts, each of which shall be an original but all of which
      taken
      together shall be but one instrument.

     

    7.  Amendments.
      No
      amendment modification or waiver of any provision of this Agreement shall be
      effective unless in writing and signed by the party against whom enforcement
      is
      sought.

     

    If
      the
      foregoing correctly sets forth our agreement, please so indicate by signing
      the
      enclosed copy of this Agreement and returning it to us.

     

    

       

    

     

    
      	 	
              Very
                truly yours,

               

            
	 	 
	 	
               

              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 
	 	
               

              [Street
                Address]

            	 
	 	
              [City,
                State, Zip Code]

            	 
	 	
              Telephone:

            	 
	 	
              Telecopy:

            	 
	
              AGREED
                AND ACCEPTED:

               

            	 
	
               

              By:

            	 	 
	 	 	 
	 	 	 
	 	 	 
	
               

              Attention:

            	 	 
	
              Telephone:

            	 	 
	
              Telecopy:

            	 	 
	
              Account
                for Payments:

            	 	 
	 	 

    

    ASSIGNMENT
      APPROVED PURSUANT TO SECTION 11.14 (SALE OR ASSIGNMENT) OF THE CREDIT AGREEMENT
      AND RELEASE APPROVED IN SECTION 2 OF THIS AGREEMENT:

     

    
      	 	
              TRUNKLINE
                LNG HOLDINGS LLC

            
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:Unassociated Document

     

     

    
 

    GREENPOINT
      MORTGAGE FUNDING TRUST 2007-HE1

    Issuing
      Entity,

    

     

    LASALLE
      BANK NATIONAL ASSOCIATION

    Securities
      Administrator

    

     

    and
      

    

     

    CITIBANK,
      N.A.

    Indenture
      Trustee

    

     

    INDENTURE

    

     

    Dated
      as
      of March 6, 2007

    

     

    

     

    MORTGAGE-BACKED
      NOTES

     

     

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF
      CONTENTS

    

     

    
      	
              ARTICLE
                I

              DEFINITIONS

               

            
	
              Section
                1.01

            	
              Definitions

            
	
              Section
                1.02

            	
              Incorporation
                by Reference of Trust Indenture Act

            
	
              Section
                1.03

            	
              Rules
                of Construction

               

            
	
              ARTICLE
                II

              ORIGINAL
                ISSUANCE OF NOTES

               

            
	
              Section
                2.01

            	
              Form

            
	
              Section
                2.02

            	
              Execution,
                Authentication and Delivery

               

            
	
              ARTICLE
                III

              COVENANTS

               

            
	
              Section
                3.01

            	
              Existence

            
	
              Section
                3.02

            	
              Payment
                of Principal and Interest.

            
	
              Section
                3.03

            	
              Protection
                of Trust Estate

            
	
              Section
                3.04

            	
              Opinions
                as to Trust Estate

            
	
              Section
                3.05

            	
              Performance
                of Obligations

            
	
              Section
                3.06

            	
              Negative
                Covenants

            
	
              Section
                3.07

            	
              Annual
                Statement as to Compliance

            
	
              Section
                3.08

            	
              Representations
                and Warranties Concerning the HELOCs

            
	
              Section
                3.09

            	
              Investment
                Company Act

            
	
              Section
                3.10

            	
              No
                Other Business

            
	
              Section
                3.11

            	
              No
                Borrowing

            
	
              Section
                3.12

            	
              Guarantees,
                Loans, Advances and Other Liabilities

            
	
              Section
                3.13

            	
              Capital
                Expenditures

            
	
              Section
                3.14

            	
              Determination
                of Note Interest Rate.

            
	
              Section
                3.15

            	
              Restricted
                Payments

            
	
              Section
                3.16

            	
              Notice
                of Events of Default

            
	
              Section
                3.17

            	
              Further
                Instruments and Acts

            
	
              Section
                3.18

            	
              Certain
                Representations Regarding the Trust Estate.

            
	
              Section
                3.19

            	
              Allocation
                of Charge-Off Amounts.

            
	
              Section
                3.20

            	
              Claims
                on the Policy; Policy Payments Account.

               

            
	
              ARTICLE
                IV

              THE
                NOTES; SATISFACTION AND DISCHARGE OF INDENTURE

               

            
	
              Section
                4.01

            	
              The
                Notes

            
	
              Section
                4.02

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

            
	
              Section
                4.03

            	
              Mutilated,
                Destroyed, Lost or Stolen Notes

            
	
              Section
                4.04

            	
              Persons
                Deemed Owners

            
	
              Section
                4.05

            	
              Cancellation

            
	
              Section
                4.06

            	
              Book-Entry
                Notes

            
	
              Section
                4.07

            	
              Notices
                to Depository

            
	
              Section
                4.08

            	
              Definitive
                Notes

            
	
              Section
                4.09

            	
              Application
                of Trust Money

            
	
              Section
                4.10

            	
              Subrogation
                and Cooperation

            
	
              Section
                4.11

            	
              Repayment
                of Monies Held by Paying Agent

            
	
              Section
                4.12

            	
              Temporary
                Notes

            
	
              Section
                4.13

            	
              Representation
                Regarding ERISA

               

            
	
              ARTICLE
                V

              DEFAULT
                AND REMEDIES

               

            
	
              Section
                5.01

            	
              Events
                of Default

            
	
              Section
                5.02

            	
              Acceleration
                of Maturity; Rescission and Annulment

            
	
              Section
                5.03

            	
              Collection
                of Indebtedness and Suits for Enforcement by Indenture
                Trustee.

            
	
              Section
                5.04

            	
              Remedies;
                Priorities

            
	
              Section
                5.05

            	
              Optional
                Preservation of the Trust Estate

            
	
              Section
                5.06

            	
              Limitation
                of Suits

            
	
              Section
                5.07

            	
              Unconditional
                Rights of Noteholders To Receive Principal and Interest

            
	
              Section
                5.08

            	
              Restoration
                of Rights and Remedies

            
	
              Section
                5.09

            	
              Rights
                and Remedies Cumulative

            
	
              Section
                5.10

            	
              Delay
                or Omission Not a Waiver

            
	
              Section
                5.11

            	
              Control
                By Note Insurer and Noteholders

            
	
              Section
                5.12

            	
              Waiver
                of Past Defaults

            
	
              Section
                5.13

            	
              Undertaking
                for Costs

            
	
              Section
                5.14

            	
              Waiver
                of Stay or Extension Laws

            
	
              Section
                5.15

            	
              Sale
                of Trust Estate

            
	
              Section
                5.16

            	
              Action
                on Notes

               

            
	
              ARTICLE
                VI

              THE
                INDENTURE TRUSTEE AND THE SECURITIES ADMINISTRATOR

               

            
	
              Section
                6.01

            	
              Duties
                of Indenture Trustee and Securities Administrator

            
	
              Section
                6.02

            	
              Rights
                of Indenture Trustee and Securities Administrator

            
	
              Section
                6.03

            	
              Individual
                Rights of Indenture Trustee

            
	
              Section
                6.04

            	
              Indenture
                Trustee’s and Securities Administrator’s Disclaimer

            
	
              Section
                6.05

            	
              Notice
                of Event of Default

            
	
              Section
                6.06

            	
              Reports
                to Residual Certificateholders

            
	
              Section
                6.07

            	
              Compensation

            
	
              Section
                6.08

            	
              Replacement
                of Indenture Trustee and the Securities Administrator

            
	
              Section
                6.09

            	
              Successor
                Indenture Trustee and Securities Administrator by
                Merger

            
	
              Section
                6.10

            	
              Appointment
                of Co-Indenture Trustee or Separate Indenture Trustee

            
	
              Section
                6.11

            	
              Eligibility;
                Disqualification

            
	
              Section
                6.12

            	
              Representations
                and Warranties

            
	
              Section
                6.13

            	
              Representations
                and Warranties

            
	
              Section
                6.14

            	
              Directions
                to Indenture Trustee and the Securities Administrator.

            
	
              Section
                6.15

            	
              The
                Agents

            
	
              Section
                6.16

            	
              Certain
                Representations Regarding the Indenture Trustee

               

            
	
              ARTICLE
                VII

              NOTEHOLDERS’
                LISTS AND REPORTS

               

            
	
              Section
                7.01

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

            
	
              Section
                7.02

            	
              Preservation
                of Information; Communications to Noteholders

            
	
              Section
                7.03

            	
              Financial
                Information

            
	
              Section
                7.04

            	
              Statements
                to Noteholders and Certificateholders

               

            
	
              ARTICLE
                VIII

              ACCOUNTS,
                DISBURSEMENTS AND RELEASES

               

            
	
              Section
                8.01

            	
              Collection
                of Money

            
	
              Section
                8.02

            	
              Officer’s
                Certificate

            
	
              Section
                8.03

            	
              Termination
                Upon Distribution to Noteholders

            
	
              Section
                8.04

            	
              Release
                of Trust Estate

            
	
              Section
                8.05

            	
              Surrender
                of Notes Upon Final Payment

            
	
              Section
                8.06

            	
              Optional
                Redemption of the HELOCs

            
	
              Section
                8.07

            	
              [reserved].

            
	
              Section
                8.08

            	
              Additional
                Requirements for Optional Redemption

            
	
              Section
                8.09

            	
              Interest
                Coverage Account.

               

            
	
              ARTICLE
                IX

              SUPPLEMENTAL
                INDENTURES

               

            
	
              Section
                9.01

            	
              Supplemental
                Indentures Without Consent of Noteholders

            
	
              Section
                9.02

            	
              Supplemental
                Indentures With Consent of Noteholders

            
	
              Section
                9.03

            	
              Execution
                of Supplemental Indentures

            
	
              Section
                9.04

            	
              Effect
                of Supplemental Indenture

            
	
              Section
                9.05

            	
              Conformity
                with Trust Indenture Act

            
	
              Section
                9.06

            	
              Reference
                in Notes to Supplemental Indentures

               

            
	
              ARTICLE
                X

              TAX
                MATTERS

               

            
	
              Section
                10.01

            	
              Description
                of REMICs and Designation of REMIC Interests.

            
	
              Section
                10.02

            	
              REMIC
                Elections and REMIC Distributions.

            
	
              Section
                10.03

            	
              Allocation
                of Charge-Off Amounts.

            
	
              Section
                10.04

            	
              Tax
                Administration.

            
	
              Section
                10.05

            	
              Tax
                Treatment of Net WAC Cap Rate Carryover Amounts.

               

            
	
              ARTICLE
                XI

              MISCELLANEOUS

               

            
	
              Section
                11.01

            	
              Compliance
                Certificates and Opinions, etc

            
	
              Section
                11.02

            	
              Form
                of Documents Delivered to Indenture Trustee

            
	
              Section
                11.03

            	
              Acts
                of Noteholders

            
	
              Section
                11.04

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

            
	
              Section
                11.05

            	
              Notices
                to Noteholders; Waiver

            
	
              Section
                11.06

            	
              Conflict
                with Trust Indenture Act

            
	
              Section
                11.07

            	
              Effect
                of Headings

            
	
              Section
                11.08

            	
              Successors
                and Assigns

            
	
              Section
                11.09

            	
              Separability

            
	
              Section
                11.10

            	
              Legal
                Holidays

            
	
              Section
                11.11

            	
              GOVERNING
                LAW

            
	
              Section
                11.12

            	
              Counterparts

            
	
              Section
                11.13

            	
              Recording
                of Indenture

            
	
              Section
                11.14

            	
              Issuing
                Entity Obligation

            
	
              Section
                11.15

            	
              No
                Petition

            
	
              Section
                11.16

            	
              Inspection

            
	
              Section
                11.17

            	
              Benefits
                of Indenture

            
	
              Section
                11.18

            	
              Securities
                Administrator to Hold Policy

            

    

    

    

    EXHIBITS

    

    
      	
              Exhibit
                A-1

            	
              —

            	
              Form
                of Class A Notes

            
	
              Exhibit
                A-2

            	
              —

            	
              Form
                of Class B Notes

            
	
              Exhibit
                A-3

            	
              —

            	
              Reserved

            
	
              Exhibit
                B

            	
              —

            	
              Mortgage
                Loan Schedule

            
	
              Exhibit
                C

            	
              —

            	
              Form
                of Transferee Certificate

            
	
              Exhibit
                D

            	
              —

            	
              Form
                of Transferor Certificate

            
	
              Exhibit
                E

            	
              —

            	
              Form
                of Mortgage Loan Purchase Agreement

            
	
              Exhibit f 

            	
              — 

            	Form
              of Policy 

    

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    This
      Indenture, dated as of March 6, 2007, is entered into among GPMF Trust 2007-HE1,
      a Delaware statutory trust, as Issuing Entity (the “Issuing Entity”), LaSalle
      Bank National Association, as Securities Administrator (the “Securities
      Administrator”) and Citibank, N.A., as Indenture Trustee (the “Indenture
      Trustee”). 

     

    WITNESSETH
      THAT:

     

    Each
      party hereto agrees as follows for the benefit of the other party and for the
      equal and ratable benefit of the Holders of the Issuing Entity’s Mortgage-Backed
      Notes, Series 2007-HE1 (the “Notes”) and the Note Insurer.

     

    GRANTING
      CLAUSE

     

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

     

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

     

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

     

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

     

     

     

    ARTICLE
      I

    DEFINITIONS

     

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

     

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

     

    “Commission”
      means the Securities and Exchange Commission.

     

    “indenture
      securities” means the Notes.

     

    “indenture
      security holder” means a Noteholder.

     

    “indenture
      to be qualified” means this Indenture.

     

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

     

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

     

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

     

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

     

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

     

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

     

    (iii)  “or”
is
      not exclusive;

     

    (iv)  “including”
      means including without limitation;

     

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

     

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

     

     

     

    ARTICLE
      II

    ORIGINAL
      ISSUANCE OF NOTES

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

     

     

    ARTICLE
      III

    COVENANTS

     

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

     

    Section
      3.02  Payment
      of Principal and Interest. 

     

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

     

    (i)  to
      the
      Note Insurer, the current and any past due premium due under the
      Policy;

     

    (ii)  to
      the
      Class A Notes, the Current Interest and any Unpaid Interest Shortfall Amount
      for
      such Payment Date; 

     

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

     

    (iv)  to
      the
      Class B-1 Notes and Class B-2 Notes, in that order, the Current Interest for
      each such Class and Payment Date; 

     

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

     

    (vi)  to
      cover
      any Charge-Off Amounts allocated to the Class A Notes on prior Payment
      Dates;

     

    (vii)  to
      the
      Class B-1 Notes and Class B-2 Notes, any Unpaid Interest Shortfall Amount for
      such Payment Date and each such Class;

     

    (viii)  from
      amounts otherwise distributable to the Class E Certificates, to the Net WAC
      Cap
      Rate Carryover Reserve Account, (x) first to pay the Class A Notes, pro rata,
      and then to pay the Class B-1 Notes and Class B-2 Notes, in that order, any
      Net
      WAC Cap Rate Carryover Amount for such Payment Date and each such Class to
      the
      extent such amount exceeds the amounts then on deposit in the WAC Cap Rate
      Carryover Reserve Account, and (y) second, to maintain a balance equal to the
      Net WAC Cap Rate Carryover Reserve Account Deposit;

     

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

     

    (x)  to
      the
      Certificate Paying Agent for distribution to the Class E Certificates, as
      specified in the Trust Agreement, any remaining amounts not exceeding the Class
      E Distribution Amount reduced by amounts distributed in clauses (v) and (viii);
      and

     

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

     

    (b)  (1)On
      each
      Payment Date, the Class S Floating Allocation Percentage of the Interest
      Collection Amount for such Payment Date, reduced by the Servicing Fees and
      master servicing fees, shall be distributed to the holders of the Class S
      Certificates.

     

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

     

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

     

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

     

    (i)  to
      the
      Class A-1 Notes and Class A-2 Notes, pro rata based on the Note Principal
      Balances of each such Class, the Available Principal Payment Amount for such
      Payment Date, until the Note Principal Balances thereof are reduced to zero;
      

     

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

     

    (iii)  sequentially,
      to the Class B-1 Notes and Class B-2 Notes, in that order, the remaining
      Available Principal Payment Amount, in each case until the Note Principal
      Balance of each such Class has been reduced to zero;

     

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

     

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

     

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

     

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

     

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

     

    (i)  to
      the
      Class A-1 Notes and Class A-2 Notes, pro rata based on the Note Principal
      Balances of each such Class, the Class A Principal Payment Amount, for such
      Payment Date, until the Note Principal Balances thereof are reduced to
      zero;

     

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

     

    (iii)  to
      the
      Class B-1 Notes, the Class B-1 Principal Payment Amount for such Payment Date,
      until the Note Principal Balance thereof is reduced to zero;

     

    (iv)  to
      the
      Class B-2 Notes, the Class B-2 Principal Payment Amount for such Payment Date,
      until the Note Principal Balance thereof is reduced to zero;

     

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

     

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

     

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

     

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

     

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

     

    (e)  Each
      distribution with respect to a Book-Entry Note shall be paid to the Depository,
      as Holder thereof, and the Depository shall be responsible for crediting the
      amount of such distribution to the accounts of its Depository Participants
      in
      accordance with its normal procedures. Each Depository Participant shall be
      responsible for disbursing such distribution to the Note Owners that it
      represents and to each indirect participating brokerage firm (a “brokerage firm”
or “indirect participating firm”) for which it acts as agent. Each brokerage
      firm shall be responsible for disbursing funds to the Note Owners that it
      represents. None of the Securities Administrator, the Note Registrar, the Paying
      Agent, the Depositor or the Master Servicer shall have any responsibility
      therefor.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Section
      3.07  Annual
      Statement as to Compliance.
      The
      Issuing Entity will deliver to the Indenture Trustee, the Securities
      Administrator and the Note Insurer, by March 1 of each year commencing with
      the
      calendar year 2008, an Officer’s Certificate stating, as to the Authorized
      Officer signing such Officer’s Certificate, that:

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Section
      3.14  Determination
      of Note Interest Rate. 

     

    On
      each
      Interest Determination Date other than first Interest Determination Date for
      which One-Month LIBOR shall be 5.320%, the Securities Administrator shall
      determine One-Month LIBOR and the Note Interest Rate for each Class of Notes
      for
      the following Accrual Period and shall make such rate available to the Issuing
      Entity, the Indenture Trustee, the Master Servicer, the Note Insurer and the
      Depositor. The establishment of One-Month LIBOR on each Interest Determination
      Date by the Securities Administrator and the Securities Administrator’s
      calculation of the rate of interest applicable to each Class of Notes for the
      related Accrual Period shall (in the absence of manifest error) be final and
      binding.

     

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

     

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

     

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

     

    Section
      3.18  Certain
      Representations Regarding the Trust Estate. 

     

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

     

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

     

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

     

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

     

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

     

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

     

    (vi)  The
      Collateral is not in the name of any Person other than the Issuing Entity or
      the
      Indenture Trustee. The Issuing Entity has in its possession all original copies
      of the security certificates that constitute or evidence the Collateral. The
      security certificates that constitute or evidence the Collateral do not have
      any
      marks or notations indicating that they have been pledged, assigned or otherwise
      conveyed to any Person other than the Indenture Trustee. The Issuing Entity
      has
      not consented to the bank maintaining the Collateral to comply with instructions
      of any Person other than the Indenture Trustee. All
      financing statements filed or to be filed against the Issuing Entity in favor
      of
      the Indenture Trustee in connection herewith describing the Collateral contain
      a
      statement to the following effect: "A purchase of or security interest in any
      collateral described in this financing statement will violate the rights of
      the
      Secured Party.” 

     

    Section
      3.19  Allocation
      of Charge-Off Amounts. 

     

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

     

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

     

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

     

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

     

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

     

    first,
      to the
      Class B-2 Notes, until the Note Principal Balance thereof has been reduced
      to
      zero;

     

    second,
      to the
      Class B-1 Notes, until the Note Principal Balance thereof has been reduced
      to
      zero; 

     

    third,
      to the
      Class A-2 Notes, until the Note Principal Balance thereof has been reduced
      to
      zero; and

     

    fourth,
      to the
      Class A-1 Notes, until the Note Principal Balance thereof has been reduced
      to
      zero.

     

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

     

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

     

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

     

    (g)  In
      addition, the Servicer must charge off a HELOC at the time such HELOC becomes
      180 days delinquent unless the Servicer reasonably believes that it may be
      able
      to obtain a net recovery through foreclosure proceedings or other conversion
      of
      the related HELOC in accordance with the Servicer’s servicing practices in
      effect for all similar loans serviced by the Servicer. Once a HELOC is charged
      off, the Servicer will not be entitled to any additional Servicing Fee for
      such
      HELOC, except to the extent of any unpaid Servicing Fees and expenses which
      will
      be reimbursable from any recoveries on such HELOC, and the HELOC will be treated
      as a liquidated HELOC. 

     

    Unless
      specific Subsequent Recoveries are anticipated by the Servicer on a particular
      HELOC that is charged off as described in the preceding paragraph, such charged
      off HELOC will be released from the Trust Estate, and will be transferred to
      the
      Class X Certificateholders. If any Subsequent Recoveries are anticipated on
      such
      Charged-Off HELOC, the release of such HELOC from the Trust Estate will be
      delayed until the Payment Date after receipt of such Subsequent Recoveries.
      After the release of a Charged-Off HELOC, the Class X Certificateholders will
      be
      entitled to any amounts subsequently received in respect of any such released
      Charged-Off HELOC, subject to any fees or expenses owed to the Servicer. Such
      Class X Certificateholder may designate any servicer to service any such
      released Charged-Off HELOC and the Class X Certificateholder may sell any such
      released Charged-Off HELOC to a third party. To the extent the servicing of
      such
      released Charged-Off HELOC is not transferred from the Servicer, the servicing
      of such released Charged-Off HELOC and the fees therefor shall be governed
      by a
      separate servicing agreement under terms similar to the Servicing Agreement.
      

     

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

     

    Section
      3.20  Claims
      on the Policy; Policy Payments Account.

     

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

     

    (b)  If
      the
      Securities Administrator has determined that an Insured Amount is required
      to be
      paid under the Policy with respect to a Payment Date, it shall deliver a notice
      of claim and certificate (substantially in the form of the Payment Notice under
      Financial Guaranty Insurance Policy No. CA03607A included as Exhibit A to the
      Policy) to the Note Insurer no later than 12:00 noon, New York, New York City
      time on the second Business Day preceding the Payment Date and shall provide
      a
      copy of such notice to the Master Servicer at the time the Payment Notice is
      delivered to the Note Insurer. That notice (substantially in the form of the
      Payment Notice under Financial Guaranty Insurance Policy No. CA03607A included
      as Exhibit A to the Policy) shall constitute a claim for payment pursuant to
      the
      Policy.

     

    (c)  If
      the
      Securities Administrator receives a certified copy of a final order of a court
      exercising jurisdiction in an Insolvency Proceeding (as defined in the Policy)
      (an “Order”) that any prior payment made on the Class A Notes constitutes an
      Avoided Payment (as defined in the Policy), the Securities Administrator shall
      so notify the Note Insurer, shall comply with the Policy to obtain payment
      by
      the Note Insurer of the Avoided Payment, and shall, at the time it provides
      notice to the Note Insurer, notify each Holder of the affected Notes by mail
      that, subject to the terms of the Policy, the Note Insurer will disburse the
      Avoided Payment directly to the receiver, conservator, debtor-in-possession,
      or
      trustee in bankruptcy named in the Order (unless a Holder of the Class A Notes
      has provided evidence satisfactory to the Note Insurer that it has previously
      paid such amount to the receiver, conservator, debtor-in-possession or trustee
      in bankruptcy named in the Order, in which case such payment shall be disbursed
      to the Securities Administrator) by 2:00 P.M., New York City time on the
      Business Day following the delivery to the Securities Administrator on behalf
      of
      the Noteholder of (1) a certified copy of the Order to the effect that the
      Securities Administrator or such Noteholder, as applicable, is required to
      return such Avoided Payment or portion thereof because such payment was avoided
      under applicable law, with respect to which order the appeal period has expired
      without an appeal having been filed, (2) an assignment substantially in the
      form
      of Exhibit B to the Policy, properly completed and executed and delivered by
      a
      Holder of the Class A Notes irrevocably assigning to the Note Insurer all rights
      and claims of such Holder relating to or arising under such Avoided Payment,
      and
      (3) a payment notice in the form of Exhibit A to the Policy appropriately
      completed and executed by the Securities Administrator. If the documents are
      received after 12:00 noon,
      New
      York City time, on a Business Day, they will be considered received on the
      following Business Day. 

     

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

     

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

     

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

     

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

     

    Bank
      of
      America, N.A.

    777
      Main
      Street

    Hartford,
      CT 06115-2001

    ABA
      Number: 026009593

    For
      the
      Account of: XL Capital Assurance Inc.

    1221
      Avenue of the Americas, 31st
      Floor

    New
      York,
      NY 10020-1001

    Account
      #: 94278 35841

    Reference:
      Policy Number CA03607A

    

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

     

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

     

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

     

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

     

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

     

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

     

     

     

    ARTICLE
      IV

    THE
      NOTES; SATISFACTION AND DISCHARGE OF INDENTURE

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Any
      transfer of a Note shall be made in accordance with the ERISA restrictions
      in
      Section 4.14.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    

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

    

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

    

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

     

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

     

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

     

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

     

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

     

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

     

    Section
      4.13    
 [reserved].

     

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

     

     

     

    ARTICLE
      V

    DEFAULT
      AND REMEDIES

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    provided,
      however, that the Indenture Trustee may not sell or otherwise liquidate the
      Trust Estate following an Event of Default, unless (1)(A) the Indenture Trustee
      obtains the consents required under Section 5.11 below, (B) the proceeds of
      such
      sale or liquidation distributable to the Holders of the Notes are sufficient
      to
      discharge in full all amounts then due and unpaid upon such Notes for principal
      and interest and to reimburse the Note Insurer for any amounts drawn under
      the
      Policy and any other amounts due to the Note Insurer under the Insurance
      Agreement or (C) the Indenture Trustee determines that the HELOCs will not
      continue to provide sufficient funds for the payment of principal of and
      interest on the applicable Notes as they would have become due if the Notes
      had
      not been declared due and payable, and the Indenture Trustee obtains the
      consents required under Section 5.11 below and (2) the Securities Administrator
      complies with each of the requirements for a qualified liquidation under Section
      860F of the Code set forth in Section 8.08 as if it were the Class E
      Certificateholder. In determining such sufficiency or insufficiency with respect
      to clause (B) and (C), the Indenture Trustee may, but need not, obtain and
      rely
      upon an opinion (obtained at the expense of the Trust) of an Independent
      investment banking or accounting firm of national reputation as to the
      feasibility of such proposed action and as to the sufficiency of the Trust
      Estate for such purpose. Notwithstanding the foregoing, any Sale of the Trust
      Estate shall be made subject to the continued servicing of the HELOCs by the
      Servicer (unless an Event of Servicer Termination has occurred and is
      continuing) as provided in the Sale and Servicing Agreement. Notwithstanding
      any
      contrary provision of this Indenture, no Sale of the Trust Estate shall be
      made
      unless an Opinion of Counsel is rendered, addressed to the Indenture Trustee,
      the Note Insurer, the Securities Administrator and the Owner Trustee, to the
      effect that such Sale would not (i) result in the imposition of the tax on
      “prohibited transactions” as defined in sections 860F(a)(2) of any REMIC created
      hereunder or (ii) cause any REMIC created hereunder to fail to qualify as a
      REMIC at any time that any Notes or Certificates are outstanding.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

     

     

    ARTICLE
      VI

    THE
      INDENTURE TRUSTEE AND THE SECURITIES ADMINISTRATOR

     

    Section
      6.01  Duties
      of Indenture Trustee and Securities Administrator.
      (a)
      If an
      Event of Default has occurred and is continuing, the Indenture Trustee shall
      exercise the rights and powers vested in it by this Indenture and use the same
      degree of care and skill in their exercise as a prudent person would exercise
      or
      use under the circumstances in the conduct of such person’s own
      affairs.

     

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

     

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

     

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

     

    (c)  Neither
      the Indenture Trustee nor the Securities Administrator may be relieved from
      liability for its own negligent action, its own negligent failure to act or
      its
      own willful misconduct, except that:

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (i)  All
      funds
      received by the Securities Administrator and required to be deposited in the
      related Interest Coverage Account pursuant to this Indenture shall be promptly
      so deposited by the Securities Administrator.

     

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

     

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

     

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

     

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

     

    (e)  For
      the
      limited purpose of effecting any action to be undertaken by each of the
      Indenture Trustee and the Securities Administrator, but not specifically as
      a
      duty of the Indenture Trustee or the Securities Administrator under the
      Indenture, each of the Indenture Trustee and the Securities Administrator may
      execute any of the trusts or powers hereunder or perform any duties hereunder,
      either directly or by or through agents, attorneys, custodians or nominees
      appointed with due care, and shall not be responsible for any willful misconduct
      or negligence on the part of any agent, attorney, custodian or nominee so
      appointed.

     

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

     

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

     

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

     

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

     

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

     

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

     

    (l)  Neither
      the Indenture Trustee nor the Securities Administrator shall be bound to make
      any investigation into the facts or matters stated in any resolution,
      certificate, statement, instrument, opinion, report, notice, request, consent,
      order, approval, bond or other paper or document, unless requested in writing
      to
      do so by the Note Insurer or Holders of Notes representing not less than 25%
      of
      the Note Principal Balance of the Notes and provided that the payment within
      a
      reasonable time to the Indenture Trustee or the Securities Administrator, as
      applicable, of the costs, expenses or liabilities likely to be incurred by
      it in
      the making of such investigation is, in the opinion of the Indenture Trustee
      or
      the Securities Administrator, as applicable, reasonably assured to the Indenture
      Trustee by the security afforded to it by the terms of this Indenture. The
      Indenture Trustee or the Securities Administrator may require reasonable
      indemnity against such expense or liability as a condition to taking any such
      action. The reasonable expense of every such examination shall be paid by the
      Noteholders requesting the investigation.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Section
      6.08  Replacement
      of Indenture Trustee and the Securities Administrator.
      No
      resignation or removal of the Indenture Trustee or the Securities Administrator
      and no appointment of a successor Indenture Trustee or a successor Securities
      Administrator shall become effective until the acceptance of appointment by
      the
      successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee
      or the Securities Administrator may resign at any time by so notifying the
      Issuing Entity and the Note Insurer. The Note Insurer or, if a Note Insurer
      Default exists, the Holders of a majority of Note Principal Balances of each
      Class of Notes may remove the Indenture Trustee by so notifying the Indenture
      Trustee and may appoint a successor Indenture Trustee. The Issuing Entity shall,
      with the consent of the Note Insurer so long as no Note Insurer Default exists
      remove the Indenture Trustee or the Securities Administrator, as applicable,
      if:

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Each
      of
      the Indenture Trustee and the Securities Administrator hereunder shall at all
      times be a corporation or an association organized and doing business under
      the
      laws of any state or the United States of America, authorized under such laws
      to
      exercise corporate trust powers, having a combined capital and surplus of at
      least $50,000,000 and subject to supervision or examination by federal or state
      authority. In case at any time the Indenture Trustee or the Securities
      Administrator shall cease to be eligible in accordance with the provisions
      of
      this Section, the Trustee or the Securities Administrator, as the case may
      be,
      shall resign immediately in the manner and with the effect specified in Section
      6.08 hereof.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Section
      6.14  Directions
      to Indenture Trustee and the Securities Administrator. 

     

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

     

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

     

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

     

    Section
      6.16  Certain
      Representations Regarding the Indenture Trustee.
      The
      Indenture Trustee represents that or agrees, as applicable, that:

     

    The
      Indenture Trustee is a “securities intermediary,” as such term is defined in
      Section 8-102(a)(14)(B) of the New York Uniform Commercial Code, and that in
      the
      ordinary course of its business maintains “securities accounts” for others, as
      such term is used in Section 8-50 (1) of the New York Uniform Commercial
      Code;

     

    With
      respect to Section 11.11, the “securities intermediary’s jurisdiction”
      as defined in the New York Uniform Commercial Code, as applicable to
      this
      Indenture, shall be the State of New York; and

     

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

     

    

     

    ARTICLE
      VII

    NOTEHOLDERS’
      LISTS AND REPORTS

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (iv)  the
      amount of Servicing Fees for the related Collection Period;

     

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

     

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

     

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

     

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

     

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

     

    (x)  if
      the
      distribution to the Holders of any Class of Notes is less than the full amount
      that would be distributable to such Holders if there were sufficient funds
      available therefor, the amount of the shortfall;

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (xxiv)  each
      HELOC that has been released from the Trust Estate to the Class X
      Certificateholder.

     

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

     

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

     

    The
      Securities Administrator will make the monthly statements provided for in this
      section (and, at its option, any additional files containing the same
      information in an alternative format) available each month to the Note Insurer,
      each Noteholder and each Certificateholder, the Depositor, the Issuing Entity,
      the Seller, the Owner Trustee, the Certificate Paying Agent and the Rating
      Agencies via the Securities Administrator's website. The Securities
      Administrator’s website shall initially be located at “www.etrustee.net.”
Assistance in using the website can be obtained by calling the Securities
      Administrator’s customer service desk at (312) 992-2745. Parties that are unable
      to use the website are entitled to have a paper copy mailed to them via first
      class mail by calling the Securities Administrator’s customer service desk and
      indicating such. The Securities Administrator may have the right to change
      the
      way the monthly statements are distributed in order to make such distribution
      more convenient and/or more accessible to the above parties and the Securities
      Administrator shall provide timely and adequate notification to all above
      parties regarding any such changes.

     

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

     

     

     

    ARTICLE
      VIII

    ACCOUNTS,
      DISBURSEMENTS AND RELEASES

     

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

     

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

     

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

     

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

     

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

     

    (c)  The
      Indenture Trustee shall release property from the lien of this Indenture
      pursuant to this Section 8.04 only upon receipt of a request from the Issuing
      Entity and a letter from the Note Insurer stating that the Note Insurer has
      no
      objection to such request from the Issuing Entity.

     

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

     

    Section
      8.06  Optional
      Redemption of the HELOCs.
      (a)
      The
      Holder of the Class E Certificates, or if there is no single holder, the
      majority Holder of the Class E Certificates, shall have the option to purchase
      the assets of the Trust and thereby cause the redemption of the Notes, in whole,
      but not in part, on or after the Payment Date on which the sum of the Note
      Principal Balances of the Notes is reduced to an amount less than or equal
      to
      20% of the sum of the original Note Principal Balances of the Notes. Such
      optional purchase shall be subject to the Note Insurer’s consent if the
      termination would result in a draw on the Policy or if, after such purchase,
      amounts would remain owed to the Note Insurer under either this Indenture or
      the
      Insurance Agreement. The aggregate redemption price (the “Redemption Price”) for
      the Notes will be equal to the lesser of (i) the fair market value of the HELOCs
      and (ii) the sum of the Outstanding Principal Balance of the HELOCs, and accrued
      and unpaid interest thereon at the weighted average of the Mortgage Rates
      through the day preceding the final Payment Date; provided that the option
      shall
      only be exercised if the Purchase Price is sufficient to repay all outstanding
      principal and accrued and unpaid interest on the Notes.

     

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

     

    Section
      8.07  [reserved].

     

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

     

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

     

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

     

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

     

    (b)
      By
      their acceptance of the Notes, the Holders thereof hereby authorize the adoption
      of a 90-day liquidation period and the adoption of a plan of complete
      liquidation for each REMIC created hereunder, which authorization shall be
      binding upon all successor Noteholders. The Securities Administrator, as agent
      for each REMIC created hereunder, hereby agrees to adopt and sign such a plan
      of
      complete liquidation meeting the requirements for a “qualified liquidation”
under Section 860F of the Code and any regulations thereunder upon the written
      request of the Class E Certificateholder or the majority Holder of the Class
      E
      Certificates, as applicable, and the receipt of the Opinion of Counsel referred
      to in clause (a)(i) above, and to take such other action in connection therewith
      as may be reasonably requested by the Class E Certificateholder or the majority
      Holder of the Class E Certificates, as applicable.

     

    Section
      8.09  Interest
      Coverage Account.

     

    (a)  No
      later
      than the Closing Date, the Securities Administrator shall establish and maintain
      a segregated trust account or a sub account of a trust account entitled the
      “Interest Coverage Account”. The Interest Coverage Account shall be an Eligible
      Account or a sub-account of an Eligible Account. On the Closing Date, the
      Securities Administrator shall, promptly upon receipt, deposit in the Interest
      Coverage Account and retain therein the Initial Interest Coverage Deposit for
      the HELOCs remitted on the Closing Date to the Securities Administrator by
      the
      Depositor. Funds deposited in the Interest Coverage Account shall be held in
      trust by the Securities Administrator for the Noteholders for the uses and
      purposes set forth herein.

     

    (b)  The
      amount on deposit in the Interest Coverage Account shall be specifically
      allocated to cover Net WAC Cap Rate Carryover Amounts on each Class of
      Notes with respect to the first Payment Date. On the first Payment Date, the
      Securities Administrator shall withdraw from the Interest Coverage Account,
      the
      Net WAC Cap Rate Carryover Amount for that Payment Date, to the extent not
      otherwise covered by the Interest Collection Amount, and distribute such amount
      to the Holders of the Notes in the priorities specified in clause (a)(viii)
      of
      Section 3.02. Any payments to the Holders of Notes in respect of Net WAC Cap
      Rate Carryover Amounts pursuant to the preceding sentence shall not be payments
      with respect to a “regular interest” in a REMIC within the meaning of
      Section 860(G)(a)(1) of the Code. Any amounts remaining in the Interest
      Coverage Account after the first Payment Date and not needed for such purposes
      will be paid to the Depositor and will not thereafter be available for payment
      to the Noteholders.

     

    (c)  For
      federal income tax purposes, the Depositor shall be the owner of the Interest
      Coverage Account and shall report all items of income, deduction, gain or loss
      arising therefrom. At no time will the Interest Coverage Account be an asset
      of
      any REMIC created hereunder. All income and gain realized from investment of
      funds deposited in the Interest Coverage Account, which investment shall be
      made
      solely upon the written direction of the Depositor, shall be for the sole and
      exclusive benefit of the Depositor and shall be remitted by the Securities
      Administrator to the Depositor no later than the first Business Day following
      receipt of such income and gain by the Securities Administrator. If no written
      direction with respect to such investment shall be received by the Securities
      Administrator from the Depositor, then funds in such Account shall remain
      uninvested. The Depositor shall deposit in the Interest Coverage Account the
      amount of any net loss incurred in respect of any such Permitted Investment
      immediately upon realization of such loss.

     

     

     

    ARTICLE
      IX

    SUPPLEMENTAL
      INDENTURES

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

     

     

    ARTICLE
      X

    TAX
      MATTERS

     

    Section
      10.01  Description
      of REMICs and Designation of REMIC Interests. 

     

    REMIC
      I

     

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

     

    
      	
              Designation

            	 	
              Uncertificated
                REMIC I

              Pass-Through
                Rate

            	 	
              Initial
                Uncertificated 

              Principal
                Balance

            	 	
              Latest
                Possible 

              Maturity
                Date (1)

            
	
              AA

            	 	
              Variable(2)

            	 	
              $

            	
              652,695,869.23
                

            	 	
              December
                25, 2031

            
	
              A-1

            	 	
              Variable(2)

            	 	
              $

            	
              5,078,370.00
                

            	 	
              December
                25, 2031

            
	
              A-2

            	 	
              Variable(2)

            	 	
              $

            	
              1,328,700.00
                

            	 	
              December
                25, 2031

            
	
              B-1

            	 	
              Variable(2)

            	 	
              $

            	
              79,920.00
                

            	 	
              December
                25, 2032

            
	
              B-2

            	 	
              Variable(2)

            	 	
              $

            	
              149,850.00
                

            	 	
              December
                25, 2032

            
	
              ZZ

            	 	
              Variable(2)

            	 	
              $

            	
              6,683,483.86
                

            	 	
              December
                25, 2032

            

    

    ___________________________

    
      	
              (1)

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

            

    

    

    
      	
              (2)

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

            

    

    

    REMIC
      II

     

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

     

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

     

    

    
      	
              Class
                Designation

            	 	
              Interest
                Rate

            	 	
              Initial
                Principal 

              Balance
                

            	 	
              Latest
                Possible 

              Maturity
                Date(1)

            
	
              A-1

            	 	
              Variable(2)

            	 	
              $

            	
              507,837,000

            	 	
              December
                25, 2031

            
	
              A-2

            	 	
              Variable(2)

            	 	
              $

            	
              132,870,000

            	 	
              December
                25, 2031

            
	
              B-1

            	 	
              Variable(2)

            	 	
              $

            	
              7,992,000

            	 	
              December
                25, 2032

            
	
              B-2

            	 	
              Variable(2)

            	 	
              $

            	
              14,985,000

            	 	
              December
                25, 2032

            
	
              E

            	 	
              Variable(3)

            	 	
              $

            	
              2,332,193.09

            	 	
              December
                25, 2032

            

    

    ___________________

    
      	
              (1)

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

            

    

    

    
      	
              (2)

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

            

    

    

    
      	
              (3)

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

            

    

    

    

    Section
      10.02  REMIC
      Elections and REMIC Distributions. 

     

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

     

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

     

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

     

    (ii) to
      the
      holders of REMIC I Regular Interests, the Available Principal Payment Amount,
      allocated as follows:

     

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

     

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

     

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

     

    (c)  On
      each
      Payment Date, an amount equal to the amounts distributed pursuant to Sections
      3.02(a)(v), (viii) and (x) on such date shall be deemed distributed from REMIC
      II to the Holder of the Class E Certificates in respect of the Class E
      Distribution Amount.

     

    Section
      10.03  Allocation
      of Charge-Off Amounts. 

     

    The
      Floating Allocation Percentage of Charge-Off Amounts on the HELOCs shall be
      allocated on each Payment Date to the following REMIC I Regular Interests in
      the
      following specified percentages: first, to Uncertificated Accrued Interest
      payable to the REMIC I Regular Interest AA and REMIC I Regular Interest ZZ
      up to
      an aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98.00%
      and 2.00%, respectively; and second, to the Uncertificated Principal Balances
      of
      REMIC I Regular Interest AA and REMIC I Regular Interest ZZ up to an aggregate
      amount equal to the REMIC I Principal Loss Allocation Amount, 98.00% and 2.00%,
      respectively. Any subsequent allocation of the Floating Allocation Percentage
      of
      Charge-Off Amounts made pursuant to Section 3.19 shall be allocated on each
      Payment Date to the following REMIC I Regular Interests in the following
      specified percentages: first, to the Uncertificated Principal Balances of REMIC
      I Regular Interest AA, REMIC I Regular Interest B-2 and REMIC I Regular Interest
      ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal
      Balance of REMIC I Regular Interest B-2 has been reduced to zero; second, to
      the
      Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I
      Regular Interest B-1 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%,
      respectively, until the Uncertificated Principal Balance of REMIC I Regular
      Interest B-1 has been reduced to zero; third, to the Uncertificated Principal
      Balances of REMIC I Regular Interest AA, REMIC I Regular Interest A-2 and REMIC
      I Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the
      Uncertificated Principal Balance of REMIC I Regular Interest A-2 has been
      reduced to zero; and fourth, to the Uncertificated Principal Balances of REMIC
      I
      Regular Interest AA, REMIC I Regular Interest A-1 and REMIC I Regular Interest
      ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal
      Balance of REMIC I Regular Interest A-1 has been reduced to zero.

     

    Section
      10.04  Tax
      Administration. 

     

    It
      is
      intended that the Trust Estate shall constitute, and that the affairs of the
      Trust Estate shall be conducted so that each REMIC formed hereunder qualifies
      as, a “real estate mortgage investment conduit” as defined in and in accordance
      with the REMIC Provisions. In furtherance of such intention, the Securities
      Administrator covenants and agrees that it shall act as agent (and the
      Securities Administrator is hereby appointed to act as agent) on behalf of
      the
      Trust Estate. The Securities Administrator, as agent on behalf of the Trust
      Estate, shall do or refrain from doing, as applicable, the following: (a) the
      Securities Administrator shall prepare and file, or cause to be prepared and
      filed, in a timely manner, U.S. Real Estate Mortgage Investment Conduit Income
      Tax Returns (Form 1066 or any successor form adopted by the Internal Revenue
      Service) and prepare and file or cause to be prepared and filed with the
      Internal Revenue Service and applicable state or local tax authorities income
      tax or information returns for each taxable year with respect to each such
      REMIC
      containing such information and at the times and in the manner as may be
      required by the Code or state or local tax laws, regulations, or rules, and
      furnish or cause to be furnished to Noteholders and Certificateholders the
      schedules, statements or information at such times and in such manner as may
      be
      required thereby; (b) the Securities Administrator shall apply for an employer
      identification number with the Internal Revenue Service via a Form SS-4 or
      other
      comparable method for each REMIC that is or becomes a taxable entity, and within
      thirty days of the Closing Date, furnish or cause to be furnished to the
      Internal Revenue Service, on Forms 8811 or as otherwise may be required by
      the
      Code, the name, title, address, and telephone number of the Person that the
      Holders of the Notes and Certificates may contact for tax information relating
      thereto, together with such additional information as may be required by such
      Form, and update such information at the time or times in the manner required
      by
      the Code for the Trust Estate; (c) the Securities Administrator shall make
      or
      cause to be made elections, on behalf of each REMIC formed hereunder to be
      treated as a REMIC on the federal tax return of such REMIC for its first taxable
      year (and, if necessary, under applicable state law); (d) the Securities
      Administrator shall prepare and forward, or cause to be prepared and forwarded,
      to the Noteholders and Certificateholders and to the Internal Revenue Service
      and, if necessary, state tax authorities, all information returns and reports
      as
      and when required to be provided to them in accordance with the REMIC
      Provisions, including without limitation, the calculation of any original issue
      discount using the Prepayment Assumption; (e) the Securities Administrator
      shall
      provide information necessary for the computation of tax imposed on the Transfer
      of a Residual Certificate to a Person that is not a Permitted Transferee, or
      an
      agent (including a broker, nominee or other middleman) of a Person that is
      not a
      Permitted Transferee, or a pass-through entity in which a Person that is not
      a
      Permitted Transferee is the record holder of an interest (the reasonable cost
      of
      computing and furnishing such information may be charged to the Person liable
      for such tax); (f) the Indenture Trustee and Securities Administrator shall,
      to
      the extent under their control, conduct the affairs of the Trust Estate at
      all
      times that any Notes or Certificates are outstanding so as to maintain the
      status of each REMIC formed hereunder as a REMIC under the REMIC Provisions;
      (g)
      the Indenture Trustee and Securities Administrator shall not knowingly or
      intentionally take any action or omit to take any action that would (i) cause
      the termination of the REMIC status of any REMIC formed hereunder or
      (ii)
      result in the imposition of a tax upon any of REMIC formed hereunder (including
      but not limited to the tax on prohibited transactions as defined in Section
      860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in
      Section 860G(d) of the Code);
      (h) the
      Securities Administrator shall pay, from the sources specified in this Section
      10.04, the amount of any federal, state and local taxes, including prohibited
      transaction taxes as described below, imposed on any REMIC formed hereunder
      prior to the termination of the Trust Estate when and as the same shall be
      due
      and payable (but such obligation shall not prevent the Securities Administrator
      or any other appropriate Person from contesting any such tax in appropriate
      proceedings and shall not prevent the Securities Administrator from withholding
      payment of such tax, if permitted by law, pending the outcome of such
      proceedings); (i) the
      Indenture Trustee shall sign or cause to be signed federal, state or local
      income tax or information returns or any other document prepared by the
      Securities Administrator pursuant to this Section 10.04 requiring a signature
      thereon by the Indenture Trustee;
      (j) the
      Securities Administrator shall maintain records relating to each REMIC formed
      hereunder including but not limited to the income, expenses, assets and
      liabilities of each such REMIC and adjusted basis of the Trust Estate property
      determined at such intervals as may be required by the Code, as may be necessary
      to prepare the foregoing returns, schedules, statements or information; (k)
      the
      Securities Administrator shall, for federal income tax purposes, maintain books
      and records with respect to the REMICs on a calendar year and on an accrual
      basis; (l) the Indenture Trustee and Securities Administrator shall not enter
      into any arrangement not otherwise provided for in this Indenture or the Basic
      Documents by which the REMICs will receive a fee or other compensation for
      services nor permit the REMICs to receive any income from assets other than
      “qualified mortgages” as defined in Section 860G(a)(3) of the Code or “permitted
      investments” as defined in Section 860G(a)(5) of the Code; and (m) as and when
      necessary and appropriate, the Securities Administrator, at the expense of
      the
      Trust Estate, shall represent the Trust Estate in any administrative or judicial
      proceedings relating to an examination or audit by any governmental taxing
      authority, request an administrative adjustment as to any taxable year of any
      REMIC formed hereunder, enter into settlement agreements with any governmental
      taxing agency, extend any statute of limitations relating to any tax item of
      the
      Trust Estate, and otherwise act on behalf of each REMIC formed hereunder in
      relation to any tax matter involving any such REMIC.

     

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

     

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

     

    In
      the
      event that any tax is imposed on “prohibited transactions” as defined in Section
      860F(a)(2) of the Code of any REMIC created hereunder, on the “net income from
      foreclosure property” of the Trust Estate as defined in Section 860G(c) of the
      Code, on any contribution to any REMIC created hereunder after the Closing
      Date
      pursuant to Section 860G(d) of the Code, or any other tax, including, without
      limitation, any federal, state or local tax or minimum tax, is imposed upon
      any
      REMIC created hereunder, and is not paid as otherwise provided for herein,
      such
      tax shall be paid (i) by the Indenture Trustee, the Securities Administrator
      or
      Owner Trustee, if any such other tax arises out of or results from a breach
      by
      the Indenture Trustee, the Securities Administrator or Owner Trustee of any
      of
      its obligations under this Indenture or the Basic Documents, (ii) by any party
      hereto (other than the Indenture Trustee, the Securities Administrator and
      Owner
      Trustee) to the extent any such other tax arises out of or results from a breach
      by such other party of any of its obligations under this Indenture or the Basic
      Documents or (iii) in all other cases, or in the event that any liable party
      hereto fails to honor its obligations under the preceding clauses (i) or (ii),
      first, with amounts otherwise to be distributed to the Residual
      Certificateholders, and second, with amounts otherwise to be distributed to
      all
      Noteholders in the following order of priority: first,
      to
      the
      Class B-2 Notes, second, to the Class B-1 Notes, and
      third, to the Class A Notes on a pro rata basis.

     

    Notwithstanding
      anything to the contrary contained herein, to the extent that any tax described
      in the preceding two paragraphs is payable by the Holder of any Notes or
      Certificates, the Securities Administrator is hereby authorized to retain on
      any
      Payment Date, from the Holders of the Residual Certificates (and, if necessary,
      second, from the Holders of the Notes in the priority specified in the preceding
      paragraph), funds otherwise distributable to such Holders in an amount
      sufficient to pay such tax. The Securities Administrator shall promptly notify
      in writing the party liable for any such tax of the amount thereof and the
      due
      date for the payment thereof.

     

    The
      Securities Administrator agrees that, in the event it should obtain any
      information necessary for the other party to perform its obligations pursuant
      to
      this Section 10.04, it will promptly notify and provide such information to
      such
      other party.

     

    Notwithstanding
      any other provision of this Indenture, the Securities Administrator shall comply
      with all federal withholding requirements respecting payments to Noteholders
      or
      Certificateholders of interest or original issue discount that the Securities
      Administrator reasonably believes are applicable under the Code. The consent
      of
      Noteholders or Certificateholders shall not be required for such withholding.
      In
      the event the Securities Administrator does withhold any amount from interest
      or
      original issue discount payments or advances thereof to any Noteholder or
      Certificateholder pursuant to federal withholding requirements, the Securities
      Administrator shall indicate the amount withheld to such Noteholders or
      Certificateholders.

     

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

     

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

     

     

     

    ARTICLE
      XI

    MISCELLANEOUS

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (iii)  the
      Note
      Insurer, XL Capital Assurance Inc., 1221 Avenue of the Americas, New York,
      New
      York 10020-1001, Attention: Surveillance (GPMF Trust 2007-HE1, Policy
      No.
      CA03607A), with a copy to the General Counsel at the above address, and in
      each
      case in which a demand, notice or other communication to the Note Insurer refers
      to a Default, an Event of Default or any event with respect to which failure
      on
      the part of the Note Insurer to respond shall be deemed to constitute consent
      or
      acceptance, then such demand, notice or other communication shall be marked
      to
      indicate "URGENT MATERIAL ENCLOSED"; or

     

    (iv)  the
      Issuing Entity by the Indenture Trustee or by any Noteholder shall be sufficient
      for every purpose hereunder if made, given, furnished or filed in writing and
      mailed first-class, postage prepaid to the Issuing Entity addressed to: GPMF
      Trust 2007-HE1, in care of Owner Trustee at the Corporate Trust Office, or
      at
      any other address previously furnished in writing to the Indenture Trustee
      by
      the Issuing Entity. The Issuing Entity shall promptly transmit any notice
      received by it from the Noteholders to the Indenture Trustee.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    GREENPOINT
      MORTGAGE FUNDING TRUST 2007-HE1, 

    as
      Issuing Entity

     

    By:
      Wilmington Trust Company, not in its individual capacity 

    but
      solely as Owner Trustee

     

    By:
      /s/ Dorri E.
      Wolhar           

    Name:
      Dorri E. Wolhar 

    Title:
      Financial Services Officer

     

    LASALLE
      BANK NATIONAL ASSOCIATION, 

    as
      Securities Administrator

     

    By:
      /s/ Rita
      Lopez                  
  

    Name:
      Rita Lopez 

    Title:
      Vice President 

     

    CITIBANK,
      N.A., 

    as
      Indenture Trustee

     

    By:
      /s/ John
      Hannon               
 

    Name:
      John Hannon 

    Title:
      Vice President

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              STATE
                OF_____________

            	
              )

            	 
	 	
              )

            	
              ss.:

            
	
              COUNTY
                OF___________

            	
              )

            	 

    

    

     

    On
      the
6th
      day of
      March 2007,
      before
      me, a notary public in and for said State, personally appeared
      _______________________________, known to me to be
      a(n)____________________________ of LaSalle Bank National Association, the
      entity that executed the within instrument, and also known to me to be the
      person who executed it on behalf of said entity, and acknowledged to me that
      such entity executed the within instrument.

     

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

     

    ______________________________________________

    Notary
      Public

    

    [NOTARIAL
      SEAL]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              STATE
                OF DELAWARE

            	
              )

            	 
	 	
              )

            	
              ss.:

            
	
              COUNTY
                OF___________

            	
              )

            	 

    

    

     

    On
      the
      6th
      day of
      March 2007, before me personally appeared ___________________________ to me
      known, who being by me duly sworn, did depose and say, that he/she is a(n)
      ____________________of the Owner Trustee, one of the entities described in
      and
      which executed the above instrument; and that he/her signed his/her name thereto
      by like order.

     

    

     

    ______________________________________________

    Notary
      Public

    

    [NOTARIAL
      SEAL]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              STATE
                OF_____________

            	
              )

            	 
	 	
              )

            	
              ss.:

            
	
              COUNTY
                OF___________

            	
              )

            	 

    

    

     

    On
      the
      6th
      day of
      March 2007, before me personally appeared _______________________ to me known,
      who being by me duly sworn, did depose and say, that he/she is a(n)
      ___________________ of the Indenture Trustee, one of the corporations described
      in and which executed the above instrument; and that he/she signed his/her
      name
      thereto by like order.

     

    _____________________________________________

    Notary
      Public

    

    [NOTARIAL
      SEAL]

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A-1

     

    CLASS
      A NOTE

     

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

     

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

     

    EACH
      HOLDER OF A NOTE OR BENEFICIAL OWNERSHIP SHALL BE DEEMED TO HAVE MADE THE
      REPRESENTATIONS SET FORTH IN SECTION 4.14 OF THE
      INDENTURE.

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              Certificate
                No. 1

            	
              Note
                Interest Rate: Adjustable Rate

            
	 	 
	
              Class
                A Senior

            	 
	 	 
	
              Cut-off
                Date: February 15, 2007

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

              $[             
                 ]

            
	
              Date
                of Indenture: As of March 6, 2007

            	 
	 	 
	
              First
                Payment Date:

              March
                13, 2007

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

              $[
                ]

            
	 	 
	
              Master
                Servicer and Securities Administrator:

              LaSalle
                Bank National Association

            	
              CUSIP:
                [                 
                ]

            
	 	 
	
              Final
                Scheduled Payment Date:

              December
                13, 2032

            	 
	 	 

    

    

    GPMF
      TRUST 2007-HE1

    MORTGAGE-BACKED
      NOTES

    SERIES
      2007-HE1

     

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

     

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

     

    This
      certifies that Cede & Co. is the registered owner of the Percentage Interest
      evidenced by this Note. This Note is one of a duly authorized issue of the
      Issuing Entity’s Mortgage-Backed Notes, Series 2007-HE1 (the “Notes”), issued
      under an Indenture dated as of March 6, 2007 (the “Indenture” or “Agreement”),
      among the Issuing Entity, LaSalle Bank National Association, as Securities
      Administrator and Citibank, N.A., as indenture trustee (the “Indenture Trustee”,
      which term includes any successor Indenture Trustee under the Indenture) to
      which Indenture and all indentures supplemental thereto reference is hereby
      made
      for a statement of the respective rights thereunder of the Issuing Entity,
      the
      Indenture Trustee, and the Holders of the Notes and the terms upon which the
      Notes are to be authenticated and delivered. All terms used in this Note which
      are defined in the Indenture shall have the meanings assigned to them in the
      Indenture.

     

    Interest
      on this Note will accrue from and including the immediately preceding Payment
      Date (or with respect to the First Payment Date, the Closing Date) to and
      including the day prior to the current Payment Date on the Note Principal
      Balance hereof at a per annum rate equal to the Note Interest Rate set forth
      above. The Securities Administrator will distribute on the 13th day of each
      month, or, if such 13th day is not a Business Day, the immediately following
      Business Day (each, a “Payment Date”), commencing on the First Payment Date
      specified above, to the Person in whose name this Note is registered at the
      close of business on the Business Day immediately preceding such Payment Date
      so
      long as such Note remains in book-entry form (and otherwise, the close of
      business on the last Business Day of the month immediately preceding the month
      of such Payment Date), an amount equal to the product of the Percentage Interest
      evidenced by this Note and the amount (of interest and principal, if any)
      required to be distributed to the Holders of Notes of the same Class as this
      Note. The Final Scheduled Payment Date is the Payment Date in the month
      following the latest scheduled maturity date of any HELOC.

     

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

     

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

     

    This
      Note
      is entitled to the benefits of an irrevocable and unconditional financial
      guaranty insurance policy issued by XL Capital Assurance Inc. (the
“Policy”).

     

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

     

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

     

    Each
      holder of a Note or beneficial ownership shall be deemed to have made the
      representations set forth in Section 4.14 of the Indenture.

     

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

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Notes is registrable with the Securities Administrator
      upon
      surrender of this Notes for registration of transfer at the offices or agencies
      maintained by the Securities Administrator for such purposes, duly endorsed
      by,
      or accompanied by a written instrument of transfer in form satisfactory to
      the
      Securities Administrator duly executed by the Holder hereof or such Holder’s
      attorney duly authorized in writing, and thereupon one or more new Notes in
      authorized denominations representing a like aggregate Percentage Interest
      will
      be issued to the designated transferee.

     

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

     

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

     

    The
      obligations created by the Indenture and the Trust Estate created thereby (other
      than the obligations to make payments to Noteholders with respect to the
      termination of the Indenture) shall terminate upon the earlier of (i) the later
      of (A) the maturity or other liquidation (or Advance with respect thereto)
      of
      the last HELOC remaining in the Trust Estate and disposition of all property
      acquired upon foreclosure or deed in lieu of foreclosure of any HELOC and (B)
      the remittance of all funds relating to the HELOCs due under the Indenture,
      or
      (ii) the optional repurchase by the party named in the Indenture of all the
      HELOCs and other assets of the Trust Estate in accordance with the terms of
      the
      Indenture. Such optional repurchase may be made only on or after the first
      Payment Date on which the sum of the Note Principal Balances of the Notes is
      reduced to an amount less than or equal to 10% of the sum of the original Note
      Principal Balances of the Notes as of the Cut-off Date as set forth in the
      Indenture. The exercise of such right will effect the early retirement of the
      Notes. In no event, however, will the Trust Estate created by the Indenture
      continue beyond the earlier of (i) the expiration of 21 years after the death
      of
      certain persons identified in Section 8.03 of the Indenture and (ii) the Latest
      Possible Maturity Date as specified in the Indenture.

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      March 6, 2007

    GPMF
      TRUST 2007-HE1

     

    By
      Wilmington Trust Company, not in its individual capacity but 

    solely
      as
      Owner Trustee

     

    By:
                                                                              
      

    Authorized
      Signatory

     

    CERTIFICATE
      OF AUTHENTICATION

     

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

     

    LASALLE
      BANK NATIONAL ASSOCIATION, not in its 

    individual
      capacity but solely as Securities Administrator

     

    By:
                                                                              
      

    Authorized
      Signatory

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

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

     

    
      	
              Dated:

            	 	 	
              ______________________________________________________________

            

    

    Signature
      by or on behalf of assignor

     

    __________________________________________

    Signature
      Guaranteed

     

    PAYMENT
      INSTRUCTIONS

     

    The
      assignee should include the following for purposes of distribution:

     

    Payments
      shall be made, by wire transfer or otherwise, in immediately available funds
      to
      _________________________________ for the account of _________________________
      account number _____________, or, if mailed by check, to
      ______________________________. Applicable statements should be mailed to
      _____________________________________________.

     

    This
      information is provided by __________________,
      the assignee named above, or ________________________, as its agent.

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    EXHIBIT
      A-2

     

    CLASS
      B-[1][2] NOTE

     

    THIS
      NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A NOTES [AND] [CLASS
      B-1
      NOTES] AS DESCRIBED IN THE INDENTURE (AS DEFINED BELOW). 

    

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

    

    EACH
      HOLDER OF A NOTE OR BENEFICIAL OWNERSHIP SHALL BE DEEMED TO HAVE MADE THE
      REPRESENTATIONS SET FORTH IN SECTION 4.14 OF THE
      INDENTURE.

    

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

    

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

    

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

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              Certificate
                No.1

            	
              Note
                Interest Rate: Adjustable Rate

            
	 	 
	
              Class
                B-[1][2] Subordinate

            	 
	 	 
	
              Cut-off
                Date: February 15, 2007

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

              $[          
                 ]

            
	
              Date
                of Indenture: As of March 6, 2007

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

              $[             
                ]

            
	
              First
                Payment Date:

              March
                13, 2007

            	 
	 	
              CUSIP:
                [            
                 ]

            
	
              Master
                Servicer and Securities Administrator:

              LaSalle
                Bank National Association

            	 
	 	 
	
              Final
                Scheduled Payment Date:

              December
                25, 2031

            	 

    

    

    GPMF
      TRUST 2007-HE1

    MORTGAGE-BACKED
      NOTES

    SERIES
      2007-HE1

     

    evidencing
      a Percentage Interest in the distributions allocable to the Class B-[1][2]
      Notes
      with respect to a Trust Estate consisting primarily of a pool of home equity
      lines of credit (“HELOCs”) that are secured by first and second liens on one- to
      four- family residences sold by BEAR STEARNS ASSET BACKED SECURITIES I LLC
      (“BSABS I LLC”).

     

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

     

    This
      certifies that Cede & Co. is the registered owner of the Percentage Interest
      evidenced by this Note. This Note is one of a duly authorized issue of the
      Issuing Entity’s Mortgage-Backed Notes, Series 2007-HE1 (the “Notes”), issued
      under an Indenture dated as of March 6, 2007 (the “Indenture” or “Agreement”),
      among the Issuing Entity, LaSalle Bank National Association, as Securities
      Administrator and Citibank, N.A., as indenture trustee (the “Indenture Trustee”,
      which term includes any successor Indenture Trustee under the Indenture) to
      which Indenture and all indentures supplemental thereto reference is hereby
      made
      for a statement of the respective rights thereunder of the Issuing Entity,
      the
      Indenture Trustee, and the Holders of the Notes and the terms upon which the
      Notes are to be authenticated and delivered. All terms used in this Note which
      are defined in the Indenture shall have the meanings assigned to them in the
      Indenture.

    

    Interest
      on this Note will accrue from and including the immediately preceding Payment
      Date (or with respect to the First Payment Date, the Closing Date) to and
      including the day prior to the current Payment Date on the Note Principal
      Balance hereof at a per annum rate equal to the Note Interest Rate set forth
      above. The Securities Administrator will distribute on the 13th day of each
      month, or, if such 13th day is not a Business Day, the immediately following
      Business Day (each, a “Payment Date”), commencing on the First Payment Date
      specified above, to the Person in whose name this Note is registered at the
      close of business on the Business Day immediately preceding such Payment Date
      so
      long as such Note remains in book-entry form (and otherwise, the close of
      business on the last Business Day of the month immediately preceding the month
      of such Payment Date), an amount equal to the product of the Percentage Interest
      evidenced by this Note and the amount (of interest and principal, if any)
      required to be distributed to the Holders of Notes of the same Class as this
      Note. The Final Scheduled Payment Date is the Payment Date in the month
      following the latest scheduled maturity date of any HELOC.

    

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

    

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

    

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

    

    Each
      holder of a Note or beneficial ownership shall be deemed to have made the
      representations set forth in Section 4.14 of the Indenture.

    

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

     

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      the transfer of this Notes is registrable with the Securities Administrator
      upon
      surrender of this Notes for registration of transfer at the offices or agencies
      maintained by the Securities Administrator for such purposes, duly endorsed
      by,
      or accompanied by a written instrument of transfer in form satisfactory to
      the
      Securities Administrator duly executed by the Holder hereof or such Holder’s
      attorney duly authorized in writing, and thereupon one or more new Notes in
      authorized denominations representing a like aggregate Percentage Interest
      will
      be issued to the designated transferee.

    

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

    

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

    

    The
      obligations created by the Indenture and the Trust Estate created thereby (other
      than the obligations to make payments to Noteholders with respect to the
      termination of the Indenture) shall terminate upon the earlier of (i) the later
      of (A) the maturity or other liquidation (or Advance with respect thereto)
      of
      the last HELOC remaining in the Trust Estate and disposition of all property
      acquired upon foreclosure or deed in lieu of foreclosure of any HELOC and (B)
      the remittance of all funds relating to the HELOCs due under the Indenture,
      or
      (ii) the optional repurchase by the party named in the Indenture of all the
      HELOCs and other assets of the Trust Estate in accordance with the terms of
      the
      Indenture. Such optional repurchase may be made only on or after the first
      Payment Date on which the sum of the Note Principal Balances of the Notes is
      reduced to an amount less than or equal to 10% of the sum of the original Note
      Principal Balances of the Notes as of the Cut-off Date as set forth in the
      Indenture. The exercise of such right will effect the early retirement of the
      Notes. In no event, however, will the Trust Estate created by the Indenture
      continue beyond the earlier of (i) the expiration of 21 years after the death
      of
      certain persons identified in Section 8.03 of the Indenture and (ii) the Latest
      Possible Maturity Date as specified in the Indenture.

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

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

     

    Dated:
      March 6, 2007

    GREENPOINT
      MORTGAGE FUNDING TRUST 2007-HE1

     

    By
      Wilmington Trust Company, not in its individual capacity 

    but
      solely as Owner Trustee

     

    By:
                                                                                       
      

    Authorized
      Signatory

     

    CERTIFICATE
      OF AUTHENTICATION

     

    This
      is
      one of the Class B-[1][2] Notes referred to in the within-mentioned
      Agreement.

    

    LASALLE
      BANK NATIONAL ASSOCIATION, not in its 

    individual
      capacity but solely as Securities Administrator

     

    By:
                                                                                     
      

    Authorized
      Signatory

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    I
      (We)
      further direct the Certificate Registrar 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

     

    __________________________________________

    Signature
      Guaranteed

     

    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-3

     

    [RESERVED]

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    EXHIBIT
      B

     

    MORTGAGE
      LOAN SCHEDULE

     

    [See
      Exhibit A to the Sale and Servicing Agreement]

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

     

    FORM
      OF
      TRANSFEREE CERTIFICATE

     

    [Date]

     

    [NOTE
      REGISTRAR]  [SECURITIES ADMINISTRATOR]

     

    
      	 	
              Re:

            	
              GPMF
                Trust 2007-HE1

            

    

    Mortgage-Backed
      Notes, Series 2007-HE1 (the “Notes”)

     

    Ladies
      and Gentlemen:

     

    __________________
      (the “Transferee”) intends to purchase from _________________ (the “Transferor”)
      the Class ___ Notes having an initial aggregate Note Balance as of March 6,
      2007
      (the “Closing Date”) of $_____________ (the “Transferred Notes”). The Notes,
      including the Transferred Notes, were issued pursuant to the Indenture, dated
      as
      of March 6, 2007 (the “Indenture”), between GPMF Trust 2007-HE1 (the “Issuer”),
      LaSalle Bank National Association (the “Securities Administrator”) and Citibank,
      N.A. (the “Indenture Trustee”). All capitalized terms used herein and not
      otherwise defined shall have the meanings set forth in the Indenture. The
      Transferee hereby certifies, represents and warrants to you, as [Securities
      Administrator] [Note Registrar], and for the benefit of the Issuer, the
      Securities Administrator, the Indenture Trustee and the Transferor,
      that:

     

    1. The
      Transferee is a “qualified institutional buyer” (a “Qualified Institutional
      Buyer”) as that term is defined in Rule 144A (“Rule l44A”) under the Securities
      Act of 1933, as amended (the “Securities Act”), and has completed one of the
      forms of certification to that effect attached hereto as Annex 1 and Annex
      2.
      The Transferee is aware that the sale to it of the Transferred Notes is being
      made in reliance on Rule 144A. The Transferee is acquiring the Transferred
      Notes
      for its own account or for the account of a Qualified Institutional Buyer,
      and
      understands that such Transferred Notes may be resold, pledged or transferred
      only (i) to a person reasonably believed to be a Qualified Institutional Buyer
      that purchases for its own account or for the account of a Qualified
      Institutional Buyer to whom notice is given that the resale, pledge or transfer
      is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
      from registration under the Securities Act.

     

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

     

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

     

    
      	 	 	 	 	 	 	 	
              Very
                truly yours,

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              (Transferee)

            
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Name:

            	 
	 	 	 	 	 	 	 	
              Title:

            	 

    

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    ANNEX
      1 TO EXHIBIT C

     

    QUALIFIED
      INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

     

    [for
      Transferees other than Registered Investment Companies]

     

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

     

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

     

    2. The
      Transferee is a “qualified institutional buyer” as that term is defined in Rule
      144A under the Securities Act of 1933, as amended (“Rule 144A”), because (i) the
      Transferee owned and/or invested on a discretionary basis $____________________
      in securities (other than the excluded securities referred to below) as of
      the
      end of the Transferee’s most recent fiscal year (such amount being calculated in
      accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in
      the
      category marked below.

     

    
      	 	
              ____

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

            

    

     

    
      	 	
              ____

            	
              Bank.
                The Transferee (a) is a national bank or a banking institution organized
                under the laws of any State, U.S. territory or the District of Columbia,
                the business of which is substantially confined to banking and is
                supervised by the State or territorial banking commission or similar
                official or is a foreign bank or equivalent institution, and (b)
                has an
                audited net worth of at least $25,000,000 as demonstrated in its
                latest
                annual financial statements, a
                copy of which is attached hereto,
                as of a date not more than 16 months preceding the date of sale of
                the
                Note in the case of a U.S. bank, and not more than 18 months preceding
                such date of sale for a foreign bank or equivalent
                institution.

            

    

     

    
      	 	
              ____

            	
              Savings
                and Loan.
                The Transferee (a) is a savings and loan association, building and
                loan
                association, cooperative bank, homestead association or similar
                institution, which is supervised and examined by a State or Federal
                authority having supervision over any such institutions or is a foreign
                savings and loan association or equivalent institution and (b) has
                an
                audited net worth of at least $25,000,000 as demonstrated in its
                latest
                annual financial statements, a
                copy of which is attached hereto,
                as of a date not more than 16 months preceding the date of sale of
                the
                Note in the case of a U.S. savings and loan association, and not
                more than
                18 months preceding such date of sale for a foreign savings and loan
                association or equivalent
                institution.

            

    

     

    
      	 	
              ____

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

            

    

     

    
      	 	
              ____

            	
              Insurance
                Company.
                The Transferee is an insurance company whose primary and predominant
                business activity is the writing of insurance or the reinsuring of
                risks
                underwritten by insurance companies and which is subject to supervision
                by
                the insurance commissioner or a similar official or agency of a State,
                U.S. territory or the District of
                Columbia.

            

    

     

    
      	 	
              ____

            	
              State
                or Local Plan.
                The Transferee is a plan established and maintained by a State, its
                political subdivisions, or any agency or instrumentality of the State
                or
                its political subdivisions, for the benefit of its
                employees.

            

    

     

    
      	 	
              ____

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

            

    

     

    
      	 	
              ____

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

            

    

     

    
      	 	
              ____

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

            

    

     

    3. The
      term
“securities”
as
      used
      herein does
      not include
      (i)
      securities of issuers that are affiliated with the Transferee, (ii) securities
      that are part of an unsold allotment to or subscription by the Transferee,
      if
      the Transferee is a dealer, (iii) bank deposit notes and certificates of
      deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities
      owned but subject to a repurchase agreement and (vii) currency, interest rate
      and commodity swaps. For purposes of determining the aggregate amount of
      securities owned and/or invested on a discretionary basis by the Transferee,
      the
      Transferee did not include any of the securities referred to in this
      paragraph.

     

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

     

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

     

    ____ ____ Will
      the
      Transferee be purchasing the Transferred Notes

    Yes No only
      for
      the Transferee’s own account?

     

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

     

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

     

    
      	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              Print
                Name of Transferee

            
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Name:

            	 
	 	 	 	 	 	 	 	
              Title:

            	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              Date:

            	 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    ANNEX
      2 TO EXHIBIT C

     

    QUALIFIED
      INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

     

    [for
      Transferees that are Registered Investment Companies]

     

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

     

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

     

    2. The
      Transferee is a “qualified institutional buyer” as defined in Rule 144A because
      (i) the Transferee is an investment company registered under the Investment
      Company Act of 1940, as amended, and (ii) as marked below, the Transferee alone
      owned and/or invested on a discretionary basis, or the Transferee’s Family of
      Investment Companies owned, at least $100,000,000 in securities (other than
      the
      excluded securities referred to below) as of the end of the Transferee’s most
      recent fiscal year. For purposes of determining the amount of securities owned
      by the Transferee or the Transferee’s Family of Investment Companies, the cost
      of such securities was used, unless the Transferee or any member of the
      Transferee’s Family of Investment Companies, as the case may be, reports its
      securities holdings in its financial statements on the basis of their market
      value, and no current information with respect to the cost of those securities
      has been published, in which case the securities of such entity were valued
      at
      market.

     

    
      	 	
              ____

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

            

    

     

    
      	 	
              ____

            	
              The
                Transferee is part of a Family of Investment Companies which owned
                in the
                aggregate $_____________ in securities (other than the excluded securities
                referred to below) as of the end of the Transferee’s most recent fiscal
                year (such amount being calculated in accordance with Rule
                144A).

            

    

     

    3. The
      term
“Family
      of Investment Companies”
as
      used
      herein means two or more registered investment companies (or series thereof)
      that have the same investment adviser or I investment advisers that are
      affiliated (by virtue of being majority owned subsidiaries of the same parent
      or
      because one investment adviser is a majority owned subsidiary of the
      other).

     

    4. The
      term
“securities”
as
      used
      herein does not include (i) securities of issuers that are affiliated with
      the
      Transferee or are part of the Transferee’s Family of Investment Companies, (ii)
      bank deposit notes and certificates of deposit, (iii) loan participations,
      (iv)
      repurchase agreements, (v) securities owned but subject to a repurchase
      agreement and (vi) currency, interest rate and commodity swaps. For purposes
      of
      determining the aggregate amount of securities owned and/or invested on a
      discretionary basis by the Transferee, or owned by the Transferee’s Family of
      Investment Companies, the securities referred to in this paragraph were
      excluded.

     

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

     

    ____
          ____ 
        Will
      the
      Transferee be purchasing the Transferred Notes

           
      Yes         No    
       only
      for
      the Transferee’s own account?

     

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

     

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

     

    
      	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              Print
                Name of Transferee or Adviser

            
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Name:

            	 
	 	 	 	 	 	 	 	
              Title:

            	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              IF
                AN ADVISER:

            
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              Print
                Name of Transferee

            
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              Date:

            	 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    EXHIBIT
      D

     

    FORM
      OF
      TRANSFEROR CERTIFICATE

     

    [Date]

     

    [SECURITIES
      ADMINISTRATOR]

     

    
      	 	
              Re:

            	
              GPMF
                Trust 2007-HE1

            

    

    Mortgage-Backed
      Notes, Series 2007-HE1 (the “Notes”)

     

    Ladies
      and Gentlemen:

     

    In
      connection with the sale by _____________________________ (the “Transferor”) to
      _________________________ (the “Transferee”) of the Class __ Notes having an
      initial aggregate Note Balance as of March 6, 2007 (the “Closing Date”) of
      $______________ (the “Transferred Notes”). The Notes, including the Transferred
      Notes, were issued pursuant to the Indenture, dated as of March 6, 2007 (the
      “Indenture”), among GPMF Trust 2007-HE1 (the “Issuer”), LaSalle Bank National
      Association (the “Securities Administrator”) and Citibank, N.A. (the “Indenture
      Trustee”). All capitalized terms used but not otherwise defined herein shall
      have the respective meanings set forth in the Indenture. The Transferor hereby
      certifies, represents and warrants to you, as [Securities Administrator] [Note
      Registrar], and for the benefit of the Issuer, the Securities Administrator,
      the
      Indenture Trustee and the Transferee, that:

     

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

     

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

     

    

     

    *
      Please
      contact Bear Stearns for pricing information.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    
      	 	
              ____

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

            

    

     

    
      	 	
              ____

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

            

    

     

    
      	 	
              ____

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

            

    

     

    
      	 	
              ____

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

            

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      	 	 	 	 	 	 	 	
              Very
                truly yours,

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              (Transferor)

            
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Name:

            	 
	 	 	 	 	 	 	 	
              Title:

            	 

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      E

     

    FORM
      OF
      MORTGAGE LOAN PURCHASE AGREEMENT

     

    [See
      Exhibit C-3 to the Sale and Servicing Agreement]

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      F 

     

    FORM
      OF
      POLICY

     

     

    
      

        
          	
                  

                	 
	 	 
	 	
                  1221
                    Avenue of the Americas

                  New
                    York, New York 10020

                  Telephone:
                    (212) 478-3400

                  Facsimile:
                    (212) 478-3597

                
	 	 
	
                  FINANCIAL
                    GUARANTY 

                  INSURANCE
                    POLICY

                	 
	 	 
	
                  Insured
                    Obligations: 

                	
                  GreenPoint
                    Mortgage Funding Trust 2007-HE1

                  Mortgage-Backed
                    Notes, Series 2007-HE1

                  U.S.
                    $507,837,000 Class A-1 Notes and 

                  U.S.
                    $132,870,000 Class A-2 Notes

                	
                  Policy
                    No:
                    CA03607A

                   

                   

                  Effective
                    Date:
                    March 6, 2007

                

        

      

    

     

     

    XL
      Capital Assurance Inc. (XLCA),
      a New
      York stock insurance company, in consideration of the payment of the premium,
      hereby unconditionally and irrevocably guarantees to the Securities
      Administrator for the benefit of the Owners of the Insured Obligations, the
      full
      and complete payment of the Scheduled Payments in respect of the Insured
      Obligations, subject only to the terms of this Policy (which includes the
      Endorsement attached hereto).

     

    XLCA
      will
      pay the Insured Amount to the Securities Administrator upon the presentation
      of
      a Payment Notice to XLCA (which Payment Notice shall include an irrevocable
      assignment to XLCA of all rights and claims in respect of the relevant Insured
      Obligation, as specified in the Payment Notice, free of any adverse claim),
      on
      the later of (a) one (1) Business Day following receipt by XLCA of a Payment
      Notice or (b) the Business Day on which Scheduled Payments are due for payment.
      XLCA shall be subrogated to the Owners’ rights to payment on the Insured
      Obligations to the extent of any payment by XLCA hereunder. The obligations
      of
      XLCA with respect to a Scheduled Payment will be discharged to the extent funds
      to pay such Scheduled Payment are deposited in the account specified in the
      Payment Notice, whether such funds are properly applied by the Securities
      Administrator or claimed by an Owner.

     

    In
      addition, in the event that any Scheduled Payment which has become due for
      payment and which is made to an Owner by or on behalf of the Securities
      Administrator is recovered or is recoverable from the Owner pursuant to a final
      order of a court of competent jurisdiction in an Insolvency Proceeding that
      such
      payment constitutes an Avoided Payment to such Owner within the meaning of
      any
      applicable bankruptcy law, XLCA unconditionally and irrevocably guarantees
      payment of the amount of such recovery if sufficient funds are not otherwise
      available (in accordance with Endorsement No. 1 hereto). 

     

    This
      Policy sets forth in full the undertaking of XLCA and shall not be cancelled
      or
      revoked by XLCA for any reason, including failure to receive payment of any
      premium due hereunder, and may not be further endorsed or modified without
      the
      written consent of XLCA. The premium on this Policy is not refundable for any
      reason. This Policy does not insure against loss of any prepayment or other
      acceleration payment which at any time may become due in respect of any Insured
      Obligation, other than at the sole option of XLCA, nor against any risk other
      than Nonpayment and Avoided Payment, including any shortfalls, if any,
      attributable to the liability of the Obligor for taxes or withholding taxes
      if
      any, including interest and penalties in respect of such liability.

     

    THIS
      POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED
      IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.

     

    Any
      capitalized terms not defined herein shall have the meaning given such terms
      in
      the Endorsement attached hereto and forming a part hereof. In witness whereof,
      XLCA has caused this Policy to be executed as of the Effective
      Date.

     

    
      	
              ____________________________

              Name:
                Linda S. Kobrin

              Title:
                Managing Director

            	
              ___________________________

              Name:
                R. Sharon Smith

              Title:
                Associate General Counsel

            

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Financial
      Guaranty Insurance Policy Endorsement

    Effective
      Date: March 6, 2007

     

    Attached
      to and forming part of

    Financial
      Guaranty Insurance Policy No. CA03607A

     

     

    
      	
              Obligor:

            	
              GreenPoint
                Mortgage Funding Trust 2007-HE1 referred to herein (the “Issuing
                Entity”)

            
	
            	
               

            
	
              Insured
                Obligations:

            	
              Mortgage-Backed
                Notes, Series 2007-HE1

              U.S.
                $507,837,000 Class A-1 Notes (the “Class A-1 Notes”)

              U.S.
                $132,870,000 Class A-2 Notes (the “Class A-2 Notes” and together with the
                Class A-1 Notes, the “Insured Notes”)

            
	
            	
               

            
	
              Beneficiary:

            	
              LaSalle
                Bank National Association, not in its individual capacity, but solely
                as
                the Securities Administrator, for the benefit of the Owners of the
                Insured
                Obligations

            

    

     

    Capitalized
      terms used herein and not otherwise defined herein or in the Policy shall have
      the meanings assigned to them in the Indenture.

     

    As
      used
      herein the term “Avoided
      Payment”
means,
      with respect to the Insured Notes, any payment of principal or interest
      previously distributed to a holder of an Insured Note by or on behalf of the
      Issuing Entity that is voided as a result of any Insolvency Proceeding and
      which
      is returned by a holder of Insured Notes as required by a final, nonappealable
      order of a court of competent jurisdiction.

     

    As
      used
      herein the term “Business
      Day”
means
      any day other than a Saturday, a Sunday or a day on which the New York Stock
      Exchange or Federal Reserve is closed or on which the jurisdiction in which
      the
      Indenture Trustee, the Owner Trustee, the Master Servicer, the Servicer or
      Securities Administrator is located, are authorized or obligated by law or
      executive order to be closed.

     

    As
      used
      herein the term “Deficiency
      Amount”
means,
      for any Payment Date, the sum of (a) the amount by which Current Interest for
      the related Accrual Period on the Insured Notes exceeds the amount payable
      on
      such Payment Date in respect of such Current Interest pursuant to the Indenture
      from sources other than the Policy, plus (b) (i) for any Payment Date other
      than
      the Final Scheduled Payment Date, the Insured Note Charge-off Amount (as defined
      below) for such Payment Date, if any, or (ii) on the Final Scheduled Payment
      Date, the Note Principal Balance of the Insured Notes on such Payment Date
      after
      giving effect to payments made in reduction of such Note Principal Balance
      on
      such Payment Date pursuant to the Indenture from sources other than the
      Policy.

     

    As
      used
      herein the term “Final
      Scheduled Payment Date”
means
      the Payment Date occurring in December 2032.

     

    As
      used
      herein the term “Indenture”
means
      that certain Indenture, dated as of March 6, 2007 by and among the Issuing
      Entity, the Securities Administrator and Citibank, N.A., as indenture trustee.
      

     

    As
      used
      herein the term “Insolvency
      Proceeding”
means
      the commencement, after the date hereof, of any bankruptcy, insolvency,
      readjustment of debt, reorganization, marshalling of assets and liabilities
      or
      similar proceedings by or against any Person, the commencement, after the date
      hereof, of any proceedings by or against any Person for the winding up or
      liquidation of its affairs, or the consent by any Person, after the date hereof,
      to the appointment of a trustee, conservator, receiver or liquidator in any
      bankruptcy, insolvency, readjustment of debt, reorganization, marshalling of
      assets and liabilities or similar proceedings of or relating to that
      Person.

     

    As
      used
      herein the term “Insurance
      Agreement”
means
      that certain Insurance and Indemnity Agreement, dated as of March 6, 2007,
      among
      XLCA, EMC Mortgage Company, as sponsor, the Depositor, the Issuing Entity,
      LaSalle Bank National Association, as Master Servicer and Securities
      Administrator, GreenPoint Mortgage Funding, Inc., as Servicer and the Indenture
      Trustee. 

     

    As
      used
      herein the term “Insured
      Amounts”
means,
      with respect to any Payment Date, that portion of the Scheduled Payments that
      shall become due for payment but shall be unpaid by reason of Nonpayment on
      such
      Payment Date, which shall be equal to the related Deficiency Amount.

     

    As
      used
      herein the term “Insured
      Note Charge-Off Amount”
means,
      with respect to any Payment Date, the Charge-Off Amounts for the related period
      allocated to reduce the Note Principal Balance of the Insured
      Notes.

     

    As
      used
      herein the term “Insured
      Payments”
means,
      with respect to any Payment Date, the aggregate amount actually paid by the
      Note
      Insurer to the Securities Administrator in respect of Insured Amounts for such
      Payment Date. 

     

    As
      used
      herein the term “Nonpayment”
means,
      with respect to any Payment Date, the failure of the Securities Administrator
      to
      receive in full, in accordance with the terms of the Indenture, funds legally
      available to pay all or a portion of the Scheduled Payment that is due for
      payment with respect to such Payment Date. 

     

    As
      used
      herein the term “Owner”
means
      the registered owner of any Insured Obligation as indicated in the registration
      books maintained by or on behalf of the Securities Administrator for such
      purpose not including any such owner that is the Indenture Trustee, the Owner
      Trustee, the Sponsor, the Depositor, the Master Servicer, the Securities
      Administrator, any Servicer or any of their respective affiliates.

     

    As
      used
      herein, the term “Person”
means
      an individual, a partnership, a limited liability company, a joint venture,
      a
      corporation, a trust, an unincorporated organization, and a government or any
      department or agency thereof.

     

    As
      used
      herein the term “Reimbursement
      Amount”
means,
      as to any Payment Date, the sum of (x)(i) all Insured Payments and Avoided
      Payments paid by the Note Insurer, but for which the Note Insurer has not been
      reimbursed prior to such Payment Date, plus (ii) interest accrued on such
      Insured Payments and Avoided Payments not previously repaid calculated at the
      rate set forth in the Insurance Agreement, from the date the Securities
      Administrator received the related Insured Payments or Avoided Payments, and
      (y)
      without duplication (i) any amounts then due and owing to the Note Insurer
      under
      the Insurance Agreement, but for which the Note Insurer has not been paid or
      reimbursed prior to such Payment Date, plus (ii) interest on such amounts at
      the
      rate set forth in the Insurance Agreement.

     

    As
      used
      herein the term “Scheduled
      Payment”
means,
      with respect to any Payment Date with respect to the Insured Notes during the
      Term of the Policy, (i) the Current Interest due and payable in respect of
      the
      Insured Notes on such Payment Date, (ii) for any Payment Date other than the
      Final Scheduled Payment Date, the related Insured Note Charge-Off Amount and
      (iii) for the Final Scheduled Payment Date, the Note Principal Balance of the
      Insured Notes outstanding on such Payment Date, in each case, in accordance
      with
      the original terms of the Insured Notes and the Indenture when the Insured
      Notes
      were issued and without regard to any subsequent amendment or modification
      of
      the Insured Notes or the Indenture that has not been consented to in writing
      by
      the Note Insurer. Notwithstanding the foregoing, “Scheduled Payments” shall in
      no event include payments which become due on an accelerated basis as a result
      of any optional redemption, in whole or in part, or any other cause, unless
      the
      Note Insurer elects, in its sole discretion, to pay such amounts in whole or
      in
      part (in which event Scheduled Payments shall include such accelerated payments
      as, when, and to the extent so elected by the Note Insurer). In the event that
      the Note Insurer does not make such election, “Scheduled Payments” shall include
      payments due in accordance with the original scheduled terms of the Insured
      Notes without regard to any acceleration. In addition, “Scheduled Payments”
shall not include, nor shall coverage be provided under the Policy in respect
      of, (i) any amounts due in respect of the Insured Notes attributable to any
      increase in interest rate, penalty or other sum payable by the Issuing Entity
      by
      reason of any default or event of default in respect of the Insured Notes,
      or by
      reason of any deterioration of the creditworthiness of the Issuing Entity,
      (ii)
      any Relief Act Shortfalls, (iii) any Net WAC Cap Rate Carryover Amounts, (iv)
      any prepayment interest shortfalls, or (v) any taxes, withholding or other
      charge imposed by any governmental authority due in connection with the payment
      of any Scheduled Payment to any holder or owner of an Insured Note. Furthermore,
      the Policy does not cover any interest shortfalls resulting from any
      Extraordinary Trust Fund Expenses in excess of the Extraordinary Trust Fund
      Expenses Cap.

     

    As
      used
      herein the term “Term
      of the Policy”
means
      the period from and including the date hereof to and including the first date
      on
      which (i) all Scheduled Payments have been paid that are required to be paid
      under the Indenture; (ii) any period during which any Scheduled Payment could
      have been avoided in whole or in part as a preference payment under applicable
      bankruptcy, insolvency, receivership or similar law has expired; and (iii)
      if
      any proceedings requisite to avoidance as a preference payment have been
      commenced prior to the occurrence of (i) and (ii) above, a final and
      nonappealable order in resolution of each such proceeding has been entered;
      provided,
      further,
      that if
      the Holders of Insured Notes are required to return any Avoided Payment as
      a
      result of such Insolvency Proceeding, then the Term of the Policy shall
      terminate on the date on which the Note Insurer has made all payments required
      to be made under the terms of the Policy in respect of all such Avoided
      Payments. 

     

    To
      make a
      claim under the Policy, the Securities Administrator shall deliver to XLCA
      a
      Payment Notice in the form of Exhibit
      A
      hereto
      (a “Payment
      Notice”),
      appropriately completed and executed by the Securities Administrator. A Payment
      Notice under this Policy may be presented to XLCA by (i) delivery of the
      original Payment Notice to XLCA at its address set forth below, or
      (ii) facsimile transmission of the original Payment Notice to XLCA at its
      facsimile number set forth below. If presentation is made by facsimile
      transmission, the Securities Administrator shall (x) simultaneously confirm
      transmission by telephone to XLCA at its telephone number set forth below,
      and
      (y) as soon as reasonably practicable, deliver the original Payment Notice
      to XLCA at its address set forth below. Any Payment Notice received by XLCA
      after 10:00 a.m., New York City time, on a Business Day, or on any day that
      is
      not a Business Day, will be deemed to be received by XLCA at 9:00 a.m., New
      York
      City time, on the next succeeding Business Day. 

     

    Following
      receipt by XLCA of a Payment Notice from the Securities Administrator, XLCA
      shall unconditionally and irrevocably pay an amount payable hereunder in respect
      of an Insured Amount out of the funds of XLCA on the later to occur of (a)
      12:00
      noon, New York City time, on the first Business Day following such receipt
      and
      (b) 12:00 noon, New York City time, on the Payment Date to which the related
      Deficiency Amount relates. Payments due hereunder in respect of an Insured
      Amount will be disbursed by wire transfer of immediately available funds to
      the
      Policy Payments Account established pursuant to the Indenture or, if no such
      Policy Payments Account has been established, to the Securities
      Administrator.

     

    Subject
      to the foregoing, if the payment of any amount with respect to the Scheduled
      Payment is sought to be recovered (a “Preference
      Event”)
      as a
      result of an Insolvency Proceeding and as a result of such Preference Event,
      an
      Owner is required to return such payment, or any portion of such voided payment,
      made in respect of an Insured Obligation (an “Avoided
      Payment”),
      XLCA
      will pay an amount equal to such Avoided Payment, following receipt by XLCA
      from
      the Securities Administrator on behalf of such Owner of (x) a certified
      copy of a final order of a court exercising jurisdiction in such Insolvency
      Proceeding to the effect that the Securities Administrator or the Owner, as
      applicable, is required to return such Avoided Payment or portion thereof
      because such payment was avoided under applicable law, with respect to which
      order the appeal period has expired without an appeal having been filed (the
      “Final
      Order”),
      (y) an assignment, substantially in the form attached hereto as
Exhibit
      B,
      properly completed and executed by such Owner irrevocably assigning to XLCA
      all
      rights and claims of such Owner relating to or arising under such Avoided
      Payment, and (z) a Payment Notice in the form of Exhibit
      A
      hereto
      appropriately completed and executed by the Securities
      Administrator.

     

    XLCA
      shall make payments due in respect of Avoided Payments no later than 2:00 p.m.
      New York City time on the Business Day following XLCA’s receipt of the documents
      required under clauses (x) through (z) of the preceding paragraph. Any
      such documents received by XLCA after 10:00 a.m. New York City time on any
      Business Day or on any day that is not a Business Day shall be deemed to have
      been received by XLCA at 9:00 a.m., New York City time, on the next succeeding
      Business Day. All payments made by XLCA hereunder on account of any Avoided
      Payment shall be disbursed to the receiver, conservator, debtor-in-possession
      or
      trustee in bankruptcy named in the Final Order and not to the Securities
      Administrator or any Owner directly (unless an Owner has previously paid such
      Avoided Payment to such receiver, conservator, debtor-in-possession or trustee
      in bankruptcy named in the Final Order, in which case XLCA will pay the
      Securities Administrator on behalf of such Owner, subject to the delivery of
      (a)
      the items referred to in clauses (x), (y) and (z) of the preceding paragraph
      to
      XLCA and (b) evidence satisfactory to XLCA that payment has been made to such
      receiver, conservator, debtor-in-possession of trustee in bankruptcy named
      in
      the Final Order). XLCA hereby waives, and agrees not to assert, any and all
      rights to require the Securities Administrator to make demand on or to proceed
      against any person, party or security prior to the Securities Administrator
      demanding payment under this Policy.

     

    No
      defenses, set-offs and counterclaims of any kind available to XLCA so as to
      deny
      payment of any amount due in respect of this Policy will be valid and XLCA
      hereby waives, and agrees not to assert, any and all such defenses (including,
      without limitation, defense of fraud in the inducement or fact, or any other
      circumstances which would have the effect of discharging a surety in law or
      in
      equity), set-offs and counterclaims, including, without limitation, any such
      rights acquired by subrogation, assignment or otherwise. Upon any payment
      hereunder, in furtherance and not in limitation of XLCA’s equitable right of
      subrogation and XLCA’s rights under the Indenture, XLCA will be subrogated to
      the rights of the Owner in respect of which such payment was made to receive
      any
      and all amounts due in respect of the obligations in respect of which XLCA
      has
      made a payment hereunder. Any rights of subrogation acquired by XLCA as a result
      of any payment made under this Policy shall, in all respects, be subordinate
      and
      junior in right of payment to the prior indefeasible payment in full of any
      amounts due the Owner on account of payments due under the Insured Notes.
      Notwithstanding the foregoing, XLCA does not waive its rights to seek payment
      in
      full of all Reimbursement Amounts owed to it under the Indenture or the
      Insurance Agreement.

     

    This
      Policy is neither transferable nor assignable, in whole or in part, except
      to a
      successor securities administrator duly appointed and qualified under the
      Indenture. All Payment Notices and other notices, presentations, transmissions,
      deliveries and communications made by the Securities Administrator to XLCA
      with
      respect to this Policy shall specifically refer to the number of this Policy
      and
      shall be made to XLCA at:

     

    XL
      Capital Assurance Inc.

    1221
      Avenue of the Americas

    New
      York,
      New York 10020

    Attention:
      Surveillance

    Telephone:
      (212) 478-3400

    Facsimile:
      (212) 478- 3597

    

    or
      such
      other address, telephone number or facsimile number as XLCA may designate to
      the
      Securities Administrator in writing from time to time. Each such Payment Notice
      and other notice, presentation, transmission, delivery and communication shall
      be effective only upon actual receipt by XLCA.

     

    The
      obligations of XLCA under this Policy are irrevocable, primary, absolute and
      unconditional, subject to satisfaction of the conditions for making a claim
      under this Policy, and neither the failure of any Person to perform any covenant
      or obligation in favor of XLCA (or otherwise), nor the commencement of any
      Insolvency Proceeding shall in any way affect or limit XLCA’s obligations under
      this Policy. If a successful action or proceeding to enforce this Policy is
      brought by the Securities Administrator, the Securities Administrator shall
      be
      entitled to recover from XLCA costs and expenses reasonably incurred, including,
      without limitation, reasonable fees and expenses of counsel.

     

    This
      Policy and the obligations of XLCA hereunder shall terminate on the expiration
      of the Term of this Policy. This Policy shall be returned to XLCA by the
      Securities Administrator upon the expiration of the Term of this Policy.

     

    The
      Property/Casualty Insurance Security Fund specified in Article 76 of the New
      York Insurance Law does not cover this Policy. The Florida Insurance Guaranty
      Association created under Part II of Chapter 631 of the Florida Insurance Code
      does not cover this Policy. In the event that XLCA were to become insolvent,
      the
      California Insurance Guaranty Association, established pursuant to Article
      14.2
      of Chapter 1 of Part 2 of Division 1 of the California Insurance Code excludes
      from coverage any claims arising under this Policy.

     

    THIS
      POLICY SHALL BE CONSTRUED, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
      PARTIES HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE
      OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD REQUIRE
      THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

     

    In
      the
      event any term or provision of this Policy is inconsistent with the provisions
      of this Endorsement, the provisions of this Endorsement shall take precedence
      and be binding.

     

    

     

    [Remainder
      of Page Intentionally Left Blank]

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      XL
      Capital Assurance Inc. has caused this Endorsement to the Policy to be executed
      on the Effective Date.

     

    
      	
               

              _____________________________

              Name:
                Linda Kobrin

              Title:
                Managing Director

            	
               

              _____________________________

              Name:
                R. Sharon Smith

              Title:
                Associate General Counsel

            
	 	 

    

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A to Financial Guaranty Insurance Policy No. CA03607A

     

    XL
      Capital Assurance Inc.

    1221
      Avenue of the Americas

    New
      York,
      New York 10020

    Attention:   
      Surveillance

     

    PAYMENT
      NOTICE

    UNDER
      FINANCIAL GUARANTY INSURANCE POLICY NO. CA03607A

     

    LaSalle
      Bank National Association, as Securities Administrator (the “Securities
      Administrator”),
      hereby certifies to XL Capital Assurance Inc. (“XLCA”)
      with
      reference to that certain Financial Guaranty Insurance Policy, No. CA03607A,
      dated together with the Endorsement attached thereto (the “Policy”),
      issued by XLCA in favor of the Securities Administrator on behalf of the Owner
      under the Indenture, as follows:

     

    1. The
      Securities Administrator is the Securities Administrator under the Indenture
      and
      the Beneficiary of the Policy on behalf of each Owner.

     

    2. The
      Securities Administrator is entitled to make a demand under the Policy pursuant
      to Section 3.20 of the Indenture.

     

    3. This
      notice relates to the [insert date] Payment Date. The amount demanded is to be
      paid in immediately available funds to the [Specify Account] at [Identify
      Financial Institution Holding Account] account number[_____].

     

    [For
      a
      Payment Notice in respect of Insured Amounts, use paragraph 4.]

     

    4. The
      Securities Administrator demands payment of $________, which is the amount
      equal
      to the sum of : 

     

    (a)
      __________, which is the amount by which Current Interest for the related
      Accrual Period on the Insured Notes exceeds the amount payable on such Payment
      Date in respect of such Current Interest pursuant to the Indenture from sources
      other than the Policy, plus

     

    (b)
      (i)
      for any Payment Date other than the Final Scheduled Payment Date, $____________,
      which is the Insured Note Charge-off Amount (as defined below) for such Payment
      Date, if any, 

     

    or
      (ii)
      on the Final Scheduled Payment Date, $____________, which is the Note Principal
      Balance of the Insured Notes on such Payment Date after giving effect to
      payments made in reduction of such Note Principal Balance on such Payment Date
      pursuant to the Indenture from sources other than the Policy . 

     

    [For
      a
      Payment Notice in respect of an Avoided Payment use the following paragraphs
      [4]
      or [5].]

     

    [4.] The
      Securities Administrator hereby represents and warrants, based upon information
      available to it, that (i) the amount entitled to be drawn under the Policy
      on the date hereof in respect of Avoided Payments is the amount paid (or to
      be
      paid simultaneously with such draw on the Policy) by the Owner on account of
      an
      Insolvency Proceeding [$________] (the “Avoided
      Payment Amount”)
      and
      (ii) the documents required by the Policy to be delivered in connection with
      such Avoided Payments and Avoided Payment Amount have previously been presented
      to XLCA or are attached hereto.

     

    [5.] The
      Securities Administrator agrees that, following payment of funds by XLCA, it
      shall use reasonable efforts to ensure (a) that such amounts are applied
      directly to the payment of any Deficiency Amount which is due for payment;
      (b)
      that such funds are not applied for any other purpose; and (c) the maintenance
      of an accurate record of such payments in respect of each Insured Obligation
      and
      the corresponding claim on the Policy and the proceeds thereof.

     

    [5.]
      or
      [6.] The
      Securities Administrator, on behalf of itself and the Owners, hereby assigns
      to
      XLCA all rights and claims (including rights of actions and claims in respect
      of
      securities laws violations or otherwise) of the Securities Administrator and
      the
      Owners with respect to the Insured Obligation to the extent of any payments
      under the Policy. The foregoing assignment is in addition to, and not in
      limitation of, rights of subrogation otherwise available to XLCA in respect
      of
      such payments. The Securities Administrator shall take such action and deliver
      such instruments as may be reasonably required by XLCA to effectuate the
      purposes of provisions of this Clause [5.] or [6.]. 

     

    [6.]
      or
      [7.] The
      Securities Administrator, on behalf of itself and the Owners, hereby appoints
      XLCA as agent and attorney-in-fact for the Securities Administrator and the
      Owners in any legal proceeding in respect of the Insured Obligation. The
      Securities Administrator, on behalf of itself and the Owners, hereby (and
      without limiting the generality of the preceding sentence) agrees that XLCA
      may
      at any time during the continuation of any proceeding by or against any debtor
      with respect to which a Preference Claim (as defined below) or other claim
      with
      respect to the Insured Obligation is asserted under any Insolvency Proceeding,
      direct all matters relating to such Insolvency Proceeding, including, without
      limitation, (a) all matters relating to any claim in connection with an
      Insolvency Proceeding seeking the avoidance as a preferential transfer of any
      payment made with respect to the obligations (a “Preference
      Claim”),
      (b)
      the direction of any appeal of any order relating to any Preference Claim and
      (c) the posting of any surety, supersedes or performance bond pending any such
      appeal. In addition, the Securities Administrator, on behalf of itself and
      the
      Owners, hereby agrees that XLCA shall be subrogated to, and the Securities
      Administrator, on behalf of itself and the Owners, hereby delegates and assigns,
      to the fullest extent permitted by law, the rights of the Securities
      Administrator and the Owners in the conduct of any Insolvency Proceeding,
      including, without limitation, all rights of any party to an adversary
      proceeding or action with respect to any court order issued in connection with
      any such Insolvency Proceeding.

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Capitalized
      terms used herein and not otherwise defined herein shall have the meanings
      assigned to them in the Indenture.

     

    IN
      WITNESS WHEREOF, this notice has been executed this ____ day of ________,
      ____.

     

    
      	 	 	 	 	 	 	 	
              LASALLE
                BANK NATIONAL ASSOCIATION,

              as
                Securities Administrator

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	 	
              Authorized
                Officer

            
	 	 	 	 	 	 	 	 	 

    

    

     

    Any
      Person Who Knowingly And With Intent To Defraud Any Insurance Company Or Other
      Person Files An Application For Insurance Or Statement Of Claim Containing
      Any
      Materially False Information, Or Conceals For The Purpose Of Misleading
      Information Concerning Any Fact Material Thereof, Commits A Fraudulent Insurance
      Act, Which Is A Crime, And Shall Also Be Subject To A Civil Penalty Not To
      Exceed Five Thousand Dollars And The Stated Value Of The Claim For Each Such
      Violation

     

    

     

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      B to Financial Guaranty Insurance Policy, No. CA03607A

     

    Form
      of Assignment

     

    Reference
      is made to the Financial Guaranty Insurance Policy No. CA03607A, dated March
      6,
      2007 (together with the Endorsement attached thereto, the “Policy”)
      issued
      by XL Capital Assurance Inc. (“XLCA”)
      relating to the Mortgage-Backed Notes, Series 2007-HE1, Class A-1 Notes and
      Class A-2 Notes. Unless otherwise defined herein, capitalized terms used in
      this
      Assignment shall have the meanings assigned thereto in the Policy including
      as
      incorporated by reference therein. In connection with the Avoided Payment of
      [$________] [paid][or][sought to be recovered from] by the undersigned (the
      “Owner”)
      on
      [__________] and the payment by XLCA in respect of such Avoided Payment pursuant
      to the Policy, the Owner hereby irrevocably and unconditionally, without
      recourse, representation or warranty (except as provided below), sells, assigns,
      transfers, conveys and delivers all of such Owner’s rights, title and interest
      in and to any rights or claims, whether accrued, contingent or otherwise, which
      the Owner now has or may hereafter acquire, against any person relating to,
      arising out of or in connection with such Avoided Payment. The Owner represents
      and warrants that such claims and rights are free and clear of any lien or
      encumbrance created or incurred by such Owner.1 

     

    

    
      	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	
              [Owner]
                [Securities Administrator,

              as
                Owner’s attorney-in-fact]

            
	 	 	 	 	 	 	 	 	 

    

    

    

    ________________________

      
        1 In
          the
          event that the terms of this form of assignment are reasonably determined
          to be
          insufficient solely as a result of a change of law or applicable rules
          after the
          date of the Policy to fully vest all of the Owner’s right, title and interest in
          such rights and claims, the Owner or the Securities Administrator, as Owner’s
          attorney-in-fact, as the case may be, and XLCA shall agree on such other
          form as
          is reasonably necessary to effect such assignment, which assignment shall
          be
          without recourse, representation or warranty except as provided
          above.

         

      

    

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      APPENDIX
        A

      DEFINITIONS

       

      10-K
        Filing Deadline:
        As
        defined in Section 4.17(a)(iii) of the Sale and Servicing
        Agreement.

       

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

       

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

       

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

       

      Accrual
        Period:
        With
        respect to the Notes and the Class E Certificates and any Payment Date, the
        period from and including the preceding Payment Date (or from the Closing
        Date,
        in the case of the first Payment Date) to and including the day prior to
        the
        current Payment Date. Calculations of interest on the Notes and the Class
        E
        Certificates will be based on a 360-day year and the actual number of days
        elapsed during the related accrual period. 

       

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

       

      Additional
        Disclosure:
        As
        defined in Section 4.17(a)(iv) of the Sale and Servicing Agreement.

       

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

       

      Additional
        Form 10-D Disclosure:
        As
        defined in Section 4.17(a)(i) of the Sale and Servicing Agreement.

       

      Additional
        Form 10-K Disclosure:
        As
        defined in Section 4.17(a)(iii) of the Sale and Servicing Agreement.

       

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

       

      Administration
        Agreement:
        The
        Administration Agreement, dated as of March 6, 2007, among the Issuing Entity,
        the Depositor, the Owner Trustee and the Securities Administrator.

       

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

       

      Annual
        Statement of Compliance:
        As
        defined in Section 4.15 of the Sale and Servicing Agreement.

       

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

       

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

       

      Assessment
        of Compliance:
        As
        defined in Section 4.16 of the Sale and Servicing Agreement.

       

      Assignment
        Agreement:
        The
        Assignment, Assumption and Recognition Agreement, dated as of March 6, 2007,
        among EMC, GreenPoint and the Indenture Trustee, whereby the Servicing Agreement
        was assigned to the Indenture Trustee for the benefit of the Noteholders
        and the
        Note Insurer. 

       

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

       

      Attestation
        Report:
        As
        defined in Section 4.16 of the Sale and Servicing Agreement.

       

      Attesting
        Party:
        As
        defined in Section 4.16 of the Sale and Servicing Agreement.

       

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

       

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

       

      Available
        Principal Payment Amount:
        With
        respect to the Class A Notes and Class B Notes and any Payment
        Date:

       

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

       

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

       

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

       

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

       

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

       

      minus

       

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

       

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

       

      Avoided
        Payment:
        As
        defined in the Policy.

       

      Back-Up
        Certification:
        As
        defined in Section 4.17(a)(iii) of the Sale and Servicing
        Agreement.

       

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

       

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

       

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

       

      Basis
        Risk Shortfall:
        With
        respect to the Notes and any Payment Date, if such Notes are subject to the
        Net
        WAC Cap Rate on such Payment Date, the excess, if any, of (i) the amount
        of
        interest that would have been payable to such Class of Notes on such Payment
        Date if the Note Interest Rate for such Class for such Payment Date were
        calculated at the Formula Rate over (ii) the amount of interest payable on
        such
        Class of Notes at the Net WAC Cap Rate for such Payment Date. 

       

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

       

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

       

      BSABS
        I:
        Bear
        Stearns Asset Backed Securities I LLC.

       

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

       

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

       

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

       

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

       

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

       

      Certificate
        Principal Balance:
        With
        respect to the Class S Certificates shall equal the amount by which Draws
        on any
        Payment Date exceed the Principal Collection Amount, minus (i) all amounts
        in
        respect of principal distributed to the Class S Certificates on previous
        Payment
        Dates and (ii) any Charge-Off Amounts allocated to such Class on previous
        Payment Dates. With respect to the Class E Certificates as of any date of
        determination shall be an amount equal to the excess, if any, of (A) the
        then
        aggregate Uncertificated Principal Balance of the REMIC I Regular Interests
        over
        (B) the then aggregate Note Principal Balance of the Notes then
        outstanding.

       

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

       

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

       

      Certificates:
        The
        Class E, Class S, Class X and Class R Certificates.

       

      Certification
        Parties:
        As
        defined in Section 4.17(a)(iii) of the Sale and Servicing
        Agreement.

       

      Certifying
        Person:
        As
        defined in Section 4.17(a)(iii) of the Sale and Servicing
        Agreement.

       

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

       

      Charged-Off
        HELOC:
        Any
        HELOC that is more than 180 days delinquent (or, earlier, in accordance with
        the
        Servicer’s servicing practices), subject to certain terms and conditions set
        forth in the Servicing Agreement or the Sale and Servicing
        Agreement.

       

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

       

      Class
        A Notes:
        The
        Class A-1 Notes and Class A-2 Notes.

       

      Class
        B Notes:
        The
        Class B-1 Notes and Class B-2 Notes.

       

      Class
        A Principal Payment Amount:
        With
        respect to any Payment Date is the lesser of (I) the Available Principal
        Payment
        Amount and any amounts drawn on the Policy for Charged-Off HELOCs for such
        Payment Date and (II) an amount equal to the excess (if any) of (A) the
        aggregate Note Principal Balance of the Class A Notes immediately prior to
        such
        Payment Date over (B) the lesser of (x) the product of (1) the Invested Amount
        as of the end of the Collection Period multiplied by (2) approximately 85.40%
        and (y) (1) the Invested Amount as of the end of the related Collection Period,
        less (2) the Overcollateralization Floor.

       

      Class
        B-1 Principal Payment Amount:
        With
        respect to any Payment Date is the lesser of (I) the Available Principal
        Payment
        Amount remaining after payment of the Class
        A
        Principal Payment Amount on
        such
        Payment Date, and (II) an amount equal to the excess (if any) of (A) the
        sum of
        (1) the aggregate Note Principal Balance of the Class A Notes (after taking
        into
        account the payment of the Class A Principal Payment Amount for that Payment
        Date) and (2) the Note Principal Balance of the Class B-1 Notes immediately
        prior to such payment date over (B) the lesser of (x) the product of (1)
        the
        Invested Amount as of the end of the Collection Period multiplied by (2)
        approximately 87.80% and (y) (1) the Invested Amount as of the end of the
        Collection Period, less (2) the Overcollateralization Floor.

       

      Class
        B-2 Principal Payment Amount:
        With
        respect to any Payment Date is the lesser of (I) the Available Principal
        Payment
        Amount remaining after payment of the Class A Principal Payment Amount and
        Class
        B-1 Principal Payment Amount on such Payment Date, and (II) an amount equal
        to
        the excess (if any) of (A) the sum of (1) the aggregate Note Principal Balance
        of the Class A Notes and Class B-1 Notes (after taking into account the payment
        of the Class A Principal Payment Amount and Class B-1 Principal Payment Amount
        for that Payment Date) and (2) the Note Principal Balance of the Class B-2
        Notes
        immediately prior to such Payment Date over (B) the lesser of (x) the product
        of
        (1) the Invested Amount as of the end of the Collection Period multiplied
        by (2)
        approximately 92.30% and (y) (1) the Invested Amount as of the end of the
        Collection Period, less (2) the Overcollateralization Floor.

       

      Class
        E Certificates:
        The
        Class E Certificates.

       

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

       

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

       

      Class
        E Notional Amount:
        With
        respect to the Class E Certificates and any Payment Date, an amount equal
        to the
        Invested Amount at the beginning of the related Collection Period. The initial
        Class E Notional Amount of the Class E Certificates shall be $666,016,193.09.
        For federal income tax purposes, the Class E Notional Amount of the Class
        E
        Certificates for any Payment Date shall be an amount equal to the aggregate
        Uncertificated Principal Balance of the REMIC I Regular Interests for such
        Payment Date.

       

      Class
        R Certificates:
        The
        Class R Certificates.

       

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

       

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

       

      Class
        S Certificates:
        The
        Class S Certificates.

       

      Class
        X Certificates:
        The
        Class X Certificates.

       

      Closing
        Date:
        March
        6, 2007.

       

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

       

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

       

      Collection
        Period:
        (1)
        With respect to the first Payment Date, February 15th
        through
        and including February 28th
        and (2)
        with respect to each Payment Date thereafter, the first day of the month
        preceding the month in which such Payment Date occurs through and including
        the
        last day of the month preceding the month in which such Payment Date occurs.
        

       

      Commission:
        The
        Securities and Exchange Commission.

       

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

       

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

       

      Corporate
        Trust Office:
        With
        respect to the Indenture Trustee, the principal corporate trust office of
        the
        Indenture Trustee at which at any particular time its corporate trust business
        shall be administered, which office at the date of the execution of this
        instrument is located at 388 Greenwich Street, 14th
        Floor,
        New York, NY 10013, Attention: Agency and Trust - GPMF
        Trust 2007-HE1.
        With
        respect to the Owner Trustee, the principal corporate trust office of the
        Owner
        Trustee at which at any particular time its corporate trust business shall
        be
        administered, which office at the date of the execution of this Trust Agreement
        is located at 1100 North Market Street, Wilmington, Delaware 19890, Attention:
        Corporate Trust Administration. With respect to the Securities Administrator,
        Certificate Registrar, Note Registrar and Paying Agent, the Corporate Trust
        Office of the Note Registrar and the Certificate Registrar for purposes of
        presentment and surrender of the Notes and the Certificates for the final
        payment or distribution thereon and for transfer is located at 135 South
        LaSalle
        Street, Suite 1511, Chicago, Illinois 60603, Attention: Global Securities
        and
        Trust Services- GPMF Trust 2007-HE1, or any other address that the Securities
        Administrator may designate from time to time by notice to the Noteholders
        and
        the Certificateholders.

       

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

       

      CPR:
        A constant rate of prepayment on the HELOCs.

       

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

       

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

       

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

       

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

       

      Custodial
        Agreement:
        The
        custodial agreement, dated as of March 6, 2007, among the Indenture Trustee,
        the
        Custodian, the Sponsor, the Master Servicer and the Depositor, relating to
        the
        GPMF Trust 2007-HE1, Mortgage-Backed Notes, Series 2007-HE1. 

       

      Custodian:
        LaSalle, or any successor custodian appointed pursuant to the provisions
        hereof
        and the Custodial Agreement

       

      Cut-off
        Date:
        February
        15, 2007.

       

      Cut-off
        Date Balance:
        $666,016,193.09.

       

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

       

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

       

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

       

      Deficiency
        Amount:
        The
        meaning specified in the Policy.

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      (i) a
        failure
        by the Issuing Entity to pay Current Interest on the Notes on any Payment
        Date
        and such default shall continue for a period of one Business Day;
        or

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      Expense
        Fee Rate:
        With
        respect to any HELOC or REO Property is the sum of (i) the Servicing Fee
        Rate
        and (ii) the Master Servicing Fee Rate. 

       

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

       

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

       

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

       

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

       

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

       

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

       

      Final
        Scheduled Payment Date:
        With
        respect to the Class A Notes, the Payment Date in December 2032 and with
        respect
        to the Class B Notes, the Payment Date in December 2031. 

       

      Fitch:
        Fitch,
        Inc.

       

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

       

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

       

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

       

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

       

      GreenPoint:
        GreenPoint Mortgage Funding, Inc. 

       

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

       

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

       

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

       

      Indenture:
        The
        indenture, dated as of March 6, 2007, among the Issuing Entity, the Indenture
        Trustee and the Securities Administrator, relating to the GPMF Trust 2007-HE1,
        Mortgage-Backed Notes, Series 2007-HE1.

       

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

       

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

       

      Independent
        Certificate:
        A
        certificate or opinion to be delivered to the Indenture Trustee under the
        circumstances described in, and otherwise complying with, the applicable
        requirements of Section 11.01 of the Indenture, made by an independent appraiser
        or other expert appointed by an Issuing Entity Request and approved by the
        Indenture Trustee in the exercise of reasonable care, and such opinion or
        certificate shall state that the signer has read the definition of “Independent”
in this Indenture and that the signer is Independent within the meaning
        thereof.

       

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

       

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

       

      Initial
        Interest Coverage Deposit:
        The amount to be paid by the Depositor to the Securities Administrator for
        deposit in the Interest Coverage Account on the Closing Date, which amount
        is
        approximately $500,000.

       

      Initial
        Note Principal Balance:
        With
        respect to the Class A-1 Notes, $507,837,000, with respect to the Class A-2
        Notes, $132,870,000, with respect to the Class B-1 Notes, $7,992,000 and
        with
        respect to the Class B-2 Notes, $14,985,000.

       

      Insurance
        Agreement:
        The
        Insurance and Indemnity Agreement dated as of March 6, 2007, among the Note
        Insurer, EMC, as seller, the Depositor, the Issuing Entity, the Master Servicer,
        the Servicer, the Securities Administrator and the Indenture Trustee, including
        any amendments and supplements thereto in accordance with the terms
        thereof.

       

      Insured
        Amount:
        The
        meaning specified in the Policy.

       

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

       

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

       

      Interest
        Coverage Account:
        The
        account or sub-account established and maintained pursuant to Section 8.09
        of
        the Indenture and which shall be an Eligible Account or sub-account of an
        Eligible Account. 

       

      Interest
        Determination Date:
        The
        second LIBOR Business Day preceding the related Payment Date on which such
        Accrual Period commences. 

       

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

       

      (a) Partial
        Principal Prepayments received during the relevant Collection Period: The
        difference between (i) one month’s interest at the applicable Expense Adjusted
        Mortgage Rate on the amount of such prepayment and (ii) the amount of interest
        for the calendar month of such prepayment (adjusted to the applicable Expense
        Adjusted Mortgage Rate) received at the time of such prepayment;

       

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

       

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

       

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

       

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

       

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

       

      Invested
        Amount:
        With
        respect to any Payment Date, the aggregate Stated Principal Balance of the
        HELOCs reduced by the aggregate Certificate Principal Balance of the Class
        S
        Certificates, if any. The Invested Amount on the Closing Date is
        $666,016,193.

       

      IRS:
        The
        Internal Revenue Service.

       

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

       

      Issuing
        Entity:
        GPMF
        Trust 2007-HE1, a Delaware statutory trust, or its successor in
        interest.

       

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

       

      Latest
        Possible Maturity Date:
        November 25, 2031. For purposes of the Treasury regulations under Sections
        860A
        through 860G of the Code, the Latest Possible Maturity Date for the HELOCs
        shall
        be the latest possible maturity date of each REMIC I Regular Interest, the
        Notes
        and the Class E Certificates. 

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      Marker
        Rate:
        With
        respect to the Class E Certificates and any Payment Date, a per annum rate
        equal
        to two (2) times the weighted average of the Uncertificated REMIC I Pass-Through
        Rates for the REMIC I Regular Interests (other than REMIC I Regular Interest
        AA), , with the rate on each of the REMIC I Regular Interests A-1 and A-2
        subject to a cap equal to the Note Interest Rate for the Corresponding Note
        for
        such Payment Date, plus the Premium Percentage, for the purpose of this
        calculation, with the rate on each of the REMIC I Regular Interests B-1 and
        B-2
        subject to a cap equal to the Note Interest Rate for the Corresponding Note
        for
        such Payment Date for the purpose of this calculation and with the rate on
        REMIC
        I Regular Interest ZZ subject to a cap of zero for the purpose of this
        calculation; provided, however, that solely for this purpose, the related
        cap
        with respect to each REMIC I Regular Interest (other than REMIC I Regular
        Interests AA and ZZ) shall be multiplied by a fraction, the numerator of
        which
        is 30 and the denominator of which is the actual number of days in the related
        Accrual Period. 

       

      Margin:
        With
        respect to any Payment Date on or prior to the first possible Optional
        Termination Date and (i) with respect to the Class A-1 Notes, 0.150% per
        annum,
        (ii) with respect to the Class A-2 Notes, 0.170% per annum, (iii) with respect
        to the Class B-1 Notes, 3.00% per annum and (iv) with respect to the Class
        B-2
        Notes, 3.00% per annum; and with respect to any Payment Date after the first
        possible Optional Termination Date, the Margin will increase to (i) with
        respect
        to the Class A-1 Notes, 0.300% per annum, (ii) with respect to the Class
        A-2
        Notes, 0.340% per annum, (iii) with respect to the Class B-1 Notes, 4.500%
        per
        annum and (iv) with respect to the Class B-2 Notes, 4.500% per
        annum.

       

      Master
        Servicer:
        LaSalle.

       

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

       

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

       

      Master
        Servicer Event of Default:
        As
        defined in Section 7.01 of the Sale and Servicing Agreement.

       

      Master
        Servicing Fee Rate:
        0.0175%
        per annum.

       

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

       

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

       

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

       

      Maximum
        Uncertificated Accrued Interest Deferral Amount:
        With
        respect to the any Payment Date, the excess, if any, of (i) the accrued interest
        at the Uncertificated REMIC I Pass-Through Rate applicable to REMIC I Regular
        Interest ZZ for such Payment Date on a balance equal to the Uncertificated
        Principal Balance of REMIC I Regular Interest ZZ minus the REMIC I
        Overcollateralization Amount, in each case for such Payment Date, over (ii)
        the
        aggregate amount of Uncertificated Accrued Interest for such Payment Date
        on the
        REMIC I Regular Interests (other than REMIC I Regular Interests AA and ZZ),
        with
        the rate on each of the REMIC I Regular Interests A-1 and A-2 subject to
        a cap
        equal to the Note Interest Rate for the Corresponding Note for such Payment
        Date, plus the Premium Percentage, for the purpose of this calculation and
        with
        the rate on each of the REMIC I Regular Interests B-1 and B-2 subject to
        a cap
        equal to the Note Interest Rate for the Corresponding Note for such Payment
        Date
        for the purpose of this calculation and; provided, however, that solely for
        this
        purpose, the related cap with respect to each REMIC I Regular Interest (other
        than REMIC I Regular Interests AA and ZZ) shall be multiplied by a fraction,
        the
        numerator of which is 30 and the denominator of which is the actual number
        of
        days in the related Accrual Period.

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      Mortgage
        Loan Purchase Agreement:
        The
        Mortgage Loan Purchase Agreement, dated as of March 6, 2006, between EMC
        Mortgage Corporation, as seller, and Bear Stearns Asset Backed Securities
        I LLC,
        as purchaser, and all amendments thereof and supplements thereto, attached
        to
        the Sale and Servicing Agreement as Exhibit E.

       

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

       

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

       

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

       

      Mortgagor:
        The
        obligor on a Mortgage Note.

       

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

       

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

       

      Net
        WAC Cap Rate:
        With
        respect to any Payment
        Date and
        the
        Class A Notes, a per annum rate equal to the excess, if any, of (x) the weighted
        average of the Expense Adjusted Mortgage Rates of the HELOCs as of the first
        day
        of the Collection Period preceding such Payment Date, over (y) the Premium
        Percentage. With respect to any Payment Date and the Class B Notes, a per
        annum
        rate equal to the weighted average of the Expense Adjusted Mortgage Rates
        of the
        HELOCs as of the first day of the related Collection Period preceding such
        payment date. The Net WAC Cap Rate for each Class of Notes will be calculated
        based on a 360-day year and the actual number of days elapsed in the related
        Accrual Period.

       

      Net
        WAC Cap Rate Carryover Amount:
        With
        respect to any Class of Notes and any Payment Date, the sum of (A) if such
        Notes
        are subject to the Net WAC Cap Rate on such Payment Date, the excess, if
        any, of
        (x) the amount of interest that would have been payable to such Class of Notes
        on such Payment Date if the Note Interest Rate for such Class for such Payment
        Date were calculated at the Formula Rate over (y) the amount of interest
        payable
        on such Class of Notes at the Net WAC Cap Rate for such Payment Date, and
        (B)
        the Net WAC Cap Rate Carryover Amount for the previous Payment Date not
        previously paid, together with interest thereon at a rate equal to the related
        Formula Rate for such Class of Notes for the current Payment Date.

       

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

       

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

       

      Notes:
        The
        Class A-1, Class A-2, Class B-1 and Class B-2 Notes. 

       

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

       

      Note
        Insurer:
        XL
        Capital Assurance Inc.

       

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

       

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

       

      Note
        Owner:
        The
        Beneficial Owner of a Note.

       

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

       

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

       

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

       

      Officer’s
        Certificate:
        With
        respect to the Master Servicer, a certificate signed by the President, Managing
        Director, a Director, a Vice President or an Assistant Vice President, of
        the
        Master Servicer and delivered to the Indenture Trustee or the Securities
        Administrator, as applicable. With respect to the Issuing Entity, a certificate
        signed by any Authorized Officer of the Issuing Entity or a Responsible Officer
        of the Securities Administrator, under the circumstances described in, and
        otherwise complying with, the applicable requirements of Section 11.01 of
        the
        Indenture, and delivered to the Indenture Trustee. Unless otherwise specified,
        any reference in the Indenture to an Officer’s Certificate shall be to an
        Officer’s Certificate of any Responsible Officer of the Securities
        Administrator.

       

      One-Month
        LIBOR:
        With
        respect to any Accrual Period other than the first Accrual Period, the rate
        determined by the Securities Administrator on the related Interest Determination
        Date on the basis of the London interbank offered rate for one-month United
        States dollar deposits, as such rates appear on the Telerate Screen Page
        3750,
        as of 11:00 a.m. (London time) on such Interest Determination Date; provided
        that the parties hereto acknowledge that One-Month LIBOR for the first Accrual
        Period shall equal 5.320% per annum.

       

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

       

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

       

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

       

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

       

      Opinion
        of Counsel:
        A
        written opinion of counsel acceptable to the Indenture Trustee (and Owner
        Trustee, if applicable) and the Note Insurer which counsel may be in-house
        counsel for the Depositor or the Sponsor if acceptable to the Indenture Trustee
        (and Owner Trustee, if applicable), the Note Insurer and the Rating Agencies
        or
        outside counsel for the Depositor, the Sponsor, the Issuing Entity or the
        Master
        Servicer, as the case may be.

       

      Optional
        Termination Date:
        The
        first date on which the majority holder of the Class E Certificates may
        terminate the Trust Estate (with the consent of the Note Insurer if such
        termination would result in a draw against the Policy).

       

      Original
        Value:
        The
        lesser of (i) the Appraised Value or (ii) the sales price of a Mortgaged
        Property at the time of origination of a HELOC, except in instances where
        either
        clauses (i) or (ii) is unavailable, the other may be used to determine the
        Original Value, or if both clauses (i) and (ii) are unavailable, Original
        Value
        may be determined from other sources reasonably acceptable to the
        Depositor.

       

      Originator:
        Any
        originator of any of the HELOCs.

       

      Outstanding:
        With
        respect to the Notes, as of the date of determination, all Notes theretofore
        executed, authenticated and delivered under this Indenture except:

       

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

       

      (ii) Notes
        in
        exchange for or in lieu of which other Notes have been executed, authenticated
        and delivered pursuant to the Indenture unless proof satisfactory to the
        Securities Administrator is presented that any such Notes are held by a holder
        in due course; provided,
        Notes
        that have been paid with proceeds of the Policy will be considered Outstanding
        for purposes of Section 4.12 of the Indenture.

       

      Outstanding
        HELOC:
        With
        respect to any Due Date, a HELOC which, prior to such Due Date, was not the
        subject of a Principal Prepayment in full, did not become a Charged-Off HELOC
        and was not purchased or replaced.

       

      Outstanding
        Principal Balance:
        As of
        the time of any determination, the principal balance of a HELOC remaining
        to be
        paid by the Mortgagor, or, in the case of an REO Property, the principal
        balance
        of the related HELOC remaining to be paid by the Mortgagor at the time such
        property was acquired by the Trust less any related Excess Liquidation Proceeds
        with respect thereto to the extent applied to principal.

       

      Overcollateralization
        Amount:
        With
        respect to any Payment Date is the amount, if any, by which the Invested
        Amount
        exceeds the aggregate Note Principal Balance of the Notes as of such Payment
        Date after giving effect to payments to be made on such Payment
        Date.

       

      Overcollateralization
        Deficit:
        With
        respect to any Payment Date, the amount, if any, by which the aggregate Note
        Principal Balance of the Notes as of such Payment Date, after giving effect
        to
        payments to be made on such Payment Date, exceeds the Invested
        Amount.

       

      Overcollateralization
        Floor:
        With
        respect to the Notes, 0.50% of the Invested Amount as of the Cut-off
        Date.

       

      Overcollateralization
        Increase Amount:
        With
        respect to any Payment Date, the amount payable to the Notes pursuant to
        Section
        3.02(a)(3) of the Indenture.

       

      Overcollateralization
        Reduction Amount:
        With
        respect to the Notes and any Payment Date for which the Excess
        Overcollateralization Amount is, or would be, after taking into account all
        other payments to be made on that Payment Date, greater than zero, an amount
        equal to the lesser of (i) the Excess Overcollateralization Amount for that
        Payment Date and (ii) the Available Principal Payment Amount for that Payment
        Date (without giving effect to the Overcollateralization Reduction
        Amount).

       

      Overcollateralization
        Target Amount:
        With
        respect to any Payment Date (a) prior to the Stepdown Date, an amount equal
        to
        3.85% of the Invested Amount as of the Cut-off Date, (b) on or after the
        Stepdown Date and if a Trigger Event is not in effect, the greater of (A)
        the
        lesser of (i) an amount equal to 3.85% of the Invested Amount as of the Cut-off
        Date and (ii) approximately 7.70% of the then current Invested Amount as
        of the
        last day of the Collection Period and (B) the Overcollateralization Floor
        or (c)
        on or after the Stepdown Date and if a Trigger Event is in effect, the
        Overcollateralization Target Amount for the immediately preceding Payment
        Date.

       

      Owner
        Trust Estate:
        The
        corpus of the Issuing Entity created by the Trust Agreement which consists
        of
        items referred to in Section 3.01 of the Trust Agreement.

       

      Owner
        Trustee:
        Wilmington Trust Company, acting not in its individual capacity but solely
        as
        owner trustee under the Trust Agreement, and its successors and assigns or
        any
        successor owner trustee appointed pursuant to the terms of the Trust
        Agreement.

       

      Paying
        Agent:
        Any
        paying agent or co-paying agent appointed under the Indenture, which initially
        shall be the Securities Administrator.

       

      Payment
        Account:
        The
        trust account or accounts created and maintained pursuant to Section 3.01
        of the
        Indenture, which shall be denominated LaSalle Bank National Association,
        as
        Securities Administrator f/b/o holders of GPMF Trust 2007-HE1, Mortgage-Backed
        Notes, Series 2007-HE1 - Payment Account.” The Payment Account shall be an
        Eligible Account.

       

      Payment
        Account Deposit Date:
        The
        Business Day prior to each Payment Date.

       

      Payment
        Date:
        The
        13th day of each month, or if such day is not a Business Day, then the next
        Business Day, commencing in March 2007.

       

      Percentage
        Interest:
        With
        respect to any Note, the percentage obtained by dividing the Note Principal
        Balance of such Note by the aggregate Note Principal Balances of all Notes
        of
        that Class. With respect to any Certificate, the percentage as stated on
        the
        face thereof.

       

      Periodic
        Rate Cap:
        With
        respect to any HELOC, the maximum rate, if any, by which the Mortgage Rate
        on
        such HELOC can adjust on any Adjustment Date, as stated in the related Mortgage
        Note or Mortgage.

       

      Permitted
        Investments:
        Any one
        or more of the following obligations or securities held in the name of the
        Indenture Trustee for the benefit of the Noteholders and the Note Insurer,
        or in
        the name of the Securities Administrator for the benefit of the
        Certificateholders:

       

      (i) direct
        obligations of, and obligations the timely payment of which are fully guaranteed
        by the United States of America or any agency or instrumentality of the United
        States of America the obligations of which are backed by the full faith and
        credit of the United States of America;

       

      (ii) (a)
        demand or time deposits, federal funds or bankers’ acceptances issued by any
        depository institution or trust company incorporated under the laws of the
        United States of America or any state thereof (including the Indenture Trustee,
        Securities Administrator or the Master Servicer or its Affiliates acting
        in its
        commercial banking capacity) and subject to supervision and examination by
        federal and/or state banking authorities, provided that the commercial paper
        and/or the short-term debt rating and/or the long-term unsecured debt
        obligations of such depository institution or trust company at the time of
        such
        investment or contractual commitment providing for such investment have the
        Applicable Credit Rating or better from the Rating Agencies and (b) any other
        demand or time deposit or certificate of deposit that is fully insured by
        the
        FDIC;

       

      (iii) repurchase
        obligations with respect to (a) any security described in clause (i) above
        or
        (b) any other security issued or guaranteed by an agency or instrumentality
        of
        the United States of America, the obligations of which are backed by the
        full
        faith and credit of the United States of America, in either case entered
        into
        with a depository institution or trust company (acting as principal) described
        in clause (ii)(a) above where the Securities Administrator holds the security
        therefor;

       

      (iv) securities
        bearing interest or sold at a discount issued by any corporation (including
        the
        Indenture Trustee, Securities Administrator or the Master Servicer or its
        Affiliates) incorporated under the laws of the United States of America or
        any
        state thereof that have the Applicable Credit Rating or better from the Rating
        Agencies at the time of such investment or contractual commitment providing
        for
        such investment; provided, however, that securities issued by any particular
        corporation will not be Permitted Investments to the extent that investments
        therein will cause the then outstanding principal amount of securities issued
        by
        such corporation and held as part of the Trust to exceed 10% of the aggregate
        Outstanding Principal Balances of all the HELOCs and Permitted Investments
        held
        as part of the Trust as determined by the Master Servicer;

       

      (v) commercial
        paper (including both non-interest-bearing discount obligations and
        interest-bearing obligations payable on demand or on a specified date not
        more
        than one year after the date of issuance thereof) having the Applicable Credit
        Rating or better from the Rating Agencies at the time of such
        investment;

       

      (vi) a
        reinvestment agreement issued by any bank, insurance company or other
        corporation or entity;

       

      (vii) any
        other
        demand, money market or time deposit, obligation, security or investment
        as may
        be acceptable to the Note Insurer and to the Rating Agencies as evidenced
        in
        writing by the Rating Agencies to the Securities Administrator; and

       

      (viii) any
        money
        market or common trust fund having the Applicable Credit Rating or better
        from
        the Rating Agencies, including any such fund for which the Securities
        Administrator or Master Servicer or any affiliate of the Securities
        Administrator or Master Servicer acts as a manager or an advisor; provided,
        however, that no instrument or security shall be a Permitted Investment if
        such
        instrument or security evidences a right to receive only interest payments
        with
        respect to the obligations underlying such instrument or if such security
        provides for payment of both principal and interest with a yield to maturity
        in
        excess of 120% of the yield to maturity at par or if such instrument or security
        is purchased at a price greater than par as determined by the Master
        Servicer.

       

      Permitted
        Transferee:
        Any
        person (x) other than (i) the United States, any State or political subdivision
        thereof, any possession of the United States or any agency or instrumentality
        of
        any of the foregoing, (ii) a foreign government, International Organization
        or
        any agency or instrumentality of either of the foregoing, (iii) an organization
        (except certain farmers’ cooperatives described in section 521 of the Code) that
        is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
        by section 511 of the Code on unrelated business taxable income) on any excess
        inclusions (as defined in section 860E(c)(1) of the Code) with respect to
        any
        Residual Certificate, (iv) rural electric and telephone cooperatives described
        in section 1381(a)(2)(C) of the Code or (v) on electing large partnership
        within
        the meaning of Section 775(a) of the Code, (y) that is a citizen or resident
        of
        the United States, a corporation, partnership (other than a partnership that
        has
        any direct or indirect foreign partners) or other entity (treated as a
        corporation or a partnership for federal income tax purposes), created or
        organized in or under the laws of the United States, any State thereof or
        the
        District of Columbia, an estate whose income from sources without the United
        States is includible in gross income for United States federal income tax
        purposes regardless of its connection with the conduct of a trade or business
        within the United States, or a trust if a court within the United States
        is able
        to exercise primary supervision over the administration of the trust and
        one or
        more United States persons have authority to control all substantial decisions
        of the trust or if it has a valid election in effect under applicable U.S.
        Treasury regulations to be treated as a United States person and (z) other
        than
        any other Person so designated by the Securities Administrator based upon
        an
        Opinion of Counsel addressed to the Securities Administrator (which shall
        not be
        an expense of the Securities Administrator or the Indenture Trustee) that
        states
        that the Transfer of an ownership interest in a Residual Certificate to such
        Person may cause REMIC I or REMIC II to fail to qualify as a REMIC at any
        time
        that any Notes or Certificates are Outstanding. The terms “United States,”
“State” and “International Organization” shall have the meanings set forth in
        section 7701 of the Code or successor provisions. A corporation will not
        be
        treated as an instrumentality of the United States or of any State or political
        subdivision thereof for these purposes if all of its activities are subject
        to
        tax and, with the exception of Freddie Mac, a majority of its board of directors
        is not selected by such government unit.

       

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

       

      Plan:
        Any
        employee benefit plan or certain other retirement plans and arrangements,
        including individual retirement accounts and annuities, Keogh plans and bank
        collective investment funds and insurance company general or separate accounts
        in which such plans, accounts or arrangements are invested, that are subject
        to
        ERISA or Section 4975 of the Code.

       

      Plan
        Assets:
        Assets
        of a Plan within the meaning of Department of Labor regulation 29 C.F.R.
§
2510.3-101, as modified by Section 3(42) of ERISA.

       

      Policy:
        The
        financial guaranty insurance policy (No.
        CA03607A)
        with respect to the Class A Notes and all endorsements thereto, if any, dated
        the Closing Date, issued by the Note Insurer for the benefit of the holders
        of
        the Class
        A
        Notes only.

       

      Pool
        Balance:
        With
        respect to any date of determination, the aggregate of the Stated Principal
        Balances of all HELOCs as of such date.

       

      Premium:
        The
        premium due to the Note Insurer calculated based on the product of the Premium
        Percentage and the aggregate Note Principal Balance of the Class A Notes
        as of
        the immediately preceding Payment Date, based on a 360-day year consisting
        of
        twelve 30-day months.

       

      Premium
        Percentage:
        0.150%
        per annum.

       

      Prepayment
        Assumption:
        A
        specified CPR and a Constant Draw Rate of 10%.

       

      Principal
        Collection Amount:
        With
        respect to each Payment Date, an amount equal to the amount received by the
        Servicer and consisting of amounts collected during the related Collection
        Period on the HELOCs and allocated to principal in accordance with the terms
        of
        the Sale and Servicing Agreement, together with the principal portion of
        any
        repurchase price relating to any repurchased HELOCs and substitution adjustment
        amount paid during the Collection Period and Subsequent Recoveries, to the
        extent such Subsequent Recoveries relate to principal.

       

      Principal
        Prepayment:
        Any
        payment (whether partial or full) or other recovery of principal on a HELOC
        which is received in advance of its scheduled Due Date to the extent that
        it is
        not accompanied by an amount as to interest representing scheduled interest
        due
        on any date or dates in any month or months subsequent to the month of
        prepayment, including Insurance Proceeds and Repurchase Proceeds, but excluding
        the principal portion of Excess Liquidation Proceeds.

       

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

       

      Protected
        Account:
        The
        trust account or accounts created and maintained by the Servicer pursuant
        to the
        Servicing Agreement. The Protected Account shall be an Eligible Account.
        

       

      Purchaser:
        Bear
        Stearns Asset Backed Securities I LLC, a Delaware limited liability company,
        and
        its successors and assigns.

       

      Qualified
        Insurer:
        Any
        insurance company duly qualified as such under the laws of the state or states
        in which the related Mortgaged Property or Mortgaged Properties is or are
        located, duly authorized and licensed in such state or states to transact
        the
        type of insurance business in which it is engaged and approved as an insurer
        by
        the Master Servicer, so long as the claims paying ability of which is acceptable
        to the Rating Agencies for mortgage-backed notes having the same rating as
        the
        Notes rated by the Rating Agencies as of the Closing Date.

       

      Rapid
        Amortization Event:
        With
        respect to the HELOCs, any one of the following events: 

       

      (a)  the
        failure of the Sponsor to make any payments or deposits as required by the
        Sale
        and Servicing Agreement, or to observe or perform in any material respect
        any
        covenant of the Sponsor in the Mortgage Loan Purchase Agreement or the Sale
        and
        Servicing Agreement that materially and adversely affects the interests of
        the
        Noteholders or the Note Insurer and that continues unremedied and continues
        to
        affect materially and adversely the interests of the Noteholders or the Note
        Insurer for sixty (60) days (five days in the case of any failure to repurchase
        an affected HELOC when required or to substitute a Substitute HELOC for an
        affected HELOC) after the date on which written notice of the failure, requiring
        it to be remedied, shall have been given to the Sponsor by the Indenture
        Trustee
        or the Securities Administrator, or to the Sponsor, the Indenture Trustee
        and
        the Securities Administrator by the Note Insurer or the Holders of greater
        than
        50% of the aggregate Note Principal Balance of the Notes;

       

      (b)  any
        representation or warranty made by the Sponsor in the Mortgage Loan Purchase
        Agreement or the Sale and Servicing Agreement proves to have been incorrect
        in
        any material respect when made, as a result of which the interests of the
        Noteholders or the Note Insurer are materially and adversely affected and
        that
        continues to be incorrect in any material respect and continues to affect
        materially and adversely the interests of the Noteholders for thirty (30)
        days
        after the date on which notice of the failure, requiring it to be remedied,
        shall have been given to the Sponsor by the Indenture Trustee or the Securities
        Administrator, or to the Sponsor, the Indenture Trustee and the Securities
        Administrator by the Holders of greater than 50% of the aggregate Note Principal
        Balance of the Notes (a Rapid Amortization Event pursuant to this subparagraph
        (b) shall not occur if the Sponsor has repurchased the related HELOCs or
        substituted for them during the 60-day period (or such longer period (not
        to
        exceed an additional 60 days) as the Indenture Trustee or the Securities
        Administrator may specify) in accordance with the Sale and Servicing
        Agreement);

       

      (c)  a
        declaration of bankruptcy or insolvency by any of the Trust, the Depositor,
        the
        Master Servicer or the Servicer;

       

      (d)  the
        Trust
        becomes subject to the Investment Company Act of 1940; 

       

      (e)  the
        occurrence of a Rapid Amortization Trigger Event; or

       

      (f)  a
        draw is
        made on the Policy which remains unreimbursed for three months.

       

      If
        any
        event described in clause (a), (b), (e) or (f) occurs, a Rapid Amortization
        Event will occur only if, after the applicable grace period, either the
        Indenture Trustee or the Securities Administrator acting at the direction
        of the
        Noteholders evidencing more than 51% in Note Principal Balance of the Notes
        then
        outstanding by written notice to the holder of the Class E Certificates,
        the
        Depositor, the Sponsor, the Note Insurer and the Servicer (and to the Securities
        Administrator, if given by the Noteholders) declare that a Rapid Amortization
        Event has occurred. If any event described in clauses (c) or (d) occurs,
        a Rapid
        Amortization Event will occur without any notice or other action on the part
        of
        the Securities Administrator or the Noteholders immediately on the occurrence
        of
        such event.

       

      Rapid
        Amortization Period:
        The
        period beginning upon the occurrence of the Rapid Amortization
        Event.

       

      Rapid
        Amortization Trigger Event:
        Is in
        effect with respect to the Notes and any Payment Date if the cumulative amount
        of Charge-Off Amounts (net of Subsequent Recoveries) incurred on the HELOCs
        from
        the Cut-off Date through the end of the Collection Period immediately preceding
        such Payment Date exceeds the applicable percentage set forth below of the
        aggregate Stated Principal Balance of the HELOCs as of the Cut-off
        Date:

      

      
        	
                Prior
                  to September 2009

              	
                3.20%
                  

              
	
                September
                  2009 to August 2010

              	
                3.20%,
                  plus an additional 1/12th of 2.80% for each Payment Date after
                  September
                  2009 up to and including the Payment Date in August
                  2010

              
	
                September
                  2010 to August 2011

              	
                6.00%,
                  plus an additional 1/12th of 1.50% for each Payment Date after
                  September
                  2010 up to and including the Payment Date in August
                  2011

              
	
                September
                  2011 to August 2012

              	
                7.50%,
                  plus an additional 1/12th of 0.50% for each Payment Date after
                  September
                  2011 up to and including the Payment Date in August
                  2012

              
	
                September
                  2012 and thereafter

              	
                8.00%
                  

              

      

       

      Rating
        Agency:
        Any
        nationally recognized statistical rating organization, or its successor,
        that
        rated the Notes at the request of the Depositor at the time of the initial
        issuance of the Notes. Initially, Standard & Poor’s and Moody’s. If such
        organization or a successor is no longer in existence, “Rating Agency” with
        respect to the Notes shall be such nationally recognized statistical rating
        organization, or other comparable Person, designated by the Depositor, notice
        of
        which designation shall be given to the Securities Administrator, the Indenture
        Trustee, the Note Insurer and Master Servicer. References herein to the highest
        short term unsecured rating category of a Rating Agency shall mean A-1 or
        better
        in the case of Standard & Poor’s, P-1 in the case of Moody’s and in the case
        of any other Rating Agency shall mean such equivalent ratings. References
        herein
        to the highest long-term rating category of a Rating Agency shall mean “AAA” in
        the case of Standard & Poor’s, “Aaa” in the case of Moody’s and in the case
        of any other Rating Agency, such equivalent rating.

       

      Rating
        Confirmation:
        A
        letter from each Rating Agency then providing a rating for any of the Notes
        at
        the request of the Issuing Entity confirming that the action proposed to
        be
        taken by the Issuing Entity will not, in and of itself, result in a downgrade
        of
        any of the ratings then applicable to the Notes (without regard to the Policy),
        or cause any Rating Agency to suspend or withdraw the Ratings then applicable
        to
        the Notes (without regard to the Policy).

       

      Recordation
        Event:
        Any of
        (i) the resignation of a Servicer, (ii) the occurrence of an Event of Servicer
        Termination, or (iii) the occurrence of a bankruptcy, insolvency or foreclosure
        relating to a Servicer; provided,
        that
        any Recordation Event may be waived by the Majority
        Securityholders.

       

      Record
        Date:
        With
        respect to any Class of Notes, the business day preceding the applicable
        Payment
        Date so long as such Class of Notes is in book-entry form; and otherwise
        the
        Record Date shall be the close of business on the last business day of the
        month
        immediately preceding the month of the applicable Payment Date. 

       

      Reference
        Banks:
        Any
        leading banks engaged in transactions in Eurodollar deposits in the
        international Eurocurrency market (i) with an established place of business
        in
        London, (ii) whose quotations appear on the Telerate Screen Page 3750 on
        the
        Interest Determination Date, (iii) which have been designated as such by
        the
        Securities Administrator and (iv) which are not Affiliates of the Depositor
        or
        the Sponsor.

       

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

       

      Regular
        Interest:
        A
“regular interest” in a REMIC within the meaning of Section 860G(a)(1) of the
        Code.

       

      Regulation
        AB:
        Subpart
        229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject
        to
        such clarification and interpretation as have been provided by the Commission
        in
        the adopting release (Asset-Backed Securities, Securities Act Release No.
        33-8518, 70 Fed. Reg. 1,506-1,631 (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.

       

      Related
        Documents:
        With respect to each HELOC, the documents specified in Section 2.01(d)(i)-(viii)
        of the Sale and Servicing Agreement, and any documents required to be added
        to
        such documents pursuant to the Sale and Servicing Agreement, the Trust
        Agreement, the Indenture or the Mortgage Loan Purchase Agreement.

       

      Release:
        The
        Federal Reserve Board’s statistical Release No. H.15(519).

       

      Relief
        Act:
        Servicemembers Civil Relief Act.

       

      Relief
        Act HELOC:
        Any
        HELOC as to which the Scheduled Payment thereof has been reduced due to the
        application of the Relief Act.

       

      REMIC:
        A “real
        estate mortgage investment conduit” within the meaning of Section 860D of the
        Code.

       

      REMIC
        I:
        The
        segregated pool of assets described in Section 10.01 of the
        Indenture.

      

      REMIC
        I Regular Interest:
        Any of
        the separate non-certificated beneficial ownership interests in REMIC I issued
        hereunder and designated as a Regular Interest in REMIC I. Each REMIC I Regular
        Interest shall accrue interest at the related Uncertificated REMIC I
        Pass-Through Rate in effect from time to time, and shall be entitled to
        distributions of principal, subject to the terms and conditions hereof, in
        an
        aggregate amount equal to its initial Uncertificated Principal Balance as
        set
        forth in the Section 10.01 of the Indenture. The designations for the respective
        REMIC I Regular Interests are set forth in Section 10.01 of the
        Indenture.

      

      REMIC
        I Interest Loss Allocation Amount:
        With
        respect to any Payment Date, an amount (subject to adjustment based on the
        actual number of days elapsed in the respective Accrual Period) equal to
        (a) the
        product of (i) the Invested Amount and related REO Properties then outstanding
        and (ii) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
        Interest AA minus the Marker Rate, divided by (b) 12.

       

      REMIC
        I Overcollateralization Amount:
        With
        respect to any date of determination, (i) 1.00% of the aggregate Uncertificated
        Principal Balance of the REMIC I Regular Interests minus (ii) the aggregate
        Uncertificated Principal Balance of each REMIC I Regular Interest for which
        a
        Note is the Corresponding Note, in each case, as of such date of
        determination.

       

      REMIC
        I Principal Loss Allocation Amount:
        With
        respect to any Payment Date, an amount equal to the product of (i) the Invested
        Amount and related REO Properties then outstanding and (ii) 1 minus a fraction,
        the numerator of which is two (2) times the aggregate Uncertificated Principal
        Balance of each REMIC I Regular Interest for which a Note is the Corresponding
        Note, and the denominator of which is the aggregate Uncertificated Principal
        Balance of each REMIC I Regular Interest for which a Note is the Corresponding
        Note and REMIC I Regular Interest ZZ.

       

      REMIC
        I Regular Interest:
        Any of
        the REMIC I Regular Interests AA, A-1, A-2, B-1, B-2 and ZZ.

       

      REMIC
        I Required Overcollateralization Amount:
        1.00%
        of the Overcollateralization Target Amount.

      

      REMIC
        II:
        The
        segregated pool of assets described in Section 10.01 of the
        Indenture.

      

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

       

      REO
        Property:
        A
        Mortgaged Property acquired in the name of the Indenture Trustee, for the
        benefit of the Noteholders and the Note Insurer, by foreclosure or deed-in-lieu
        of foreclosure in connection with a defaulted HELOC.

       

      Reportable
        Event:
        As
        defined in Section 4.17(a)(iv) of the Sale and Servicing Agreement.

       

      Repurchase
        Price:
        With
        respect to any HELOC (or any property
        acquired with respect thereto) required to be repurchased pursuant to the
        Mortgage Loan Purchase Agreement or the Sale and Servicing Agreement, an
        amount
        equal to the sum of (i) 100% of the principal remaining unpaid on such HELOC
        as
        of the date of repurchase (including if a foreclosure has already occurred,
        the
        principal balance of the related HELOC at the time the Mortgage Property
        was
        acquired), net of any Servicing Advances attributable to principal and payable
        to the repurchaser of the HELOC if such repurchaser is also the Servicer
        of such
        HELOC, (ii) accrued and unpaid interest thereon at the Mortgage Interest
        Rate
        through and including the last day of the month of repurchase, net of any
        portion of the Servicing Fee and any Servicing Advances attributable to interest
        that is payable to the repurchaser of the HELOC if such repurchaser is also
        the
        Servicer of such HELOC, plus (iii) any costs and damages (if any) incurred
        by
        the Trust in connection with any violation of such HELOC of any anti-predatory
        lending laws. 

       

      Repurchase
        Proceeds:
        The
        Repurchase Price in connection with any repurchase of a HELOC by the Sponsor
        and
        any cash deposit in connection with the substitution of a HELOC.

       

      Request
        for Release:
        A
        request for release in the form attached to the Custodial Agreement as Exhibit
        Four.

       

      Required
        Insurance Policy:
        With
        respect to any HELOC, any insurance policy which is required to be maintained
        from time to time under the Sale and Servicing Agreement with respect to
        such
        HELOC.

       

      Residual
        Certificates:
        Any of
        the Class S Certificates and Class R Certificates, each evidencing the sole
        class of Residual Interests in the related REMIC.

       

      Residual
        Certificateholders:
        Any of
        the Holders of the Class S Certificates and Class R Certificates. 

       

      Residual
        Interest:
        The
        sole class of “residual interests” in a REMIC within the meaning of Section
        860G(a)(2) of the Code.

       

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

       

      60
        Day
        Plus Delinquent Percentage:
        With
        respect to any Payment Date is the arithmetic average for each of the three
        successive Payment Dates ending with the applicable Payment Date of the
        percentage equivalent of a fraction, (A) the numerator of which is the aggregate
        Stated Principal Balance of (i) the HELOCs that are 60 or more days delinquent
        in the payment of principal or interest for the relevant Payment Date, (ii)
        HELOCs in foreclosure, (iii) REO Property and (iv) HELOCs with a related
        mortgagor subject to bankruptcy procedures, and (B) the denominator of which
        is
        the aggregate Stated Principal Balance of all of the HELOCs immediately
        preceding the relevant Payment Date.

       

      Sale
        and Servicing Agreement:
        The
        Sale and Servicing Agreement, dated as of March 6, 2007, among the Issuing
        Entity, the Sponsor, the Indenture Trustee, the Master Servicer, the Securities
        Administrator and the Depositor.

       

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

       

      Sarbanes-Oxley
        Certification:
        The
        meaning set forth in Section 4.17(a)(iii) of the Sale and Servicing
        Agreement.

       

      Scheduled
        Payment:
        With
        respect to any HELOC and any month, the scheduled payment or payments of
        principal and interest due during such month on such HELOC which either is
        payable by a Mortgagor in such month under the related Mortgage Note or,
        in the
        case of REO Property, would otherwise have been payable under the related
        Mortgage Note.

       

      Scheduled
        Principal:
        The
        principal portion of any Scheduled Payment.

       

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

       

      Securities
        Administrator:
        LaSalle
        Bank National Association, or its successor in interest, or any successor
        securities administrator.

       

      Security:
        Any of
        the Certificates or Notes.

       

      Securityholder
        or
Holder:
        Any
        Noteholder or Certificateholder.

       

      Security
        Instrument:
        A
        written instrument creating a valid first lien on a Mortgaged Property securing
        a Mortgage Note, which may be any applicable form of mortgage, deed of trust,
        deed to secure debt or security deed, including any riders or addenda
        thereto.

       

      Seller:
        EMC
        Mortgage Corporation, and its successors and assigns.

       

      Servicer:
        GreenPoint, or its successors and assigns.

       

      Servicer
        Remittance Date:
        The
        date set forth in the Servicing Agreement.
        

       

      Servicing
        Advances:
        All
        customary, reasonable and necessary “out of pocket” costs and expenses
        (including reasonable legal fees) incurred in the performance by the Servicer
        of
        its servicing obligations under the Servicing Agreement, including, but not
        limited to, the cost of (i) the preservation, restoration and protection
        of a
        Mortgaged Property, (ii) any enforcement or judicial proceedings, including
        foreclosures, and including any expenses incurred in relation to any such
        proceedings that result from the HELOC being registered in the MERS® System and
        (iii) the management and liquidation of any REO Property (including, without
        limitation, realtor’s commissions).

       

      Servicing
        Agreement:
        The
        Seller’s Purchase, Warranties and Servicing Agreement, dated as of October 18,
        2004, as amended by Amendment Number One dated as of September 20, 2006,
        between
        GreenPoint and EMC.

       

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

       

      Servicing
        Fee:
        As
        to any HELOC and Payment Date, an amount equal to the product of (i) the
        Stated
        Principal Balance of such HELOC as of the Due Date in the preceding calendar
        month and (ii) the Servicing Fee Rate.

       

      Servicing
        Fee Rate:
        As
        to any HELOC, a per annum rate of 0.500%.

       

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

       

      Sponsor:
        EMC
        Mortgage Corporation, and its successors and assigns.

       

      Sponsor
        Certificate Pro Rata Test:
        Is met
        with respect to any Payment Date during the Managed Amortization Period if
        the
        Certificate Principal Balance of the Class S Certificates is greater than
        3.00%
        of the aggregate Stated Principal Balance of the HELOCs.

       

      Standard
        & Poor’s:
        Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., or its
        successor in interest.

       

      Stated
        Principal Balance:
        With
        respect to any HELOC and any Payment Date, the principal balance of the HELOC
        as
        of the related Cut-off date, plus the aggregate amount of all related Draws
        conveyed to the Trust in respect of such HELOC minus all collections credited
        against the principal balance of such HELOC in accordance with the related
        mortgage note and minus all prior related Charge-Off Amounts. The Stated
        Principal Balance of any Charged-Off HELOC is equal to zero.

       

      Statutory
        Trust Statute:
        Chapter
        38 of Title 12 of the Delaware Code, 12 Del.
        Code
§§3801 et seq.,
        as the
        same may be amended from time to time.

       

      Stepdown
        Date:
        The
        earlier to occur of

       

      (A)         
         the Payment Date following the Payment Date on which the Class A Notes are
        retired; and 

       

      (B)         
         the later to occur of 

       

      (x)          
         the
        Payment Date occurring in September 2009 and

       

      (y)         
         the
        first
        Payment Date for which the Current Specified Enhancement Percentage is greater
        than or equal to approximately 14.60%.

       

      Subordinate
        Notes:
        The
        Class B Notes.

       

      Subsequent
        Recoveries:
        Means
        any amount recovered by the Servicer or the Master Servicer (net of reimbursable
        expenses) with respect to any HELOC that has been previously charged off
        or
        liquidated.

       

      Substitute
        HELOC:
        The
        meaning specified in the Mortgage Loan Purchase Agreement.

       

      Tax
        Matters Person:
        The
        person designated as “tax matters person” in the manner provided under Treasury
        Regulation Sections 1.860F-4(d) and 301.6231(a)(7)-1T. The Holder of the
        greatest Percentage Interest in a Class of Residual Certificates shall be
        the
        Tax Matters Person for the related REMIC. The Securities Administrator, or
        any
        successor thereto or assignee thereof, shall serve as tax administrator
        hereunder and as agent for the related Tax Matters Person(s).

       

      Telerate
        Screen Page 3750:
        The
        display designated as page 3750 on the Telerate Service (or such other page
        as
        may replace page 3750 on that service for the purpose of displaying London
        interbank offered rates of major banks).

       

      Transfer:
        Any
        direct or indirect transfer or sale of any ownership interest in a Note or
        a
        Certificate.

       

      Treasury
        Regulations:
        Regulations, including proposed or temporary regulations, promulgated under
        the
        Code. References herein to specific provisions of proposed or temporary
        regulations shall include analogous provisions of final Treasury Regulations
        or
        other successor Treasury Regulations.

       

      Trigger
        Event:
        With
        respect to any Payment Date is if any of the following tests is not satisfied:
        (A) the 60 Day Plus Delinquency Percentage is less than 5.25% of the aggregate
        Stated Principal Balance of the HELOCs, (B) for any Payment Date, the Cumulative
        Charge-Off Percentage for such Payment Date is less than the
        following:

       

      
        	
                Prior
                  to September 2009

              	
                3.00%
                  

              
	
                September
                  2009 to August 2010

              	
                3.00%,
                  plus an additional 1/12th of 1.50% for each Payment Date after
                  September
                  2009 up to and including the Payment Date in August
                  2010

              
	
                September
                  2010 to August 2011

              	
                4.50%,
                  plus an additional 1/12th of 1.00% for each Payment Date after
                  September
                  2010 up to and including the Payment Date in August
                  2011

              
	
                September
                  2011 and thereafter

              	
                5.50%

              

      

       

      Trust:
        The
        GPMF Trust 2007-HE1 created pursuant to the Trust Agreement.

       

      Trust
        Agreement:
        The
        Trust Agreement, dated as of February 13, 2007 between the Depositor and
        the
        Owner Trustee, as amended and restated by the Amended and Restated Trust
        Agreement, dated as of March 6, 2007, among the Depositor, the Owner Trustee,
        and the Securities Administrator.

       

      Trust
        Estate:
        The
        meaning specified in the Granting Clause of the Indenture.

       

      Trust
        Indenture Act or TIA:
        The
        Trust Indenture Act of 1939, as amended from time to time, as in effect on
        any
        relevant date.

       

      UCC:
        The
        Uniform Commercial Code, as amended from time to time, as in effect in any
        specified jurisdiction.

       

      Uncertificated
        Accrued Interest:
        With
        respect to each REMIC I Regular Interest on each Payment Date, an amount
        equal
        to one month’s interest at the Uncertificated REMIC I Pass-Through Rate on the
        related Uncertificated Principal Balance of such REMIC I Regular Interest.
        In
        each case, Uncertificated Accrued Interest will be reduced by any interest
        shortfalls allocated to such REMIC I Regular Interests.

       

      Uncertificated
        Principal Balance:
        The
        amount of REMIC I Regular Interests outstanding as of any date of determination.
        As of the Closing Date, the Uncertificated Principal Balance of each REMIC
        I
        Regular Interest shall equal the amount set forth in Section 10.01 of the
        Indenture as its initial uncertificated principal balance. On each Payment
        Date,
        the Uncertificated Principal Balances of the REMIC I Regular Interests shall
        be
        reduced by all distributions of principal made on such REMIC I Regular Interests
        on such Payment Date pursuant to Section 10.02(b) of the Indenture and, if
        and
        to the extent necessary and appropriate, shall be further reduced on such
        Payment Date by Charge-Off Amounts, as provided in Section 10.03 of the
        Indenture, and the Uncertificated Principal Balance of REMIC I Regular Interest
        ZZ shall be increased by interest deferrals as provided in Sections 10.02(b)(i)
        of the Indenture. The Uncertificated Principal Balance of each REMIC I Regular
        Interest shall never be less than zero. 

       

      Uncertificated
        REMIC I Pass-Through Rate:
        With
        respect to any REMIC I Regular Interest and any Payment Date, a per annum
        rate
        equal to the weighted average of the Expense Adjusted Mortgage Rates of the
        HELOCs as of the first day of the related Collection Period preceding such
        Payment Date.

       

      Underwriter:
        Bear,
        Stearns & Co. Inc.

       

      Uninsured
        Cause:
        Any
        cause of damage to a Mortgaged Property or related REO Property such that
        the
        complete restoration of such Mortgaged Property or related REO Property is
        not
        fully reimbursable by the hazard insurance policies required to be maintained
        pursuant to the Servicing Agreement, without regard to whether or not such
        policy is maintained.

       

      Unpaid
        Interest Shortfall Amount:
        With
        respect to any Class of Notes and (i) the first Payment Date, zero, and (ii)
        any
        Payment Date after the first Payment Date, the amount, if any, by which (A)
        the
        sum of (1) the Current Interest for such Class of Notes for the immediately
        preceding Payment Date and (2) the outstanding Unpaid Interest Shortfall
        Amount,
        if any, for such Class of Notes for such preceding Payment Date exceeds (B)
        the
        aggregate amount distributed on such Class of Notes in respect of interest
        pursuant to clause (A) above on such preceding Payment Date, plus interest
        on
        the amount of the interest due but not paid on such Class of Notes on such
        preceding Payment Date, to the extent permitted by law, at the Note Interest
        Rate for such Class for the related Accrual Period.

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