Document:

EXHIBIT 10.33 GROUND LEASE WITH FAMILY LANDS, L.P.

     

    Exhibit
      10.33

    STATE
      OF
      MISSISSIPPI 

    COUNTY
      OF
      HARRISON 

    FIRST
      JUDICIAL DISTRICT

     

    GROUND
      LEASE

     

    This
      GROUND LEASE (the "Lease")
      is
      made and entered into effective the 5th day of May, 2006 by and between
FAMILY
      LANDS L.P.,
      a
      Mississippi limited partnership (the "Landlord"),
      with
      an address of 3702 Hardy St., Hattiesburg, MS 39402; and IOC
      MISSISSIPPI, INC.,
      a
      Mississippi corporation (the "Tenant")
      with
      an address of 1641 Popps Ferry Road #B-1, Biloxi, MS 39532.

     

    Background

     

    A.  Landlord
      is the fee simple owner of the surface of certain land more particularly
      described on Exhibit
      F
      attached
      hereto and located in the First Judicial District of Harrison County,
      Mississippi (“Landlord’s
      Entire Property”).

     

    B.  Tenant
      wishes to lease from Landlord, and Landlord wishes to lease to Tenant, the
      portion of the Landlord’s Entire Property described on Exhibit
      A
      attached
      hereto in order for the Tenant to seek a gaming license to develop and operate
      a
      gaming resort and entertainment facility (“Isle
      Project”)
      pursuant to the terms and conditions hereof.

     

    Terms

     

    NOW,
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which is hereby acknowledged, and for other good and valuable consideration,
      and
      intending to be legally bound hereby, the parties hereto agree as
      follows:

     

    1.  Premises
      and Improvements.

     

    Landlord
      hereby leases, demises, and lets to Tenant, and Tenant hereby leases, takes
      and
      hires from Landlord, on the terms, covenants, provisions, and agreements and
      for
      the uses hereinafter provided, the following (collectively, the “Premises”):

     

    1.1.  Land.
      That
      certain tract or parcel of land lying and being in the First Judicial District
      of Harrison County, State of Mississippi, and described on Exhibit
      A
      attached
      hereto and incorporated herein for all purposes, together with the littoral
      or
      riparian rights thereto and other appurtenances, if any, thereunto belonging
      (the “Land”),
      less
      and except any and all right, title and interest in and to the oil, gas and/or
      other minerals thereon or thereunder; and

     

    1.2.  Access
      Easement.
      A
      non-exclusive easement not less than sixty (60) feet wide for utilities and
      for
      ingress and egress to and from that portion of the Land located in the SE1/4
      of
      the NW1/4 of Section 6, Township 8 South, Range 13 West, Harrison
      County, Mississippi, to a point on the Kiln-Delisle Road public right-of-way
      not
      more than 1,500 feet from the I-10 eastbound exit ramp (the “Access
      Easement”).
      The
      Landlord further agrees to 

     

    
      
        
        

      

      
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      cooperate
        with Tenant to provide to Tenant an easement on real property (not to exceed
        one
        (1) acre) owned by Landlord and adjacent to the Access Easement for the purpose
        of locating and constructing a water tower (the “Water
        Tower Easement”).
        The
        location and boundaries of the Water Tower Easement and the Access Easement
        shall be permanently determined by Landlord and Tenant, surveyed, and placed
        of
        record prior to the expiration of the Initial Development and Permitting
        Period. 

    

     

    1.3.  Improvements.
      Any and
      all improvements, if any, presently on the Land; and

     

    1.4.  Appurtenances.
      All and
      singular, the appurtenances, rights, interest, easements, and privileges, on,
      in, and/or to the Land, including without limitation, all riparian and/or
      littoral rights thereto.

     

    2.  Term,
      Conditions, Uses and Duration.

     

    2.1.  Term.
      The
      initial term of this Lease shall be five (5) years (the “Initial
      Term”)
      and
      shall commence as of the expiration of the Development and Permitting Period
      (as
      defined herein). Tenant shall have the option to renew the Lease for up to
      eighteen (18) successive five-year terms and one successive final four-year
      term, under the terms and conditions provided herein (each a “Renewal
      Term”).
      Unless the Tenant shall notify the Landlord in writing that the Tenant does
      not
      desire to exercise its renewal option for a successive Renewal Term prior to
      one
      hundred eighty (180) days before the termination of the Initial Term or any
      Renewal Term then in effect, this Lease shall automatically be renewed for
      the
      next Renewal Term. Tenant’s rights to extend this Lease shall expire
      automatically upon the termination of this Lease. 

     

    2.2.  Conditions
      to Lease and Title.
      Tenant
      shall satisfy or waive the following conditions in order for the Initial Term
      to
      commence: Tenant shall have obtained, within six (6) months following
      execution of this Lease, at its expense, all permits and approvals from any
      governmental or quasi-governmental entities which are required or necessary
      for
      the intended use and development of the Isle Project, including, without
      limitation, those permits and approvals set forth on Exhibit D
      attached
      hereto, and shall pursue such approvals and permits with diligence while keeping
      Landlord informed as to its progress (the “Initial
      Development and Permitting Period”).
      Notwithstanding the foregoing, if Tenant has been unable to obtain all permits
      and approvals on the Isle Project within the Initial Development and Permitting
      Period, and has been pursuing such permits and approvals, and if Tenant in
      its
      sole business judgment still considers the Isle Project to be feasible, then
      the
      period for satisfying or waiving the provisions herein may be extended, upon
      ten
      (10) days’ prior written notice to the Landlord, for up to four (4) additional
      periods of three (3) months each (each such period an “Extended
      Development and Permitting Period”),
      provided that the Tenant shall pay $250,000 to Landlord for each extension
      with
      the notice of extension required hereunder (the Initial Development and
      Permitting Period, together with each Extended Development and Permitting
      Period, if any, are collectively referred to as the “Development
      and Permitting Period”).
      Tenant represents that prior to the execution hereof, Tenant, at Tenant’s
      expense, has ordered from a title company licensed to do business in the State
      of Mississippi, a commitment for an ALTA owner’s title policy on the Land (the
“Commitment”).
      Tenant shall have ten (10) days after execution hereof 

     

    
      
        
        

      

      
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      to
        notify
        Landlord in writing as to specific matters to which Tenant objects. Within
        five
        (5) days of receipt of Tenant’s title objection notice, Landlord shall notify
        Tenant in writing as to any title objections that Landlord is unable or
        unwilling to cure or satisfy, or cause to be insured over by affirmative
        title
        insurance coverage. Failure of Landlord to provide such notice shall be deemed
        notice by Landlord that it is unable or unwilling to cure such title objection.
        Unless written notice of Tenant’s failure to obtain any necessary permit or
        approval or Tenant’s refusal to waive any title objections that Landlord is
        unable or unwilling to cure, and Tenant’s election to terminate this Lease, is
        given by Tenant to the Landlord prior to the expiration of the Development
        and
        Permitting Period, the Initial Term will automatically commence upon the
        date of
        such expiration (the “Commencement
        Date”).
        This
        Lease shall terminate upon Tenant giving timely notice in accordance with
        the
        immediately preceding sentence; and except as otherwise provided herein,
        neither
        party shall have any further rights or obligations hereunder. From the date
        hereof through the Commencement Date, Landlord shall use reasonable efforts
        to
        make its surveyor, Nicholas M. Connolly of Shows, Dearman & Waits,
        Inc., available to Tenant in connection with Tenant’s review of title
        matters.

    

     

    2.3.  Uses.
      Tenant
      shall use the Premises for the purpose of conducting and offering casino gaming.
      Tenant may also use the Premises for entertainment, hotel (including a
      condominium hotel), other lodging, dining, retail, parking and recreational
      facilities, and other purposes related to casino gaming. Tenant agrees that
      the
      Premises shall not be used for any unlawful purposes or for any purpose which
      is
      extra hazardous or constitutes a public or private nuisance. Tenant shall not
      construct, or permit to be constructed, on the Premises any retail facility,
      restaurant, hotel, or other commercial development that is not contained within
      or physically connected to, either by landscaping, sidewalk, walkway, or similar
      means providing for a common integrated development scheme, the primary casino
      facility on the Premises. Tenant will not assign or sell any portion of the
      Premises for purposes inconsistent with the uses permitted under this Section
      2.3.

     

    2.4.  Inspection.
      Tenant
      and its representatives or agents shall have the right to inspect the Premises
      at all reasonable times without the consent of the Landlord during the
      Development and Permitting Period, including the right to enter the Premises
      at
      any reasonable time to make tests, borings, surveys, studies, inspections,
      investigations and interviews of persons familiar with the Premises. Tenant
      shall keep the Premises free of any liens and repair any material physical
      damage to the Premises.

     

    3.  Short
      Form or Memorandum of Lease Suitable for Recording.

     

    3.1.  The
      parties hereto have contemporaneously herewith executed and delivered the short
      form or memorandum of lease and restrictions, in the form attached as
Exhibit B
      hereto,
      duly acknowledged and in recordable form. The short form or memorandum of lease
      may be recorded by either Landlord or Tenant. All the costs and expenses of
      recording said short form or memorandum of lease shall be paid by the Tenant.
      The short form or memorandum of lease shall be amended to incorporate the legal
      descriptions for the Access Easement and Water Tower Easement when finally
      determined pursuant to Section 1.2 hereof.

     

    
      
        
        

      

      
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    4.  Rent.

     

    4.1.  Initial
      Rent.

     

    4.1.1.  Amount
      and Payment Terms.
      Commencing on the Commencement Date and continuing each year during the term
      hereof, if the Lease has not been previously terminated, Tenant shall be
      obligated to pay to Landlord annual initial rent (“Initial
      Rent”)
      of
      Five Hundred Thousand and No/100 Dollars ($500,000.00), commencing on the
      Commencement Date and ending on the first
      day of
      the calendar month immediately following the earliest of: (i) completion of
      construction of the Isle Project; (ii) the date on which any portion of the
      Isle Project opens to the public; (iii) twenty-four (24) months following
      the Commencement Date; or (iv) December 31, 2008 (the “Base
      Rent Commencement Date”).
      The
      Initial Rent shall be payable in monthly installments of Forty-One Thousand
      Six
      Hundred Sixty-Six and 66/100 Dollars ($41,666.66) each, shall be due and payable
      on the first day of the month immediately following the Commencement Date,
      and
      shall continue on the first day of each month thereafter until the Base Rent
      Commencement Date. From the Commencement Date to the first day of the
      immediately following month, the monthly Initial Rent shall be prorated by
      multiplying $41,666.66 by a fraction of the number of calendar days remaining
      in
      such month and the denominator of which shall be the total number of calendar
      days of such month.

     

    4.2.  Base
      Rent, Amount and Payment Terms.
      Beginning on the Base Rent Commencement Date, Tenant shall pay Landlord an
      annual rent in the amount of Two Million Five Hundred Thousand and No/100
      Dollars ($2,500,000.00) (as adjusted from time to time hereunder, the
“Base
      Rent”).
      All
      Base Rent shall be paid in advance on the first day of each calendar month
      in
      equal monthly installments of Two Hundred Eight Thousand Three Hundred
      Thirty-Three and 33/100 Dollars ($208,333.33) each (subject to adjustment
      pursuant to Section 4.4 hereof).

     

    4.3.  Manner
      of Payment.
      Tenant
      covenants to pay to Landlord the rent and all other sums and payments to be
      made
      by Tenant as provided under this Lease which may become due from or payable
      by
      Tenant, at the time and in the manner in the Lease, all of which rents, sums
      and
      payments are to be paid in legal tender of the United States of America, which
      shall be legal tender in payment of all debts and dues, public or private,
      at
      the time of payment, or by good check without any deduction, diminution,
      abatement, or rebate of whatsoever kind, nature, and description, except as
      otherwise specifically provided in this Lease; and payment shall be considered
      paid when received by Landlord, in U. S. mail, postage pre-paid, and addressed
      to the Landlord at the notice address provided herein,

     

    4.4.  Consumer
      Price Index Adjustment.

     

    4.4.1.  Adjustment
      Procedure.
      The
      Base Rent shall be adjusted every five (5) years from and after the Base Rent
      Commencement Date in proportion to the increase, if any, in the Consumer Price
      Index as determined and published by the Bureau of Labor Statistics of the
      United States Department of Labor, U.S. City Average, All Items and Major Group
      Figures For All Urban Consumers (CPI-U) (1982-84 = 100) (the “Price
      Index”)
      over
      the Price Index that was published on the Base Rate Commencement Date (the
      “Base
      Price Index”).
      On
      the Base Rate Commencement Date, Landlord and Tenant shall complete and execute
      the 

     

    
      
        
        

      

      
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      Certificate
        which is attached hereto as Exhibit
        C
        in order
        to memorialize the Base Rate Commencement Date and the dates (the “Adjustment
        Dates”)
        on
        which the Base Rent shall be adjusted to reflect any increases in the Price
        Index. Until the Price Index is published for the month immediately preceding
        the applicable Adjustment Date, Tenant shall continue to pay the Base Rent
        provided for in Section 4.2 of this Lease, as adjusted on the most recent
        previous Adjustment Date, if any. Upon publication of the Price Index for
        the
        month immediately preceding the applicable Adjustment Date the Landlord shall
        compute the adjusted Base Rent applicable until the next succeeding Adjustment
        Date, and shall furnish the Tenant with the Landlord’s computation of the
        adjusted Base Rent. The adjusted Base Rent for the period following the
        applicable Adjustment Date shall be the greater of the Base Rent provided
        for in
        Section 4.2 of this Lease, as adjusted through the most recent previous
        Adjustment Date, if any, or the product arrived at by multiplying (i)
        $2,500,000.00 by (ii) a fraction, the numerator of which shall be the Price
        Index published for the month immediately preceding the Adjustment Date and
        the
        denominator of which shall be the Base Price Index. The adjustment in Base
        Rent
        calculated on each Adjustment Date shall not exceed ten (10) percent of the
        Base
        Rent payable immediately prior to such Adjustment Date. Such adjusted Base
        Rent
        shall be divided and paid in 12 equal monthly installments during each lease
        year, commencing on the first day of the first month immediately after Landlord
        furnishes Tenant with such computation. When the adjusted Base Rent is
        determined, Tenant, on the first day of the first month after Landlord furnished
        Tenant with such computation, shall pay Landlord the difference between the
        adjusted Base Rent as determined by such computation, and the Base Rent,
        as
        adjusted down through the most recent previous adjustment date, if any, for
        each
        month between the applicable Adjustment Date, and the first day of the first
        month after Landlord furnished Tenant with such computation. 

    

     

    4.4.2.  Unavailability
      of Price Index.
      If the
      Price Index is no longer based on the years 1982-84 and a conversion factor
      is
      made available, then the Price Index will be calculated by using such conversion
      factor. If the Price Index is not published for any month which is to be used
      in
      calculating the Base Rent under this Section, the Price Index which is published
      for the most recent month within the six month period prior to the month
      specified in this Section shall be used for calculating the Base Rent. If
      publication of the Price Index is discontinued, the most comparable statistics
      on the cost of living for the Mississippi Gulf Coast metropolitan area, as
      such
      statistics are computed and published by a federal agency or by a recognized
      financial periodical shall be used in making adjustments contemplated in this
      Section 4.4. If comparable statistics are used in place of the Price Index,
      the
      method of computation shall include all revisions required to carry out the
      intent of this Section. . 

     

    4.4.3.  Effect
      of Delay.
      Landlord’s delay or failure in computing or billing for the Adjusted Base Rent
      shall not impair the continuing obligation of Tenant to pay such Base Rent
      as
      determined in accordance with this Section.
      

     

    4.5.  Percentage
      and Additional Rent.

     

    4.5.1.  Amount
      and Payment Terms.
      After
      the commencement of gaming operations of the Isle Project, Tenant shall pay
      Landlord an annual percentage rent (the “Percentage
      Rent”)
      in an
      amount equal to five percent (5%) of the Gross Gaming Revenues from gaming
      operations on the Isle Project as calculated for the purpose of license fees
      under the Mississippi Gaming Control Act (the “GGR”),
      as
      now or hereafter amended, and the regulation

     

    
      
        
        

      

      
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      as
        promulgated now or hereafter under such law, but only to the extent that
        such
        amount exceeds the annual Base Rent then payable. Any Percentage Rent required
        to be paid shall be paid to Landlord on or before the 20th
        day of
        each month following the months during which revenues are collected and shall
        be
        accompanied by a copy of the monthly revenue reports which must be submitted
        to
        the Mississippi Gaming Commission. Tenant shall also provide Landlord with
        copies of any financial statements, reports, or audits required of Tenant
        by the
        Mississippi Gaming Commission pursuant to the Mississippi Gaming Control
        Act, as
        now or hereafter amended, within ten (10) days after the same are submitted
        to
        the Commission. 

    

     

    4.5.2.  Books,
      Records, and Audits.
      The
      Tenant shall maintain books and records according to generally accepted
      accounting principles, consistently applied, with respect to all business
      transacted in, on, or from the Premises, which shall contain sufficient
      information to permit a calculation of the Percentage Rent provided for in
      this
      Lease. Landlord may examine all books and records of Tenant that in any way
      pertain to business transacted in, on, or from the Premises, regardless of
      the
      location of such books and records. Such examination shall be made at reasonable
      times and places. Tenant shall promptly provide Landlord with a copy of all
      audits prepared by Tenant or its independent certified public accountant with
      respect to the Premises. The Landlord may also audit the Tenant’s records but
      only for the purpose of ascertaining the amount of Percentage Rent due under
      the
      terms hereof. If the Landlord wishes to audit the Tenant’s records, it shall
      notify the Tenant in writing of its election so to do. Any audit or examination
      by Landlord shall be at Landlord’s expense, unless the audit discloses a
      discrepancy of more than one percent (1%) in the net profits realized from
      operations or activities unrelated to gaming, or a discrepancy of more than
      one
      percent (1%) in the amount of GGR as calculated for the purpose of reporting
      to
      the Mississippi Gaming Commission. In the event of any such discrepancy of
      more
      than one percent (1%), each such audit or examination shall be at Tenant’s
      expense. Landlord shall keep in confidence all information furnished to it
      and
      any information which it might gain or gather from the examination or audit
      of
      the Tenant’s books.

     

    4.5.3.  Additional
      Rent.
      Provided this Lease has not been previously terminated pursuant to Section
      2.2
      hereof on the date that any of the following amounts become due, Tenant shall
      also pay Landlord the following amounts (collectively, the “Additional
      Rent”):
      (i) Two Hundred Fifty Thousand and No/100 Dollars ($250,000) upon execution
      of the Lease; (ii) Two Hundred Fifty Thousand and No/100 Dollars ($250,000)
      payable six months after execution of the Lease; (iii) Two Hundred Fifty
      Thousand and No/100 Dollars ($250,000) payable twelve months following execution
      of the Lease; and (iv) all amounts described in Section 2.2 hereof in
      connection with the Extended Development and Permitting Periods. 

     

    4.6.  Late
      Payments.
      All
      amounts which Tenant is required to pay pursuant to this Lease, including but
      not limited to the Initial Rent, the Base Rent, the Percentage Rent, Additional
      Rent, payment required by Section 22.3 (c) hereof, together with every fine,
      penalty, interest and cost which may be added for non-payment or late payment
      thereof, shall constitute rent or any other sum due hereunder when the same
      shall become due. Landlord shall have all rights, powers and remedies with
      respect thereto as are provided herein or by law in the case of non-payment
      of
      any Base Rent and shall, except as expressly provided herein, have the right
      to
      pay the same on behalf of Tenant. Tenant shall pay to Landlord interest at
      the
      rate of one percent over the consensus prime rate as published from time to
      time
      in The
      Wall Street 

     

    
      
        
        

      

      
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      Journal,
        but not
        to exceed the maximum amount permitted by law, on all overdue rent from the
        due
        date thereof until paid, in each case paid by Landlord on behalf of Tenant,
        from
        the date of payment by Landlord until repaid by Tenant. Tenant shall perform
        all
        its obligations under this Lease at its sole cost and expense, and shall
        pay all
        Initial Rent, Base Rent, Percentage Rent, Additional Rent and any other sum
        due
        hereunder when due and payable, without notice or demand. 

    

     

    5.  Taxes,
      Assessments and Utilities.
      Tenant
      shall pay before they become due, and before any fine, penalty, interest or
      costs may be added thereto:

     

    
      	(a)  	
              All
                taxes, license fees, assessments, levies, water and sewer rents and
                charges, and all other governmental charges, general and special,
                ordinary
                and extraordinary, foreseen and unforeseen, whether or not now customary
                or within the contemplation of Landlord and Tenant, which are at
                any time
                during the duration of this Lease, imposed or levied upon, reasonably
                attributable to, or assessed against (a) the Premises, (b) any Initial
                Rent, Base Rent, Percentage Rent, Additional Rent or other sums payable
                hereunder, (c) this Lease or the leasehold estate hereby created
                (d) the
                operation, possession or use of the Premises, (e) the cost or value
                of any
                equipment, furniture, fixtures and other personal property located
                in or
                upon the Premises, or the cost or value of any leasehold improvements
                made
                in or to the Premises by or for Tenant whether such improvements
                are owned
                by Landlord or Tenant, and (f) the possession, leasing, operation,
                management, maintenance, alteration, repair, use or occupancy by
                Tenant of
                the Premises or any portion thereof;

            

    

     

    
      	(b)  	
              All
                sales, value added, ad valorem, use, and similar taxes at any time
                levied,
                assessed or payable on account of the acquisition, ownership, leasing,
                operation, possession or use of the Premises;
                and

            

    

     

    
      	(c)  	
              All
                charges of utilities, communications and similar services serving
                the
                Premises.

            

    

     

    

    5.2.  Tenant
      shall have the right to contest by appropriate legal proceedings, diligently
      conducted in good faith, the validity or amount of any tax, assessment or
      utility charge provided no civil or criminal penalty shall be incurred by
      Landlord, and which proceedings shall prevent the sale, forfeiture or loss
      of
      the Premises. Landlord agrees to cooperate in any such contest.

     

    5.3.  Tenant
      shall not be required to pay any franchise, estate, inheritance, transfer,
      income or similar tax of Landlord, unless and only to the extent that such
      tax
      is imposed, levied or assessed in substitution for any other tax, assessment,
      charge or levy which tenant is required to pay pursuant to this Section 5;
      provided however, that if any time during the term of this Lease, the method
      of
      taxation shall be such that there shall be assessed, levied, charged or imposed
      on Landlord a capital levy or other sales-type tax directly on the rents

     

    
      
        
        

      

      
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      received
        therefrom, or on the value of the Premises or any present or future improvements
        on the Premises, then all such levies and taxes, or the part so measured
        or
        based, shall be paid by Tenant.

    

     

    5.4.  All
      taxes
      assessed for the year 2006 which are payable after the Commencement Date, and
      all taxes assessed for the last year of the term hereof, but payable after
      the
      expiration or other termination of the term hereof, shall be adjusted and
      prorated so that the Landlord shall pay its prorated share for the periods
      preceding and following the term hereof, and the Tenant shall pay its prorated
      share for the lease term. Landlord shall deliver to Tenant the ad valorem tax
      statements for the Premises at least twenty-five (25) days prior to the date
      that the payment of same is due.

     

    5.5.  If
      any
      time during the Initial Term or any Renewal Term, the method of taxation shall
      be such that there shall be assessed, levied, charged or imposed on Landlord
      a
      capital levy or other tax directly on the rents received therefrom, or upon
      the
      value of the Premises or any present or any future improvement or improvements
      on the Premises, then all such levies and taxes or the part thereof so measured
      or based shall be payable by Tenant, and Tenant shall pay and discharge the
      same
      as herein provided. Tenant will furnish to Landlord, promptly after demand
      therefor, proof of payment of all items referred to above which are payable
      by
      Tenant. If any such assessment may legally be paid in installments, Tenant
      may
      pay such assessment in installments.

     

    5.6.  Utilities.
      Tenant
      shall be obligated to pay or cause to be paid all expenses of heat, light,
      charges and taxes for water and any other utility expenses in connection with
      Tenant's use and operation of the Premises or for the connection, setting and
      repairing of meters in and for any, buildings and improvements hereafter erected
      by Tenant. Tenant, upon approval by Landlord, shall have the right to enter
      into
      reasonable agreements with public utility authorities and governmental agencies
      creating easements in favor of such public utilities and governmental agencies
      as may be required in order to provide service to the Premises. Landlord, if
      required by the affected utility, will join in any standard utility easements
      that Tenant is reasonably required to grant to utility companies in connection
      with utility service to the Premises provided that such easements do not create
      any personal liability or obligations on the part of Landlord. Any easements
      granted under the authority of this Section 5.4 shall be limited to the
      term of this Lease and shall be limited to the Premises.

     

    6.  Landlord's
      Termination Right.
      

     

    6.1.  Right.
      In the
      event that the Tenant fails, after the Base Rent Commencement Date, to use
      and
      occupy the Premises primarily as an operating casino for a continuous period
      of
      twelve (12) months, then Landlord shall have the right, subject to
      Section 6.2 and to Section 21 hereunder, to do one of the following:
      (i) elect to terminate this Lease by providing written notice to Tenant at
      least sixty (60) days prior
      to
      the effective date of such termination, and upon the expiration of such sixty
      (60) day period, this Lease shall terminate unless Tenant or Tenant's successor
      under Section 20, has, within such sixty (60) day period resumed operation
      of the casino; or (ii) elect not to terminate this Lease in which case all
      of the terms and provisions hereof shall remain in full force and effect, and
      Landlord may pursue its remedies under law or in equity, if any. 

     

    
      
        
        

      

      
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    6.2.  Limitations.
      Notwithstanding anything in Section 6.1 hereinabove to the contrary, in the
      event Tenant is unable to operate the Premises primarily as a casino for any
      consecutive twelve month period by reason of: (i) fire or other casualty
      damage to all or any portion of the Premises, (ii) condemnation of all or a
      portion of the Premises, or (iii) a Force Majeure (as defined in
      Section 26 hereof), Landlord shall have no right to terminate this Lease so
      long as Tenant (1) has notified Landlord of its intention to resume
      operations, which notice shall include a specific description of Tenant’s
      intended action plan for so resuming operations, (2) is diligently pursuing
      the steps set forth in its action plan, and (3) is not otherwise in default
      hereunder. 

     

    7.  Maintenance
      and Repairs.
      

     

    7.1.  Requirements
      of Tenant.
      Tenant,
      at its own expense will maintain all parts of the Premises in good repair and
      condition, ordinary wear and tear excluded, and will take all actions and will
      make all foreseen and unforeseen and ordinary and extraordinary changes and
      repairs which may be required to keep all parts of the Premises in good repair
      and condition. Landlord shall not be required to maintain or repair the Premises
      or any facilities or utilities which are utilized by Tenant in connection with
      the Premises. Tenant waives the right to (i) require Landlord to maintain or
      repair the Premises, or (ii) make repairs at the expense of Landlord pursuant
      to
      any legal requirements, contract, agreement, covenant, condition or restriction
      at any time in effect.

     

    8.  Infrastructure. 

     

    8.1.  Tenant’s
      Right to Use.
      Tenant
      grants to Landlord for the benefit of Landlord’s Adjacent Property (as defined
      herein) the unrestricted right and permanent easement and license to use certain
      infrastructure, including roadways, driveways, and utilities, constructed by
      Tenant on the Access Easement. Landlord shall have the absolute right, at its
      expense, to connect a roadway to, or utilize, any access road constructed by
      Tenant on the Access Easement. Landlord shall have no obligation to maintain
      or
      repair any of the infrastructure which is utilized by the Landlord. A recordable
      document granting the easement from the Tenant to the Landlord to utilize the
      infrastructure shall be agreed upon, executed by both parties, and recorded
      prior to the Commencement Date. Such easement shall provide inter alia
      that
      Landlord’s use of the infrastructure will not interfere with Tenant’s use or
      intended use thereof and will not result in such infrastructure being used
      or
      burdened beyond the levels for which such infrastructure was
      designed.

     

    9.  Representations
      and Warranties of Landlord.

     

    Landlord
      hereby represents and warrants to Tenant as follows:

     

    9.1.  Formation.
      Landlord is a limited partnership duly formed, validly existing, and in good
      standing under the laws of the State of Mississippi, and Landlord’s general
      partner is a corporation duly incorporated, validly existing and in good
      standing under the laws of the State of Delaware. Landlord has the requisite
      partnership power and authority to enter into and perform its obligations under
      this Lease, and to own or lease its properties and assets as now owned or
      leased, and to operate its businesses as now conducted.

     

    
      
        
        

      

      
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    9.2.  Authorization.
      The
      execution, delivery and performance by Landlord of this Lease has been duly
      authorized by the necessary action(s). This Lease has been duly and validly
      executed and delivered by Landlord and constitutes the legal, valid, and binding
      obligation of Landlord, enforceable against Landlord in accordance with its
      terms.

     

    9.3.  Title.
      Landlord's title to the Premises is good and marketable and free and clear
      of
      any and all exceptions, items, and encumbrances except such easements and
      matters of record which do not, to the best of Landlord's knowledge and belief,
      either individually or in the aggregate, prohibit the Tenant's use of the
      Premises as a casino, hotel, and other permitted uses of the Premises (subject
      to any matters that Landlord agrees to cure or insure over pursuant to
      Section 2.2 hereof, the "Permitted
      Exceptions").
      Within five (5) days following execution of this Lease, Landlord shall obtain
      a
      partial release of any deed of trust granted by Landlord encumbering any part
      of
      the Land. At the Commencement Date, there shall not be a deed of trust granted
      by Landlord encumbering the remaining part of the Premises.

     

    10.  Representations
      and Warranties of Tenant.
      Tenant
      hereby represents and warrants to Landlord as follows:

     

    10.1.  Incorporation.
      Tenant
      is a corporation duly incorporated, validly existing and in good standing under
      the laws of the State of Mississippi. Tenant has the requisite corporate power
      and authority to enter into and perform its obligations under this Lease, and
      to
      own or lease its properties and assets as now owned, or leased, and to operate
      its businesses as now conducted.

     

    10.2.  Authorization.
      The
      execution, delivery and performance by Tenant of this Lease has been duly
      authorized by all necessary corporate action. This Lease has been duly and
      validly executed and delivered by Tenant and constitutes the legal, valid and
      binding obligation of Tenant enforceable against Tenant in accordance with
      its
      terms.

     

    11.  Environmental.
      

     

    11.1.  Tenant’s
      Representations.
      Except
      as reasonably necessary in connection with the conduct of Tenant’s business on
      the Premises and except in strict compliance with applicable environmental
      laws,
      Tenant shall not allow the placement, use or storage on the Premises of any
      hazardous waste, hazardous material, pollutant or contaminant, as such terms
      are
      now or hereafter defined in any or all applicable federal, state, and local
      laws, ordinances or regulations now or hereinafter enacted or amended and any
      and all terms which are or may be used in any or all applicable laws now or
      hereafter enacted to define prohibited or regulated substances ("Toxic
      Substance").
      Any
      liability which may be imposed upon Landlord as owner of the Premises which
      arises out of the presence and/or release of any Toxic Substance placed or
      permitted to be put or placed on the Premises after the Commencement Date of
      this Lease is hereby specifically assumed by Tenant, and Tenant shall indemnify
      and hold Landlord harmless from any such liability.

     

    
      
        
        

      

      
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    12.  Covenants
      of Landlord.
      Landlord hereby covenants to Tenant as follows:

     

    12.1.  Cooperation.
      Landlord shall join with Tenant (including without limitation, making joint
      applications where necessary) and fully cooperate with Tenant in any manner
      reasonably requested by Tenant to obtain any consents, permits, licenses,
      leases, permissions, approvals or consents required for the construction, use
      and/or operation of the Premises as permitted by this Lease. Without limiting
      the generality of the foregoing, reference is made to Section 35
      hereof.

     

    12.2.  Quiet
      Enjoyment.
      Tenant
      shall quietly and peaceably hold, possess and enjoy the Premises (including
      the
      Access Easement and the Water Tower Easement) for the full term of the Lease
      without any hindrance or molestation by Landlord or its agents or employees
      or
      any other person or entity claiming by, through or under Landlord.

     

    12.3.  Incompatible
      Uses of Landlord’s Adjacent Property.
      The
      Landlord’s real property described in Exhibit E
      attached
      hereto (the “Landlord’s
      Adjacent Property”)
      shall
      be restricted to those uses permitted under A-1, E-1, R-1, R-2, R-3, O-1, C-1,
      C-2 and C-3 zoning under the zoning ordinances of Harrison County, Mississippi
      as in effect on the date hereof. This restriction shall expire upon the
      expiration or earlier termination of this Lease; provided that this restriction
      shall not expire for twenty-five (25) years from the Commencement Date in the
      event Tenant acquires title to the Premises pursuant to the terms of this Lease
      prior to the expiration of such 25-year period.

     

    13.  Assignment
      and Subletting.

     

    13.1.  Landlord’s
      Right.
      Subject
      to Section 13.5 hereof, Landlord reserves the right to sell, assign, or
      transfer this Lease in connection with a sale of the Premises or mortgage
      financing of the Premises, upon the condition that in such event this Lease
      shall remain in full force and effect subject to the performance by Tenant
      of
      all its terms and conditions, and upon the further condition that such assignee
      or transferee, except an assignee or transferee merely for security, agrees
      to
      perform all the terms, covenants and conditions under this Lease. 

     

    13.2.  Tenant’s
      Right.
      Tenant
      shall not have the right to assign or sublet its interest under this Lease
      without the prior written consent of Landlord, except as set forth in
      Section 13.4 hereof; provided, however, that subject to Section 2.3
      hereof, Tenant shall have the right to sublet without Landlord’s consent
      portions of the Premises so long as such portions are located within the casino
      and hotel facility and do not exceed fifty percent (50%) of the aggregate square
      footage of the casino facility. Except for an assignment permitted by clause
      (ii) of Section 13.4 hereof, no such assignment or subletting shall relieve
      the assigning party of the further performance of the covenants of this Lease,
      and each assigning party shall remain liable for the payment of rent and the
      performance of all other obligations hereunder. If Tenant enters into any
      sublease pursuant to the provisions hereof, then each sublease shall be
      subordinate to this Lease and each sublease shall contain provisions in form
      and
      substance substantially as follows:

     

    “Sublessee
      agrees that if, by reason of a default under any underlying lease (including
      an
      underlying lease through which Sublessor derives its leasehold 

     

    
      
        
        

      

      
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    estate
      in
      the demised subpremises), such underlying lease and the leasehold estate of
      sublessor in the demised subpremises is terminated, then Sublessee, at the
      option and request of the then fee owner of the demised subpremises (the
“Fee
      Lessor”),
      shall
      attorn to such Fee Lessor and shall recognize such Fee Lessor as Sublessee’s
      direct lessor under this Sublease. Sublessee agrees to execute and deliver,
      at
      any time and from time to time, upon the request of Sublessor or of the Fee
      Lessor or any mortgagee of either, any instrument that may be necessary or
      appropriate to evidence such attornment. Sublessee hereby appoints Sublessor
      or
      such Fee Lessor or such mortgagee the attorney-in-fact, irrevocably, with full
      power of substitution, of Sublessee to execute and deliver any such instrument
      for and on behalf of the Sublessee. This appointment is coupled with an interest
      and is irrevocable. Sublessee waives any statute or rule of law now or
      subsequently in effect that may give or purport to give Sublessee any right
      to
      elect to terminate this Sublease or to surrender possession of the demised
      subpremises in the event that any proceeding is brought by a Fee Lessor to
      terminate any such underlying lease. Sublessee agrees that this Sublease shall
      not be affected in any way whatsoever by any such proceeding.”

     

    13.3.  Landlord’s
      Right of First Refusal.
      Prior
      to any sale of the leasehold interest in the Premises to a third party, Tenant
      shall give Landlord a right of first refusal to purchase the leasehold interest
      on the same terms and conditions agreed upon by the Tenant and third-party
      purchaser (the “Purchaser”).
      Landlord shall have forty-five (45) days after receiving notice from Tenant
      of
      the proposed sale to accept the terms agreed upon between the Tenant and the
      Purchaser. If Landlord fails to give notice to Tenant before the expiration
      of
      the forty-five day period, Tenant, pursuant to Section 13.2, shall be free
      to
      assign the Lease, to Purchaser on said same terms and conditions.

     

    13.4.  Landlord’s
      Consent Not Required.
      Landlord’s right to consent to an assignment or subletting by Tenant pursuant to
      Section 13.2 hereof and Landlord’s right of first refusal pursuant to Section
      13.3 shall not apply to (i) any change in control in the ownership of
      Guarantor, (ii) any assignment of this Lease or sale of the Premises by
      Tenant to a third party having a minimum net worth of $100,000,000 as determined
      by generally accepted accounting principles ( the “Required
      Net Worth”)
      or to
      a third party who obtains a guaranty of this Lease from a third party having
      the
      Required Net Worth, or (iii) subject to Section 2.3 hereof, uses
      permitted under Section 2.3 hereof (other than casino gaming). Any
      sublessee described in clause (iii) hereof may sell hotel condominium units
      without the consent or approval of Landlord, but such sales shall be subject
      to
      the terms and conditions of this Lease, including without limitation this
      Section 13.

     

    13.5.  Tenant’s
      Right of First Refusal.
      Prior
      to any sale of the Land or Premises to a third party, Landlord shall give Tenant
      a right of first refusal to purchase the Premises proposed to be sold on the
      same terms and conditions agreed upon by the Landlord and third-party purchaser
      (the “Purchaser”).
      Tenant shall have forty-five (45) days after receiving notice from Landlord
      of
      the proposed sale to accept the terms agreed upon between the Landlord and
      the
      Purchaser. If Tenant fails to give notice to Landlord before the expiration
      of
      the forty-five (45) day period, Landlord shall be free to sell all, but not
      less
      than all, the Land or Premises to the Purchaser on the same terms and
      conditions. This Section 13.5 shall not apply to any sale or 

     

    
      
        
        

      

      
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      transfer
        by Landlord to its general or limited partners or any entity owned or controlled
        by its general or limited partners.

    

     

    14.  Reversion
      to Landlord.
      On or
      before the last day of the term of this Lease, or at such earlier time as this
      Lease is terminated, Tenant shall remove its personal property and peaceably
      surrender and yield up to Landlord the Premises, and all improvements and
      fixtures the Landlord instructs not to be removed. Title to any buildings and
      improvements remaining on the Premises at the expiration of the term of this
      Lease may in the Landlord's sole discretion, vest in the Landlord upon
      expiration hereof. Notwithstanding anything herein to the contrary, Tenant
      shall
      remove all buildings and improvements except to the extent, if any, otherwise
      instructed by the Landlord.

     

    15.  Net
      Lease.
      This is
      a net lease and, except as otherwise provided herein, there shall be no
      abatement, diminution or reduction of the rent for any cause whatsoever. It
      is
      the intention of Landlord and Tenant that all rents and other amounts payable
      hereunder shall be net to Landlord and that all costs, expenses and obligations
      of every kind whatsoever relating to Tenant's use, occupancy and possession
      of
      the Premises which may arise or become due during the term of this Lease shall
      be paid by Tenant, except to the extent otherwise provided herein. Landlord
      shall not be obligated to render any services to Tenant except as specifically
      set forth herein,

     

    16.  Casualty.

     

    16.1.  Fire,
      Flood and Extended Coverage.
      Tenant
      shall procure and maintain, at its own expense during the term of this Lease,
      casualty insurance written by companies of nationally recognized financial
      standing covering the Premises and all equipment, fixtures and machinery at
      or
      in the Premises, against loss, damage, or destruction by fire, flood, or wind,
      including extended coverage and special extended coverage endorsements and
      against such other hazards, casualties, and contingencies, in an amount not
      less
      than eighty percent (80%) of the replacement value of the insurable buildings,
      structures, improvements, and equipment.

     

    16.2.  Waiver
      of Subrogation.
      Landlord and Tenant each hereby waives any and all rights of recovery against
      the officers, employees, agents and representatives of such other party for
      loss
      of or damage to such waiving party of its property or the property of others
      under its control, arising from any cause insured against under the standard
      form of fire and extended coverage insurance policy with permissible extension
      endorsements covering additional perils or under any other policy of insurance
      carried by such waiving party in lieu thereof. 

     

    16.3.  No
      Cancellation.
      All
      policies referred to in this Lease shall provide that they will not be canceled,
      modified or amended except after thirty (30) days’ written notice to Landlord
      and that they shall not be invalidated by any act or negligence of Landlord,
      Tenant, or any person or entity having an interest in the Premises, nor by
      occupancy or use of the Premises for purposes more hazardous than permitted
      by
      such policy, nor by any foreclosure or other proceedings relating to the
      Premises, nor by change in title to or ownership of the Premises.

     

    
      
        
        

      

      
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    17.  Liability
      Insurance.

     

    17.1.  Obligation.
      Tenant
      covenants and agrees, at its sole cost and expense, to obtain, keep, and
      maintain in full force and effect for the benefit of Tenant, Landlord, and
      Landlord's general partner, and such other parties as Tenant may elect from
      the
      date construction of the improvements commences and thereafter: (1)
      comprehensive liability insurance against claims for damage to persons or
      property arising out of the use and occupancy of the Premises or any part or
      parts thereof in limits of not less than Ten Million Dollars ($10,000,000)
      combined single limit for bodily injury and not less than Five Million Dollars
      ($5,000,000) combined single limit for property damage.

     

    17.2.  Certificate.
      A
      duplicate original, certificate, or binder of such insurance shall be furnished
      to Landlord prior to commencement of the construction of the improvements on
      or
      at the Premises; and each renewal certificate of each such policy shall be
      furnished to Landlord.

     

    17.3.  Additional
      Insured.
      All
      policies of liability insurance which Tenant is obligated to maintain according
      to this Lease shall name Landlord as an additional insured. All liability
      insurance policies maintained by Tenant shall contain a provision indicating
      that Landlord, although named as an additional insured, will nevertheless be
      entitled to directly recover under such policies for a loss sustained by it,
      its
      directors, officers, employees and agents as a result of the acts or omissions
      of Tenant.

     

    17.4.  Landlord's
      Ability to Cure.
      In the
      event Tenant fails to cause the aforesaid insurance policies to be written
      or
      pay the premiums for the same or deliver all such certificates of insurance
      or
      duplicate originals thereof to Landlord within the time provided for in this
      Lease, Landlord shall nevertheless have the right, without being obligated
      to do
      so, to effect such insurance and pay the premiums therefor, and all such
      premiums paid by Landlord shall be repaid to Landlord by Tenant on demand as
      additional rent hereunder.

     

    17.5.  Workers’
      Compensation.
      Appropriate workers’ compensation insurance covering all persons employed in
      connection with the construction, alteration, repair or operation of the
      Premises and with respect to whom any claim could be asserted against Landlord
      will be carried by Tenant.

     

    17.6.  Construction
      Period.
      From
      the commencement of the Initial Term through the completion of all construction
      and/or renovation of the Premises, Tenant shall also provide, or cause its
      general contractor to provide, the following insurance coverage:
      (a) Contractor’s Comprehensive and Motor Vehicle Liability Insurance having
      a combined single limit of not less than Ten Million Dollars ($10,000,000.00);
      and (b) builder’s risk insurance in amounts and coverage customary for
      projects of similar size, value and scope.

     

    18.  Indemnity.

     

    18.1.  Tenant's
      Indemnification.
      Tenant
      covenants and agrees to indemnify and hold Landlord, its affiliates, its general
      partner's shareholders, directors, officers, employees, agents, successors
      and
      assigns harmless from and against any and all liability, damage, cost or expense
      of any nature whatsoever arising from or related to (i) any
      misrepresentations or breach 

     

    
      
        
        

      

      
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      of
        warranty or covenant by Tenant contained in this Lease, (ii) any violations
        of law by Tenant with respect to the Premises existing or occurring prior
        to,
        on, and/or after the date hereof, and (iii) Tenant's use and operation of
        the Premises and the use and operation of the Premises by Tenant's contractors,
        employees, licensees, and invitees, occurring prior to, on, and/or after
        the
        date hereof except for any liability, damage, cost, or expense caused by
        the
        intentional acts or negligence of Landlord or Landlord’s affiliates, Landlord’s
        general partner, employees, licensees, and invitees. 

    

     

    19.  Construction
      of Buildings and Improvements.

     

    19.1.  Authorization.
      During
      the term of this Lease, or any renewal or extension hereof, Tenant may erect,
      on
      the Premises, consistent with the uses provided for in Section 2.3, any
      building, improvements, structures, and appurtenances thereto; and Tenant may
      demolish all existing building(s), structures, and improvements now located
      or
      hereafter erected on the Premises, if any, and may remove, raze, and/or destroy
      trees, plants, shrubs, and topsoil as Tenant may, in its sole and absolute
      discretion, deem necessary or desirable. 

     

    19.2.  Construction
      and Capital Investment.
      If
      Tenant at any time or times during the term of this Lease shall construct any
      buildings, structures, or improvements on the Premises, or any part or parts
      thereof, the same shall be constructed without cost or expense to Landlord,
      in
      accordance with the requirements of all laws, ordinances, codes, orders, rules,
      and regulations of all governmental authorities having jurisdiction over the
      Premises. All such buildings, structures or improvements shall be constructed
      by
      or on behalf of Tenant and shall be the sole and exclusive property of Tenant.
      Subject to Section 2.3, Tenant shall initially construct the
      following:

     

    
      	(a)  	
              A
                casino with a minimum of 2,000 gaming
                positions;

            

    

     

    
      	(b)  	
              A
                minimum of 500 hotel rooms;

            

    

     

    
      	(c)  	
              Not
                less than five food and beverage
                outlets;

            

    

     

    
      	(d)  	
              Entertainment
                and meeting space containing not less than 30,000 square
                feet;

            

    

     

    
      	(e)  	
              Structured
                parking for not less than 2,500 vehicles;
                and

            

    

     

    
      	(f)  	
              An
                entry drive or road connecting the Isle project to public roadways,
                together with all water, sewer, drainage and related infrastructure
                required in connection with the improvements to be
                constructed.

            

    

     

    In
      the
      event the Commencement Date shall occur hereunder, Tenant agrees the total
      cost
      of the foregoing improvements shall be not less than $250,000,000.00 and to
      use
      its best efforts to complete construction of each of the above improvements
      on
      or before December 31, 2008. 

     

    19.3.  Permits.
      Tenant,
      at its own cost and expense, shall apply for and prosecute with reasonable
      commercial efforts using Tenant’s business judgment, all necessary permits,
      licenses and approvals required for the Isle Project, including without
      limitation those permits and approvals described in Exhibit D
      attached
      hereto. Landlord, without material cost or expense to itself, shall fully
      cooperate with Tenant in securing building and all other permits 

     

    
      
        
        

      

      
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      and
        authorizations necessary from time to time for performance of any construction,
        alterations or other work permitted or required to be done by Tenant under
        this
        Lease

    

     

    19.4.  Construction
      and Permit Covenants.
      Tenant
      agrees to conform to the following, unless otherwise approved in writing by
      the
      Landlord, with respect to all construction and work to be completed in the
      initial phase of the Isle Project:

     

    
      	(a)  	
              All
                construction activities and improvements related to the Isle Project
                shall
                avoid and shall not affect regulated wetlands as defined by Section
                404 of
                the Clean Water Act; and 

            

    

     

    
      	(b)  	
              All
                construction activities and improvements related to the Isle Project
                shall
                avoid known cultural or historic resources as defined by Section
                106 of
                the National Historic Preservation Act of 1996; and described in
                the June
                14, 1996 letter from the State Historic Preservation Officer (Page
                494 of
                the Administrative Record); and 

            

    

     

    
      	(c)  	
              All
                construction activities and operations related to the Isle Project
                shall
                not result in a significant impact to federally listed threatened
                or
                endangered species or violate any ordinance, regulation, or rule
                administered by the Mississippi Department of Marine Resources;
                and

            

    

     

    
      	(d)  	
              All
                construction activity and location of facilities shall occur landward
                of
                the mean high tide elevation; and

            

    

     

    20.  Restrictions
      of Property.

     

    20.1.  Exclusivity.
      Subject
      to the provisions in Section 20.2 and 20.3 below, during the term of the Lease,
      Landlord will not utilize, or allow any third party to utilize (except by
      process or operation of law), any portion of Landlord’s Adjacent Property in
      connection with any gaming operation other than the Isle Project or another
      gaming project developed by the Tenant.

     

    20.2.  End
      of
      Exclusivity Period.  Except
      as
      provided for in Section 20.3, if at any time after December 31, 2013, and for
      any period of twelve (12) consecutive calendar months thereafter (the
“Termination
      Period”),
      the
      GGR from the Isle Project is less than ten percent (10%) of the total of all
      GGR
      from all casinos which are then in either Harrison County, Mississippi or
      Hancock County, Mississippi, then the exclusivity provided for in Section 20.1
      above shall terminate as of the end of said twelve (12) consecutive calendar
      month period.

     

    20.3.  Payments
      in Lieu.
      Upon
      payment from Tenant to Landlord, within thirty (30) days of expiration of such
      Termination Period, and in addition to any and all other payments provided
      for
      herein, such that the total of all payments made by Tenant to Landlord within
      said Termination Period is at least equal to 5 percent (5%) of ten percent
      (10%)
      of the total of all GGR from all casinos which are then in either Harrison
      County, Mississippi or Hancock County, Mississippi during said Termination
      Period, then the exclusivity provided for in 20.1 above shall not terminate
      as
      of the end of that Termination Period.

     

    
      
        
        

      

      
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    20.4.  Tenant’s
      Rights When Exclusivity Not in Effect.
      If at
      any time, and from time to time, when the exclusivity provided for in this
      Section 20 shall no longer be in effect and Landlord shall desire to sell
      or lease all or any portion or portions of Landlord’s Adjacent Property for
      gaming purposes, Landlord may make a written offer to Tenant stating the terms
      and conditions on which Landlord desires to so sell or lease; and Tenant shall
      have thirty (30) days within which to accept said offer on said terms and
      conditions. If said offer is not so accepted by Tenant within said thirty (30)
      days, Landlord will have one hundred eighty (180) days within which to so sell
      or lease to a third party on said terms and conditions.

     

    20.5.  Infrastructure
      Reimbursement.
      Upon
      the expiration of exclusivity pursuant to this Section 20, and in the event
      thereafter that a third party shall use any of Landlord’s Adjacent Property for
      gaming operations, then Tenant shall be reimbursed by the operator of a second
      casino located on the Landlord’s Adjacent Property for such operator’s use of
      all infrastructure on the Premises described in Section 8 hereof and benefiting
      the operator. The reimbursement shall be one-half of the original total cost
      of
      construction of such infrastructure then still in use.

     

    21.  Leasehold
      Financing.

     

    21.1.  Right
      to Mortgage.
      Notwithstanding anything to the contrary contained in this Lease, Tenant, upon
      receiving the prior written consent of Landlord, shall have the absolute right,
      at any time and from time to time, to mortgage the Tenant's interest in the
      leasehold interest herein demised, one or more times (subject to the terms
      and
      conditions of this Lease), on such terms, conditions, and maturity as Tenant
      shall determine, and to enter into any and all extensions, modifications,
      amendments, replacements, and refinancings of any such leasehold mortgages
      as
      Tenant may desire (subject to the terms and conditions of this Lease). Tenant,
      however, may not mortgage or encumber any of Landlord's interest; and no such
      mortgages shall extend to or affect Landlord's reversionary interest or the
      estate of Landlord in and to the Premises.

     

    21.2.  Right
      following Foreclosure.
      Notwithstanding anything to the contrary contained in this Lease, following
      foreclosure, the successor to the Tenant (hereafter "Successor
      Tenant"),
      shall
      have the absolute right, at any time and from time to time, to mortgage the
      Successor Tenant's leasehold interest herein demised, one or more times (subject
      to the terms and conditions of this Lease), on such terms, conditions, and
      maturity as Successor Tenant shall determine, and to enter into any and all
      extensions, modifications, amendments, replacements, and refinancings of any
      such leasehold mortgages as Successor Tenant may desire (subject to the terms
      and conditions of this Lease with prior written consent). Successor Tenant,
      however, may not mortgage or encumber any of Landlord's interest.

     

    21.3.  Other.

     

    21.3.1.  Landlord
      hereby acknowledges Tenant’s existing financing pursuant to that certain Seven
      Hundred Million and No/100 Dollar ($700,000,000.00) Third Amended and Restated
      Credit Agreement dated February 4, 2005 with Canadian Imperial Bank of
      Canada, as Administrative Agent. Tenant shall keep Landlord fully informed
      of
      any material 

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

       

      changes
        in the Tenant’s financing if such change could adversely affect the Landlord’s
        rights under the Lease.

    

     

    21.3.2.  If
      an
      event or events shall occur which shall entitle Landlord to terminate this
      Lease, and (a) if before the expiration of thirty (30) days after the date
      of
      service of a notice upon such leasehold mortgagee under this Lease, such
      leasehold mortgagor shall have paid to Landlord all Base Rent herein provided
      for then in default and (b) if before the expiration of sixty (60) days after
      the date of service of a notice upon such leasehold mortgagee under this lease,
      such leasehold mortgagee shall have paid to Landlord all percentage rent and
      other payments herein provided for then in default, and shall have complied
      or
      shall be engaged in the work of complying with all the other requirements of
      this Lease, if any, then in default, then Landlord shall not then be entitled
      to
      terminate this Lease, and any notice of termination theretofore given shall
      be
      void and of no effect.

     

    21.3.3.  If
      an
      event or events shall occur, including without limitation bankruptcy, assignment
      for benefit of creditors, insolvency, or any other similar event, if applicable,
      which shall entitle Landlord to terminate this Lease, and if such event or
      events shall be in the nature of a non-monetary default by Tenant which a
      leasehold mortgagee cannot cure by payment within the sixty (60) day period
      after the date of service of notice to the leasehold mortgagee or is of a nature
      that is not susceptible to cure by a leasehold mortgagee (including the filing
      of bankruptcy by Tenant), then the leasehold mortgagee’s right to cure such
      default shall be extended for so long as such leasehold mortgagee is diligently
      prosecuting action reasonably calculated to cure such default, but not in excess
      of three hundred sixty-five (365) days from service of such notice (a
      "Non-Monetary
      Cure Period"),
      or to
      foreclose. If the leasehold mortgagee cures such non-monetary default within
      the
      Non-Monetary Cure Period, Landlord shall not then be entitled to terminate
      this
      Lease and notice of termination theretofore given shall be void and of no force
      and effect.

     

    21.3.4.  Nothing
      herein contained shall in any way affect, diminish, or impair Landlord's right
      to terminate this Lease (if such default is not cured within said sixty (60)
      day
      period, is not cured within the Non-Monetary Cure Period, if applicable, or
      is
      not in the process of being cured as aforesaid) or to enforce any other remedy
      in the event of the non-payment of any Base Rent and Percentage Rent thereafter
      payable by Tenant or in case of any other subsequent default in the performance
      of any of the obligations of Tenant hereunder, in accordance with this Lease,
      subject, however, to all of the provisions of this Section 21.

     

    21.3.5.  Nothing
      contained herein shall release Tenant named in this Lease from any of its
      obligations under this Lease which may not have been discharged or fully
      performed by any holder of the leasehold mortgage, or its
      designees.

     

    21.3.6.  Notwithstanding
      anything to the contrary in this Lease, each leasehold mortgagee shall have
      the
      right to perform any term, covenant, condition or agreement of this Lease to
      be
      performed by Tenant and to remedy any default by Tenant hereunder, and Landlord
      shall accept such performance by leasehold mortgagee with the same force and
      effect as if furnished by Tenant, provided, however, that the leasehold
      mortgagee shall not thereby be subrogated to the rights of
      Landlord.

     

    
      
        
        

      

      
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    21.4.  Use
      of
      Term.
      Whenever and wherever in this Lease the term "leasehold mortgagee" has been
      used
      the same shall include any then holder of a leasehold mortgage
      thereof.

     

    21.5.  No
      Effect on Landlord’s Interest.
      Landlord’s written consent to any leasehold financing, mortgage of the leasehold
      interest, or any leasehold deed of trust, promissory note, assignment of rents
      and/or security agreement, including, but not limited to, leasehold deed of
      trust, assignment of rents and security agreement between Tenant and a
      designated trustee and beneficiary whether such mortgage of leasehold interest,
      etc. is accomplished by Tenant or any successor Tenant, shall not be construed
      to modify, enlarge or affect Landlords' obligations or modify, diminish, impair
      or affect Landlords' rights under this Lease or to subordinate Landlord’s
      interest in the Premises to such leasehold deed of trust.

     

    22.  Events
      of Default; Forfeiture; Termination.

     

    22.1.  Defaults.
      The
      following events are defaults under this Lease:

     

    
      	(a)  	
              The
                failure of Tenant to pay in full, within five (5) days after Landlord
                gives Tenant written notice of non-payment, any installment of Initial
                Rent, Base Rent, Percentage Rent, Additional Rent or any other rent
                payable to Landlord hereunder;

            

    

     

    
      	(b)  	
              The
                failure of Tenant to pay in full, within five (5) days after Landlord
                gives Tenant written notice of non-payment, any other sums payable
                by
                Tenant hereunder to Landlord;

            

    

     

    
      	(c)  	
              The
                failure of Tenant to comply in a timely manner with any covenant
                or
                obligation under the provisions of this
                Lease;

            

    

     

    
      	(d)  	
              The
                failure of the Tenant to meet its obligations as they become due,
                the
                adjudication of the Tenant as a bankrupt, the making by Tenant of
                a
                general assignment for the benefit of creditors, or the taking by
                Tenant
                of the benefit of any insolvency act, or the appointment of a trustee
                or
                receiver for Tenant’s property;

            

    

     

    
      	(e)  	
              The
                failure of Tenant to obtain a gaming license within two years from
                the
                Commencement Date, or to thereafter have a gaming license in full
                force
                and effect at all times during the term hereof; or
                

            

    

     

    
      	(f)  	
              The
                vacancy or desertion of the premises by Tenant for a period of more
                than
                thirty (30) days, unless such vacancy is the result of a Force Majeure
                (as
                defined herein) pursuant to Section
                26.

            

    

     

    22.2.  Notice:
      Opportunity to Cure.
      Upon
      the occurrence of any default other than as described in Section 22.1 (a) and
      22.1 (b), if Tenant fails to cure such other default or defaults within thirty
      (30) days after Landlord gives Tenant written notice thereof, such other uncured
      default or defaults shall also become an event of default (collectively, each
      occurrence an “Event
      of Default”);
      except that if any such other default is of a character that required additional
      time to be cured, such other default shall not become an Event of Default if
      Tenant 

     

    
      
        
        

      

      
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      diligently
        commences in good faith to cure such other default upon receipt of the notice
        specifying the nature of such other default and Tenant thereafter continuously
        and diligently attempts to cure such other default.

    

     

    22.3.  Remedies.
      If an
      Event of Default shall have occurred, Landlord shall have the right to take
      any
      or all of the following actions:

     

    
      	(a)  	
              Give
                Tenant written notice of Landlord’s termination of this Lease. Upon the
                giving of such notice, the Lease and the estate hereby granted shall
                expire and terminate on such date as fully and completely and with
                the
                same effect as if such date were the date herein fixed for the expiration
                of the Lease, all rights of Tenant hereunder shall expire and
                terminate;

            

    

     

    
      	(b)  	
              The
                Landlord may, without terminating this Lease, reenter or repossess
                the
                Premises, by force, unlawful entry and detainer proceedings or otherwise,
                and dispossess and remove Tenant or other occupants therefrom, and
                may
                relet all or part of the Premises as Tenant’s agent, and Tenant shall pay
                Landlord the difference between the rent due for the remaining term
                as of
                the time of reentry or repossession and any amount received or to
                be
                received under such reletting for the remaining
                term;

            

    

     

    
      	(c)  	
              In
                addition to any other legal remedy, Landlord may enter on and into
                the
                Premises and cure any then uncured Event of Default at the expense
                and for
                the account of Tenant. Any expenses, liabilities, penalties, or other
                damages of any kind incurred by Landlord in such action, including
                reasonable attorneys’ fees, shall be immediately due and payable by Tenant
                to Landlord as Additional Rent due hereunder;

            

    

     

    
      	(d)  	
              Landlord
                may obtain any manner of equitable relief in order to compel Tenant
                to
                observe and perform its obligations
                hereunder.

            

    

     

    22.4.  Additional
      Rights of Landlord.

     

    22.4.1.  No
      right
      or remedy hereunder shall be exclusive of any other right or remedy, but shall
      be cumulative and in addition to any other right or remedy hereunder or now
      or
      hereafter existing. Failure to insist upon the strict performance of any
      provision hereof or to exercise any option, right, power or remedy contained
      herein shall not constitute a waiver or relinquishment thereof for the future.
      Receipt by Landlord of any Initial Rent, Base Rent, Percentage Rent, Additional
      Rent or other sums payable hereunder with knowledge of the breach of any
      provision hereof shall not constitute waiver of such breach, and no waiver
      by
      Landlord of any provision hereof shall be deemed to have been made unless made
      in writing specifying the matters waived. Landlord shall be entitled to
      injunctive relief in case of the violation, or attempted or threatened
      violation, of any of the provisions hereof, or to any other remedy allowed
      to
      Landlord by law or equity.

     

    
      
        
        

      

      
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    22.4.2.  Except
      as
      otherwise provided herein, Tenant hereby waives and surrenders for itself and
      all those claiming under it, including creditors of all kinds, (i) any right
      and
      privilege which it or any of them may have to redeem the Premises or to have
      a
      continuance of this Lease after termination of Tenant’s right of occupancy by
      order or judgment of any court or by any legal process or writ, or under the
      terms of this Lease, or after the termination of the Lease as herein provided,
      and (ii) the benefits of any law which exempts property from liability for
      debt
      or for attachment or distress for rent.

     

    22.4.3.  If
      Tenant
      shall be in default in the performance of any of its obligations hereunder,
      Tenant shall pay to Landlord, on demand, all expenses incurred by Landlord
      as a
      result thereof, including reasonable attorneys’ fees and expenses (including
      those incurred in connection with any appellate proceedings). If Landlord shall
      be made a party to any litigation commenced against Tenant and Tenant shall
      fail
      to provide Landlord with counsel approved by Landlord and pay the expenses
      thereof, Tenant shall pay all costs and reasonable attorneys’ fees and expenses
      incurred by Landlord in connection with such litigation (including fees and
      expenses incurred in connection with any appellate proceedings).

     

    23.  Landlord’s
      Defaults and Tenant's Remedies.

     

    23.1.  Landlord
      Default.
      The
      occurrence of any of the following shall be a "Landlord
      Default"
      hereunder:

     

    
      	(a)  	
              The
                breach of any representation or warranty made by Landlord in this
                Lease;
                or

            

    

     

    
      	(b)  	
              The
                failure of Landlord
                to timely perform any other obligations or keep and perform any other
                covenants hereunder within thirty (30) days of the date of notice
                that
                such obligations or covenants have not been performed or complied
                with,
                provided that if such default cannot reasonably be cured within such
                thirty (30) day period, such period of thirty (30) days shall be
                extended
                for so long as Landlord is diligently prosecuting action reasonably
                calculated to cure such default.

            

    

     

    23.2.  Tenant's
      Remedies.
      Except
      as otherwise provided for herein, upon the occurrence of a Landlord Default,
      Tenant shall have the right to exercise any remedy available at law or in
      equity.

     

    23.3.  Landlord
      Cure.
      Anything to the contrary in this Lease notwithstanding, and provided that an
      Event of Default by Landlord has not occurred or has occurred but is not
      continuing hereunder, Landlord and Tenant agree that if Tenant fails to perform
      any of its obligations under this Lease, Landlord shall have the right (but
      not
      the obligation) as well as any other right provided in this Lease, at its option
      and after the expiration of thirty (30) days after written notice from Landlord
      to Tenant, to do or cause to be done such obligation on behalf of Tenant, and
      to
      charge Tenant the actual cost(s) related thereto, which amount(s) will be due
      to
      be paid by Tenant to Landlord within thirty (30) days after notice thereof
      has
      been given by Landlord to Tenant.

     

    
      
        
        

      

      
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    24.  Estoppel
      Certificates. 

     

    24.1.  Landlord’s
      Estoppel Certificate.
      Landlord shall, without charge, from time to time and at reasonable times,
      within thirty (30) business days after request by Tenant or any party who holds
      a mortgage or deed of trust upon Tenant’s leasehold interest in the Premises,
      certify in writing to the effect that this Lease is unmodified and in full
      force
      and effect (or, if there shall have been modifications, stating the
      modifications), the date to which all rent and other charges have been paid,
      the
      expiration date of the Lease, and whether, to the best knowledge of the person
      executing such certificate on behalf of Landlord, any default by Tenant has
      occurred; and if so, the notice shall specify such default to the extent of
      the
      knowledge of the person executing the certificate.

     

    24.2.  Tenant’s
      Estoppel Certificate.
      Tenant
      shall, without charge from time to time and at reasonable times, within thirty
      (30) business days after request by Landlord, certify in writing to Landlord
      or
      any other person or entity specified by Landlord: (i) that this Lease is then
      unmodified and in full force (or, if there have been any modifications, stating
      the modifications); (ii) stating whether there are then any existing setoffs
      or
      defenses against the enforcement of any of the provisions of this Lease and
      any
      modifications hereof upon the part of Tenant to be performed or complied with,
      and, if so, specifying the same; and (iii) the dates to which rent and other
      charges hereunder have been paid in advance.

     

    25.  
      Condemnation.

     

    25.1.  Total
      Taking.
      If the
      entire Premises shall be taken by the exercise of the right of eminent domain
      for any public or
      quasi-public improvement or use, this Lease and the term hereby granted shall
      then expire, on the date when title to the Premises so taken shall vest in
      the
      appropriate authority or on the date when any possession is required to be
      surrendered, whichever is later.

     

    25.2.  Partial
      Taking.
      If (i)
      so substantial a portion of the Premises or any building or improvements thereon
      shall be so taken as to make same or the remaining portion of the Premises
      unusable for the purposes to which the Premises shall then be devoted; or (ii)
      there is a permanent deprivation of access to the streets or highways (permanent
      being defined as a continuous period in excess of twelve months); then Tenant
      shall have the right to cancel or terminate this Lease by providing written
      notice to Landlord at least sixty (60) days prior to the date when title to
      the
      portions so taken shall vest in the appropriate authority or, at Tenant's
      option, on the date physical possession is required to be surrendered, and
      thereupon, this Lease shall terminate and neither party hereunder shall have
      any
      obligation to the other under this
      Lease.

     

    25.3.  Rights.
      On such
      entire or partial taking, Landlord and Tenant shall pursue, in their respective
      individual and separate names and rights, unless otherwise required by law,
      such
      remedies and make such claims as they may have against the authority exercising
      such right of eminent domain or other lawful taking as if this Lease and the
      term hereof had not expired (whether or not such expiration shall have occurred
      on account of such taking) and for the purpose of determining the respective
      rights and remedies of the parties, or for the purpose of an equitable
      apportionment of the award for damages if made to the Landlord and
      Tenant

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

       

      jointly,
        or if made to Landlord or Tenant, Landlord shall be deemed to be the owner
        of
        the land constituting the Premises (subject to Tenant's leasehold estate
        therein) and Tenant shall be deemed to be the owner of the leasehold estate
        created hereby and the buildings and all other improvements situated upon
        said
        Premises (and the term of this Lease shall be deemed to include all available
        renewal terms).

    

     

    26.  Effect
      of Unavoidable Delays.

     

    26.1.  Force
      Majeure.
      The
      provisions of this Section 26 shall only be applicable if there shall occur,
      during the Lease, any of the following: Acts of God, acts of governmental
      authorities, governmental restrictions, moratoriums, regulations, failures
      to
      act by governmental authorities with respect to licenses, applications, permits
      or other approvals necessary to comply with terms and conditions of this Lease,
      enemy or hostile governmental action, civil commotion, insurrection, revolution,
      sabotage, fire or other casualty, or other conditions beyond the control of
      the
      Tenant (a "Force
      Majeure”).

     

    26.2.  Lease
      Obligations.
      If
      Tenant shall, as the result of any such Force Majeure, fail to punctually
      perform a Lease obligation other than Tenant’s obligations to pay Base Rent,
      Percentage Rent, or other monetary payments required under this Lease within
      the
      time limit provided under this Lease, then such time limit shall be deemed
      extended for a period equal to the duration of such Force Majeure, provided
      that
      within thirty (30) days after the happening of any event for which Tenant shall
      be entitled to an extension hereunder, Tenant shall send to Landlord written
      notice describing such event. However, in no event shall a Force Majeure extend
      or relieve Tenant from a duty or obligation for longer than a period of twelve
      (12) consecutive months, any provisions of this Section 26 to the contrary
      notwithstanding.

     

    27.  Protection
      against Lien Claims.
      All
      work on the Isle Project shall be performed by Tenant in such a manner that
      the
      Premises will remain free and clear at all times of all liens and encumbrances
      of any nature except for taxes not yet due and payable and liens created by
      persons for whom payment is not the responsibility of the Tenant. Tenant shall
      not be required to pay any such lien if Tenant is diligently pursuing in good
      faith, the existence, amount or validity thereof by appropriate proceedings.
      If
      Tenant desires to contest any such matter, Tenant shall provide security as
      is
      required by law, if any, by irrevocable letter of credit, surety bond, or other
      security satisfactory to Landlord, in order to insure ultimate payment of such
      lien and to prevent any sale or forfeiture of the Premises or any portion
      thereof. Subject to the foregoing, Tenant will promptly pay and discharge all
      claims and liens in connection with the Isle Project. 

     

    28.  Mineral
      Non-Disturbance.
      Landlord hereby conveys and releases unto Tenant and its successors and assigns
      all rights which it possesses to use the surface of the Land for the drilling,
      mining, exploration, development, and production of oil, gas, and other minerals
      of every kind, nature, and character, in, on and under the Land. Landlord
      further covenants and agrees that any lease or leases of the Land by Landlord
      hereafter shall contain a clause which shall prohibit the use of the surface
      of
      the Land for the conduct of oil, gas, and other mineral development activity.
      Landlord hereby agrees it will not exercise its respective rights to mineral
      interest in, on, and under the Land in any way that will interfere with the
      use
      of the surface of the Land by Tenant, its successors and assigns. This Section
      28 shall constitute a covenant running with the land and shall be binding upon
      the Landlord, its successors, assigns, and legal 

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

       

      representatives
        as the case may be, and shall inure to the benefit of the Tenant and its
        successors, assigns, lenders, mortgagees, tenants, and all persons acquiring
        an
        interest in and to the Premises. This covenant running with the land will
        be
        placed of record pursuant to Section 3 hereof.

    

     

    29.  Holdover.
      If,
      with the permission and written consent of Landlord, the Tenant shall hold
      over
      as a Tenant after the expiration of the then existing Lease term, then such
      tenancy shall be deemed to be on a month-to-month basis on the same terms and
      conditions in effect immediately prior to the expiration of the
      Lease.

     

    30.  Partial
      Invalidity.
      If any
      term, covenant, condition, or provision of this Lease or the application thereof
      to any person or circumstance shall, at any time or to any extent, be invalid
      or
      unenforceable, the remainder of this Lease, or the application of such term
      or
      provision to persons or circumstances other than those as to which this Lease
      is
      held invalid or unenforceable, shall not be affected thereby, and each term,
      covenant, condition, and provision of this Lease shall be valid and be
      enforceable to the fullest extent permitted by law.

     

    31.  Written
      Notices.
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed to have been given if and when received by the respective parties at
      the
      below addresses (or at such other address as a party may hereafter designate
      for
      itself by notice to the other party and with required copy as required hereby).
      From and after the Base Rent Commencement Date, all notices and communications
      to Tenant may also be given by leaving same at the Premises during business
      hours.

     

    If
      to
      Landlord:

     

    Family
      Lands L.P.

    c/o
      Pine
      Hills, Inc.

    3702
      Hardy Street 

    Hattiesburg,
      MS 39402 

    Attention:
      Stewart Gammill, IV

    

    With
      a
      required copy to:

     

    Butler,
      Snow, O'Mara Stevens & Cannada, PLLC 

    AmSouth
      Plaza, 17th
      Floor

    210
      East
      Capitol Street

    Jackson,
      MS 39201 

    Attention:
      Don B. Cannada

    

    If
      to
      Tenant:

     

    IOC
      Mississippi, Inc.

    1614
      Popps Ferry Road #B-1 

    Biloxi,
      MS 39532

    Attention:
      Greg Guida

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    With
      a
      required copy to Guarantor:

     

    Isle
      of
      Capri Casino, Inc.

    1614
      Popps Ferry Road #B-1

    Biloxi,
      MS 39532

    Attention:
      Greg Guida

    

    32.  Confidentiality.
      During
      the term of the Lease, Landlord and Tenant shall maintain in confidence and
      shall cause their respective employees, officers, agents, agents, and advisors
      to maintain in confidence all Financial and other Confidential Information
      (defined herein below) regarding the other party and they shall not be revealed
      to anyone except: (i) to the extent communication of such information is
      required by law; (ii) to parties and their counsel in litigation in which the
      Landlord and Tenant are parties relating to the Premises or other litigation
      seeking enforcement, the rights, duties and obligations of the Landlord or
      Tenant under this Lease; (iii) to effectuate a transaction or any financing
      contemplated by this Lease, or (iv) to the MGC, the Securities Exchange
      Commission and similar governmental authorities regulating or governing Landlord
      or Tenant or the transactions contemplated by this Lease. “Financial and other
      Confidential Information” includes such information obtained by the review of
      financial statements, reports or audits required under this Lease.

     

    33.  Guaranty.
      In
      consideration of Landlord granting this Lease to Tenant, Isle of Capri Casino,
      Inc. (“Guarantor”)
      does
      hereby guarantee all and singular of the obligations and duties of the Tenant
      under this Lease. The obligations, covenants, agreements and duties of the
      Guarantor under this Lease shall not be affected or impaired by (a) any
      assignment or transfer in whole or in part of any of the Lease or the Premises
      by the Landlord or the Tenant without notice to the Guarantor (other than as
      set
      forth in Section 13 hereof), or (b) any waiver by the Landlord of the
      performance of observance by the Tenant or any other guarantor of any of the
      agreements, covenants, terms or conditions contained in the Lease, or (c) any
      indulgence in, or the extension of the time for, payment by the Tenant or any
      other guarantor of any amounts payable under or in connection with this Lease
      or
      in any other instrument or agreement relating to this Lease or of the extension
      of time for performance by the Tenant or any other guarantor of any other
      obligations under or arising out of any of the foregoing or the extension or
      renewal thereof, or (d) the modification or amendment (whether material or
      otherwise) of any duty, agreement or obligation of the Tenant or any other
      guarantor set forth in any of the foregoing, or (e) the voluntary or involuntary
      sale or other disposition of all or substantially all the assets of the Tenant
      or any other guarantor (subject to Section 13 hereof), or (f) the
      insolvency, bankruptcy or other similar proceedings affecting the Tenant or
      any
      such other guarantor or any assets of the Tenant or any such other guarantor.
      

     

    34.  Tenant’s
      Finance of Landlord’s Purchase of Additional Land.
      In the
      event that Landlord shall desire to enter into any contract from time to time
      to
      purchase any land located within two (2) miles of the boundary of Landlord’s
      Adjacent Property, then Landlord shall have the option with respect to each
      such
      contract to request an acquisition loan from Tenant in an amount equal to the
      purchase price thereunder for the purpose of purchasing such land, provided
      that
      the Landlord provides written notice to the Tenant pursuant to the terms hereof
      of its election to finance such purchase with a loan from the Tenant. Such
      notice shall include a complete copy of the proposed purchase contract,
      Landlord’s proposed use of such land, and a 

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

       

      description
        of the purchase price to be paid for the land to be acquired by Landlord.
        Within
        three (3) days following Tenant’s receipt of such notice, Tenant shall notify
        Landlord of Tenant’s election to provide or not provide such loan. In the event
        Tenant elects to provide such loan, then on or before the closing date under
        such purchase contract, the Tenant will advance to the Landlord the purchase
        price set forth in the notice as a purchase money loan for such land, pursuant
        to loan documents mutually acceptable to Landlord and Tenant. Landlord shall
        execute in favor of Tenant at closing a non-recourse promissory note (an
        “Acquisition
        Note”)
        in the
        principal amount of the funds advanced by Tenant, bearing interest at the
        rate
        of eight percent (8%) per annum, and being payable by Landlord to Tenant
        in
        periodic installments equal to twenty-five percent (25%) of the periodic
        installment of Percentage Rent payable from time to time by Tenant to Landlord
        pursuant to this Lease. Tenant shall have the right to offset the installment
        payments due from time to time by Landlord pursuant to the Acquisition Note
        against amounts payable by Tenant to Landlord under this Lease. Each Acquisition
        Note, if not sooner paid, shall be due and payable ten (10) years from the
        date
        thereof. Tenant covenants and agrees not to acquire any lands within two
        (2)
        miles of the boundary of Landlord’s Adjacent Property during the term of this
        Lease. All land purchased by Landlord pursuant to acquisition loans furnished
        hereunder by Tenant shall become part of Landlord’s Adjacent Property upon
        acquisition by Landlord.

    

     

    35.  Mississippi
      Gaming Commission.
      Landlord and Tenant acknowledge and agree that certain provisions of this Lease,
      including, without limitation, portions of Sections 4 and 13 hereof, are subject
      to the approval of the Mississippi Gaming Commission (the “MGC”),
      and
      Landlord and Tenant each agree to use reasonable efforts to cooperate and assist
      one another in obtaining all consents and approvals from MGC in connection
      with
      this Lease, including without limitation as to suitability. By execution hereof,
      each party gives its full consent for the other party hereto to view and inspect
      all documents submitted to the MGC or related governmental agencies relative
      to
      the contemplated Isle Project but excluding confidential information such as
      personal financial statements.

     

    36.  Binding
      on Successors and Assigns.
      Except
      as otherwise provided in this Lease, all covenants, agreements, provisions,
      and
      conditions of this Lease shall be binding on and inure to the benefit of the
      parties hereto, their respective personal representatives, successors, and
      assigns. This Lease, its provisions, and the parties' respective rights and
      obligations cannot be modified, waived or changed unless evidenced by an
      agreement in writing signed by Landlord and Tenant.

     

    37.  No
      Broker.
      Landlord and Tenant each covenant and agree with the other that neither has
      retained or contracted with any realtor or person in regard to this Lease who
      is
      entitled to a commission or other brokerage fee in connection with the
      consummation of the Lease. Landlord and Tenant each covenant and agree to defend
      and hold the other harmless from any claim of any such person for any commission
      or other compensation arising from the negotiation or execution of this Lease
      to
      the extent such claim is asserted to arise out of such claimant's contract
      or
      claim having been through the party to be charged.

     

    38.  No
      Merger.
      Notwithstanding any provision of this Lease to the contrary, if at any time
      or
      times during the term of this Lease or any renewal or extension hereof, Landlord
      and Tenant shall be the same person, party, or entity, Landlord's and Tenant's
      interests shall remain 

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

       

      separate
        and distinct, and shall not be merged into one estate, so as to cancel,
        terminate, or extinguish this Lease by law or otherwise.

    

     

    39.  Captions.
      The
      captions of the Sections of this instrument are solely for convenience and
      shall
      not be deemed a part
      of
      this instrument for the purpose of construing the meaning thereof, or for any
      other purpose.

     

    40.  No
      Waiver.
      No
      waiver of any covenant or condition contained in this Lease or of any breach
      of
      any such covenant or condition shall constitute a waiver of any subsequent
      breach of such covenant or condition by either party, or justify or authorize
      the non-observance on any other occasion of the same or any other covenant
      or
      condition hereof of either party.

     

    41.  Interpretation.
      This
      Lease shall be governed by and construed in accordance with the law of the
      State
      of Mississippi, without giving any effect to any conflict of laws, Whenever
      the
      contents of any provision shall require it, the singular number shall be held
      to
      include the plural number, and vice versa. The neuter gender includes the
      masculine and the feminine.

     

    42.  No
      Joint Venture.
      Any
      intention to create a joint venture or partnership relation or principal agent
      relationship between the parties hereto is expressly disclaimed.

     

    43.  Joint
      Work Project.
      This
      Lease is the joint work product of the duly authorized representatives of the
      Landlord and Tenant and, accordingly, in the event of ambiguity, no inferences
      shall be drawn against either party,

     

    44.  Entire
      Agreement.
      This
      Lease contains the entire agreement of the parties hereto with respect to the
      letting and hiring of the Premises described above and this Lease may not be
      amended, modified, released, or discharged, in whole or in part, except by
      an
      instrument in writing signed by the parties hereto, or their respective
      successors or assigns.

     

    45.  Landlord
      Consents.
      When
      the Landlord’s consent is required hereunder, the Landlord agrees not to
      unreasonably withhold, condition or delay such consent.

     

    

     

    

     

    (Signatures
      appear on following page)

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Landlord and the Tenant have caused this Lease to be
      executed effective the day and year first above written.

     

    LANDLORD:

    FAMILY
      LANDS, L.P.

    a
      Mississippi limited partnership

    

    By: Pine
      Hills, Inc.

    a
      Delaware corporation, its general partner

    

    By:  /s/Stewart
      Gammill, IV________________

    STEWART
      GAMMILL, IV 

    Its: President

    

    

    TENANT:

    IOC
      MISSISSIPPI, INC.

    

    By:  /s/Gregory
      P. Guida___________________

    GREGORY
      P. GUIDA

    Its: Senior
      Vice President

    

    

    GUARANTOR:

    ISLE
      OF
      CAPRI CASINO, INC.

    a
      Delaware corporation

    

    By:  /s/Gregory
      P. Guida___________________

    GREGORY
      P. GUIDA

    Its: Senior
      Vice President

    
 

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    
 

    EXHIBIT
      A

    

    Legal
      Description

    

    See
      attached.

     

    

 

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    

     

     

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

    

    Memorandum
      of Lease

    

    See
      attached.

    
 

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    Prepared
      by:

    Butler,
      Snow, O'Mara, Stevens & Cannada, PLLC

    ATTN:
      Don B. Cannada

    17th
      Floor, AmSouth Plaza

    Post
      Office Box 22567

    Jackson,
      Mississippi 39225-2567

    (601)
      948-5711

    

    To
      the Chancery Clerk of Harrison County, Mississippi:

    The
      real property described herein is situated in the S1⁄2 of NW1⁄4 and N1⁄2 of SW1⁄4 of
      Section 6, Township 8S, Range 13 W of the First Judicial District of Harrison
      County, Mississippi

    

    

    

    MEMORANDUM
      OF LEASE AND RESTRICTIONS

     

    THIS
      MEMORANDUM is executed and delivered by FAMILY LANDS L.P., a Mississippi limited
      partnership (the "Landlord")
      and
      IOC MISSISSIPPI, INC., a Mississippi corporation (the "Tenant"),
      pursuant to that certain Ground Lease, dated as of May, ___ 2006, between the
      Landlord and the Tenant (as amended, modified and supplemented from time to
      time, the "Lease").

     

    WITNESSETH:

     

    In
      consideration of the rents, covenants and agreements on the part of the Tenant
      to be observed and performed under the Lease, the Landlord has leased and let
      unto the Tenant that certain parcel of land lying and being situated in Harrison
      County, Mississippi, and more particularly described on Exhibit A
      attached
      hereto (the "Premises"),
      under
      the terms and conditions of the Lease which provides in pertinent part the
      following:

     

    1.  Term
      and Renewal Option.The
      initial term of the Lease is for a period of five (5) years commencing as of
      the
      expiration of the Development and Permitting Period (as defined in the Lease
      and
      which shall expire no later than ____________, 200_), with options to renew
      for
      up to eighteen (18) successive five-year terms and one (1) successive final
      four-year term. 

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    2.  Use
      of
      Premises.
      The
      Premises shall be used by the Tenant for the purpose of conducting and offering
      casino gaming, entertainment, hotel, dining, retail, parking, recreational
      and
      for related purposes as provided in the Lease. Tenant shall not construct on
      the
      Premises a retail facility, restaurant, hotel or other commercial development
      that is not contained within or physically connected to the primary casino
      facility on the Premises.

     

    3.  Use
      of
      Landlord’s Adjacent Property.
      The
      real property of Landlord described in Exhibit
      E
      attached
      hereto (“Landlord’s
      Adjacent Property”)
      shall
      be restricted to uses permitted under A-1, E-1, R-1, R-2, R-3, O-1, C-1,
      C-2 and
      C-3
      zoning under the Harrison County, Mississippi zoning ordinances as in effect
      on
      the date hereof. The restrictions in this Section 3 shall expire on the
      expiration or earlier termination of the Lease; provided this restriction shall
      not expire for twenty-five (25) years from the Lease commencement date in the
      event Tenant acquires title to the Premises pursuant to the terms of the
      Lease.

     

    4.  Mineral
      Non-Disturbance.
      Landlord
      hereby conveys and releases unto Tenant and its successors and assigns all
      rights which it possesses to use the surface of the Premises for any purpose,
      including the drilling, mining, exploration, development, and production of
      oil,
      gas, and other minerals of every kind, nature, and character, in, on and under
      the Premises. Landlord further covenants and agrees that any lease or leases
      of
      the Premises hereafter made by Landlord shall contain a clause which shall
      prohibit the use of the surface of the Premises for the conduct of oil, gas,
      and
      other mineral development activity. This Section 4 shall constitute a covenant
      running with the land for the benefit of the Tenant, its successors, and
      assigns.

     

    5.  Exclusivity.
      During
      the term of the Lease, Landlord will not utilize, or voluntarily allow any
      third
      party to utilize, any portion of Landlord’s Adjacent Property, in connection
      with any gaming operation other than the Isle Project or another gaming project
      

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    developed
      by the Tenant. This Section 5 is contingent on Tenant meeting certain conditions
      to maintain exclusivity as provided in the Lease.

    This
      is a
      memorandum of certain provisions of the Lease and not a restatement thereof.
      In
      the event of any conflict between this Memorandum of Lease and the provisions
      of
      the Lease, the provisions of the Lease shall control.

    IN
      WITNESS WHEREOF, the Landlord and the Tenant have executed this Memorandum
      of
      Lease as of May ___, 2006.

    

    -
      LANDLORD
      -

    

    FAMILY
      LANDS L.P.

    a
      Mississippi limited partnership

    

    By: Pine
      Hills, Inc.,

    a
      Delaware corporation, its General Partner

     

    

    By:        

      STEWART
      GAMMILL, IV

      Its
      President

    

    

    

    -
      TENANT
      -

    

    IOC
      MISSISSIPPI, INC.,

    a
      Mississippi Corporation

    

    

    By:
              

    TIMOTHY
      M. HINKLEY

    Its:
      President

    

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    STATE
      OF
      _______________________

    COUNTY
      OF
      _____________________

    

    Personally
      appeared before me, the undersigned authority in and for the said County and
      State, on this ___ day of May, 2006, within my jurisdiction, the within named
      STEWART GAMMILL, IV, who acknowledged to me that he is President of PINE HILLS,
      INC. a Delaware corporation which is the general partner of FAMILY LANDS L.P.,
      a
      Mississippi limited partnership, and that for and on behalf of said corporation
      as general partner of said limited partnership, and as the act and deed of
      said
      corporation as general partner of said limited partnership, and as the act
      and
      deed of said limited partnership, he executed the above and foregoing
      instrument, after first having been duly authorized by said corporation and
      said
      limited partnership so to do.

    

    

    __________________________________________

    NOTARY
      PUBLIC

    

    My
      Commission Expires:

    

    ________________________________

    [AFFIX
      NOTARIAL SEAL]

     

    

    STATE
      OF
     

    COUNTY
      OF
    

    

    Personally
      appeared before me, the undersigned authority in and for the said County and
      State, on this      
      day of
      May, 2006, within my jurisdiction, the within named TIMOTHY M. HINKLEY, who
      acknowledged that he is President of IOC MISSISSIPPI, INC., a Mississippi
      corporation, and that for and on behalf of the said corporation, and as its
      act
      and deed, he executed the above and foregoing instrument, after first having
      been duly authorized by said corporation so to do.

    

    

    NOTARY
      PUBLIC

    

    

     

    

    My
      Commission Expires:

    

     

    [AFFIX
      NOTARIAL SEAL]

    
 

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    
 

    EXHIBIT
      C

    

    Commencement
      of Operations Certificate

    

    See
      Attached

    
 

    
 

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    CERTIFICATE
      OF COMMENCEMENT OF GAMING OPERATIONS

    

    

     

    This
      certificate of commencement of gaming operations (the “Certificate”)
      is
      executed the ___ day of ______, 2006 to memorialize the date on which gaming
      operations or activities have commenced on the Premises. The parties agree
      the
      Base Rent shall be adjusted to reflect any increase in the Price Index from
      the
      Adjustment Date to the date of execution hereof pursuant to Section 4.5.1 of
      the
      Lease. 

     

    All
      capitalized terms not defined herein shall have the meaning as set forth in
      the
      Lease.

     

    IN
      WITNESS WHEREOF,
      the
      parties have caused this certificate to be executed on the date specified
      herein.

     

     

    -
      LANDLORD -

    

    FAMILY
      LANDS L.P.

    a
      Mississippi limited partnership

    

    By: PINE
      HILLS, INC.

    a
      Delaware corporation, its General Partner

     

    

    

    By:        

      STEWART
      GAMMILL, IV

      Its
      President

    

    

    

    -
      TENANT -

    

    IOC
      MISSISSIPPI, INC.

    a
      Mississippi corporation

    

    

     

    By:
             

    TIMOTHY
      M. HINKLEY

    Its:
      President

    

    

    

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    EXHIBIT
      D

    

    Permits
      and Approvals

    

    

    

     

    
      	1.  	
              NPDES
                Stormwater Discharge
                Permit.

            

    

     

    Issuing
      agency: State
      of
      Mississippi Department of Environmental Quality.

     

    Requirement: Construction-related
      erosion control.

     

    

     

    
      	2.  	
              Construction
                Permit for Potable Water Supply
                (well).

            

    

     

    Issuing
      agency: State
      of
      Mississippi Department of Environmental Quality.

     

    Requirement: Potable
      water well.

     

    

     

    
      	3.  	
              Sanitary
                Sewer Construction
                Approval.

            

    

     

    Issuing
      agency: State
      of
      Mississippi Department of Environmental Quality.

     

    Requirement: Construction
      of sanitary sewer forcemain, pumpstation, and connection.

     

    

     

    
      	4.  	
              NPDES
                Permit Modification for Wastewater Treatment Plant (Water Pollution
                Control Permit).

            

    

     

    Issuing
      agency: State
      of
      Mississippi Department of Environmental Quality.

    Requirement: Increased
      capacity of West Harrison County Water & Sewer District Wastewater Treatment
      Plant.

    

    
      	5.  	
              Harrison
                County Zoning Approvals:

            

    

     

    
      	a.  	
              Master
                Plan Approval (Section 412.02).

            

    

    
      	b.  	
              Height
                Limitation Variance (Section 416 - Table
                of Areas and Dimensional Requirements).

            

    

    

     

    
      	6.  	
              Harrison
                County Building Permit.

            

    

     

    

     

    
      	7.  	
              Mississippi
                Gaming Commission
                Approvals:

            

    

     

    
      	a.  	
              Gaming
                Site Approval

            

    

     

    
      	b.  	
              Site
                Development Plan Approval

            

    

     

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    EXHIBIT
      E

    

    Landlord’s
      Adjacent Property

    

    

    Pine
      Hills On-The-Bay Subdivisions #1, #2 and #3 are as shown on the Plats of Record
      of said subdivisions in the office of the Chancery Clerk of Harrison County,
      Mississippi.

     

    TOWNSHIP
      7 SOUTH, RANGE 13 WEST:

     

    
      	 	
              Section
                31:

            	
              All
                that part of Blocks J and K lying in Section 31, Township 7
                South, Range 13 West of Pine Hills On-The-Bay Subdivision #3, less
                and except that part of Block J which is part of those lands
                described in that certain deed recorded in Book 623, Pages 500-502 of
                the Record of Deeds of Harrison
                County.

            

    

     

    
      	 	
              Section
                32:

            	
              All
                that part of Blocks F, H, I, J, K and L lying in Section 32, Township
                7 South, Range 13 West of Pine Hills On-The-Bay Subdivision #3,
                less Lot 4 of Block F of said Pine Hills On-The-Bay Subdivision
                #3.

            

    

     

    TOWNSHIP
      8 SOUTH, RANGE 13 WEST:

     

    
      	 	
              Section
                5:

            	
              All
                that part of Blocks K and L lying in Section 5, Township 8 South,
                Range 13 West of Pine Hills On-The-Bay Subdivision
                #3.

            

    

     

    
      	 	
              Section
                6:

            	
              All
                of Section 6, less and except the
                following:

            

    

     

    
      	1.  	
              All
                lands described in that certain deed recorded in Book 623,
                Pages 500-502 of the Record of Deeds of Harrison
                County.

            

    

     

    
      	2.  	
              All
                lands which are a part of the Pine Hills On-The-Bay Subdivision #1
                and
                #2.

            

    

     

    
      	3.  	
              Those
                lands conveyed to Crosby Wood Preserving Co. and described in that
                certain
                deed recorded in Book 593, Pages 151-152 of the Record of Deeds
                of Harrison County.

            

    

     

    
      	4.  	
              Those
                lands conveyed to H. H. Pepper and described in that certain deed
                recorded
                in Book 478, Pages 534-535 of the Record of Deeds of Harrison
                County.

            

    

     

    
      	5.  	
              Those
                lands conveyed to Milford R. Kelly and his wife, Anne Marie Kelly
                and
                described in that certain deed recorded in Book 478,
                Pages 533-534 of the Record of Deeds of Harrison
                County.

            

    

     

    
      	6.  	
              Those
                lands conveyed to Robert T. McRaney and his wife, Doris M. McRaney
                and described in that certain deed recorded in Book 478,
                Pages 536-537 of the Record of Deeds of Harrison
                County.

            

    

     

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    
      	7.  	
              Those
                lands conveyed to Crosby Wood Preserving Co. and described in that
                certain
                deed recorded in Book 629, Pages 62-65 of the Record of Deeds of
                Harrison County.

            

    

     

    
      	8.  	
              Those
                lands conveyed to Mrs. Marie Baudean Grillot and described in that
                certain deed recorded in Book 654, Pages 565-567 of the Record
                of Deeds of Harrison County.

            

    

     

    Pinehills
      On-The-Bay Subdivision #1 as shown by Plat of Record in the Chancery Clerk’s
      office.

     

    
      	 	
              Block
                4:

            	
              All
                of Block 4.

            

    

     

    
      	 	
              Block
                5:

            	
              Lots
                1 through 12, inclusive; Lots 17 through 21, inclusive; and Lots
                23
                through 30, inclusive.

            

    

     

    
      	 	
              Block
                6:

            	
              Lots
                1 through 10, inclusive; Lots 12 through 17, inclusive; and Lots
                19 and
                20.

            

    

     

    
      	 	
              Block
                7:

            	
              Lots
                1 through 3, inclusive; and that part designated as
                Park.

            

    

     

    
      	 	
              Block
                8:

            	
              Lots
                1 through 9, inclusive; and Lots 12 through 17,
                inclusive.

            

    

     

    
      	 	
              Block
                9:

            	
              All
                of Block 9.

            

    

     

    
      	 	
              Block
                10:

            	
              Lots
                1 through 10, inclusive; and Lots 13 through 22,
                inclusive.

            

    

     

    
      	 	
              Block
                11:

            	
              Lots
                1 through 14, inclusive; Lot 16; Lots 18 and 19; and Lots 21 through
                37,
                inclusive.

            

    

     

    
      	 	
              Block
                12:

            	
              Lot
                1; Lots 3 through 17, inclusive; Lots 19 throguh 24, inclusive; and
                Lot
                26.

            

    

     

    
      	 	
              Block
                18:

            	
              Lots
                1 through 16, inclusive; and Lots 18 through 21,
                inclusive.

            

    

     

    
      	 	
              Block
                19:

            	
              Lots
                3 through 19, inclusive.

            

    

     

    Pinehills
      On-The-Bay Subdivision #2 as shown by Plat of Record in the Chancery Clerk’s
      Office.

     

    
      	 	
              Block
                3:

            	
              Lot
                6 and Lot 7.

            

    

     

    

     

    LESS
      AND EXCEPT THE LAND DESCRIBED ON EXHBIIT A

     

    
 

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    
 

    EXHIBIT
      F

    

    Landlord’s
      Entire Property

    

    

    Pine
      Hills On-The-Bay Subdivisions #1, #2 and #3 are as shown on the Plats of Record
      of said subdivisions in the office of the Chancery Clerk of Harrison County,
      Mississippi.

     

    TOWNSHIP
      7 SOUTH, RANGE 13 WEST:

     

    
      	 	
              Section
                31:

            	
              All
                that part of Blocks J and K lying in Section 31, Township
                7 South, Range 13 West of Pine Hills On-The-Bay Subdivision #3,
                less and except that part of Block J which is part of those lands
                described in that certain deed recorded in Book 623, Pages 500-502 of
                the Record of Deeds of Harrison
                County.

            

    

     

    
      	 	
              Section
                32:

            	
              All
                that part of Blocks F, H, I, J, K and L lying in Section 32, Township
                7 South, Range 13 West of Pine Hills On-The-Bay Subdivision #3,
                less Lot 4 of Block F of said Pine Hills On-The-Bay Subdivision
                #3.

            

    

     

    TOWNSHIP
      8 SOUTH, RANGE 13 WEST:

     

    
      	 	
              Section
                5:

            	
              All
                that part of Blocks K and L lying in Section 5, Township 8 South,
                Range 13 West of Pine Hills On-The-Bay Subdivision
                #3.

            

    

     

    
      	 	
              Section
                6:

            	
              All
                of Section 6, less and except the
                following:

            

    

     

    
      	1.  	
              All
                lands described in that certain deed recorded in Book 623,
                Pages 500-502 of the Record of Deeds of Harrison
                County.

            

    

     

    
      	2.  	
              All
                lands which are a part of the Pine Hills On-The-Bay Subdivision #1
                and
                #2.

            

    

     

    
      	3.  	
              Those
                lands conveyed to Crosby Wood Preserving Co. and described in that
                certain
                deed recorded in Book 593, Pages 151-152 of the Record of Deeds
                of Harrison County.

            

    

     

    
      	4.  	
              Those
                lands conveyed to H. H. Pepper and described in that certain deed
                recorded
                in Book 478, Pages 534-535 of the Record of Deeds of Harrison
                County.

            

    

     

    
      	5.  	
              Those
                lands conveyed to Milford R. Kelly and his wife, Anne Marie Kelly
                and
                described in that certain deed recorded in Book 478,
                Pages 533-534 of the Record of Deeds of Harrison
                County.

            

    

     

    
      	6.  	
              Those
                lands conveyed to Robert T. McRaney and his wife, Doris M. McRaney
                and described in that certain deed recorded in Book 478,
                Pages 536-537 of the Record of Deeds of Harrison
                County.

            

    

     

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    
      	7.  	
              Those
                lands conveyed to Crosby Wood Preserving Co. and described in that
                certain
                deed recorded in Book 629, Pages 62-65 of the Record of Deeds of
                Harrison County.

            

    

     

    
      	8.  	
              Those
                lands conveyed to Mrs. Marie Baudean Grillot and described in that
                certain deed recorded in Book 654, Pages 565-567 of the Record
                of Deeds of Harrison County.

            

    

     

    Pinehills
      On-The-Bay Subdivision #1 as shown by Plat of Record in the Chancery Clerk’s
      office.

     

    
      	 	
              Block
                4:

            	
              All
                of Block 4.

            

    

     

    
      	 	
              Block
                5:

            	
              Lots
                1 through 12, inclusive; Lots 17 through 21, inclusive; and Lots
                23
                through 30, inclusive.

            

    

     

    
      	 	
              Block
                6:

            	
              Lots
                1 through 10, inclusive; Lots 12 through 17, inclusive; and Lots
                19 and
                20.

            

    

     

    
      	 	
              Block
                7:

            	
              Lots
                1 through 3, inclusive; and that part designated as
                Park.

            

    

     

    
      	 	
              Block
                8:

            	
              Lots
                1 through 9, inclusive; and Lots 12 through 17,
                inclusive.

            

    

     

    
      	 	
              Block
                9:

            	
              All
                of Block 9.

            

    

     

    
      	 	
              Block
                10:

            	
              Lots
                1 through 10, inclusive; and Lots 13 through 22,
                inclusive.

            

    

     

    
      	 	
              Block
                11:

            	
              Lots
                1 through 14, inclusive; Lot 16; Lots 18 and 19; and Lots 21 through
                37,
                inclusive.

            

    

     

    
      	 	
              Block
                12:

            	
              Lot
                1; Lots 3 through 17, inclusive; Lots 19 throguh 24, inclusive; and
                Lot
                26.

            

    

     

    
      	 	
              Block
                18:

            	
              Lots
                1 through 16, inclusive; and Lots 18 through 21,
                inclusive.

            

    

     

    
      	 	
              Block
                19:

            	
              Lots
                3 through 19, inclusive.

            

    

     

    Pinehills
      On-The-Bay Subdivision #2 as shown by Plat of Record in the Chancery Clerk’s
      Office.

     

    
      	 	
              Block
                3:

            	
              Lot
                6 and Lot 7.

            

    

     

    
       

      
        42Unassociated Document

    

     

    
      

      

    

     

    NEW
      CENTURY HOME EQUITY LOAN TRUST 2006-2

     

    Issuing
      Entity

     

    and

     

    DEUTSCHE
      BANK NATIONAL TRUST COMPANY

     

    Indenture
      Trustee

     

    _____________________________

     

    INDENTURE

     

    Dated
      as
      of June 29, 2006

     

    _____________________________

     

    ASSET-BACKED
      NOTES, SERIES 2006-2

     

    ________________

     

    

    
      

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    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 THE NOTES

              
	 	 
	
                Section
                  2.01.

              	
                Form

              
	
                Section
                  2.02.

              	
                Execution,
                  Authentication and Delivery

              
	
                Section
                  2.03.

              	
                Acceptance
                  of Mortgage Loans by Indenture Trustee.

              
	
                Section
                  2.04.

              	
                Acceptance
                  of Swap Agreement by Indenture Trustee

              
	 	 
	
                ARTICLE
                  III

              
	 	 
	
                COVENANTS

              
	 	 
	
                Section
                  3.01.

              	
                Collection
                  of Payments with respect to the Mortgage Loans

              
	
                Section
                  3.02.

              	
                Maintenance
                  of Office or Agency

              
	
                Section
                  3.03.

              	
                Money
                  for Payments To Be Held in Trust; Paying Agent

              
	
                Section
                  3.04.

              	
                Existence

              
	
                Section
                  3.05.

              	
                Payment
                  of Principal and Interest.

              
	
                Section
                  3.06.

              	
                Protection
                  of Trust Estate.

              
	
                Section
                  3.07.

              	
                Opinions
                  as to Trust Estate.

              
	
                Section
                  3.08.

              	
                Performance
                  of Obligations.

              
	
                Section
                  3.09.

              	
                Negative
                  Covenants

              
	
                Section
                  3.10.

              	
                [Reserved.]

              
	
                Section
                  3.11.

              	
                [Reserved.]

              
	
                Section
                  3.12.

              	
                Representations
                  and Warranties Concerning the Mortgage Loans

              
	
                Section
                  3.13.

              	
                Amendments
                  to Servicing Agreement

              
	
                Section
                  3.14.

              	
                Servicer
                  as Agent and Bailee of the Indenture Trustee

              
	
                Section
                  3.15.

              	
                Investment
                  Company Act

              
	
                Section
                  3.16.

              	
                Issuing
                  Entity May Consolidate, etc.

              
	
                Section
                  3.17.

              	
                Successor
                  or Transferee.

              
	
                Section
                  3.18.

              	
                No
                  Other Business

              
	
                Section
                  3.19.

              	
                No
                  Borrowing

              
	
                Section
                  3.20.

              	
                Guarantees,
                  Loans, Advances and Other Liabilities

              
	
                Section
                  3.21.

              	
                Capital
                  Expenditures

              
	
                Section
                  3.22.

              	
                Determination
                  of Note Rate

              
	
                Section
                  3.23.

              	
                Restricted
                  Payments

              
	
                Section
                  3.24.

              	
                Notice
                  of Events of Default

              
	
                Section
                  3.25.

              	
                Further
                  Instruments and Acts

              
	
                Section
                  3.26.

              	
                Statements
                  to Noteholders

              
	
                Section
                  3.27.

              	
                [Reserved].

              
	
                Section
                  3.28.

              	
                Certain
                  Representations Regarding the Trust Estate.

              
	
                Section
                  3.29.

              	
                Allocation
                  of Realized Losses.

              
	 	 
	
                ARTICLE
                  IV

              
	 	 
	
                THE
                  NOTES; SATISFACTION AND DISCHARGE OF INDENTURE

              
	 	 
	
                Section
                  4.01.

              	
                The
                  Notes

              
	
                Section
                  4.02.

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

              
	
                Section
                  4.03.

              	
                Mutilated,
                  Destroyed, Lost or Stolen Notes

              
	
                Section
                  4.04.

              	
                Persons
                  Deemed Owners

              
	
                Section
                  4.05.

              	
                Cancellation

              
	
                Section
                  4.06.

              	
                Book-Entry
                  Notes

              
	
                Section
                  4.07.

              	
                Notices
                  to Depository

              
	
                Section
                  4.08.

              	
                Definitive
                  Notes

              
	
                Section
                  4.09.

              	
                Tax
                  Treatment

              
	
                Section
                  4.10.

              	
                Satisfaction
                  and Discharge of Indenture

              
	
                Section
                  4.11.

              	
                Application
                  of Trust Money

              
	
                Section
                  4.12.

              	
                Derivative
                  Contracts for Benefit of the Certificates

              
	
                Section
                  4.13.

              	
                Repayment
                  of Monies Held by Paying Agent

              
	
                Section
                  4.14.

              	
                Temporary
                  Notes

              
	
                Section
                  4.15.

              	
                Representation
                  Regarding ERISA

              
	 	 
	
                ARTICLE
                  V

              
	 	 
	
                DEFAULT
                  AND REMEDIES

              
	 	 
	
                Section
                  5.01.

              	
                Events
                  of Default

              
	
                Section
                  5.02.

              	
                Acceleration
                  of Maturity; Rescission and Annulment

              
	
                Section
                  5.03.

              	
                Collection
                  of Indebtedness and Suits for Enforcement by Indenture
                  Trustee.

              
	
                Section
                  5.04.

              	
                Remedies;
                  Priorities.

              
	
                Section
                  5.05.

              	
                Optional
                  Preservation of the Trust Estate

              
	
                Section
                  5.06.

              	
                Limitation
                  of Suits

              
	
                Section
                  5.07.

              	
                Unconditional
                  Rights of Noteholders To Receive Principal and
                  Interest.

              
	
                Section
                  5.08.

              	
                Restoration
                  of Rights and Remedies

              
	
                Section
                  5.09.

              	
                Rights
                  and Remedies Cumulative

              
	
                Section
                  5.10.

              	
                Delay
                  or Omission Not a Waiver

              
	
                Section
                  5.11.

              	
                Control
                  By Noteholders

              
	
                Section
                  5.12.

              	
                Waiver
                  of Past Defaults

              
	
                Section
                  5.13.

              	
                Undertaking
                  for Costs

              
	
                Section
                  5.14.

              	
                Waiver
                  of Stay or Extension Laws

              
	
                Section
                  5.15.

              	
                Sale
                  of Trust Estate.

              
	
                Section
                  5.16.

              	
                Action
                  on Notes

              
	
                Section
                  5.17.

              	
                Performance
                  and Enforcement of Certain Obligations.

              
	 	 
	
                ARTICLE
                  VI

              
	 	 
	
                THE
                  INDENTURE TRUSTEE

              
	 	 
	
                Section
                  6.01.

              	
                Duties
                  of Indenture Trustee.

              
	
                Section
                  6.02.

              	
                Rights
                  of Indenture Trustee.

              
	
                Section
                  6.03.

              	
                Individual
                  Rights of Indenture Trustee

              
	
                Section
                  6.04.

              	
                Indenture
                  Trustee’s Disclaimer

              
	
                Section
                  6.05.

              	
                Notice
                  of Event of Default

              
	
                Section
                  6.06.

              	
                Reports
                  by Indenture Trustee to Holders and Tax Administration.

              
	
                Section
                  6.07.

              	
                Compensation
                  and Indemnity

              
	
                Section
                  6.08.

              	
                Replacement
                  of Indenture Trustee

              
	
                Section
                  6.09.

              	
                Successor
                  Indenture Trustee by Merger

              
	
                Section
                  6.10.

              	
                Appointment
                  of Co-Indenture Trustee or Separate Indenture Trustee.

              
	
                Section
                  6.11.

              	
                Eligibility;
                  Disqualification

              
	
                Section
                  6.12.

              	
                Preferential
                  Collection of Claims Against Issuing Entity

              
	
                Section
                  6.13.

              	
                Representations
                  and Warranties

              
	
                Section
                  6.14.

              	
                Directions
                  to Indenture Trustee

              
	
                Section
                  6.15.

              	
                The
                  Agents

              
	 	 
	
                ARTICLE
                  VII

              
	 	 
	
                NOTEHOLDERS’
                  LISTS AND REPORTS

              
	 	 
	
                Section
                  7.01.

              	
                Issuing
                  Entity To Furnish Indenture Trustee Names and Addresses of
                  Noteholders.

              
	
                Section
                  7.02.

              	
                Preservation
                  of Information; Communications to Noteholders.

              
	
                Section
                  7.03.

              	
                Reports
                  of Issuing Entity.

              
	
                Section
                  7.04.

              	
                Reports
                  by Indenture Trustee

              
	
                Section
                  7.05.

              	
                Statements
                  to Noteholders.

              
	 	 
	
                ARTICLE
                  VIII

              
	 	 
	
                ACCOUNTS,
                  DISBURSEMENTS AND RELEASES

              
	 	 
	
                Section
                  8.01.

              	
                Collection
                  of Money

              
	
                Section
                  8.02.

              	
                Trust
                  Accounts.

              
	
                Section
                  8.03.

              	
                Officer’s
                  Certificate

              
	
                Section
                  8.04.

              	
                Termination
                  Upon Distribution to Noteholders

              
	
                Section
                  8.05.

              	
                Release
                  of Trust Estate.

              
	
                Section
                  8.06.

              	
                Surrender
                  of Notes Upon Final Payment

              
	
                Section
                  8.07.

              	
                Optional
                  Redemption of the Notes.

              
	 	 
	
                ARTICLE
                  IX

              
	 	 
	
                SUPPLEMENTAL
                  INDENTURES

              
	 	 
	
                Section
                  9.01.

              	
                Supplemental
                  Indentures Without Consent of Noteholders.

              
	
                Section
                  9.02.

              	
                Supplemental
                  Indentures With Consent of Noteholders

              
	
                Section
                  9.03.

              	
                Execution
                  of Supplemental Indentures

              
	
                Section
                  9.04.

              	
                Effect
                  of Supplemental Indenture

              
	
                Section
                  9.05.

              	
                Conformity
                  with Trust Indenture Act

              
	
                Section
                  9.06.

              	
                Reference
                  in Notes to Supplemental Indentures

              
	 	 
	
                ARTICLE
                  X

              
	 	 
	
                MISCELLANEOUS

              
	 	 
	
                Section
                  10.01.

              	
                Compliance
                  Certificates and Opinions, etc.

              
	
                Section
                  10.02.

              	
                Form
                  of Documents Delivered to Indenture Trustee

              
	
                Section
                  10.03.

              	
                Acts
                  of Noteholders.

              
	
                Section
                  10.04.

              	
                Notices
                  etc., to Indenture Trustee Issuing Entity and Rating
                  Agencies.

              
	
                Section
                  10.05.

              	
                Notices
                  to Noteholders; Waiver

              
	
                Section
                  10.06.

              	
                Conflict
                  with Trust Indenture Act

              
	
                Section
                  10.07.

              	
                Effect
                  of Headings

              
	
                Section
                  10.08.

              	
                Successors
                  and Assigns

              
	
                Section
                  10.09.

              	
                Separability

              
	
                Section
                  10.10.

              	
                [Reserved.]

              
	
                Section
                  10.11.

              	
                Legal
                  Holidays

              
	
                Section
                  10.12.

              	
                GOVERNING
                  LAW

              
	
                Section
                  10.13.

              	
                Counterparts

              
	
                Section
                  10.14.

              	
                Recording
                  of Indenture

              
	
                Section
                  10.15.

              	
                Issuing
                  Entity Obligation

              
	
                Section
                  10.16.

              	
                No
                  Petition

              
	
                Section
                  10.17.

              	
                Inspection

              
	
                Section
                  10.18.

              	
                No
                  Recourse to Owner Trustee

              
	
                Section
                  10.19.

              	
                Proofs
                  of Claim

              

      

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBITS

    

    
      	
              Exhibit
                A-1

            	
              Form
                of Class A-1 Note

            
	
              Exhibit
                A-2

            	
              Form
                of Class A-2a Note

            
	
              Exhibit
                A-3

            	
              Form
                of Class A-2b Note

            
	
              Exhibit
                A-4

            	
              Form
                of Class A-2c Note

            
	
              Exhibit
                A-5

            	
              Form
                of Class M-1 Note

            
	
              Exhibit
                A-6

            	
              Form
                of Class M-2 Note

            
	
              Exhibit
                A-7

            	
              Form
                of Class M-3 Note

            
	
              Exhibit
                A-8

            	
              Form
                of Class M-4 Note

            
	
              Exhibit
                A-9

            	
              Form
                of Class M-5 Note

            
	
              Exhibit
                A-10

            	
              Form
                of Class M-6 Note

            
	
              Exhibit
                A-11

            	
              Form
                of Class M-7 Note

            
	
              Exhibit
                A-12

            	
              Form
                of Class M-8 Note

            
	
              Exhibit
                A-13

            	
              Form
                of Class M-9 Note

            
	
              Exhibit
                A-14

            	
              Form
                of Class M-10 Note

            
	
              Exhibit
                B

            	
              Mortgage
                Loan Schedule

            
	
              Exhibit
                C-1

            	
              Form
                of Indenture Trustee’s Initial Certification

            
	
              Exhibit
                C-2

            	
              Form
                of Indenture Trustee’s Final Certification

            
	
              Exhibit
                D

            	
              Interest
                Rate Swap Agreement

            
	
              Appendix
                A

            	
              Definitions

            

    

     

    This
      Indenture, dated as of June 29, 2006, is entered into between New Century Home
      Equity Loan Trust 2006-2, a Delaware statutory trust, as Issuing Entity (the
      “Issuing Entity”), and Deutsche Bank National Trust Company, a national banking
      association, as Indenture Trustee (the “Indenture Trustee”).

     

    WITNESSETH
      THAT:

     

    Each
      party hereto agrees as follows for the benefit of the other party and for the
      equal and ratable benefit of the Holders of the Issuing Entity’s Asset-Backed
      Notes, Series 2006-2 (the “Notes”).

     

    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, all of the Issuing Entity’s
      right, title and interest in and to whether now existing or hereafter created
      by
      (a) the Mortgage Loans, Qualified Substitute Mortgage Loans and the proceeds
      thereof and all rights under the Related Documents; (b) all funds on deposit
      from time to time in the Collection Account allocable to the Mortgage Loans
      excluding any investment income from such funds; (c) all funds on deposit from
      time to time in the Payment Account and in all proceeds thereof; (d) all rights
      under (i) the Mortgage Loan Purchase Agreement as assigned to the Issuing
      Entity, (ii) the Servicing Agreement, (iii) any title, hazard and primary
      insurance policies with respect to the Mortgaged Properties and (iv) the rights
      with respect to the Interest Rate Swap Agreement; (e) all present and future
      claims, demands, causes and choses in action in respect of any or all of the
      foregoing and all payments on or under, and all proceeds of every kind and
      nature whatsoever in respect of, any or all of the foregoing and all payments
      on
      or under, and all proceeds of every kind and nature whatsoever in the conversion
      thereof, voluntary or involuntary, into cash or other liquid property, all
      cash
      proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks,
      deposit accounts, rights to payment of any and every kind, and other forms
      of
      obligations and receivables, instruments and other property which at any time
      constitute all or part of or are included in the proceeds of any of the
      foregoing and (f) all other property of the Issuing Entity (collectively, the
      “Trust Estate” or the “Collateral”).

     

    The
      foregoing Grant is made in trust to secure the payment of principal of and
      interest on, and any other amounts owing in respect of, the Notes, equally
      and
      ratably without prejudice, priority or distinction, and to secure compliance
      with the provisions of this Indenture, all as provided in this
      Indenture.

     

    The
      Indenture Trustee, as trustee on behalf of the Holders of the Notes,
      acknowledges such Grant, accepts the trust under this Indenture in accordance
      with the provisions hereof and agrees to perform its duties as Indenture Trustee
      as required herein.

     

    ARTICLE
      I

    DEFINITIONS

     

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

     

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

     

    “Commission”
      means the Securities and Exchange Commission.

     

    “indenture
      securities” means the Notes.

     

    “indenture
      security holder” means a Noteholder.

     

    “indenture
      to be qualified” means this Indenture.

     

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

     

    “obligor”
      on the indenture securities means the 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 and have the
      meanings assigned to them by such definitions.

     

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

     

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

     

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

     

    (iii) “or”
is
      not exclusive;

     

    (iv) “including”
      means including without limitation;

     

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

     

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

     

    ARTICLE
      II

     

    ORIGINAL
      ISSUANCE OF THE NOTES

     

    Section
      2.01.  Form.
      The
      Class A Notes and the Mezzanine Notes, together with the Indenture Trustee’s
      certificate of authentication, shall be in substantially the form set forth
      in
      Exhibits A-1 through A-13 to this Indenture, respectively, with such appropriate
      insertions, omissions, substitutions and other variations as are required or
      permitted by this Indenture.

     

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

     

    The
      terms
      of the Notes set forth in Exhibits A-1 through A-14 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
      Indenture Trustee shall upon Issuing Entity Request authenticate and deliver
      the
      Class A Notes and the Mezzanine Notes for original issue in an aggregate initial
      principal amount of $1,167,700,000. The
      Classes of Notes shall have the following Initial Note Balances:

     

    
      	
              Class

            	 	
              Initial
                Note Balance

            	 
	
              A-1

            	 	
              $

            	
              435,122,000

            	 
	
              A-2a

            	 	
              $

            	
              224,944,000

            	 
	
              A-2b

            	 	
              $

            	
              240,865,000

            	 
	
              A-2c

            	 	
              $

            	
              34,182,000

            	 
	
              M-1

            	 	
              $

            	
              52,481,000

            	 
	
              M-2

            	 	
              $

            	
              54,866,000

            	 
	
              M-3

            	 	
              $

            	
              17,295,000

            	 
	
              M-4

            	 	
              $

            	
              22,662,000

            	 
	
              M-5

            	 	
              $

            	
              20,277,000

            	 
	
              M-6

            	 	
              $

            	
              10,735,000

            	 
	
              M-7

            	 	
              $

            	
              15,506,000

            	 
	
              M-8

            	 	
              $

            	
              8,349,000

            	 
	
              M-9

            	 	
              $

            	
              14,313,000

            	 
	
              M-10

            	 	
              $

            	
              16,102,000

            	 

    

     

     

    Each
      of
      the Notes shall be dated the date of its authentication. The Notes shall be
      issuable as registered Notes and the Notes shall be issuable in the minimum
      initial Note Balances of $25,000 and in integral multiples of $1 in excess
      thereof.

     

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

     

    Section
      2.03.  Acceptance
      of Mortgage Loans by Indenture Trustee.

     

    (a)  The
      Indenture Trustee acknowledges receipt of, subject to the exceptions it notes
      pursuant to the procedures described below, the documents (or certified copies
      thereof) referred to in Section 2.1(b) of the Mortgage Loan Purchase Agreement,
      and declares that it holds and will continue to hold those documents and any
      amendments, replacements or supplements thereto and all other assets of the
      Trust Estate as Indenture Trustee in trust for the use and benefit of all
      present and future Holders of the Notes.

     

    The
      parties hereto understand and agree that it is not intended that any Mortgage
      Loan be included in the Trust that is a “High-Cost Home Loan” as defined by the
      Homeownership and Equity Protection Act of 1994 or any other applicable federal,
      state and local predatory or abusive lending laws.

     

    The
      Indenture Trustee agrees, for the benefit of the Noteholders, to review each
      Mortgage File on or before the Closing Date and to certify in substantially
      the
      form attached hereto as Exhibit C-1 that, as to each Mortgage Loan listed in
      the
      Mortgage Loan Schedule (other than any Mortgage Loan specifically identified
      in
      the exception report annexed thereto as not being covered by such
      certification), (i) all documents constituting part of such Mortgage File (other
      than such documents described in Section 2.1(b)(v) of the Mortgage Loan Purchase
      Agreement) required to be delivered to it pursuant to the Mortgage Loan Purchase
      Agreement are in its possession, (ii) such documents have been reviewed by
      it
      and appear regular on their face and relate to such Mortgage Loan and (iii)
      based on its examination and only as to the foregoing, the information set
      forth
      in the Mortgage Loan Schedule that corresponds to items (i), (ii), (x), (xi),
      (xiv) and (xvi) (solely as to Gross Margin) of the definition of “Mortgage Loan
      Schedule” accurately reflects information set forth in the Mortgage File. It is
      herein acknowledged that, in conducting such review, the Indenture Trustee
      was
      under no duty or obligation (i) to inspect, review or examine any such
      documents, instruments, certificates or other papers to determine whether they
      are genuine, enforceable, or appropriate for the represented purpose or whether
      they have actually been recorded or that they are other than what they purport
      to be on their face or (ii) to determine whether any Mortgage File should
      include any of the documents specified in clause (v) of Section 2.1(b) of the
      Mortgage Loan Purchase Agreement. 

     

    Prior
      to
      the first anniversary date of this Indenture the Indenture Trustee shall deliver
      to the Depositor and the Servicer a final certification in the form annexed
      hereto as Exhibit C-2 evidencing the completeness of the Mortgage Files, with
      any applicable exceptions noted thereon, and the Servicer shall forward a copy
      thereof to any Sub-Servicer.

     

    If
      in the
      process of reviewing the Mortgage Files and making or preparing, as the case
      may
      be, the certifications referred to above, the Indenture Trustee finds any
      document or documents constituting a part of a Mortgage File to be missing
      or
      defective in any material respect, at the conclusion of its review the Indenture
      Trustee shall so notify the Depositor and the Servicer. In addition, upon the
      discovery by the Indenture Trustee of a breach of any of the representations
      and
      warranties made by NC Capital in the Mortgage Loan Purchase Agreement in respect
      of any Mortgage Loan which materially adversely affects such Mortgage Loan
      or
      the interests of the related Noteholders in such Mortgage Loan, the Indenture
      Trustee or any other party discovering such breach shall give prompt written
      notice to the Depositor, the Servicer and NC Capital.

     

    (b)  Upon
      deposit of the Purchase Price in the Payment Account, the Indenture Trustee
      shall release and deliver to NC Capital (at the expense of the Servicer) the
      related Mortgage File and shall execute and deliver all instruments of transfer
      or assignment, without recourse, furnished to it by NC Capital as are necessary
      to vest in NC Capital title to and rights under the related Mortgage Loan.
      Such
      purchase shall be deemed to have occurred on the date on which certification
      of
      the deposit of the Purchase Price in the Payment Account was received by the
      Indenture Trustee.

     

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

     

    ARTICLE
      III

     

    COVENANTS

     

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

     

    Section
      3.02.  Maintenance
      of Office or Agency.
      The
      Issuing Entity will maintain an office or agency where, subject to satisfaction
      of conditions set forth herein, Notes may be surrendered for registration of
      transfer or exchange, and where notices and demands to or upon the Issuing
      Entity in respect of the Notes and this Indenture may be served. The Issuing
      Entity hereby initially appoints the Indenture Trustee to serve as its agent
      for
      the foregoing purposes. If at any time the Issuing Entity shall fail to maintain
      any such office or agency or shall fail to furnish the Indenture Trustee with
      the address thereof, such surrenders may be made at the office of the Indenture
      Trustee’s agent located at DB Services Tennessee, 648 Grassmere Park Road,
      Nashville, Tennessee 37211-3658, Attention: Transfer Unit, and notices and
      demands may be made or served at the Corporate Trust Office.

     

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

     

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

     

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

     

    (ii)  give
      the
      Indenture Trustee notice of any default by the Issuing Entity of which it has
      actual knowledge in the making of any payment required to be made with respect
      to the Notes;

     

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

     

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

     

    (v)  comply
      with all requirements of the Code with respect to the withholding from any
      payments made by it on any Notes of any applicable withholding taxes imposed
      thereon and with respect to any applicable reporting requirements in connection
      therewith; and

     

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

     

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

     

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

     

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

     

    Section
      3.05.  Payment
      of Principal and Interest.

     

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

     

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

     

    (i)  To
      the
      Holders of the Group I Notes, the Senior Interest Payment Amount allocable
      to
      such Notes; and

     

    (ii)  concurrently,
      to the Holders of each Group II Notes, on a pro
      rata basis
      based on the entitlement of each such Class, the Senior Interest Payment Amount
      for such Notes, to the extent remaining unpaid after the payment of the Group
      II
      Interest Remittance Amount as set forth in Section 3.05(b)(II)(i).

     

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

     

    (i)  concurrently,
      to the Holders of each Class of Group II Notes, on a pro
      rata basis
      based on the entitlement of each such Class, an amount equal to the Senior
      Interest Payment Amount allocable to such Class of Notes; and

     

    (ii)  to
      the
      Holders of the Group I Notes, the Senior Interest Payment Amount for such Notes,
      to the extent remaining unpaid after the payment of the Group I Interest
      Remittance Amount as set forth in Section 3.05 (b)(I)(i).

     

    (III) On
      each
      Payment Date, following the payments made pursuant to Sections 3.05(b)(I) and
      (II), the Indenture Trustee shall withdraw from the Payment Account an amount
      equal to any remaining Group I Interest Remittance Amount and Group II Interest
      Remittance Amount and pay sequentially, to the Holders of the Class M-1 Notes,
      the Class M-2 Notes, the Class M-3 Notes, the Class M-4 Notes, the Class M-5
      Notes, the Class M-6 Notes, the Class M-7 Notes, the Class M-8 Notes, the Class
      M-9 Notes and the Class M-10 Notes in that order, in an amount equal to the
      Interest Payment Amount allocable to each such Class of Notes.

     

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

     

    (i)  to
      the
      Group I Notes, until the Note Balances thereof have been reduced to zero;
      and

     

    (ii)  after
      taking into account the amount paid to the Group II Notes pursuant to Section
      3.05(c)(II)(i) on such Payment Date, to the Group II Notes (allocated among
      the
      Group II Notes in the priority described below), until the Note Balances thereof
      have been reduced to zero.

     

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

     

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

     

    (ii)  after
      taking into account the amount paid to the Group I Notes pursuant to Section
      3.05(c)(I)(i) on such Payment Date, to the Group I Notes, until the Note
      Balances thereof have been reduced to zero.

     

    (III) On
      each
      Payment Date (a) prior to the Stepdown Date or (b) on which a Trigger Event
      is
      in effect, the sum of the Group I Principal Payment Amount and the Group II
      Principal Payment Amount remaining after payments pursuant to Section 3.05(c)(I)
      and Section (c)(II) for such Payment Date shall be paid in the following order
      of priority: sequentially, to the Class M-1 Notes, the Class M-2 Notes, the
      Class M-3 Notes, the Class M-4 Notes, the Class M-5 Notes, the Class M-6 Notes,
      the Class M-7 Notes, the Class M-8 Notes, the Class M-9 Notes and the Class
      M-10
      Notes in that order, until the respective Note Balance of each such Class has
      been reduced to zero.

     

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

     

    (i)  to
      the
      Group I Notes, the Group I Senior Principal Payment Amount, until the Note
      Balances thereof have been reduced to zero; and

     

    (ii)  to
      the
      Group II Notes (allocated among the Group II Notes in the priority described
      below), an amount equal to the excess, if any, of (x) the amount required to
      be
      paid pursuant to Section 3.05(c)(V)(i) for such Payment Date over (y) the amount
      actually paid pursuant to Section 3.05(c)(V)(i) from the Group II Principal
      Payment Amount on such Payment Date.

     

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

     

    (i)  to
      the
      Group II Notes (allocated among the Group II Notes in the priority described
      below), the Group II Senior Principal Payment Amount, until the Note Balances
      thereof have been reduced to zero; and

     

    (ii)  to
      the
      Group I Notes, an amount equal to the excess, if any, of (x) the amount required
      to be paid pursuant to Section 3.05(c)(IV)(i) for such Payment Date over (y)
      the
      amount actually paid pursuant to Section 3.05(c)(IV)(i) from the Group I
      Principal Payment Amount on such Payment Date.

     

    (iii)  (VI)On
      each
      Payment Date (a) on or after the Stepdown Date and (b) on which a Trigger Event
      is not in effect, the sum of the Group I Principal Payment Amount and the Group
      II Principal Payment Amount remaining after payments pursuant to Section
      3.05(c)(IV) and Section 3.05(c)(V) shall be paid to the Class M-1 Notes, Class
      M-2 Notes, Class M-3 Notes, Class M-4 Notes, Class M-5 Notes, Class M-6 Notes,
      Class M-7 Notes, Class M-8 Notes, Class M-9 Notes and the Class M-10 Notes,
      the
      related Class M principal Payment Amount, in that order, until the Note Balance
      thereof has been reduced to zero.

     

    With
      respect to the Group II Notes, all principal payments will be paid sequentially,
      to the Class A-2a Notes, the Class A-2b Notes and the Class A-2c Notes in that
      order, until their respective Note Balances have been reduced to zero; provided,
      however, on any Payment Date on which the aggregate Note Balance of the
      Mezzanine Notes and the Overcollateralization Amount have been reduced to zero,
      principal payments will be paid, concurrently, to the Class A-2a Notes, the
      Class A-2b Notes and the Class A-2c Notes, on a pro
      rata
      basis
      based on the Note Balance of each such Class, until their respective Note
      Balances have been reduced to zero.

     

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

     

    (i)  to
      the
      Holders of the Class or Classes of Notes then entitled to receive payments
      in
      respect of principal, as part of the Group I Principal Payment Amount and the
      Group II Principal Payment Amount in an amount equal to the
      Overcollateralization Increase Amount for the Notes, applied to reduce the
      Note
      Balance of such Notes until the aggregate Note Balance of such Notes is reduced
      to zero;

     

    (ii)  sequentially,
      to the Holders of the Class M-1 Notes, the Class M-2 Notes, the Class M-3 Notes,
      the Class M-4 Notes, the Class M-5 Notes, the Class M-6 Notes, the Class M-7
      Notes, the Class M-8 Notes, the Class M-9 Notes and the Class M-10 Notes, in
      that order, first, in an amount equal to the Interest Carry Forward Amount
      allocable to each such Class of Notes and second, in an amount equal to the
      Allocated Realized Loss Amount allocable to each such Class of
      Notes;

     

    (iii)  to
      the
      Holders of the Class A Notes and the Mezzanine Notes (in the priority described
      below), any Basis Risk Shortfalls for such Payment Date;

     

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

     

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

     

    (vi)  to
      the
      Owner Trustee, any fees, expenses and indemnities not otherwise paid and then,
      to the Holders of the Certificates, any remaining amounts and any Prepayment
      Charges collected during the related Prepayment Period.

     

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

     

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

     

    (e)  On
      each
      Payment Date, after making the distributions of the Available Payment Amount
      as
      set forth above, the Indenture Trustee will determine the amount of any Basis
      Risk Shortfalls with respect to the Class A Notes and the Mezzanine Notes for
      such Payment Date and pay such amount to the extent of the applicable Basis
      Risk
      Shortfall in the following order of priority:

     

    (i)  concurrently
      to each Class of Class A Notes, on a pro
      rata
      basis
      based on the Basis Risk Shortfall for each such Class, until the unpaid Basis
      Risk Shortfall for each such class has been reduced to zero; and

     

    (ii)  sequentially,
      to the Class M-1 Notes, the Class M-2 Notes, the Class M-3 Notes, the Class
      M-4
      Notes, the Class M-5 Notes, the Class M-6 Notes, the Class M-7 Notes, the Class
      M-8 Notes, the Class M-9 Notes and the Class M-10 Notes in that order, until
      the
      unpaid Basis Risk Shortfall for each such class has been reduced to
      zero.

     

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

     

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

     

    (h)  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 reasonably satisfactory to the Indenture Trustee as
      of
      the preceding Record Date or in all other cases or if no such instructions
      have
      been delivered to the Indenture Trustee, by check to such Noteholder mailed
      to
      such Holder’s address as it appears in the Note Register in the amount required
      to be paid to such Holder on such Payment Date pursuant to such Holder’s Notes;
provided,
      however,
      that
      the Indenture Trustee shall not pay to such Holders any amount required to
      be
      withheld from a payment to such Holder by the Code.

     

    (i)  The
      principal of each Note shall be due and payable in full on the Final Stated
      Maturity Date for such Note as provided in the forms of Notes set forth in
      Exhibits A-1 through A-13 to this Indenture. All principal payments on the
      Notes
      shall be made to the Noteholders entitled thereto in accordance with the
      Percentage Interests represented by such Notes. The Indenture Trustee shall
      notify the Person in whose name a Note is registered at the close of business
      on
      the Record Date preceding the Final Stated Maturity Date or other final Payment
      Date (including any final Payment Date resulting from any redemption pursuant
      to
      Section 8.07 hereof). Such notice shall to the extent practicable be mailed
      no
      later than five Business Days prior to such Final Stated Maturity Date or other
      final Payment Date and shall specify that payment of the principal amount and
      any interest due with respect to such Note at the Final Stated Maturity Date
      or
      other final Payment Date will be payable only upon presentation and surrender
      of
      such Note and shall specify the place where such Note may be presented and
      surrendered for such final payment. No interest shall accrue on the Notes on
      or
      after the Final Stated Maturity Date or any such other final Payment
      Date.

     

    Section
      3.06.  Protection
      of Trust Estate.

     

    (a)  The
      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 Servicer to enforce any of the rights to the Mortgage Loans;
      or

     

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

     

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

     

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

     

    Section
      3.07.  Opinions
      as to Trust Estate.

     

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

     

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

     

    Section
      3.08.  Performance
      of Obligations.

     

    The
      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.

     

    The
      Issuing Entity 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.

     

    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 Mortgage Loans or under
      any instrument included in the Trust Estate, or which would result in the
      amendment, hypothecation, subordination, termination or discharge of, or impair
      the validity or effectiveness of, any of the documents relating to the Mortgage
      Loans or any such instrument, except such actions as the Servicer is expressly
      permitted to take in the Servicing Agreement. The Indenture Trustee may exercise
      the rights of the Issuing Entity to direct the actions of the Servicer pursuant
      to the Servicing Agreement.

     

    The
      Issuing Entity may retain an administrator and may enter into contracts 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.

     

    Section
      3.09.  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, unless directed to do so by the Indenture
      Trustee;

     

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

     

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

     

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

     

    Section
      3.10.  [Reserved.]

     

    Section
      3.11.  [Reserved.]

     

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

     

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

     

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

     

    Section
      3.15.  Investment
      Company Act.
      The
      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 3.15 if it shall have
      obtained an order exempting it from regulation as an “investment company” so
      long as it is in compliance with the conditions imposed in such
      order.

     

    Section
      3.16.  Issuing
      Entity May Consolidate, etc.

     

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

     

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

     

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

     

    (iii)  the
      Rating Agencies shall have notified the Issuing Entity that such transaction
      shall not cause the rating of the Notes to be reduced, suspended or withdrawn
      or
      to be considered by either Rating Agency to be below investment
      grade;

     

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

     

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

     

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

     

    (b)  The
      Issuing Entity shall not convey or transfer any of its properties or assets,
      including those included in the Trust Estate, to any Person,
      unless:

     

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

     

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

     

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

     

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

     

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

     

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

     

    Section
      3.17.  Successor
      or Transferee.

     

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

     

    (b)  Upon
      a
      conveyance or transfer of all the assets and properties of the Issuing Entity
      pursuant to Section 3.16(b), the Issuing Entity will be released from every
      covenant and agreement of this Indenture to be observed or performed on the
      part
      of the Issuing Entity with respect to the Notes immediately upon the delivery
      of
      written notice to the Indenture Trustee of such conveyance or
      transfer.

     

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

     

    Section
      3.19.  No
      Borrowing.
      The
      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.

     

    Section
      3.20.  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
      3.21.  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
      3.22.  Determination
      of Note Rate.
      On each
      Interest Determination Date, the Indenture Trustee shall determine One-Month
      LIBOR and the related Note Rate for each Class of Notes for the following
      Interest Accrual Period. The establishment of One-Month LIBOR on each Interest
      Determination Date by the Indenture Trustee and the Indenture Trustee’s
      calculation of the rate of interest applicable to each Class of Notes for the
      related Accrual Period shall (in the absence of manifest error) be final and
      binding.

     

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

     

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

     

    Section
      3.25.  Further
      Instruments and Acts.
      Upon
      request of the Indenture Trustee, the 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
      3.26.  Statements
      to Noteholders.
      On each
      Payment Date, the Indenture Trustee and the Certificate Registrar shall prepare
      and make available on the Indenture Trustee’s website,
      https://www.tss.db.com/invr (or deliver at the recipient’s option), to each
      Noteholder and Certificateholder the most recent statement prepared by the
      Indenture Trustee pursuant to Section 7.05 hereof.

     

    Section
      3.27.  [Reserved].

     

    Section
      3.28.  Certain
      Representations Regarding the Trust Estate.

     

    (a)  With
      respect to that portion of the Collateral described in clauses (a) through
      (d)
      of the definition of Trust Estate, the 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” or “instruments,” 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 taken all steps necessary to cause the Indenture Trustee
      to
      become the account holder of the Collateral.

     

    (v)  Other
      than the security interest granted to the Indenture Trustee pursuant to this
      Indenture, the Issuing Entity has not pledged, assigned, sold, granted a
      security interest in, or otherwise conveyed any of the Collateral.

     

    (vi)  The
      Collateral is not in the name of any Person other than the Issuing Entity or
      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.

     

    (b)  With
      respect to that portion of the Collateral described in clause (e), 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 “general intangibles” 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)  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.

     

    (c)  With
      respect to any Collateral in which a security interest may be perfected by
      filing, 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 such Collateral, other than any financing statement
      relating to the security interest granted to the Indenture Trustee hereunder
      or
      that has been terminated. The Issuing Entity is not aware of any judgment or
      tax
      lien filings against the Issuing Entity.

     

    (d)  The
      Issuing Entity has caused or will have caused, within ten days, the filing
      of
      all appropriate financing statements in the proper filing office in the
      appropriate jurisdictions under applicable law in order to perfect the security
      interest in all Collateral granted to the Indenture Trustee hereunder in which
      a
      security interest may be perfected by filing and the Issuing Entity will cause
      such security interest to be maintained. Any financing statement that is filed
      in connection with this Section 3.28 shall contain a statement that a purchase
      or security interest in any collateral described therein will violate the rights
      of the secured party named in such financing statement.

     

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

     

    Section
      3.29.  Allocation
      of Realized Losses.

     

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

     

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

     

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

     

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

     

    ARTICLE
      IV

    THE
      NOTES; SATISFACTION AND DISCHARGE OF INDENTURE

     

    Section
      4.01.  The
      Notes.
      Each
      Class of Notes shall be registered in the name of a nominee designated by the
      Depository. Beneficial Owners will hold interests in the Notes through the
      book-entry facilities of the Depository in minimum initial Note Balances of
      $25,000 and integral multiples of $1 in excess thereof.

     

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

     

    In
      the
      event the Depository Trust Company resigns or is removed as Depository, the
      Indenture Trustee with the approval of the Issuing Entity 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 Indenture Trustee and delivered by the Indenture Trustee
      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.

     

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

     

    Subject
      to the restrictions and limitations set forth below, upon surrender for
      registration of transfer of any Note at the Corporate Trust Office, the 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 Balances evidencing the same Class and aggregate
      Percentage Interests.

     

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

     

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

     

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

     

    Section
      4.03.  Mutilated,
      Destroyed, Lost or Stolen Notes.
      If (i)
      any mutilated Note is surrendered to the Indenture Trustee, or the Indenture
      Trustee receives evidence to its satisfaction of the destruction, loss or theft
      of any Note, and (ii) there is delivered to the Indenture Trustee such security
      or indemnity as may be required by it to hold the Issuing Entity and the
      Indenture Trustee harmless, then, in the absence of notice to the Issuing
      Entity, the Note Registrar or the Indenture Trustee that such Note has been
      acquired by a bona fide purchaser, and provided that the requirements of Section
      8-405 of the UCC are met, the Issuing Entity shall execute, and upon its request
      the Indenture Trustee shall authenticate and deliver, in exchange for or in
      lieu
      of any such mutilated, destroyed, lost or stolen Note, a replacement Note;
      provided,
      however,
      that if
      any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
      become or within seven days shall be due and payable, instead of issuing a
      replacement Note, the 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 and the Indenture Trustee shall be entitled
      to
      recover such replacement Note (or such payment) from the Person to whom it
      was
      delivered or any Person taking such replacement Note from such Person to whom
      such replacement Note was delivered or any assignee of such Person, except
      a
      bona fide purchaser, and shall be entitled to recover upon the security or
      indemnity provided therefor to the extent of any loss, damage, cost or expense
      incurred by the Issuing Entity or the Indenture Trustee in connection
      therewith.

     

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

     

    Every
      replacement Note issued pursuant to this Section 4.03 in replacement of any
      mutilated, destroyed, lost or stolen Note shall constitute an original
      additional contractual obligation of the 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 Indenture Trustee, the Paying Agent and any agent of the Issuing Entity
      or
      the Indenture Trustee may treat the Person in whose name any Note is registered
      (as of the day of determination) as the owner of such Note for the purpose
      of
      receiving payments of principal of and interest, if any, on such Note and for
      all other purposes whatsoever, whether or not such Note be overdue, and neither
      the Issuing Entity, the Indenture Trustee, the Paying Agent nor any agent of
      the
      Issuing Entity or the Indenture Trustee shall be affected by notice to the
      contrary.

     

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

     

    Section
      4.06.  Book-Entry
      Notes.  The
      Notes, upon original issuance, will be issued in the form of typewritten Notes
      representing the Book-Entry Notes, to be delivered to The Depository Trust
      Company, the initial Depository, by, or on behalf of, the 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 and the Indenture Trustee shall be entitled to
      deal
      with the Depository for all purposes of this Indenture (including the payment
      of
      principal of and interest on the Notes and the giving of instructions or
      directions hereunder) as the sole holder of the Notes, and shall have no
      obligation to the Beneficial Owners of the Notes;

     

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

     

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

     

    (v)  whenever
      this Indenture requires or permits actions to be taken based upon instructions
      or directions of Holders of Notes evidencing a specified percentage of the
      Note
      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
      Indenture Trustee.

     

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

     

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

     

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

     

    Section
      4.10.  Satisfaction
      and Discharge of Indenture.
      This
      Indenture shall cease to be of further effect with respect to the Notes except
      as to (i) rights of registration of transfer and exchange, (ii) substitution
      of
      mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
      receive payments of principal thereof and interest thereon, (iv) Sections 3.03,
      3.04, 3.06, 3.09, 3.17, 3.19 and 3.20, (v) the rights and immunities of the
      Indenture Trustee hereunder (including the rights of the Indenture Trustee
      under
      Section 6.07) and the obligations of the Indenture Trustee under Section 4.11
      and (vi) the rights of Noteholders as beneficiaries hereof with respect to
      the
      property so deposited with the Indenture Trustee payable to all or any of them,
      and the Indenture Trustee, on demand of and at the expense of the Issuing
      Entity, shall execute proper instruments acknowledging satisfaction and
      discharge of this Indenture with respect to the Notes and shall release and
      deliver the Collateral to or upon the order of the Issuing Entity,
      when

     

    (A) either

     

    (1) all
      Notes
      theretofore authenticated and delivered (other than (i) Notes that have been
      destroyed, lost or stolen and that have been replaced or paid as provided in
      Section 4.03 hereof and (ii) Notes for whose payment money has theretofore
      been
      deposited in trust or segregated and held in trust by the Issuing Entity and
      thereafter repaid to the Issuing Entity or discharged from such trust, as
      provided in Section 3.03) have been delivered to the Indenture Trustee for
      cancellation; or

     

    (2) all
      Notes
      not theretofore delivered to the Indenture Trustee for cancellation (a) have
      become due and payable, (b) will become due and payable at the Final Stated
      Maturity Date within one year, or (c) have been called for early redemption
      pursuant to Section 8.07 hereof, and the Issuing Entity, in the case of (a)
      or
      (b) above, has irrevocably deposited or caused to be irrevocably deposited
      with
      the Indenture Trustee cash or direct obligations of or obligations guaranteed
      by
      the United States of America (which will mature prior to the date such amounts
      are payable), in trust for such purpose, in an amount sufficient to pay and
      discharge the entire indebtedness on such Notes then outstanding not theretofore
      delivered to the Indenture Trustee for cancellation when due on the Final Stated
      Maturity Date or other final Payment Date, or, in the case of (c) above, the
      Issuing Entity shall have complied with all requirements of Section 8.07
      hereof,

     

    (B) the
      Issuing Entity has paid or caused to be paid all other sums payable hereunder;
      and

     

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

     

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

     

    Section
      4.12.  Derivative
      Contracts for Benefit of the Certificates.
      At any
      time on or after the Closing Date, the Issuing Entity shall have the right
      to
      convey to the Trust Estate, solely for the benefit of the Holder of the
      Certificates, a derivative contract or comparable instrument. Any such
      instrument shall constitute a fully prepaid agreement. All collections, proceeds
      and other amounts in respect of such an instrument shall be distributed to
      the
      Certificates on the Payment Date following receipt thereof by the Indenture
      Trustee.

     

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

     

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

     

    If
      temporary Notes are issued, the 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 office of the Indenture Trustee located
      at DB Services Tennessee, 648 Grassmere Park Road, Nashville, Tennessee
      37211-3658, Attention: Transfer Unit, without charge to the Holder. Upon
      surrender for cancellation of any one or more temporary Notes, the Issuing
      Entity shall execute and the Indenture Trustee shall authenticate and make
      available for delivery, in exchange therefor, Definitive Notes of authorized
      denominations and of like tenor, class and aggregate principal amount. Until
      so
      exchanged, such temporary Notes shall in all respects be entitled to the same
      benefits under this Indenture as Definitive Notes.

     

    Section
      4.15.  Representation
      Regarding ERISA.
      By
      acquiring a Note or interest therein, each Holder of such Note or Beneficial
      Owner of any such interest will be deemed to represent that either (1) it is
      not
      acquiring the Note with Plan Assets or (2) (A) the acquisition, holding and
      transfer of such Note will not give rise to a non-exempt prohibited transaction
      under Section 406 of ERISA or Section 4975 of the Code and (B) the 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 Indenture Trustee and the Owner Trustee
      with
      an opinion of counsel, which opinion of counsel will not be at the expense
      of
      the Issuing Entity, the Seller, NC Capital, any Underwriter, the Owner Trustee,
      the Indenture Trustee, the Servicer or any successor servicer which opines
      that
      the acquisition, holding and transfer of such Note or interest therein is
      permissible under applicable law, will not constitute or result in a non-exempt
      prohibited transaction under ERISA or Section 4975 of the Code and will not
      subject the Issuing Entity, the Seller, NC Capital, the Depositor, the Owner
      Trustee, the Indenture Trustee, the Servicer or any successor servicer to any
      obligation in addition to those undertaken in the Indenture or the other
      Operative Agreements.

     

    ARTICLE
      V

    DEFAULT
      AND REMEDIES

     

    Section
      5.01.  Events
      of Default.
      The
      Issuing Entity shall deliver to the Indenture Trustee, written notice in the
      form of an Officer’s Certificate, within five days after learning of the
      occurrence of any event which with the giving of notice and the lapse of time
      would become an Event of Default under clause (iii), (iv) or (v) 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 Event of Default unless a Responsible
      Officer has actual knowledge thereof or unless written notice of such Event
      of
      Default is received by a Responsible Officer and such notice references the
      Notes, the Trust Estate or this Indenture.

     

    Section
      5.02.  Acceleration
      of Maturity; Rescission and Annulment.
      If an
      Event of Default should occur and be continuing, then and in every such case
      the
      Indenture Trustee at the written direction of the Holders of Notes representing
      not less than a majority of the aggregate Note Balance of the Notes, together
      with accrued and unpaid interest thereon through the date of acceleration shall
      become immediately due and payable.

     

    At
      any
      time after such declaration of acceleration of maturity with respect to an
      Event
      of Default has been made and before a judgment or decree for payment of the
      money due has been obtained by the Indenture Trustee as hereinafter in this
      Article V provided, Holders of the Notes representing not less than a majority
      of the aggregate Note Balance of the Notes, by written notice to the Issuing
      Entity and the Indenture Trustee, may 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 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 upon the Notes if the Event of
      Default giving rise to such acceleration had not occurred; and (b) all sums
      paid
      or advanced by the Indenture Trustee hereunder and the reasonable compensation,
      expenses, disbursements and advances of the Indenture Trustee and its agents
      and
      counsel; and

     

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

     

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

     

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

     

    (a)  The
      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 Holders of a majority of the aggregate Note
      Balance of the Notes, pay to the Indenture Trustee, for the benefit of the
      Holders of Notes, the whole amount then due and payable on the Notes for
      principal and interest, with interest at the applicable Note Rate upon the
      overdue principal, and in addition thereto such further amount as shall be
      sufficient to cover the costs and expenses of collection, including the
      reasonable compensation, expenses, disbursements and advances of the Indenture
      Trustee and its agents and counsel.

     

    (b)  In
      case
      the 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,
      subject to the provisions of Section 10.16 hereof may institute a Proceeding
      for
      the collection of the sums so due and unpaid, and may prosecute such Proceeding
      to judgment or final decree, and may enforce the same against the 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 the Notes, wherever
      situated, the monies adjudged or decreed to be payable.

     

    (c)  If
      an
      Event of Default occurs and is continuing, the Indenture Trustee, subject to
      the
      provisions of Section 10.16 hereof may, as more particularly provided in Section
      5.04 hereof, in its discretion, proceed to protect and enforce its rights and
      the rights of the Noteholders, by such appropriate Proceedings, as directed
      in
      writing by Holders of a majority of the aggregate Note Balance of the Notes,
      to
      protect and enforce any such rights, whether for the specific enforcement of
      any
      covenant or agreement in this Indenture or in aid of the exercise of any power
      granted herein, or to enforce any other proper remedy or legal or equitable
      right vested in the Indenture Trustee by this Indenture or by law.

     

    (d)  In
      case
      there shall be pending, relative to the 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, as directed
      in writing by Holders of a majority of the aggregate Note Balance of the Notes,
      irrespective of whether the principal of any Notes shall then be due and payable
      as therein expressed or by declaration or otherwise and irrespective of whether
      the Indenture Trustee shall have made any demand pursuant to the provisions
      of
      this Section, shall be entitled and empowered, by intervention in such
      Proceedings or otherwise:

     

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

     

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

     

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

     

    (iv)  to
      file
      such proofs of claim and other papers or documents as may be necessary or
      advisable in order to have the claims of the Indenture Trustee or the Holders
      of
      Notes allowed in any judicial proceedings relative to the 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 Indenture Trustee and, in the event
      that the Indenture Trustee shall consent to the making of payments directly
      to
      such Noteholders, to pay to the Indenture Trustee such amounts as shall be
      sufficient to cover reasonable compensation to the Indenture Trustee, each
      predecessor Indenture Trustee and their respective agents, attorneys and
      counsel, and all other expenses and liabilities incurred, and all advances
      made,
      by the Indenture Trustee and each predecessor Indenture Trustee.

     

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

     

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

     

    (g)  In
      any
      Proceedings brought by the Indenture Trustee (and also any Proceedings involving
      the interpretation of any provision of this Indenture to which the Indenture
      Trustee shall be a party), the Indenture Trustee shall be held to represent
      all
      the Holders of the Notes, and it shall not be necessary to make any Noteholder
      a
      party to any such Proceedings.

     

    Section
      5.04.  Remedies;
      Priorities.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Section
      5.06.  Limitation
      of Suits.
      No
      Holder of any Note shall have any right to institute any Proceeding, judicial
      or
      otherwise, with respect to this Indenture, or for the appointment of a receiver
      or trustee, or for any other remedy hereunder, unless and subject to the
      provisions of Section 10.16 hereof

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (iv)  the
      Indenture Trustee may take any other action deemed proper by the Indenture
      Trustee that is not inconsistent with such direction of the Holders of Notes
      representing a majority of the Note 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 Holders of Notes representing not less than a
      majority of the aggregate Note Balance of the Notes may waive any past Event
      of
      Default and its consequences except an Event of Default (a) with respect to
      payment of principal of or interest on any of the Notes or (b) in respect of
      a
      covenant or provision hereof which cannot be modified or amended without the
      consent of the Holder of each Note. In the case of any such waiver, the Issuing
      Entity, the Indenture Trustee and the Holders of the Notes shall be restored
      to
      their former positions and rights hereunder, respectively, but no such waiver
      shall extend to any subsequent or other Event of Default or impair any right
      consequent thereto.

     

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

     

    Section
      5.13.  Undertaking
      for Costs.
      All
      parties to this Indenture agree, and each Holder of any Note and each Beneficial
      Owner of any interest therein by such Holder’s or Beneficial Owner’s acceptance
      thereof shall be deemed to have agreed, that any court may in its discretion
      require, in any suit for the enforcement of any right or remedy under this
      Indenture, or in any suit against the Indenture Trustee for any action taken,
      suffered or omitted by it as Indenture Trustee, the filing by any party litigant
      in such suit of an undertaking to pay the costs of such suit, and that such
      court may in its discretion assess reasonable costs, including reasonable
      attorneys’ fees, against any party litigant in such suit, having due regard to
      the merits and good faith of the claims or defenses made by such party litigant;
      but the provisions of this Section 5.13 shall not apply to (a) any suit
      instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder,
      or group of Noteholders, in each case holding in the aggregate more than 10%
      of
      the Note 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
      Section 5.05 hereof and this Section 5.15. The power to effect any such Sale
      shall not be exhausted by any one or more Sales as to any portion of the Trust
      Estate remaining unsold, but shall continue unimpaired until the entire Trust
      Estate shall have been sold or all amounts payable on the Notes and under this
      Indenture shall have been paid. The Indenture Trustee may from time to time
      postpone any public Sale by public announcement made at the time and place
      of
      such Sale. The Indenture Trustee hereby expressly waives its right to any amount
      fixed by law as compensation for any Sale.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (iv)  the
      Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact
      of the 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; and

     

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

     

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

     

    Section
      5.17.  Performance
      and Enforcement of Certain Obligations.

     

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

     

    (b)  The
      Indenture Trustee, as pledgee of the Mortgage Loans, may, and at the direction
      (which direction shall be in writing or by telephone (confirmed in writing
      promptly thereafter)) of the Holders of 66-2/3% of the Note Balances of the
      Notes, shall exercise all rights, remedies, powers, privileges and claims of
      the
      Issuing Entity against the Seller, NC Capital or the Servicer under or in
      connection with the Mortgage Loan Purchase Agreement and the Servicing
      Agreement, including the right or power to take any action to compel or secure
      performance or observance by the Seller, NC Capital or the Servicer, as the
      case
      may be, of each of their obligations to the Issuing Entity thereunder and to
      give any consent, request, notice, direction, approval, extension or waiver
      under the Mortgage Loan Purchase Agreement and the Servicing Agreement, as
      the
      case may be, and any right of the Issuing Entity to take such action shall
      not
      be suspended.

     

    ARTICLE
      VI

    THE
      INDENTURE TRUSTEE

     

    Section
      6.01.  Duties
      of Indenture Trustee.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (iii)  the
      Indenture Trustee shall not be liable with respect to any action it takes or
      omits to take in good faith in accordance with a direction received by it from
      Noteholders or from the Issuing Entity, which they are entitled to give under
      the Basic Documents.

     

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

     

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

     

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

     

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

     

    (h)  The
      Indenture Trustee shall act in accordance with Sections 6.03 of the Servicing
      Agreement and shall act as successor to the Servicer or appoint a successor
      Servicer in accordance with Section 6.02 of the Servicing
      Agreement.

     

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

     

    (j)  The
      Indenture Trustee shall, at the written direction of the Depositor, enforce
      all
      of its rights and exercise any remedies under the Interest Rate Swap Agreement.
      In the event the Interest Rate Swap Agreement is terminated as a result of
      the
      designation by either party thereto of an Early Termination Date (as defined
      therein), the Indenture Trustee shall, at the direction of the Depositor,
      appoint a replacement counterparty to enter into a replacement swap agreement.
      The Indenture Trustee shall have no responsibility with regard to the selection
      of a replacement swap provider or the negotiation of a replacement swap
      agreement. Any Swap Termination Payment received by the Indenture Trustee shall
      be part of the available Payment Amount and shall be used to make any upfront
      payment required under a replacement swap agreement and any upfront payment
      received from the counterparty to a replacement swap agreement shall be used
      to
      pay any Swap Termination Payment owed to the Swap Provider.

     

    Section
      6.02.  Rights
      of Indenture Trustee.

     

    (a)  The
      Indenture Trustee may conclusively rely on, and shall be fully protected from
      acting or refraining from acting upon, any document believed by it to be genuine
      and to have been signed or presented by the proper person. The Indenture Trustee
      need not investigate any fact or matter stated in the document.

     

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

     

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

     

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

     

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

     

    (f)  The
      Indenture Trustee or its Affiliates are permitted to receive additional
      compensation that could be deemed to be in the Indenture Trustee’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 Indenture Trustee (i) as part of the Indenture
      Trustee Fee, (ii) pursuant to Sections 3.05(d), 3.05(h), 5.04(b), 6.07 or
      8.02(c) hereunder or (iii) out of the Available Payment Amount.

     

    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 Sections 6.11 and 6.12 hereof.

     

    Section
      6.04.  Indenture
      Trustee’s Disclaimer.
      The
      Indenture Trustee shall not be responsible for and makes no representation
      as to
      the validity or adequacy of this Indenture or the Notes, it shall not be
      accountable for the 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 Indenture Trustee’s certificate of
      authentication. 

     

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

     

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

     

    The
      Indenture Trustee shall deliver to each Noteholder such information as may
      be
      required to enable such holder to prepare its federal and state income tax
      returns. The Indenture Trustee shall prepare and file (or cause to be prepared
      and filed), on behalf of the Owner Trustee or the Issuing Entity, all tax
      returns (if any) and information reports, tax elections and such annual or
      other
      reports of the Issuing Entity as are necessary for preparation of tax returns
      and information reports as provided in Section 5.03 of the Trust Agreement,
      including without limitation Form 1099. All tax returns and information reports
      shall be signed by the Owner Trustee as provided in Section 5.03 of the Trust
      Agreement.

     

    Section
      6.07.  Compensation
      and Indemnity.  The
      Indenture Trustee shall withdraw from the Payment Account on each Payment Date
      and pay to itself the Indenture Trustee Fee. The Indenture Trustee’s
      compensation shall not be limited by any law on compensation of a trustee of
      an
      express trust. In addition, the Indenture Trustee shall withdraw from the
      Payment Account on each Payment Date and pay to the Owner Trustee the Owner
      Trustee Fee and its Expenses.

     

    The
      Issuing Entity shall reimburse the Indenture Trustee and the Owner Trustee
      for
      all reasonable out-of-pocket expenses incurred or made by it, including costs
      of
      collection, in addition to compensation for its services. Such expenses shall
      include reasonable compensation and expenses, disbursements and advances of
      the
      Indenture Trustee’s or the Owner Trustee’s agents, counsel, accountants and
      experts. The Issuing Entity shall indemnify the Indenture Trustee and hold
      it
      harmless against any and all claim, tax, penalty, loss, liability or expense
      (including attorneys’ fees and expenses) of any kind whatsoever incurred by it
      in connection with the administration of this Trust and the performance of
      its
      duties under any of the Basic Documents. The Indenture Trustee shall notify
      the
      Issuing Entity promptly of any claim for which it may seek indemnity. Failure
      by
      the Indenture Trustee to so notify the Issuing Entity shall not relieve the
      Issuing Entity of its obligations hereunder. The Issuing Entity shall defend
      any
      such claim, and the Indenture Trustee may have separate counsel and the Issuing
      Entity shall pay the fees and expenses of such counsel. The Issuing Entity
      is
      not obligated to reimburse any expense or indemnify against any loss, liability
      or expense incurred by the Indenture Trustee through the Indenture Trustee’s own
      willful misconduct, negligence or bad faith.

     

    The
      Issuing Entity’s payment obligations to the Indenture Trustee and the Owner
      Trustee pursuant to this Section 6.07 shall survive the discharge of this
      Indenture and the termination or resignation of the Indenture Trustee. When
      the
      Indenture Trustee or the Owner Trustee incurs expenses after the occurrence
      of
      an Event of Default with respect to the 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.
      No
      resignation or removal of the Indenture Trustee and no appointment of a
      successor Indenture Trustee shall become effective until the acceptance of
      appointment by the successor Indenture Trustee pursuant to this Section 6.08.
      The Indenture Trustee may resign at any time by so notifying the Issuing Entity.
      Holders of a majority of Note Balances of the Notes may remove the Indenture
      Trustee by so notifying the Indenture Trustee and may appoint a successor
      Indenture Trustee. The Issuing Entity shall, remove the Indenture Trustee
      if:

     

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

     

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

     

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

     

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

     

    If
      the
      Indenture Trustee resigns or is removed or if a vacancy exists in the office
      of
      the Indenture Trustee for any reason (the Indenture Trustee in such event being
      referred to herein as the retiring Indenture Trustee), the Issuing Entity shall,
      promptly appoint a successor Indenture Trustee.

     

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

     

    If
      a
      successor Indenture Trustee does not take office within 30 days after the
      retiring Indenture Trustee resigns or is removed, the retiring Indenture
      Trustee, the Issuing Entity or the Holders of a majority of Note Balances of
      the
      Notes may petition any court of competent jurisdiction for the appointment
      of a
      successor Indenture Trustee.

     

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

     

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

     

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

     

    Section
      6.10.  Appointment
      of Co-Indenture Trustee or Separate Indenture Trustee.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (ii)  to
      authenticate and deliver the Notes substantially in the form prescribed by
      Exhibits A-1 through A-13 to this Indenture in accordance with the terms of
      this
      Indenture; and

     

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

     

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

     

    ARTICLE
      VII

    NOTEHOLDERS’
      LISTS AND REPORTS

     

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

     

    The
      Issuing Entity will furnish or cause to be furnished to the Indenture Trustee
      (a) not more than five days after each Record Date, a list, in such form as
      the
      Indenture Trustee may reasonably require, of the names and addresses of the
      Holders of Notes as of such Record Date, (b) at such other times as the
      Indenture Trustee may request in writing, within 30 days after receipt by the
      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 Indenture Trustee is the Note Registrar, no such list shall be
      required to be furnished to the Indenture Trustee.

     

    Section
      7.02.  Preservation
      of Information; Communications to Noteholders.

     

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

     

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

     

    (c)  The
      Issuing Entity, the Indenture Trustee and the Note Registrar shall have the
      protection of TIA § 312(c).

     

    Section
      7.03.  Reports
      of Issuing Entity.

     

    (a)  Subject
      to Section 4.02 of the Servicing Agreement,

     

    (i)  The
      Indenture Trustee shall file with the Commission on behalf of the Issuing
      Entity, with a copy to the Issuing Entity within 15 days before the Issuing
      Entity is required to file the same with the Commission, the annual reports
      and
      the information, documents and other reports (or such portions of any of the
      foregoing as the Commission may from time to time by rules and regulations
      prescribe) that the Issuing Entity may be required to file with the Commission
      pursuant to Section 13 or 15(d) of the Exchange Act;

     

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

     

    (iii)  The
      Indenture Trustee shall supply (and the Indenture Trustee shall transmit by
      mail
      to all Noteholders described in TIA § 313(c)) such summaries of any information,
      documents and reports required to be filed by the Issuing Entity pursuant to
      clauses (i) and (ii) of this Section 7.03(a) and by rules and regulations
      prescribed from time to time by the Commission.

     

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

     

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

     

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

     

    Section
      7.05.  Statements
      to Noteholders.

     

    (a)  With
      respect to each Payment Date, the Indenture Trustee shall make available via
      the
      Indenture Trustee’s website https://www.tss.db.com/invr or deliver at the
      recipient’s option to each Noteholder and each Certificateholder, the Depositor,
      the Owner Trustee, the Certificate Paying Agent and each Rating Agency, a
      statement setting forth the following information as to the Notes, to the extent
      applicable:

     

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

     

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

     

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

     

    (iv)  the
      aggregate amount of P&I Advances for such Payment Date (including the
      general purpose of such P&I Advances);

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (xii)  the
      Interest Payment Amount in respect of the Class A Notes and the Mezzanine Notes
      for such Payment Date and the Interest Carry Forward Amount, if any, with
      respect to the Class A Notes and the Mezzanine Notes on such Payment
      Date;

     

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

     

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

     

    (xv)  the
      Net
      Monthly Excess Cashflow, the Overcollateralized Amount, the
      Overcollateralization Reduction Amount, Overcollateralization Increase Amount,
      the Overcollateralization Target Amount, the Credit Enhancement Percentage
      for
      such Payment Date;

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (xxiv)  the
      Significance Percentage for such Payment Date.

     

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

     

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

     

    (c)  For
      each
      Payment Date, through and including the Payment Date in December 2006, the
      Indenture Trustee shall calculate the Significance Percentage of the Interest
      Rate Swap Agreement. If on any such Payment Date, the Significance Percentage
      is
      equal to or greater than 9%, the Indenture Trustee shall promptly notify the
      Depositor and the Depositor, on behalf of the Indenture Trustee, shall obtain
      the financial information required to be delivered by the Swap Provider pursuant
      to the terms of the Interest Rate Swap Agreement. If, on any succeeding Payment
      Date through and including the Payment Date in December 2006, the Significance
      Percentage is equal to or greater than 10%, the Indenture Trustee shall promptly
      notify the Depositor and the Depositor shall, within 10 calendar days of such
      Payment Date, deliver to the Indenture Trustee the financial information in
      edgarized compatible format, provided to it by the Swap Provider for inclusion
      in the Form 10-D relating to such Payment Date.

     

    With
      respect to any Payment Date, for purposes of determining the numerator of the
      fraction that constitutes the Significance Percentage, the interest rate used
      to
      project future amounts payable under the Interest Rate Swap Agreement shall
      be
      equal to the sum of (a) the highest rate reflected on the Implied Forwards
      Curve
      available at Bloomberg Financial Markets, L.P. for the remaining term of the
      Interest Rate Swap Agreement, (b) the percentage equivalent of a fraction,
      the
      numerator of which is 4.00% and the denominator of which is the initial number
      of Payment Dates on which the Indenture Trustee is entitled to receive payments
      under the Interest Rate Swap Agreement (the “Add-On Amount”) and (c) the Add-On
      Amount for each previous period. The discount rate used to determine the net
      present value of the estimated future amounts payable shall be equal to the
      lowest rate reflected on the Implied Forwards Curve. The Indenture Trustee
      shall
      obtain the Implied Forwards Curve from Bloomberg within 15 Business Days of
      the
      respective Payment Date. To determine the Implied Forwards Curve for such
      Payment Date, the Indenture Trustee shall take the following steps on the
      Bloomberg terminal: (1) the following keystrokes shall be entered: fwcv
<enter>, us <enter>, 3 <enter>; (2) the Forwards shall be set
      to “1-Mo”; (3) the Intervals shall be set to “1-Mo”; and (4) the Points shall be
      set to equal the remaining term of the Interest Rate Swap Agreement in months
      and the Trustee shall click <enter>. For purposes of estimating future
      amounts payable under the Interest Rate Swap Agreement, the accrual period
      for
      both the Fixed Amounts and the Floating Amounts (as defined in the Confirmation)
      shall be assumed to be a 30-day period in a 360-day year.

    

     

    ARTICLE
      VIII

    ACCOUNTS,
      DISBURSEMENTS AND RELEASES

     

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

     

    Section
      8.02.  Trust
      Accounts.

     

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

     

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

     

    (c)  Pursuant
      to Section 3.12 of the Servicing Agreement, funds in the Payment Account shall
      remain uninvested unless the Indenture Trustee is otherwise directed by the
      Servicer in Section 3.10(d) of the Servicing Agreement.

     

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

     

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

     

    Section
      8.05.  Release
      of Trust Estate.

     

    (a)  Subject
      to the payment of its fees 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 repurchase by the Servicer of a Mortgage Loan pursuant to Section 3.16
      of
      the Servicing Agreement. No party relying upon an instrument executed by the
      Indenture Trustee as provided in Article VIII hereunder shall be bound to
      ascertain the Indenture Trustee’s authority, inquire into the satisfaction of
      any conditions precedent, or see to the application of any monies.

     

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

     

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

     

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

     

    Section
      8.07.  Optional
      Redemption of the Notes.

     

    (a)  The
      Servicer shall have the option to purchase the Mortgage Loans and REO Property
      on any Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 10% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date. The aggregate purchase price will be equal
      to
      the greater of (i) the Stated Principal Balance of the Mortgage Loans and the
      appraised value of any REO Properties, such appraisal to be conducted by an
      Independent appraiser mutually agreed upon by the Servicer and the Indenture
      Trustee in their reasonable discretion and (ii) the fair market value of the
      Mortgage Loans and the REO Properties (as determined by the Servicer and, to
      the
      extent that a Class of Class A Notes or a Class of Mezzanine Notes will not
      receive all amounts owed to it as a result of the purchase, the Indenture
      Trustee (it being understood and agreed that any determination by the Indenture
      Trustee shall be made solely in reliance on an appraisal by an Independent
      appraiser as provided above), in each case plus accrued and unpaid interest
      thereon at the weighted average of the Mortgage Rates through the end of the
      Due
      Period preceding the final Payment Date plus unreimbursed Servicing Advances,
      P&I Advances, any unpaid Servicing Fees allocable to such Mortgage Loans and
      REO Properties and any accrued and unpaid Basis Risk Shortfalls and any Swap
      Termination Payment to the Swap Provider then remaining unpaid or which is
      due
      to the exercise of such option (the “Redemption Price”); provided, however, that
      the Servicer will not be permitted to purchase the Mortgage Loans unless the
      Redemption Price is sufficient to retire the Note Balance of the remaining
      Notes
      to zero. If the determination of the fair market value of the Mortgage Loans
      and
      REO Properties shall be required to be made by the Servicer and an Independent
      appraiser as provided above, (A) such appraisal shall be obtained at no expense
      to the Indenture Trustee and (B) the Indenture Trustee may conclusively rely
      on,
      and shall be protected in relying on, such appraisal.

     

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

     

    ARTICLE
      IX

    SUPPLEMENTAL
      INDENTURES

     

    Section
      9.01.  Supplemental
      Indentures Without Consent of Noteholders.

     

    (a)  Without
      the consent of the Holders of any Notes but with prior notice to the Rating
      Agencies, the Issuing Entity and the Indenture Trustee, when authorized by
      an
      Issuing Entity Request, at any time and from time to time, may enter into one
      or
      more indentures supplemental hereto (which shall conform to the provisions
      of
      the TIA as in force at the date of the execution thereof), in form satisfactory
      to the Indenture Trustee, for any of the following purposes:

     

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

     

    (ii)  to
      evidence the succession, in compliance with the applicable provisions hereof,
      of
      another person to the 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, or to surrender any right or power herein conferred upon the Issuing
      Entity;

     

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

     

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

     

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

     

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

     

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

     

    provided,
      however,
      that no
      such indenture supplements shall be entered into unless the Indenture Trustee
      shall have received an Opinion of Counsel as to the enforceability of any such
      indenture supplement and to the effect that (i) such indenture supplement is
      permitted hereunder and (ii) entering into such indenture supplement will not
      result in a “substantial modification” of the Notes under Treasury Regulation
      Section 1.1001-3 or adversely affect the status of the Notes as indebtedness
      for
      federal income tax purposes.

     

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

     

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

     

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

     

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

     

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

     

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

     

    (iv)  reduce
      the percentage of the Note Balances of the 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, cause the Issuing
      Entity (if 100% of the Certificates are not owned by the Seller) to be subject
      to an entity level tax.

     

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

     

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

     

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

     

    Section
      9.04.  Effect
      of Supplemental Indenture.
      Upon
      the execution of any supplemental indenture pursuant to the provisions hereof,
      this Indenture shall be and shall be deemed to be modified and amended in
      accordance therewith with respect to the Notes affected thereby, and the
      respective rights, limitations of rights, obligations, duties, liabilities
      and
      immunities under this Indenture of the Indenture Trustee, the 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 Indenture Trustee shall,
      bear a notation in form approved by the Indenture Trustee as to any matter
      provided for in such supplemental indenture. If the Issuing Entity or the
      Indenture Trustee shall so determine, new Notes so modified as to conform,
      in
      the opinion of the Indenture Trustee and the Issuing Entity, to any such
      supplemental indenture may be prepared and executed by the Issuing Entity and
      authenticated and delivered by the Indenture Trustee in exchange for Outstanding
      Notes.

     

    ARTICLE
      X

    MISCELLANEOUS

     

    Section
      10.01.  Compliance
      Certificates and Opinions, etc.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Any
      certificate or opinion of an Authorized Officer of the 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
      10.03.  Acts
      of Noteholders.

     

    (a)  Any
      request, demand, authorization, direction, notice, consent, waiver or other
      action provided by this Indenture to be given or taken by Noteholders may be
      embodied in and evidenced by one or more instruments of substantially similar
      tenor signed by such Noteholders in person or by agents duly appointed in
      writing; and except as herein otherwise expressly provided, such action shall
      become effective when such instrument or instruments are delivered to the
      Indenture Trustee, and, where it is hereby expressly required, to the 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
      10.04.  Notices
      etc., to Indenture Trustee Issuing Entity 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 the Corporate Trust Office. The Indenture Trustee
      shall promptly transmit any notice received by it from the Noteholders to the
      Issuing Entity; or

     

    (ii)  the
      Issuing Entity by the Indenture Trustee or by any Noteholder shall be sufficient
      for every purpose hereunder if in writing and mailed first-class, postage
      prepaid to the Issuing Entity addressed to: New Century Home Equity Loan Trust
      2006-2, in care of Wilmington Trust Company, 1100 North Market Street,
      Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration,
      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 or the Owner Trustee shall be in writing, mailed first-class postage
      pre-paid, to (i) in the case of Moody’s, at the following address: Moody’s
      Investors Service, Inc., Residential Mortgage Monitoring Department, 99 Church
      Street, New York, New York 10007 and (ii) in the case of S&P, at the
      following address: Standard & Poor’s, 55 Water Street, 41st
      Floor,
      New York, New York 10041, Attention of Asset Backed Surveillance Department;
      or
      as to each of the foregoing, at such other address as shall be designated by
      written notice to the other parties.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Section
      10.10.  [Reserved.]

     

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

     

    Section
      10.12.  GOVERNING
      LAW.  THIS
      INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
      YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
      RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
      WITH SUCH LAWS.

     

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

     

    Section
      10.14.  Recording
      of Indenture.
      If this
      Indenture is subject to recording in any appropriate public recording offices,
      such recording is to be effected by the 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 or any other Person secured hereunder or for
      the
      enforcement of any right or remedy granted to the Indenture Trustee under this
      Indenture.

     

    Section
      10.15.  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 Indenture Trustee on the Notes
      or under this Indenture or any certificate or other writing delivered in
      connection herewith or therewith, against (i) the Indenture Trustee or the
      Owner
      Trustee in its individual capacity, (ii) any owner of a beneficial interest
      in
      the Issuing Entity or (iii) any partner, owner, beneficiary, agent, officer,
      director, employee or agent of the Indenture Trustee or the Owner Trustee in
      its
      individual capacity, any holder of a beneficial interest in the Issuing Entity,
      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
      10.16.  No
      Petition.  The
      Indenture Trustee, by entering into this Indenture, and each Noteholder, by
      accepting a Note, hereby covenant and agree that they will not at any time
      prior
      to one year from the date of termination hereof, institute against the Depositor
      or the 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, except for filing
      proofs of claim.

     

    Section
      10.17.  Inspection.
      The
      Issuing Entity agrees that, at its expense, on reasonable prior notice, it
      shall
      permit any representative of the Indenture Trustee, 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 shall cause its representatives to hold in confidence all
      such
      information except to the extent disclosure may be required by law (and all
      reasonable applications for confidential treatment are unavailing) and except
      to
      the extent that the Indenture Trustee may reasonably determine that such
      disclosure is consistent with its obligations hereunder.

     

    Section
      10.18.  No
      Recourse to Owner Trustee.
      It is
      expressly understood and agreed by the parties hereto that (a) this Indenture
      is
      executed and delivered by Wilmington Trust Company, not individually or
      personally, but solely as Owner Trustee of New Century Home Equity Loan Trust
      2006-2, in the exercise of the powers and authority conferred and vested in
      it,
      (b) each of the representations, undertakings and agreements herein made on
      the
      part of the Issuing Entity is made and intended not as personal representations,
      undertakings and agreements by Wilmington Trust Company but is made and intended
      for the purpose for binding only the Issuing Entity, (c) nothing herein
      contained shall be construed as creating any liability of Wilmington Trust
      Company, individually or personally, to perform any covenant either expressed
      or
      implied contained herein, all such liability, if any, being expressly waived
      by
      the parties hereto and by any Person claiming by, through or under the parties
      hereto and (d) under no circumstances shall Wilmington Trust Company be
      personally liable for the payment of any indebtedness or expenses of the Issuing
      Entity or be liable for the breach or failure of any obligation, representation,
      warranty or covenant made or undertaken by the Issuing Entity under this
      Indenture or any other related documents.

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    IN
      WITNESS WHEREOF, the Issuing Entity 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.

     

    
      	 	 	 	 	 	 	
              NEW
                CENTURY HOME EQUITY LOAN TRUST, 2006-2, as Issuing
                Entity

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

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By: 
                

            	
              /s/
                Patricia Evans

            
	 	 	 	 	 	 	 	
              Name:
                Patricia Evans

            
	 	 	 	 	 	 	 	
              Title:
                Vice President

            

    

    

    
      	 	 	 	 	 	 	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY, as Indenture Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By: 
                

            	
              /s/
                Eiko Akiyama

            
	 	 	 	 	 	 	 	
              Name:
                Eiko Akiyama

            
	 	 	 	 	 	 	 	
              Title:
                Associate

            

    

    

    
      	 	 	 	 	 	 	
              By: 
                

            	
              /s/
                Ronaldo Reyes

            
	 	 	 	 	 	 	 	
              Name:
                Ronaldo Reyes

            
	 	 	 	 	 	 	 	
              Title:
                Vice President

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              STATE
                OF CALIFORNIA

            	
              )

            	 
	 	
              )

            	
              ss.:

            
	
              COUNTY
                OF ORANGE

            	
              )

            	 

    

    

    On
      this
      _22nd
      day of
      June, 2006, before me personally appeared ___Eiko
      Akiyama____
      to
      me known, who being by me duly sworn, did depose and say, that (s)he is a
      Financial Services Officer of the Owner Trustee, one of the corporations
      described in and which executed the above instrument; and that he signed his
      name thereto by like order.

     

    
      	 	
              /s/
                Erica Marie Judd

            
	 	
              Notary
                Public

            
	 	 
	 	
              NOTARY
                PUBLIC

            

    

    

    

    [NOTARIAL
      SEAL]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              STATE
                OF CALIFORNIA

            	
              )

            	 
	 	
              )

            	
              ss.:

            
	
              COUNTY
                OF ORANGE

            	
              )

            	 

    

    

    On
      this
      _22nd
      day of
      June, 2006, before me personally appeared ___Ronaldo
      Reyes____
      to
      me known, who being by me duly sworn, did depose and say, that (s)he is a
      Financial Services Officer of the Owner Trustee, one of the corporations
      described in and which executed the above instrument; and that he signed his
      name thereto by like order.

     

    
      	 	
              /s/
                Erica Marie Judd

            
	 	
              Notary
                Public

            
	 	 
	 	
              NOTARY
                PUBLIC

            

    

    

    

    [NOTARIAL
      SEAL]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              STATE
                OF DELAWARE

            	
              )

            	 
	 	
              )

            	
              ss.:

            
	
              COUNTY
                OF NEW CASTLE

            	
              )

            	 

    

    

    On
      this
      __22nd__
      day of
      June, 2006, before me personally appeared ____Patricia
      A. Evans________
      to me known, who being by me duly sworn, did depose and say, that (s)he is
      an
      associate and __Vice
      President__________
      to me known, who being by me duly sworn, did depose and say, that (s)he is
      a
      Vice President of the Indenture Trustee, one of the entities described in and
      which executed the above instrument; and that she signed her name thereto by
      like order.

     

    
      	 	
              /s/Amanda
                E. Burger

            
	 	
              Notary
                Public

            
	 	 
	 	
              NOTARY
                PUBLIC

            

    

    

    

    [NOTARIAL
      SEAL]

     

    

     

    

    EXHIBIT
      A-1

     

    FORM
      OF
      CLASS A-1 NOTES

     

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

     

    THE
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    NEW
      CENTURY HOME EQUITY LOAN TRUST, 2006-2

    ASSET-BACKED
      NOTES, SERIES 2006-2

    CLASS
      A-1

     

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $_____________________

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $_____________________

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. [ ]

            

    

    

    New
      Century Home Equity Loan Trust 2006-2 (the “Issuing Entity”), a Delaware
      statutory trust, for value received, hereby promises to pay to Cede & Co. or
      registered assigns, the principal sum of ($_________________) in monthly
      installments on the twenty-fifth day of each month or, if such day is not a
      Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in July 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
      Series 2006-2 (the “Notes”), issued under an Indenture dated as of June 29, 2006
      (the “Indenture”), between the Issuing Entity and Deutsche Bank National Trust
      Company, 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.

     

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

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, in such coin or currency of the United States of America as at the
      time of payment is legal tender for payment of public and private debts. All
      payments made by the Issuing Entity with respect to this Note shall be equal
      to
      this Note’s pro
      rata
      share of
      the aggregate payments on all Class A-1 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

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

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Servicer on any
      Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 10% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuing
      Entity, the Indenture Trustee and any agent of the Issuing Entity or the
      Indenture Trustee may treat the Person in whose name this Note is registered
      as
      the owner of such Note (i) on the applicable Record Date for the purpose of
      making payments and interest of such Note and (ii) on any other date for all
      other purposes whatsoever, as the owner hereof, whether or not this Note be
      overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
      agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
      to the contrary.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Issuing Entity
      and the rights of the Holders of the Notes under the Indenture at any time
      by
      the Issuing Entity and the Holders of a majority of all Notes at the time
      outstanding. The Indenture also contains provisions permitting the Holders
      of
      Notes representing specified percentages of the aggregate Note Balance of the
      Notes on behalf of the Holders of all the Notes, to waive any past Default
      under
      the Indenture and its consequences. Any such waiver by the Holder, at the time
      of the giving thereof, of this Note (or any one or more predecessor Notes)
      shall
      bind the Holder of every Note issued upon the registration of transfer hereof
      or
      in exchange hereof or in lieu hereof, whether or not notation of such consent
      or
      waiver is made upon such Note. The Indenture also permits the Issuing Entity
      and
      the Indenture Trustee to amend or waive certain terms and conditions set forth
      in the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      June ____, 2006

     

    
      	 	 	 	 	 	 	
              NEW
                CENTURY HOME EQUITY LOAN TRUST 2006-2

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

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

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

     

    
      	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY,

              as
                Indenture Trustee

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              By:

            	 
	 	
              Authorized
                Signatory

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

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

     

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

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

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING 

    NUMBER
      OF
      ASSIGNEE:

    

    
      	 
	 
	 

    

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

     

    

    
      	 

    

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

     

    Dated:
      ________________________________     ________________________________

     

    Signature
      Guaranteed by __________________________________

     

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

     

    

     

    

    EXHIBIT
      A-2

     

    FORM
      OF
      CLASS A-2A NOTES

     

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

     

    THE
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEW
      CENTURY HOME EQUITY LOAN TRUST, 2006-2

    ASSET-BACKED
      NOTES, SERIES 2006-2

    CLASS
      A-2A

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $_____________________

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $_____________________

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. [ ]

            
	 	 

    

    New
      Century Home Equity Loan Trust 2006-2 (the “Issuing Entity”), a Delaware
      statutory trust, for value received, hereby promises to pay to Cede & Co. or
      registered assigns, the principal sum of ($_________________) in monthly
      installments on the twenty-fifth day of each month or, if such day is not a
      Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in July 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
      Series 2006-2 (the “Notes”), issued under an Indenture dated as of June 29, 2006
      (the “Indenture”), between the Issuing Entity and Deutsche Bank National Trust
      Company, 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.

     

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

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, in such coin or currency of the United States of America as at the
      time of payment is legal tender for payment of public and private debts. All
      payments made by the Issuing Entity with respect to this Note shall be equal
      to
      this Note’s pro
      rata
      share of
      the aggregate payments on all Class A-2a Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

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

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Servicer on any
      Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 10% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuing
      Entity, the Indenture Trustee and any agent of the Issuing Entity or the
      Indenture Trustee may treat the Person in whose name this Note is registered
      as
      the owner of such Note (i) on the applicable Record Date for the purpose of
      making payments and interest of such Note and (ii) on any other date for all
      other purposes whatsoever, as the owner hereof, whether or not this Note be
      overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
      agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
      to the contrary.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Issuing Entity
      and the rights of the Holders of the Notes under the Indenture at any time
      by
      the Issuing Entity and the Holders of a majority of all Notes at the time
      outstanding. The Indenture also contains provisions permitting the Holders
      of
      Notes representing specified percentages of the aggregate Note Balance of the
      Notes on behalf of the Holders of all the Notes, to waive any past Default
      under
      the Indenture and its consequences. Any such waiver by the Holder, at the time
      of the giving thereof, of this Note (or any one or more predecessor Notes)
      shall
      bind the Holder of every Note issued upon the registration of transfer hereof
      or
      in exchange hereof or in lieu hereof, whether or not notation of such consent
      or
      waiver is made upon such Note. The Indenture also permits the Issuing Entity
      and
      the Indenture Trustee to amend or waive certain terms and conditions set forth
      in the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      June____, 2006

     

    
      	 	 	 	 	 	 	
              NEW
                CENTURY HOME EQUITY LOAN TRUST 2006-2

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

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

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

     

    
      	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY,

              as
                Indenture Trustee

            	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              By:

            	 	 
	 	
              Authorized
                Signatory

            	 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

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

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

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

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

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

     

    

    
      	 

    

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

     

    Dated:
      ________________________________     ________________________________

     

    Signature
      Guaranteed by __________________________________

     

    

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

    

    

    EXHIBIT
      A-3

     

    FORM
      OF
      CLASS A-2B NOTES

     

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

     

    THE
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEW
      CENTURY HOME EQUITY LOAN TRUST, 2006-2

    ASSET-BACKED
      NOTES, SERIES 2006-2

    CLASS
      A-2B

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $_____________________

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $_____________________

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. [ ]

            
	 	 

    

    

    New
      Century Home Equity Loan Trust 2006-2 (the “Issuing Entity”), a Delaware
      statutory trust, for value received, hereby promises to pay to Cede & Co. or
      registered assigns, the principal sum of ($_________________) in monthly
      installments on the twenty-fifth day of each month or, if such day is not a
      Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in July 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
      Series 2006-2 (the “Notes”), issued under an Indenture dated as of June 29, 2006
      (the “Indenture”), between the Issuing Entity and Deutsche Bank National Trust
      Company, 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.

     

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

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, in such coin or currency of the United States of America as at the
      time of payment is legal tender for payment of public and private debts. All
      payments made by the Issuing Entity with respect to this Note shall be equal
      to
      this Note’s pro
      rata
      share of
      the aggregate payments on all Class A-2b Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

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

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Servicer on any
      Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 10% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuing
      Entity, the Indenture Trustee and any agent of the Issuing Entity or the
      Indenture Trustee may treat the Person in whose name this Note is registered
      as
      the owner of such Note (i) on the applicable Record Date for the purpose of
      making payments and interest of such Note and (ii) on any other date for all
      other purposes whatsoever, as the owner hereof, whether or not this Note be
      overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
      agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
      to the contrary.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Issuing Entity
      and the rights of the Holders of the Notes under the Indenture at any time
      by
      the Issuing Entity and the Holders of a majority of all Notes at the time
      outstanding. The Indenture also contains provisions permitting the Holders
      of
      Notes representing specified percentages of the aggregate Note Balance of the
      Notes on behalf of the Holders of all the Notes, to waive any past Default
      under
      the Indenture and its consequences. Any such waiver by the Holder, at the time
      of the giving thereof, of this Note (or any one or more predecessor Notes)
      shall
      bind the Holder of every Note issued upon the registration of transfer hereof
      or
      in exchange hereof or in lieu hereof, whether or not notation of such consent
      or
      waiver is made upon such Note. The Indenture also permits the Issuing Entity
      and
      the Indenture Trustee to amend or waive certain terms and conditions set forth
      in the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      June ____, 2006

     

    
      	 	 	 	 	 	 	
              NEW
                CENTURY HOME EQUITY LOAN TRUST 2006-2

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

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

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

     

    
      	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY,

              as
                Indenture Trustee

            	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              By:

            	 	 
	 	
              Authorized
                Signatory

            	 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

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

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

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

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

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

     

    

    
      	 

    

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

     

    Dated:
      ________________________________     ________________________________

     

    Signature
      Guaranteed by __________________________________

     

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

     

    

     

    

     

    EXHIBIT
      A-4

     

    FORM
      OF
      CLASS A-2C NOTES

     

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

     

    THE
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEW
      CENTURY HOME EQUITY LOAN TRUST, 2006-2

    ASSET-BACKED
      NOTES, SERIES 2006-2

    CLASS
      A-2C

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $_____________________

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $_____________________

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. [ ]

            
	 	 

    

    

    New
      Century Home Equity Loan Trust 2006-2 (the “Issuing Entity”), a Delaware
      statutory trust, for value received, hereby promises to pay to Cede & Co. or
      registered assigns, the principal sum of ($_________________) in monthly
      installments on the twenty-fifth day of each month or, if such day is not a
      Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in July 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
      Series 2006-2 (the “Notes”), issued under an Indenture dated as of June 29, 2006
      (the “Indenture”), between the Issuing Entity and Deutsche Bank National Trust
      Company, 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.

     

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

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, in such coin or currency of the United States of America as at the
      time of payment is legal tender for payment of public and private debts. All
      payments made by the Issuing Entity with respect to this Note shall be equal
      to
      this Note’s pro
      rata
      share of
      the aggregate payments on all Class A-2c Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

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

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Servicer on any
      Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 10% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuing
      Entity, the Indenture Trustee and any agent of the Issuing Entity or the
      Indenture Trustee may treat the Person in whose name this Note is registered
      as
      the owner of such Note (i) on the applicable Record Date for the purpose of
      making payments and interest of such Note and (ii) on any other date for all
      other purposes whatsoever, as the owner hereof, whether or not this Note be
      overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
      agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
      to the contrary.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Issuing Entity
      and the rights of the Holders of the Notes under the Indenture at any time
      by
      the Issuing Entity and the Holders of a majority of all Notes at the time
      outstanding. The Indenture also contains provisions permitting the Holders
      of
      Notes representing specified percentages of the aggregate Note Balance of the
      Notes on behalf of the Holders of all the Notes, to waive any past Default
      under
      the Indenture and its consequences. Any such waiver by the Holder, at the time
      of the giving thereof, of this Note (or any one or more predecessor Notes)
      shall
      bind the Holder of every Note issued upon the registration of transfer hereof
      or
      in exchange hereof or in lieu hereof, whether or not notation of such consent
      or
      waiver is made upon such Note. The Indenture also permits the Issuing Entity
      and
      the Indenture Trustee to amend or waive certain terms and conditions set forth
      in the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      June ____, 2006

     

    
      	 	 	 	 	 	 	
              NEW
                CENTURY HOME EQUITY LOAN TRUST 2006-2

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

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

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

     

    
      	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY,

              as
                Indenture Trustee

            	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              By:

            	 	 
	 	
              Authorized
                Signatory

            	 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

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

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

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

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

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

     

    

    
      	 

    

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

     

    Dated:
      ________________________________     ________________________________

     

    Signature
      Guaranteed by __________________________________

     

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

     

    EXHIBIT
      A-5

     

    FORM
      OF
      CLASS M-1 NOTES

     

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

     

    THE
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEW
      CENTURY HOME EQUITY LOAN TRUST, 2006-2

    ASSET-BACKED
      NOTES, SERIES 2006-2

    CLASS
      M-1

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $_____________________

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $_____________________

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. [ ]

            
	 	 

    

    New
      Century Home Equity Loan Trust 2006-2 (the “Issuing Entity”), a Delaware
      statutory trust, for value received, hereby promises to pay to Cede & Co. or
      registered assigns, the principal sum of ($_________________) in monthly
      installments on the twenty-fifth day of each month or, if such day is not a
      Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in July 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
      Series 2006-2 (the “Notes”), issued under an Indenture dated as of June 29, 2006
      (the “Indenture”), between the Issuing Entity and Deutsche Bank National Trust
      Company, 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.

     

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

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, in such coin or currency of the United States of America as at the
      time of payment is legal tender for payment of public and private debts. All
      payments made by the Issuing Entity with respect to this Note shall be equal
      to
      this Note’s pro
      rata
      share of
      the aggregate payments on all Class M-1 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

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

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Servicer on any
      Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 10% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuing
      Entity, the Indenture Trustee and any agent of the Issuing Entity or the
      Indenture Trustee may treat the Person in whose name this Note is registered
      as
      the owner of such Note (i) on the applicable Record Date for the purpose of
      making payments and interest of such Note and (ii) on any other date for all
      other purposes whatsoever, as the owner hereof, whether or not this Note be
      overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
      agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
      to the contrary.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Issuing Entity
      and the rights of the Holders of the Notes under the Indenture at any time
      by
      the Issuing Entity and the Holders of a majority of all Notes at the time
      outstanding. The Indenture also contains provisions permitting the Holders
      of
      Notes representing specified percentages of the aggregate Note Balance of the
      Notes on behalf of the Holders of all the Notes, to waive any past Default
      under
      the Indenture and its consequences. Any such waiver by the Holder, at the time
      of the giving thereof, of this Note (or any one or more predecessor Notes)
      shall
      bind the Holder of every Note issued upon the registration of transfer hereof
      or
      in exchange hereof or in lieu hereof, whether or not notation of such consent
      or
      waiver is made upon such Note. The Indenture also permits the Issuing Entity
      and
      the Indenture Trustee to amend or waive certain terms and conditions set forth
      in the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      June ____, 2006

     

    
      	 	 	 	 	 	 	
              NEW
                CENTURY HOME EQUITY LOAN TRUST 2006-2

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

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

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

     

    
      	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY,

              as
                Indenture Trustee

            	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              By:

            	 	 
	 	
              Authorized
                Signatory

            	 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

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

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

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

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

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

     

    

    
      	 

    

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

     

    Dated:
      ________________________________     ________________________________

     

    Signature
      Guaranteed by __________________________________

     

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

     

     

    EXHIBIT
      A-6

     

    FORM
      OF
      CLASS M-2 NOTES

     

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

     

    THE
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEW
      CENTURY HOME EQUITY LOAN TRUST, 2006-2

    ASSET-BACKED
      NOTES, SERIES 2006-2

    CLASS
      M-2

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $_____________________

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $_____________________

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. [ ]

            
	 	 

    

    

    New
      Century Home Equity Loan Trust 2006-2 (the “Issuing Entity”), a Delaware
      statutory trust, for value received, hereby promises to pay to Cede & Co. or
      registered assigns, the principal sum of ($_________________) in monthly
      installments on the twenty-fifth day of each month or, if such day is not a
      Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in July 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
      Series 2006-2 (the “Notes”), issued under an Indenture dated as of June 29, 2006
      (the “Indenture”), between the Issuing Entity and Deutsche Bank National Trust
      Company, 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.

     

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

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, in such coin or currency of the United States of America as at the
      time of payment is legal tender for payment of public and private debts. All
      payments made by the Issuing Entity with respect to this Note shall be equal
      to
      this Note’s pro
      rata
      share of
      the aggregate payments on all Class M-2 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

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

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Servicer on any
      Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 10% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuing
      Entity, the Indenture Trustee and any agent of the Issuing Entity or the
      Indenture Trustee may treat the Person in whose name this Note is registered
      as
      the owner of such Note (i) on the applicable Record Date for the purpose of
      making payments and interest of such Note and (ii) on any other date for all
      other purposes whatsoever, as the owner hereof, whether or not this Note be
      overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
      agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
      to the contrary.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Issuing Entity
      and the rights of the Holders of the Notes under the Indenture at any time
      by
      the Issuing Entity and the Holders of a majority of all Notes at the time
      outstanding. The Indenture also contains provisions permitting the Holders
      of
      Notes representing specified percentages of the aggregate Note Balance of the
      Notes on behalf of the Holders of all the Notes, to waive any past Default
      under
      the Indenture and its consequences. Any such waiver by the Holder, at the time
      of the giving thereof, of this Note (or any one or more predecessor Notes)
      shall
      bind the Holder of every Note issued upon the registration of transfer hereof
      or
      in exchange hereof or in lieu hereof, whether or not notation of such consent
      or
      waiver is made upon such Note. The Indenture also permits the Issuing Entity
      and
      the Indenture Trustee to amend or waive certain terms and conditions set forth
      in the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      June ____, 2006

     

    
      	 	 	 	 	 	 	
              NEW
                CENTURY HOME EQUITY LOAN TRUST 2006-2

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

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

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

     

    
      	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY,

              as
                Indenture Trustee

            	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              By:

            	 	 
	 	
              Authorized
                Signatory

            	 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

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

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

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

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

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

     

    

    
      	 

    

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

     

    Dated:
      ________________________________     ________________________________

     

    Signature
      Guaranteed by __________________________________

     

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

     

    

    EXHIBIT
      A-7

     

    FORM
      OF
      CLASS M-3 NOTES

     

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

     

    THE
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEW
      CENTURY HOME EQUITY LOAN TRUST, 2006-2

    ASSET-BACKED
      NOTES, SERIES 2006-2

    CLASS
      M-3

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $_____________________

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $_____________________

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. [ ]

            
	 	 

    

    

    New
      Century Home Equity Loan Trust 2006-2 (the “Issuing Entity”), a Delaware
      statutory trust, for value received, hereby promises to pay to Cede & Co. or
      registered assigns, the principal sum of ($_________________) in monthly
      installments on the twenty-fifth day of each month or, if such day is not a
      Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in July 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
      Series 2006-2 (the “Notes”), issued under an Indenture dated as of June 29, 2006
      (the “Indenture”), between the Issuing Entity and Deutsche Bank National Trust
      Company, 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.

     

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

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, in such coin or currency of the United States of America as at the
      time of payment is legal tender for payment of public and private debts. All
      payments made by the Issuing Entity with respect to this Note shall be equal
      to
      this Note’s pro
      rata
      share of
      the aggregate payments on all Class M-3 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

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

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Servicer on any
      Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 10% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuing
      Entity, the Indenture Trustee and any agent of the Issuing Entity or the
      Indenture Trustee may treat the Person in whose name this Note is registered
      as
      the owner of such Note (i) on the applicable Record Date for the purpose of
      making payments and interest of such Note and (ii) on any other date for all
      other purposes whatsoever, as the owner hereof, whether or not this Note be
      overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
      agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
      to the contrary.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Issuing Entity
      and the rights of the Holders of the Notes under the Indenture at any time
      by
      the Issuing Entity and the Holders of a majority of all Notes at the time
      outstanding. The Indenture also contains provisions permitting the Holders
      of
      Notes representing specified percentages of the aggregate Note Balance of the
      Notes on behalf of the Holders of all the Notes, to waive any past Default
      under
      the Indenture and its consequences. Any such waiver by the Holder, at the time
      of the giving thereof, of this Note (or any one or more predecessor Notes)
      shall
      bind the Holder of every Note issued upon the registration of transfer hereof
      or
      in exchange hereof or in lieu hereof, whether or not notation of such consent
      or
      waiver is made upon such Note. The Indenture also permits the Issuing Entity
      and
      the Indenture Trustee to amend or waive certain terms and conditions set forth
      in the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      June ____, 2006

     

    
      	 	 	 	 	 	 	
              NEW
                CENTURY HOME EQUITY LOAN TRUST 2006-2

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

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

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

     

    
      	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY,

              as
                Indenture Trustee

            	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              By:

            	 	 
	 	
              Authorized
                Signatory

            	 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

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

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

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

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

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

     

    

    
      	 

    

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

     

    Dated:
      ________________________________     ________________________________

     

    Signature
      Guaranteed by __________________________________

     

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

     

    

     

    

    EXHIBIT
      A-8

     

    FORM
      OF
      CLASS M-4 NOTES

     

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

     

    THE
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEW
      CENTURY HOME EQUITY LOAN TRUST, 2006-2

    ASSET-BACKED
      NOTES, SERIES 2006-2

    CLASS
      M-4

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $_____________________

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $_____________________

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. [ ]

            
	 	 

    

    

    New
      Century Home Equity Loan Trust 2006-2 (the “Issuing Entity”), a Delaware
      statutory trust, for value received, hereby promises to pay to Cede & Co. or
      registered assigns, the principal sum of ($_________________) in monthly
      installments on the twenty-fifth day of each month or, if such day is not a
      Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in July 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
      Series 2006-2 (the “Notes”), issued under an Indenture dated as of June 29, 2006
      (the “Indenture”), between the Issuing Entity and Deutsche Bank National Trust
      Company, 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.

     

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

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, in such coin or currency of the United States of America as at the
      time of payment is legal tender for payment of public and private debts. All
      payments made by the Issuing Entity with respect to this Note shall be equal
      to
      this Note’s pro
      rata
      share of
      the aggregate payments on all Class M-4 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

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

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Servicer on any
      Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 10% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuing
      Entity, the Indenture Trustee and any agent of the Issuing Entity or the
      Indenture Trustee may treat the Person in whose name this Note is registered
      as
      the owner of such Note (i) on the applicable Record Date for the purpose of
      making payments and interest of such Note and (ii) on any other date for all
      other purposes whatsoever, as the owner hereof, whether or not this Note be
      overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
      agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
      to the contrary.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Issuing Entity
      and the rights of the Holders of the Notes under the Indenture at any time
      by
      the Issuing Entity and the Holders of a majority of all Notes at the time
      outstanding. The Indenture also contains provisions permitting the Holders
      of
      Notes representing specified percentages of the aggregate Note Balance of the
      Notes on behalf of the Holders of all the Notes, to waive any past Default
      under
      the Indenture and its consequences. Any such waiver by the Holder, at the time
      of the giving thereof, of this Note (or any one or more predecessor Notes)
      shall
      bind the Holder of every Note issued upon the registration of transfer hereof
      or
      in exchange hereof or in lieu hereof, whether or not notation of such consent
      or
      waiver is made upon such Note. The Indenture also permits the Issuing Entity
      and
      the Indenture Trustee to amend or waive certain terms and conditions set forth
      in the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      June ____, 2006

     

    
      	 	 	 	 	 	 	
              NEW
                CENTURY HOME EQUITY LOAN TRUST 2006-2

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

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

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

     

    
      	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY,

              as
                Indenture Trustee

            	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              By:

            	 	 
	 	
              Authorized
                Signatory

            	 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

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

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

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

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

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

     

    

    
      	 

    

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

     

    Dated:
      ________________________________     ________________________________

     

    Signature
      Guaranteed by __________________________________

     

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

     

    

     

    

    EXHIBIT
      A-9

     

    FORM
      OF
      CLASS M-5 NOTES

     

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

     

    THE
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEW
      CENTURY HOME EQUITY LOAN TRUST, 2006-2

    ASSET-BACKED
      NOTES, SERIES 2006-2

    CLASS
      M-5

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $_____________________

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $_____________________

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. [ ]

            
	 	 

    

    

    New
      Century Home Equity Loan Trust 2006-2 (the “Issuing Entity”), a Delaware
      statutory trust, for value received, hereby promises to pay to Cede & Co. or
      registered assigns, the principal sum of ($_________________) in monthly
      installments on the twenty-fifth day of each month or, if such day is not a
      Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in July 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
      Series 2006-2 (the “Notes”), issued under an Indenture dated as of June 29, 2006
      (the “Indenture”), between the Issuing Entity and Deutsche Bank National Trust
      Company, 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.

     

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

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, in such coin or currency of the United States of America as at the
      time of payment is legal tender for payment of public and private debts. All
      payments made by the Issuing Entity with respect to this Note shall be equal
      to
      this Note’s pro
      rata
      share of
      the aggregate payments on all Class M-5 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

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

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Servicer on any
      Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 10% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuing
      Entity, the Indenture Trustee and any agent of the Issuing Entity or the
      Indenture Trustee may treat the Person in whose name this Note is registered
      as
      the owner of such Note (i) on the applicable Record Date for the purpose of
      making payments and interest of such Note and (ii) on any other date for all
      other purposes whatsoever, as the owner hereof, whether or not this Note be
      overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
      agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
      to the contrary.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Issuing Entity
      and the rights of the Holders of the Notes under the Indenture at any time
      by
      the Issuing Entity and the Holders of a majority of all Notes at the time
      outstanding. The Indenture also contains provisions permitting the Holders
      of
      Notes representing specified percentages of the aggregate Note Balance of the
      Notes on behalf of the Holders of all the Notes, to waive any past Default
      under
      the Indenture and its consequences. Any such waiver by the Holder, at the time
      of the giving thereof, of this Note (or any one or more predecessor Notes)
      shall
      bind the Holder of every Note issued upon the registration of transfer hereof
      or
      in exchange hereof or in lieu hereof, whether or not notation of such consent
      or
      waiver is made upon such Note. The Indenture also permits the Issuing Entity
      and
      the Indenture Trustee to amend or waive certain terms and conditions set forth
      in the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      June ____, 2006

     

    
      	 	 	 	 	 	 	
              NEW
                 CENTURY HOME EQUITY LOAN TRUST 2006-2

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

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

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

     

    
      	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY,

              as
                Indenture Trustee

            	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              By:

            	 	 
	 	
              Authorized
                Signatory

            	 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

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

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

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

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

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

     

    

    
      	 

    

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

     

    Dated:
      ________________________________     ________________________________

     

    Signature
      Guaranteed by __________________________________

     

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

     

    

     

    

    EXHIBIT
      A-10

     

    FORM
      OF
      CLASS M-6 NOTES

     

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

     

    THE
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEW
      CENTURY HOME EQUITY LOAN TRUST, 2006-2

    ASSET-BACKED
      NOTES, SERIES 2006-2

    CLASS
      M-6

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $_____________________

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $_____________________

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. [ ]

            
	 	 

    

    

    New
      Century Home Equity Loan Trust 2006-2 (the “Issuing Entity”), a Delaware
      statutory trust, for value received, hereby promises to pay to Cede & Co. or
      registered assigns, the principal sum of ($_________________) in monthly
      installments on the twenty-fifth day of each month or, if such day is not a
      Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in July 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
      Series 2006-2 (the “Notes”), issued under an Indenture dated as of June 29, 2006
      (the “Indenture”), between the Issuing Entity and Deutsche Bank National Trust
      Company, 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.

     

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

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, in such coin or currency of the United States of America as at the
      time of payment is legal tender for payment of public and private debts. All
      payments made by the Issuing Entity with respect to this Note shall be equal
      to
      this Note’s pro
      rata
      share of
      the aggregate payments on all Class M-6 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

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

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Servicer on any
      Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 10% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuing
      Entity, the Indenture Trustee and any agent of the Issuing Entity or the
      Indenture Trustee may treat the Person in whose name this Note is registered
      as
      the owner of such Note (i) on the applicable Record Date for the purpose of
      making payments and interest of such Note and (ii) on any other date for all
      other purposes whatsoever, as the owner hereof, whether or not this Note be
      overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
      agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
      to the contrary.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Issuing Entity
      and the rights of the Holders of the Notes under the Indenture at any time
      by
      the Issuing Entity and the Holders of a majority of all Notes at the time
      outstanding. The Indenture also contains provisions permitting the Holders
      of
      Notes representing specified percentages of the aggregate Note Balance of the
      Notes on behalf of the Holders of all the Notes, to waive any past Default
      under
      the Indenture and its consequences. Any such waiver by the Holder, at the time
      of the giving thereof, of this Note (or any one or more predecessor Notes)
      shall
      bind the Holder of every Note issued upon the registration of transfer hereof
      or
      in exchange hereof or in lieu hereof, whether or not notation of such consent
      or
      waiver is made upon such Note. The Indenture also permits the Issuing Entity
      and
      the Indenture Trustee to amend or waive certain terms and conditions set forth
      in the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      June ____, 2006

     

    
      	 	 	 	 	 	 	
              NEW
                CENTURY HOME EQUITY LOAN TRUST 2006-2

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

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

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

     

    
      	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY,

              as
                Indenture Trustee

            	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              By:

            	 	 
	 	
              Authorized
                Signatory

            	 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

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

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

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

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

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

     

    

    
      	 

    

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

     

    Dated:
      ________________________________     ________________________________

     

    Signature
      Guaranteed by __________________________________

     

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

     

    

    EXHIBIT
      A-11

     

    FORM
      OF
      CLASS M-7 NOTES

     

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

     

    THE
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEW
      CENTURY HOME EQUITY LOAN TRUST, 2006-2

    ASSET-BACKED
      NOTES, SERIES 2006-2

    CLASS
      M-7

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $_____________________

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $_____________________

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. [ ]

            
	 	 

    

    

    New
      Century Home Equity Loan Trust 2006-2 (the “Issuing Entity”), a Delaware
      statutory trust, for value received, hereby promises to pay to Cede & Co. or
      registered assigns, the principal sum of ($_________________) in monthly
      installments on the twenty-fifth day of each month or, if such day is not a
      Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in July 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
      Series 2006-2 (the “Notes”), issued under an Indenture dated as of June 29, 2006
      (the “Indenture”), between the Issuing Entity and Deutsche Bank National Trust
      Company, 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.

     

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

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, in such coin or currency of the United States of America as at the
      time of payment is legal tender for payment of public and private debts. All
      payments made by the Issuing Entity with respect to this Note shall be equal
      to
      this Note’s pro
      rata
      share of
      the aggregate payments on all Class M-7 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

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

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Servicer on any
      Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 10% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuing
      Entity, the Indenture Trustee and any agent of the Issuing Entity or the
      Indenture Trustee may treat the Person in whose name this Note is registered
      as
      the owner of such Note (i) on the applicable Record Date for the purpose of
      making payments and interest of such Note and (ii) on any other date for all
      other purposes whatsoever, as the owner hereof, whether or not this Note be
      overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
      agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
      to the contrary.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Issuing Entity
      and the rights of the Holders of the Notes under the Indenture at any time
      by
      the Issuing Entity and the Holders of a majority of all Notes at the time
      outstanding. The Indenture also contains provisions permitting the Holders
      of
      Notes representing specified percentages of the aggregate Note Balance of the
      Notes on behalf of the Holders of all the Notes, to waive any past Default
      under
      the Indenture and its consequences. Any such waiver by the Holder, at the time
      of the giving thereof, of this Note (or any one or more predecessor Notes)
      shall
      bind the Holder of every Note issued upon the registration of transfer hereof
      or
      in exchange hereof or in lieu hereof, whether or not notation of such consent
      or
      waiver is made upon such Note. The Indenture also permits the Issuing Entity
      and
      the Indenture Trustee to amend or waive certain terms and conditions set forth
      in the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      June ____, 2006

     

    
      	 	 	 	 	 	 	
              NEW
                CENTURY HOME EQUITY LOAN TRUST 2006-2

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

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

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

     

    
      	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY,

              as
                Indenture Trustee

            	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              By:

            	 	 
	 	
              Authorized
                Signatory

            	 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

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

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

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

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

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

     

    

    
      	 

    

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

     

    Dated:
      ________________________________     ________________________________

     

    Signature
      Guaranteed by __________________________________

     

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

     

    

     

    

    EXHIBIT
      A-12

     

    FORM
      OF
      CLASS M-8 NOTES

     

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

     

    THE
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEW
      CENTURY HOME EQUITY LOAN TRUST, 2006-2

    ASSET-BACKED
      NOTES, SERIES 2006-2

    CLASS
      M-8

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $_____________________

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $_____________________

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. [ ]

            
	 	 

    

    

    New
      Century Home Equity Loan Trust 2006-2 (the “Issuing Entity”), a Delaware
      statutory trust, for value received, hereby promises to pay to Cede & Co. or
      registered assigns, the principal sum of ($_________________) in monthly
      installments on the twenty-fifth day of each month or, if such day is not a
      Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in July 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
      Series 2006-2 (the “Notes”), issued under an Indenture dated as of June 29, 2006
      (the “Indenture”), between the Issuing Entity and Deutsche Bank National Trust
      Company, 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.

     

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

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, in such coin or currency of the United States of America as at the
      time of payment is legal tender for payment of public and private debts. All
      payments made by the Issuing Entity with respect to this Note shall be equal
      to
      this Note’s pro
      rata
      share of
      the aggregate payments on all Class M-8 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

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

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Servicer on any
      Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 10% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date.

     

    The
      Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
      except to the extent of amounts available from the Trust Estate which
      constitutes security for the payment of the Notes. The assets included in the
      Trust Estate will be the sole source of payments on the Class M-8 Notes, and
      each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
      will be limited in right of payment to amounts available from the Trust Estate
      as provided in the Indenture and (ii) such Holder shall have no recourse to
      the
      Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
      Capital, the Servicer or any of their respective affiliates, or to the assets
      of
      any of the foregoing entities, except the assets of the Issuing Entity pledged
      to secure the Class M-8 Notes pursuant to the Indenture and the rights conveyed
      to the Issuing Entity under the Indenture.

     

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

     

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

     

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

     

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

     

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

     

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

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuing
      Entity, the Indenture Trustee and any agent of the Issuing Entity or the
      Indenture Trustee may treat the Person in whose name this Note is registered
      as
      the owner of such Note (i) on the applicable Record Date for the purpose of
      making payments and interest of such Note and (ii) on any other date for all
      other purposes whatsoever, as the owner hereof, whether or not this Note be
      overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
      agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
      to the contrary.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Issuing Entity
      and the rights of the Holders of the Notes under the Indenture at any time
      by
      the Issuing Entity and the Holders of a majority of all Notes at the time
      outstanding. The Indenture also contains provisions permitting the Holders
      of
      Notes representing specified percentages of the aggregate Note Balance of the
      Notes on behalf of the Holders of all the Notes, to waive any past Default
      under
      the Indenture and its consequences. Any such waiver by the Holder, at the time
      of the giving thereof, of this Note (or any one or more predecessor Notes)
      shall
      bind the Holder of every Note issued upon the registration of transfer hereof
      or
      in exchange hereof or in lieu hereof, whether or not notation of such consent
      or
      waiver is made upon such Note. The Indenture also permits the Issuing Entity
      and
      the Indenture Trustee to amend or waive certain terms and conditions set forth
      in the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      June ____, 2006

     

    
      	 	 	 	 	 	 	
              NEW
                CENTURY HOME EQUITY LOAN TRUST 2006-2

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

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

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

     

    
      	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY,

              as
                Indenture Trustee

            	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              By:

            	 	 
	 	
              Authorized
                Signatory

            	 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

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

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

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

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

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

     

    

    
      	 

    

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

     

    Dated:
      ________________________________     ________________________________

     

    Signature
      Guaranteed by __________________________________

     

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

     

    EXHIBIT
      A-13

     

    FORM
      OF
      CLASS M-9 NOTES

     

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

     

    THE
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEW
      CENTURY HOME EQUITY LOAN TRUST, 2006-2

    ASSET-BACKED
      NOTES, SERIES 2006-2

    CLASS
      M-9

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $_____________________

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $_____________________

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. [ ]

            
	 	 

    

    

    New
      Century Home Equity Loan Trust 2006-2 (the “Issuing Entity”), a Delaware
      statutory trust, for value received, hereby promises to pay to Cede & Co. or
      registered assigns, the principal sum of ($_________________) in monthly
      installments on the twenty-fifth day of each month or, if such day is not a
      Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in July 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
      Series 2006-2 (the “Notes”), issued under an Indenture dated as of June 29, 2006
      (the “Indenture”), between the Issuing Entity and Deutsche Bank National Trust
      Company, 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.

     

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

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, in such coin or currency of the United States of America as at the
      time of payment is legal tender for payment of public and private debts. All
      payments made by the Issuing Entity with respect to this Note shall be equal
      to
      this Note’s pro
      rata
      share of
      the aggregate payments on all Class M-9 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

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

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Servicer on any
      Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 10% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date.

     

    The
      Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
      except to the extent of amounts available from the Trust Estate which
      constitutes security for the payment of the Notes. The assets included in the
      Trust Estate will be the sole source of payments on the Class M-9 Notes, and
      each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
      will be limited in right of payment to amounts available from the Trust Estate
      as provided in the Indenture and (ii) such Holder shall have no recourse to
      the
      Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
      Capital, the Servicer or any of their respective affiliates, or to the assets
      of
      any of the foregoing entities, except the assets of the Issuing Entity pledged
      to secure the Class M-9 Notes pursuant to the Indenture and the rights conveyed
      to the Issuing Entity under the Indenture.

     

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

     

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

     

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

     

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

     

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

     

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

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuing
      Entity, the Indenture Trustee and any agent of the Issuing Entity or the
      Indenture Trustee may treat the Person in whose name this Note is registered
      as
      the owner of such Note (i) on the applicable Record Date for the purpose of
      making payments and interest of such Note and (ii) on any other date for all
      other purposes whatsoever, as the owner hereof, whether or not this Note be
      overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
      agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
      to the contrary.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Issuing Entity
      and the rights of the Holders of the Notes under the Indenture at any time
      by
      the Issuing Entity and the Holders of a majority of all Notes at the time
      outstanding. The Indenture also contains provisions permitting the Holders
      of
      Notes representing specified percentages of the aggregate Note Balance of the
      Notes on behalf of the Holders of all the Notes, to waive any past Default
      under
      the Indenture and its consequences. Any such waiver by the Holder, at the time
      of the giving thereof, of this Note (or any one or more predecessor Notes)
      shall
      bind the Holder of every Note issued upon the registration of transfer hereof
      or
      in exchange hereof or in lieu hereof, whether or not notation of such consent
      or
      waiver is made upon such Note. The Indenture also permits the Issuing Entity
      and
      the Indenture Trustee to amend or waive certain terms and conditions set forth
      in the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      June ____, 2006

     

    
      	 	 	 	 	 	 	
              NEW
                CENTURY HOME EQUITY LOAN TRUST 2006-2

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

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

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

     

    
      	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY,

              as
                Indenture Trustee

            	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              By:

            	 	 
	 	
              Authorized
                Signatory

            	 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

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

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

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

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

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

     

    

    
      	 

    

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

     

    Dated:
      ________________________________     ________________________________

     

    Signature
      Guaranteed by __________________________________

     

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

     

    

     

    

     

    EXHIBIT
      A-14

     

    FORM
      OF
      CLASS M-10 NOTES

     

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

     

    THE
      HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
      TO
      REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE
      INDENTURE.

     

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

     

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

     

    THIS
      NOTE
      IS SUBORDINATE TO THE CLASS A NOTES, THE CLASS M-1 NOTES, THE CLASS M-2 NOTES,
      THE CLASS M-3 NOTES, THE CLASS M-4 NOTES, THE CLASS M-5 NOTES, THE CLASS M-6
      NOTES, THE CLASS M-7 NOTES, THE CLASS M-8 NOTES AND THE CLASS M-9 NOTES TO
      THE
      EXTENT DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NEW
      CENTURY HOME EQUITY LOAN TRUST, 2006-2

    ASSET-BACKED
      NOTES, SERIES 2006-2

    CLASS
      M-10

    

    
      	
              AGGREGATE
                NOTE BALANCE:

              $_____________________

            	
              NOTE
                RATE: Variable

            
	 	 
	
              INITIAL
                NOTE BALANCE OF THIS BOND: $_____________________

            	
              BOND
                NO. 1

            
	 	 
	
              PERCENTAGE
                INTEREST: 100%

            	
              CUSIP
                NO. [ ]

            
	 	 

    

    

    New
      Century Home Equity Loan Trust 2006-2 (the “Issuing Entity”), a Delaware
      statutory trust, for value received, hereby promises to pay to Cede & Co. or
      registered assigns, the principal sum of ($_________________) in monthly
      installments on the twenty-fifth day of each month or, if such day is not a
      Business Day, the next succeeding Business Day (each a “Payment Date”),
      commencing in July 2006 and ending on or before the Payment Date occurring
      on
      the Final Stated Maturity Date and to pay interest on the Note Balance of this
      Note (this “Note”) outstanding from time to time as provided below.

     

    This
      Note
      is one of a duly authorized issue of the Issuing Entity’s Asset-Backed Notes,
      Series 2006-2 (the “Notes”), issued under an Indenture dated as of June 29, 2006
      (the “Indenture”), between the Issuing Entity and Deutsche Bank National Trust
      Company, 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.

     

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

     

    The
      principal of, and interest on, this Note are due and payable as described in
      the
      Indenture, in such coin or currency of the United States of America as at the
      time of payment is legal tender for payment of public and private debts. All
      payments made by the Issuing Entity with respect to this Note shall be equal
      to
      this Note’s pro
      rata
      share of
      the aggregate payments on all Class M-10 Notes as described above, and shall
      be
      applied as between interest and principal as provided in the
      Indenture.

     

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

     

    The
      Notes
      are subject to redemption in whole, but not in part, by the Servicer on any
      Payment Date on or after the Payment Date on which the aggregate Stated
      Principal Balance of the Mortgage Loans as of the end of the prior Due Period
      is
      less than or equal to 10% of the aggregate Stated Principal Balance of the
      Mortgage Loans as of Cut-off Date.

     

    The
      Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
      except to the extent of amounts available from the Trust Estate which
      constitutes security for the payment of the Notes. The assets included in the
      Trust Estate will be the sole source of payments on the Class M-10 Notes, and
      each Holder hereof, by its acceptance of this Note, agrees that (i) such Note
      will be limited in right of payment to amounts available from the Trust Estate
      as provided in the Indenture and (ii) such Holder shall have no recourse to
      the
      Issuing Entity, the Owner Trustee, the Indenture Trustee, the Seller, NC
      Capital, the Servicer or any of their respective affiliates, or to the assets
      of
      any of the foregoing entities, except the assets of the Issuing Entity pledged
      to secure the Class M-10 Notes pursuant to the Indenture and the rights conveyed
      to the Issuing Entity under the Indenture.

     

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

     

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

     

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

     

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

     

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

     

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

     

    Prior
      to
      the due presentment for registration of transfer of this Note, the Issuing
      Entity, the Indenture Trustee and any agent of the Issuing Entity or the
      Indenture Trustee may treat the Person in whose name this Note is registered
      as
      the owner of such Note (i) on the applicable Record Date for the purpose of
      making payments and interest of such Note and (ii) on any other date for all
      other purposes whatsoever, as the owner hereof, whether or not this Note be
      overdue, and neither the Issuing Entity, the Indenture Trustee nor any such
      agent of the Issuing Entity or the Indenture Trustee shall be affected by notice
      to the contrary.

     

    The
      Indenture permits, with certain exceptions as therein provided, the amendment
      thereof and the modification of the rights and obligations of the Issuing Entity
      and the rights of the Holders of the Notes under the Indenture at any time
      by
      the Issuing Entity and the Holders of a majority of all Notes at the time
      outstanding. The Indenture also contains provisions permitting the Holders
      of
      Notes representing specified percentages of the aggregate Note Balance of the
      Notes on behalf of the Holders of all the Notes, to waive any past Default
      under
      the Indenture and its consequences. Any such waiver by the Holder, at the time
      of the giving thereof, of this Note (or any one or more predecessor Notes)
      shall
      bind the Holder of every Note issued upon the registration of transfer hereof
      or
      in exchange hereof or in lieu hereof, whether or not notation of such consent
      or
      waiver is made upon such Note. The Indenture also permits the Issuing Entity
      and
      the Indenture Trustee to amend or waive certain terms and conditions set forth
      in the Indenture without the consent of the Holders of the Notes issued
      thereunder.

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    Dated:
      June ____, 2006

     

    
      	 	 	 	 	 	 	
              NEW
                CENTURY HOME EQUITY LOAN TRUST 2006-2

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

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Authorized
                Signatory

            
	 	 	 	 	 	 	 	 

    

    

    

    INDENTURE
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

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

     

    
      	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY,

              as
                Indenture Trustee

            	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              By:

            	 	 
	 	
              Authorized
                Signatory

            	 

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ABBREVIATIONS

     

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

    

    
      	
              TEN
                COM

            	
              --

            	
              as
                tenants in common

            
	
              TEN
                ENT

            	
              --

            	
              as
                tenants by the entireties

            
	
              JT
                TEN

            	
              --

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

            
	
              UNIF
                GIFT MIN ACT

            	
              --

            	
              __________
                Custodian

              ________________________________________

            
	 	 	
              (Cust)

            	
              (Minor)

            
	 	 	 	 
	 	 	
              under
                Uniform Gifts to Minor Act

              ________________________________________

            
	 	 	 	
              (State)

            
	 	 	 

    

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT

     

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

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

    ASSIGNEE:

    

    
      	 
	 
	 

    

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

     

    

    
      	 

    

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

     

    Dated:
      ________________________________     ________________________________

     

    Signature
      Guaranteed by __________________________________

     

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

     

     

    
 

    EXHIBIT
      B

     

    MORTGAGE
      LOAN SCHEDULE

     

    See
      Exhibit A to the Servicing Agreement

    

     

    
 

    EXHIBIT
      C-1

     

    FORM
      OF
      INITIAL CERTIFICATION

     

    June
      [___], 2006

    

    
      	
              New
                Century Home Equity Loan Trust 2006-2

              c/o
                Wilmington Trust Company

              1100
                North Market Street

              Wilmington,
                Delaware 19990-0001

              Attention:
                Corporate Trust Administration

            	
              New
                Century Mortgage Corporation

              18400
                Von Karman

              Irvine,
                California 92612

            

    

    

    
      	 	
              Re:

            	
              Indenture
                dated as of June 29, 2006, between New Century Home

              Equity
                Loan Trust 2006-2 and Deutsche Bank National Trust
                Company

            

    

    

    Ladies
      and Gentlemen:

     

    In
      accordance with Section 2.03(a) of the above-captioned Indenture and Section
      2.1(b)(i)-(v) of the Mortgage Loan Purchase Agreement, dated as of June 29,
      2006
      (the “MLPA”; and together with the Indenture, the “Agreements”), among New
      Century Credit Corporation, NC Capital Corporation and New Century Mortgage
      Securities LLC., the undersigned, as Indenture Trustee, hereby certifies that
      as
      to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
      Mortgage Loan paid in full or any Mortgage Loan specifically identified in
      the
      exception report annexed thereto as not being covered by such certification)
      (i)
      all documents constituting part of such Mortgage File (other than such documents
      described in Section 2.1(v) of the MLPA) required to be delivered to it pursuant
      to the Agreement are in its possession, (ii) such documents have been reviewed
      by it and appear regular on their face and relate to such Mortgage Loan and
      (iii) based on its examination and only as to the foregoing, the information
      set
      forth in the Mortgage Loan Schedule that corresponds to items (i), (ii), (x),
      (xi), (xiv) and (xvi) (solely as to the Gross Margin) of the definition of
      “Mortgage Loan Schedule” accurately reflects information set forth in the
      Mortgage File.

     

    The
      Indenture Trustee makes no representations as to: (i) the validity, legality,
      sufficiency, enforceability or genuineness of any of the documents contained
      in
      the Mortgage File of any of the Mortgage Loans identified on the Mortgage Loan
      Schedule, (ii) the collectability, insurability, effectiveness or suitability
      of
      any such Mortgage Loan, or (iii) whether any Mortgage File included any of
      the
      documents specified in clause (v) of Section 2.1 of the MLPA.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Capitalized
      words and phrases used herein shall have the respective meanings assigned to
      them in the above-captioned Indenture.

     

    
      	 	 	 	 	 	 	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY, as Indenture Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Name: 

            
	 	 	 	 	 	 	 	
              Title: 

            

    

    

    

    

    

    EXHIBIT
      C-2

     

    FORM
      OF
      FINAL CERTIFICATION

     

    ,
      200__

    

    
      	
              New
                Century Home Equity Loan Trust 2006-2

              c/o
                Wilmington Trust Company

              1100
                North Market Street

              Wilmington,
                Delaware 19990-0001

              Attention:
                Corporate Trust Administration

            	
              New
                Century Mortgage Corporation

              18400
                Von Karman

              Irvine,
                California 92612

            

    

    

    
      	 	
              Re:

            	
              Indenture
                dated as of June 29, 2006, between New Century Home Equity Loan Trust
                2006-2 and Deutsche Bank National Trust
                Company

            

    

    

    Ladies
      and Gentlemen:

     

    In
      accordance with Section 2.03(b) of the above-captioned Indenture, and Section
      2.1(b) of the Mortgage Loan Purchase Agreement, dated as of June 29, 2006,
      (the
“MLPA”; and together with the Indenture, the “Agreements”), among New Century
      Credit Corporation, NC Capital Corporation and New Century Mortgage Securities
      LLC, the undersigned, as Indenture Trustee, hereby certifies that as to each
      Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
      Loan
      paid in full or listed on the exception report attached hereto) it has received
      the documents set forth in Section 2.1(b) of the MLPA.

     

    The
      Indenture Trustee has made no independent examination of any documents contained
      in each Mortgage File beyond the review specifically required in the Agreements.
      The Indenture Trustee makes no representation that any documents specified
      in
      clause (v) of Section 2.1(b) should be included in any Mortgage
      File.

     

    The
      Indenture Trustee makes no representations as to and shall not be responsible
      to
      verify: (i) the validity, legality, sufficiency, enforceability, due
      authorization, recordability or genuineness of any of the documents contained
      in
      each Mortgage File of any of the Mortgage Loans identified on the Mortgage
      Loan
      Schedule, (ii) the collectability, insurability, effectiveness or suitability
      of
      any such Mortgage Loan or (iii) the existence of any assumption, modification,
      written assurance or substitution agreement with respect to any Mortgage File
      if
      no such documents appear in the Mortgage File delivered to the Indenture
      Trustee.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Capitalized
      words and phrases used herein shall have the respective meanings assigned to
      them in the above-captioned Indenture.

     

    
      	 	 	 	 	 	 	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY, as Indenture Trustee

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              By:

            	 
	 	 	 	 	 	 	 	
              Name: 

            
	 	 	 	 	 	 	 	
              Title: 

            

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      D

     

    INTEREST
      RATE SWAP AGREEMENT

     

    
       

      
        	
                Deutsche
                  Bank 

                Aktiengesellschaft

              	
                

              

      

       

      

        
          	
                  Date:

                	
                  June
                    29, 2006

                
	 	 
	
                  To:

                	
                  New
                    Century Home Equity Loan Trust 2006-2

                
	
                   

                	
                  c/o
                    Wilmington Trust Company

                
	
                	
                  1100
                    North Market Street

                
	
                	
                  Wilmington,
                    Delaware 19890-0001

                
	
                	
                  Attention:
                    Corporate Trust Administration

                
	 	 
	
                  With
                    copy to:

                	
                  Deutsche
                    Bank National Trust Company

                
	
                	
                  1761
                    E. Saint Andrew Place

                
	
                	
                  Santa
                    Ana, CA 92705

                
	
                	
                  
                    Attention:        
                        Trust Administration - NC0602

                  

                
	
                   

                	
                  
                    Telephone
                      No.:  (714) 247-6000

                  

                
	
                   

                	
                  
                    Facsimile
                      No.:     (714) 656-2622

                  

                
	 	 
	
                  Our
                    Reference:

                	
                  Global
                    No. N487723N

                
	 	 
	
                  Re:

                	
                  Interest
                    Rate Swap Transaction

                

        

      

      

      Ladies
        and Gentlemen:

      

      The
        purpose of this letter agreement (“Agreement”) is to confirm the terms and
        conditions of the Transaction entered into on the Trade Date specified below
        (the “Transaction”) between Deutsche Bank AG (“DBAG”) and New Century Home
        Equity Loan Trust 2006-2 (“Counterparty”). This Agreement, which evidences a
        complete and binding agreement between you and us to enter into the Transaction
        on the terms set forth below, constitutes a “Confirmation” as referred to in the
“ISDA Form Master Agreement” (as defined below), as well as a “Schedule” as
        referred to in the ISDA Form Master Agreement.

      

      1. This
        Agreement is subject to the 2000
        ISDA Definitions (the
        “Definitions”), as published by the International Swaps and Derivatives
        Association, Inc. (“ISDA”). You and we have agreed to enter into this Agreement
        in lieu of negotiating a Schedule to the 1992 ISDA Master Agreement
        (Multicurrency—Cross Border) form (the “ISDA Form Master Agreement”) but,
        rather, an ISDA Form Master Agreement shall be deemed to have been executed
        by
        you and us on the date we entered into the Transaction. For avoidance of
        doubt,
        the Transaction described herein shall be the sole Transaction governed by
        such
        ISDA Form Master Agreement. In the event of any inconsistency between the
        provisions of this Agreement and the Definitions or the ISDA Form Master
        Agreement, this Agreement shall prevail for purposes of the Transaction.
        Each
        term capitalized but not defined herein shall have the meaning attributed
        thereto in the Indenture, dated as of June 29, 2006, between New Century
        Home
        Equity Loan Trust 2006-2, as Issuing Entity (the “Issuing Entity”), and Deutsche
        Bank National Trust Company, as Indenture Trustee (the “Indenture Trustee”) (the
“Indenture”).

      

      2. The
        terms
        of the particular Transaction to which this Confirmation relates are as
        follows

       

      
        
          	 	
                  Notional
                    Amount:

                	
                  With
                    respect to any Calculation Period, the Notional Amount is equal
                    to the
                    lesser of (i) the Calculation Amount set forth for such Calculation
                    Period
                    in Schedule I attached hereto and (ii) the aggregate principal
                    balance of
                    the mortgage loans as of the open of business on the first day
                    of the
                    related Due Period.

                
	 	
                   

                	
                   

                
	 	
                  Trade
                    Date:

                	
                  June
                    21, 2006

                
	 	
                   

                	
                   

                
	 	
                  Effective
                    Date:

                	
                  June
                    29, 2006

                
	 	
                   

                	
                   

                
	 	
                  Termination
                    Date:

                	
                  September
                    25, 2011, subject to adjustment in accordance with the Following
                    Business
                    Day Convention; provided, however, that for the purpose of determining
                    the
                    final Fixed Rate Payer Period End Date, Termination Date shall
                    be subject
                    to No Adjustment

                

        

      

       

      Fixed
        Amounts:

       

      
        	 	
                Fixed
                  Rate Payer:

              	
                Counterparty

              
	 	 	 
	 	
                Fixed
                  Rate Payer Period End Dates:

              	
                The
                  25th day of each month, commencing July 25, 2006, through and including
                  the Termination Date, subject to No Adjustment

              
	 	 	 
	 	
                Fixed
                  Rate Payer Payment Dates:

              	
                The
                  25th day of each month, commencing July 25, 2006, through and including
                  the Termination Date, subject to adjustment in accordance with
                  the
                  Following Business Day Convention.

              
	 	 	 
	 	
                Fixed
                  Rate:

              	
                5.590%

              
	 	 	 
	 	
                Fixed
                  Rate Day Count Fraction:

              	
                30/360

              
	 	 	 
	 	
                Additional
                  Fixed Payment

              	
                On
                  the Effective Date, Counterparty will make a payment to DBAG of
                  USD
                  $1,750,000 (such payment shall be made by New Century Credit Corporation
                  on behalf of Counterparty).

              

      

      

      

      Floating
        Amounts:

      

      
        	 	
                Floating
                  Rate Payer:

              	
                DBAG

              
	 	 	 
	 	
                Floating
                  Rate Payer Period End Dates:

              	
                The
                  25th day of each month, commencing July 25, 2006, through and including
                  the Termination Date, subject
                  to adjustment in accordance with the Following Business Day
                  Convention.

              
	 	 	 
	 	
                Floating
                  Rate Payer Payment Dates:

              	
                The
                  25th day of each month, commencing July 25, 2006, through and including
                  the Termination Date, subject to adjustment in accordance with
                  the
                  Following Business Day Convention.

              
	 	 	 
	 	
                Floating
                  Rate Option:

              	
                USD-LIBOR-BBA

              
	 	 	 
	 	
                Designated
                  Maturity:

              	
                1
                  month

              
	 	 	 
	 	
                Spread:

              	
                None

              
	 	 	 
	 	
                Floating
                  Rate Day Count Fraction:

              	
                Actual/360

              
	 	 	 
	 	
                Reset
                  Dates:

              	
                The
                  first day of each Calculation Period

              
	 	 	 
	 	
                Compounding:

              	
                Inapplicable

              
	 	 	 
	
                Calculation
                  Agent: 

              	
                DBAG

              
	 	 	 
	
                Business
                  Days:

              	
                New
                  York 

              

      

       

      3. 
Additional
        Provisions:                       
 Each
        party hereto is hereby advised and acknowledges that the other party has
        engaged
        in (or refrained from engaging in) substantial financial transactions and
        has
        taken (or refrained from taking) other material actions in reliance upon
        the
        entry by the parties into the Transaction being entered into on the terms
        and
        conditions set forth herein and in the Confirmation relating to such
        Transaction, as applicable.

       

      
        	
                4.

              	
                Provisions
                  Deemed Incorporated in a Schedule to the ISDA Form Master
                  Agreement:

              

      

      

      
        	1)  	
                The
                  parties agree that subparagraph (ii) of Section 2(c) of the ISDA
                  Form
                  Master Agreement will apply to any
                  Transaction.

              

      

      

      2)
        Termination
        Provisions.
        Subject
        to the provisions of paragraph 13 below, for purposes of the ISDA Form Master
        Agreement:

      

      (a) “Specified
        Entity” is not applicable to DBAG or Counterparty for any purpose. 

      

      (b) The
        “Breach of Agreement” provisions of Section 5(a)(ii) will not apply to DBAG or
        Counterparty.

      

      (c) The
        “Credit Support Default” provisions of Section 5(a)(iii) will not apply to
        Counterparty and will apply to DBAG if DBAG has obtained a guarantee or other
        contingent agreement or posted collateral pursuant to paragraph 12
        below.

      

      (d) The
        “Misrepresentation” provisions of Section 5(a)(iv) will not apply to DBAG or
        Counterparty.

      

      (e) “Specified
        Transaction” is not applicable to DBAG or Counterparty for any purpose, and,
        accordingly, Section 5(a)(v) shall not apply to DBAG or
        Counterparty.

      

      (f) The
        “Cross Default” provisions of Section 5(a)(vi) will not apply to DBAG or to
        Counterparty. 

      

      (g) The
        “Bankruptcy” provision of Section 5(a)(vii)(2) will not apply to
        Counterparty.

      

      (h) The
        “Merger Without Assumption” provisions of Section 5(a)(viii) will not apply to
        Counterparty. 

      

      (i) The
“Tax
        Event Upon Merger” provisions of Section 5(b)(iii) will not apply to DBAG as
        Burdened Party.

      

      (j) The
        “Credit Event Upon Merger” provisions of Section 5(b)(iv) will not apply to DBAG
        or to Counterparty.

      

      (k) The
        “Automatic Early Termination” provision of Section 6(a) will not apply to DBAG
        or to Counterparty.

      

      (l) Payments
        on Early Termination. For the purpose of Section 6(e) of the ISDA Form Master
        Agreement:

      

      (i) Market
        Quotation will apply.

       

      (ii) The
        Second Method will apply. 

      

      (m) “Termination
        Currency” means United States Dollars. 

      

      3)
        Tax
        Representations. 

      

      
        	 	
                Payer
                  Representations. For the purpose of Section 3(e) of the
                  ISDA Form Master
                  Agreement, DBAG and Counterparty make the following
                  representations:

              

      

      

      
        	 	 	
                It
                  is not required by any applicable law, as modified by the practice
                  of any
                  relevant governmental revenue authority, of any Relevant Jurisdiction
                  to
                  make any deduction or withholding for or on account of any Tax
                  from any
                  payment (other than interest under Section 2(e), 6(d)(ii) or 6(e)
                  of
                  the
                  ISDA Form Master
                  Agreement) to be made by it to the other party under this Agreement.
                  In
                  making this representation, it may rely on (i) the accuracy of
                  any
                  representations made by the other party pursuant to Section 3(f)
                  of
                  the
                  ISDA Form Master
                  Agreement, (ii) the satisfaction of the agreement contained in
                  Section
                  4(a)(i) or 4(a)(iii) of the
                  ISDA Form Master
                  Agreement and the accuracy and effectiveness of any document provided
                  by
                  the other party pursuant to Section 4(a)(i) or 4(a)(iii) of the
                  ISDA Form Master
                  Agreement and (iii) the satisfaction of the agreement of the other
                  party
                  contained in Section 4(d) of the
                  ISDA Form Master
                  Agreement, provided that it shall not be a breach of this representation
                  where reliance is placed on clause (ii) and the other party does
                  not
                  deliver a form or document under Section 4(a)(iii) by reason of
                  material
                  prejudice of its legal or commercial position.

              

      

      

      
        	 	
                Payee
                  Representations. For the purpose of Section 3 (f) of the
                  ISDA Form Master
                  Agreement, DBAG and Counterparty make the following
                  representations:

              

      

      

      (i) DBAG
        represents that it
        is a
“foreign person” within the meaning of the applicable U.S. Treasury Regulations
        concerning information reporting and backup withholding tax (as in effect
        on
        January 1, 2001), unless DBAG provides written notice to Counterparty that
        it is
        no longer a foreign person. In respect of each Transaction it enters into
        through an office or discretionary agent in the United States or which otherwise
        is allocated for United States federal income tax purposes to such United
        States
        trade or business, each payment received or to be received by it under such
        Transaction will be effectively connected with its conduct of a trade or
        business in the United States.

      

      
        
          (ii)  Counterparty
            represents that it is a United States person for U.S. Federal Income
            Tax
            purposes.

        

      

      

      4)
        The
        ISDA Form Master Agreement is hereby amended as follows:

      

      The
        word
“third” shall be replaced by the word “second” in the third line of Section
        5(a)(i) of the ISDA Form Master Agreement; 

      

      5)
        Documents
        to be Delivered.
        For the
        purpose of Section 4(a)(i) and (ii) of the ISDA Form Master Agreement, each
        party agrees to deliver the following documents, as applicable:

      

      (1) Tax
        forms, documents, or certificates to be delivered are:

       

      
        	
                Party
                  required to deliver document

              	
                Form/Document/

                Certificate

              	
                Date
                  by which to

                be
                  delivered

              
	
                DBAG
                  and

                the
                  Counterparty

              	
                Any
                  document required or reasonably requested to allow the other party
                  to make
                  payments under this Agreement without any deduction or withholding
                  for or
                  on the account of any Tax or with such deduction or withholding
                  at a
                  reduced rate

              	
                Promptly
                  after the earlier of (i) reasonable demand by either party or (ii)
                  learning that such form or document is
                  required

              

      

       

      (2) Other
        documents to be delivered are:

      
        	
                Party
                  required to deliver document

              	
                Form/Document/

                Certificate

              	
                Date
                  by which to

                be
                  delivered

              	
                Covered
                  by Section 3(d) Representation

              
	
                DBAG
                  and

                the
                  Counterparty

              	
                Any
                  documents required by the receiving party to evidence the authority
                  of the
                  delivering party or its Credit Support Provider, if any, for it
                  to execute
                  and deliver this Agreement, any Confirmation, and any Credit Support
                  Documents to which it is a party, and to evidence the authority
                  of the
                  delivering party or its Credit Support Provider to perform its
                  obligations
                  under this Agreement, such Confirmation and/or Credit Support Document,
                  as
                  the case may be

              	
                Upon
                  the execution and delivery of this Agreement and such Confirmation

              	
                Yes

              
	
                DBAG
                  and

                the
                  Counterparty

              	
                A
                  certificate of an authorized officer of the party, as to the incumbency
                  and authority of the respective officers of the party signing this
                  Agreement, any relevant Credit Support Document, or any Confirmation,
                  as
                  the case may be

              	
                Upon
                  the execution and delivery of this Agreement and such
                  Confirmation

              	
                Yes

              

      

      

      6)
         Miscellaneous

      

      
        	
                (a)

              	
                Address
                  for Notices: For the purposes of Section 12(a) of the ISDA Form
                  Master Agreement:

              

      

      

      Addresses
        for notices or communications to DBAG:

       

      Addresses
        for notices to DBAG under Sections 5 or 6 (other than notices under Section
        5(a)(i)) shall be sent to:

      

      Deutsche
        Bank AG, Head Office

      Taunusanlage
        12

      60262
        Frankfurt

      GERMANY

      Attention:
        Legal Department

      Telex
        No:
        411836 or 416731 or 41233

      Answerback: DBF-D

      

      All
        other
        notices to DBAG shall be sent directly to the Office through which DBAG is
        acting for the relevant Transaction, using the address and contact particulars
        specified in the Confirmation of that Transaction or otherwise
        notified.

      

      Address
        for notices or communications to the Counterparty:

      

      New
        Century Home Equity Loan Trust 2006-2

      c/o
        Wilmington Trust Company

      1100
        North Market Street

      Wilmington,
        Delaware 19890-0001

      Attention:
        Corporate Trust Administration

      (for
        all
        purposes)

      
         

          With
            copy
            to:

        

      

      
         

          Deutsche
            Bank National Trust Company

        

      

      1761
        E.
        Saint Andrew Place

      Santa
        Ana, CA 92705

      Attention:
         Trust
        Administration - New Century 2006-2

      Telephone
        No.: (714)
        247-6000

      Facsimile
        No.: (714)
        656-2622

      

      (b) Process
        Agent. For the purpose of Section 13(c):

      

      DBAG
        appoints as its  Not
        Applicable

      

      The
        Counterparty appoints as its  Not
        Applicable

      

      
        	
                (c)

              	
                Offices.
                  The provisions of Section 10(a) will not apply to this
                  Agreement.

              

      

      

      
        	
                (d)

              	
                Multibranch
                  Party. For the purpose of Section 10(c) of the ISDA Form Master
                  Agreement:

              

      

      

      DBAG
        is
        not a Multibranch Party.

      

      
        	 	
                The
                  Counterparty is not a Multibranch
                  Party.

              

      

      

      
        	(e)  	
                Calculation
                  Agent. The Calculation Agent is
                  DBAG.

              

      

      

      (f) Credit
        Support Document.

       

      DBAG:
        Not
        applicable, except for any guarantee, contingent agreement or credit support
        annex delivered pursuant to paragraph 12 below.

      

      The
        Counterparty:  Not
        Applicable

      

      
        	
                (g)

              	
                Credit
                  Support Provider.

              

      

      

      DBAG: Not
        Applicable for so long as no Credit Support Document is delivered under
        paragraph 12 below, otherwise, to the party that is the primary obligor under
        the Credit Support Document.

      

      
        	 	
                The
                  Counterparty:

              	
                Not
                  Applicable

              

      

      

      (h) Governing
        Law. The
        parties to this Agreement hereby agree that the law of the State of New York
        shall govern their rights and duties in whole without regard to conflict
        of law
        provisions thereof other than New York General Obligations Law Sections 5-1401
        and 5-1402. 

      

      (i) Severability. If
        any
        term, provision, covenant, or condition of this Agreement, or the application
        thereof to any party or circumstance, shall be held to be invalid or
        unenforceable (in whole or in part) for any reason, the remaining terms,
        provisions, covenants, and conditions hereof shall continue in full force
        and
        effect as if this Agreement had been executed with the invalid or unenforceable
        portion eliminated, so long as this Agreement as so modified continues to
        express, without material change, the original intentions of the parties
        as to
        the subject matter of this Agreement and the deletion of such portion of
        this
        Agreement will not substantially impair the respective benefits or expectations
        of the parties. 

      

      The
        parties shall endeavor to engage in good faith negotiations to replace any
        invalid or unenforceable term, provision, covenant or condition with a valid
        or
        enforceable term, provision, covenant or condition, the economic effect of
        which
        comes as close as possible to that of the invalid or unenforceable term,
        provision, covenant or condition. 

      

      (j) Consent
        to Recording. 
        Each
        party hereto consents to the monitoring or recording, at any time and from
        time
        to time, by the other party of any and all communications between officers
        or
        employees of the parties, waives any further notice of such monitoring or
        recording, and agrees to notify its officers and employees of such monitoring
        or
        recording. 

      

      (k) Waiver
        of
        Jury Trial. Each
        party waives any right it may have to a trial by jury in respect of any
        Proceedings relating to this Agreement or any Credit Support Document.

      

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

      

      (m) Proceedings.
        DBAG
        shall not institute against or cause any other person to institute against,
        or
        join any other person in instituting against the Counterparty any bankruptcy,
        reorganization, arrangement, insolvency or liquidation proceedings, or other
        proceedings under any federal or state bankruptcy or similar law for a period
        of
        one year and one day (or, if longer, the applicable preference period) following
        payment in full of the Certificates or any notes backed by the Certificates
        (the
“Notes”). This provision will survive the termination of this
        Agreement.

      

      (n) DBAG
        hereby agrees that, notwithstanding any provision of this agreement to the
        contrary, Counterparty’s obligations to pay any amounts owing under this
        Agreement shall be subject to Section 3.05 of the Indenture and DBAG’s right to
        receive payment of such amounts shall be subject to Section 3.05 of the
        Indenture. This provision will survive the termination of this
        Agreement.

      

      7)
        “Affiliate.” DBAG and Counterparty shall be deemed to not have any Affiliates
        for purposes of this Agreement, including for purposes of Section 6(b)(ii).
        This
        provision will survive the termination of this Agreement.

       

      8)
        Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
        the
        end thereof the following subsection (g): 

      

      “(g)       
         Relationship
        Between Parties.
        

      

      Each
        party represents to the other party on each date when it enters into a
        Transaction that:--

      

      (1)
        Nonreliance.
        It is
        not relying on any statement or representation of the other party regarding
        the
        Transaction (whether written or oral), other than the representations expressly
        made in this Agreement or the Confirmation in respect of that Transaction.
        

      

      (2)
        Evaluation
        and Understanding.
        

      

      (i)
        It is
        acting for its own account and has the capacity to evaluate (internally or
        through independent professional advice) the Transaction and has made its
        own
        decision to enter into the Transaction;

      

      (ii)
        It
        understands the terms, conditions and risks of the Transaction and is willing
        and able to accept those terms and conditions and to assume those risks,
        financially and otherwise; and 

      

      (3) Purpose.
        It is an “eligible swap participant” as such term is defined in Section
        35.1(b)(2) of the regulations (17 C.F.R 35) promulgated under, and an “eligible
        contract participant” as defined in Section 1(a)(12) of, the Commodity Exchange
        Act, as amended, and it is entering into the Transaction for the purposes
        of
        managing its borrowings or investments, hedging its underlying assets or
        liabilities or in connection with a line of business. 

      

      (4) Status
        of Parties.
        The
        other party is not acting as an agent, fiduciary or advisor for it in respect
        of
        the Transaction.”

      

      9)
        Set-off. 
        Notwithstanding any provision of this Agreement or any other existing or
        future
        agreement, each party irrevocably waives any and all rights it may have to
        set
        off, net, recoup or otherwise withhold or suspend or condition payment or
        performance of any obligation between it and the other party hereunder against
        any obligation between it and the other party under any other agreements.
        The
        provisions for Set-off set forth in Section 6(e) of the Agreement shall not
        apply for purposes of this Transaction.

      

      10)
        Transfer,
        Amendment and Assignment.
        No
        transfer, amendment, waiver, supplement, assignment or other modification
        of
        this Transaction shall be permitted by either party unless each of Standard
        & Poor’s Ratings Service, a division of The McGraw-Hill Companies, Inc.
        (“S&P”) and Moody’s Investors Service, Inc. (“Moody’s”) has been provided
        notice of the same and confirms in writing (including by facsimile transmission)
        that it will not downgrade, qualify, withdraw or otherwise modify its
        then-current rating of the Certificates or any Notes.

      

      11)
        Additional
        Termination Events.
        The
        following Additional Termination Events will apply, in each case with respect
        Counterparty as the sole Affected Party (unless otherwise provided
        below): 

       

      (i)      
         DBAG
        fails to comply with the Rating Agency Downgrade provisions as set forth
        in
        Section 12 below. For all purposes of this Agreement, DBAG shall be the sole
        Affected Party with respect to the occurrence of a Termination Event described
        in this Section 11(i).

       

      (ii)     
         With
        respect to Counterparty only, any amendment to the Indenture which materially
        adversely affects any of DBAG’s rights thereunder is made without prior written
        consent of DBAG, where such consent is required under the
        Indenture.

       

      (iii)    
          If
        the
        Trustee is unable to pay the Class A Certificates any related Accrued
        Certificate Interest or any amount in respect of principal required to be
        paid
        pursuant to the terms of the Indenture or fails or admits in writing its
        inability to pay such amounts to the Class A Certificates as they become
        due.

      

      (iv)    
         If,
        at
        any time, the Master Servicer or the Servicer gives unrescindable notice
        that it
        will purchase the Mortgage Loans pursuant to Section 10.01 of the Indenture;
        provided, however, that notwithstanding Section 6(b)(iv) of the ISDA Form
        Master
        Agreement, only Counterparty shall have the right to designate an Early
        Termination Date in respect of this Additional Termination Event.

      

      (v)     
         If,
        upon
        the occurrence of a Swap Disclosure Event (as defined in Part 13 below) DBAG
        has
        not, within 10 calender days after such Swap Disclosure Event complied with
        any
        of the provisions set forth in Part 13(iii) below, then an Additional
        Termination Event shall have occurred with respect to DBAG and DBAG shall
        be the
        sole Affected Party with respect to such Additional Termination
        Event.

      

      12)
        Rating
        Agency Downgrade.
        In the
        event that DBAG’s short-term unsecured and unsubordinated debt rating is reduced
        below “A-1” by S&P or, if DBAG has both a long-term credit rating and a
        short-term credit rating from Moody’s, and either its long-term unsecured and
        unsubordinated debt rating is withdrawn or reduced to or below A1”
(on
        watch for downgrade) by Moody’s or its short-term credit rating is withdrawn or
        reduced to or below “P-1” (or watch for downgrade) by Moody’s, or, if DBAG has
        no short-term rating, and its long-term unsecured and unsubordinated debt
        rating
        is withdrawn or reduced to or below “Aa3” (on watch for downgrade) (and
        together with S&P, the “Swap Rating Agencies”, and such rating thresholds,
“Approved Rating Thresholds”), then within 30 days after such rating withdrawal
        or downgrade, DBAG shall, subject to the Rating Agency Condition and at its
        own
        expense, either (i) cause another entity to replace DBAG as party to this
        Agreement that meets or exceeds the Approved Rating Thresholds on terms
        substantially similar to this Agreement, (ii) obtain a guaranty of, or a
        contingent agreement of another person with the Approved Rating Thresholds,
        to
        honor, DBAG’s obligations under this Agreement, (iii) post collateral which will
        be sufficient to restore the immediately prior ratings of the Certificates
        and
        any Notes, or (iv) establish any other arrangement which will be sufficient
        to
        restore the immediately prior ratings of the Certificates and any Notes.
        In the
        event that DBAG’s long-term unsecured and unsubordinated debt rating is reduced
        below “BBB-” or its short-term unsecured and unsubordinated debt rating is
        reduced below “A-3” or is withdrawn by S&P or DBAG’s long-term unsecured and
        unsubordinated debt rating is withdrawn or reduced below “A3” by Moody’s or its
        short-term credit rating is reduced below “P-2” by Moody’s, then within 10 days
        after such rating withdrawal or downgrade, DBAG shall, subject to the Rating
        Agency Condition and at its own expense, either (i) cause another entity
        to
        replace DBAG as party to this Agreement that meets or exceeds the Approved
        Rating Thresholds on terms substantially similar to this Agreement or (ii)
        obtain a guaranty of, or a contingent agreement of another person with the
        Approved Rating Thresholds to honor, DBAG’s obligations under this Agreement. In
        either case, DBAG shall deliver collateral acceptable to the Swap Rating
        Agencies until DBAG has made such transfer or obtained a guaranty as set
        forth
        in (i) and (ii) above. For purposes of this provision, “Rating Agency Condition”
means, with respect to any particular proposed act or omission to act hereunder
        that the party acting or failing to act must consult with each of the Swap
        Rating Agencies then providing a rating of the Certificates and any Notes
        and
        receive from each of the Swap Rating Agencies a prior written confirmation
        that
        the proposed action or inaction would not cause a downgrade or withdrawal
        of the
        then-current rating of the Certificates or any Note.

      

      13)
        Compliance
        with Regulation AB.
        

      

      (i)      
         DBAG
        agrees and acknowledges that New Century Mortgage Securities LLC (“Depositor”)
        is required under Regulation AB under the Securities Act of 1933, as amended,
        and the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
        (“Regulation AB”), to disclose certain financial information regarding DBAG or
        its group of affiliated entities, if applicable, depending on the aggregate
        “significant percentage” of this Agreement and any other derivative contracts
        between DBAG or its group of affiliated entities, if applicable, and
        Counterparty, as calculated from time to time in accordance with Item 1115
        of
        Regulation AB.

      

      (ii)       It
        shall
        be a swap disclosure event (“Swap Disclosure Event”) if, on any Business Day
        after the date hereof, the Depositor requests from DBAG the applicable financial
        information described in Item 1115 of Regulation AB (such request to be based
        on
        a reasonable determination by the Depositor, in good faith, that such
        information is required under Regulation AB) (the “Swap Financial
        Disclosure”).

      

      (iii)   
          Upon
        the
        occurrence of a Swap Disclosure Event, DBAG, at its own expense, shall (1)(a)
        either (i) provide to the
        Depositor the
        current Swap Financial Disclosure in an EDGAR-compatible format (for example,
        such information may be provided in Microsoft Word® or Microsoft Excel® format
        but not in .pdf format) or (ii) provide written consent to Depositor to
        incorporation by reference of such current Swap Financial Disclosure as is
        filed
        with the Securities and Exchange Commission in the Exchange Act Reports of
        the
        Depositor, (b) if applicable, cause its outside accounting firm to provide
        its
        consent to filing or incorporation by reference in the Exchange Act Reports
        of
        the Depositor of such accounting firm’s report relating to their audits of such
        current Swap Financial Disclosure, and (c) provide to the Depositor any updated
        Swap Financial Disclosure with respect to DBAG or any entity that consolidates
        DBAG within five days of the release of any such updated Swap Financial
        Disclosure; (2) secure another entity to replace DBAG as party to this Agreement
        on terms substantially similar to this Agreement which entity (or a guarantor
        therefore) meets or exceeds the Approved Rating Thresholds and which satisfies
        the Rating Agency Condition and which entity is able to comply with the
        requirements of Item 1115 of Regulation AB or (3) obtain a guaranty of the
        DBAG’s obligations under this Agreement from an affiliate of the DBAG, subject
        to the Rating Agency Condition, that is able to comply with the financial
        information disclosure requirements of Item 1115 of Regulation AB, such that
        disclosure provided in respect of the affiliate will satisfy any disclosure
        requirements applicable to the Swap Provider, and cause such affiliate to
        provide Swap Financial Disclosure. If permitted by Regulation AB, any required
        Swap Financial Disclosure may be provided by incorporation by reference from
        reports filed pursuant to the Exchange Act. 

      

      (iv)   
         DBAG
        and
        the primary obligor under any Credit Support Document agree that, in the
        event
        that DBAG provides Swap Financial Disclosure to the Depositor in accordance
        with
        Part 13(iii)(a) or causes its affiliate to provide Swap Financial Disclosure
        to
        the Depositor in accordance with Part 13(iii)(c), DBAG and such primary obligor
        will indemnify and hold harmless the Depositor, its respective directors
        or
        officers and any person controlling the Depositor, from and against any and
        all
        losses, claims, damages and liabilities caused by any untrue statement or
        alleged untrue statement of a material fact contained in such Swap Financial
        Disclosure or caused by any omission or alleged omission to state in such
        Swap
        Financial Disclosure a material fact, when considered in conjunction with
        any
        other information regarding DBAG or the derivative instrument being written
        by
        DBAG in the final prospectus for ACE-2006-HE3, required to be stated therein
        or
        necessary to make the statements therein, in light of the circumstances under
        which they were made, not misleading.

      

      14)
        Third
        Party Beneficiary.
        the
        Depositor shall be an express third party beneficiary of this Agreement as
        if a
        party hereto to the extent of the Depositor’s rights explicitly specified
        herein.

      

      15)
        Deduction
        or Withholding for Tax.
        The
        provisions of Section 2(d)(i)(4) and 2(d)(ii) of the ISDA Form Master Agreement
        shall not apply to Counterparty and Counterparty shall not be required to
        pay
        any additional amounts referred to therein.  

      

      16)
        For
        purposes of Section 7 of the ISDA Form Master Agreement, DBAG hereby consents
        to
        the Permitted Security Interest.

      

      “Permitted
        Security Interest” means the collateral assignment by Counterparty of the Swap
        Collateral to the Indenture Trustee pursuant to the Indenture, and the granting
        to the Indenture Trustee of a security interest in the Swap Collateral pursuant
        to the Indenture.

      

      “Swap
        Collateral” means all right, title and interest of Counterparty in this
        Agreement, each Transaction hereunder, and all present and future amounts
        payable by DBAG to Counterparty under or in connection with the Agreement
        or any
        Transaction governed by the Agreement, whether or not evidenced by a
        Confirmation, including, without limitation, any transfer or termination
        of any
        such Transaction. 

       

      5. Account
        Details:

      

      Account
        Details for DBAG: 

      

      Deutsche
        Bank Trust Company Americas,
        New
        York

      Acct#
        01
        473
        969 

      Swift
        Code: BKTRUS33

      

      Account
        Details for Counterparty:

      

      Deutsche
        Bank Trust Company Americas

      ABA:
        021-001-033

      Acct#:
        01419663

      Acct
        Name: NYLTD Funds Control Stars West

      Ref:
        New
        Century 2006-2 Swap

      

      6. Offices:

      

      The
        Office of DBAG for this Transaction is New York

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      7. Please
        confirm that the foregoing correctly sets forth the terms of our agreement
        by
        having an authorized officer sign this Confirmation and return it via facsimile
        to:

      

      
        	 	
                Attention:
                  Derivative Documentation

              	 
	 	
                Telephone:
                  44 20 7547 4755

              	 
	 	
                Facsimile:
                  44 20 7545 9761

              	 
	 	
                E-mail:
                  derivative.documentation@db.com

              	 

      

      

      This
        message will be the only form of Confirmation dispatched by us. If you wish
        to
        exchange hard copy forms of this Confirmation, please contact us.

      

      

      Yours
        sincerely,

      

      

      DEUTSCHE
        BANK AG - New York Branch

      
 

      By: __________________________________

      Name: __________________________________

      Title: Authorized
        Signatory

      

       

      By: __________________________________

      Name: __________________________________

      Title: Authorized
        Signatory

      

      

       

      Confirmed
        as of the date first written above:

      

      New
        Century Home Equity Loan Trust 2006-2

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

       

      

      By: __________________________________

      Name: __________________________________

      Title: __________________________________

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        I

      

      (With
        respect to each Fixed Rate Payer Period End Date, each date below is subject
        to
        No Adjustment, and with respect to each Floating Rate Payer Period End Date,
        each date below is subject to adjustment in accordance with the Following
        Business Day Convention.)

      
        
          	
                  Accrue
                    from and including

                	
                  Accrue
                    to but excluding

                	
                  Calculation
                    Amount (USD)

                
	
                  Effective
                    Date

                	
                  7/25/2006

                	
                  1,192,746,592.21

                
	
                  7/25/2006

                	
                  8/25/2006

                	
                  1,185,456,397.59

                
	
                  8/25/2006

                	
                  9/25/2006

                	
                  1,175,178,460.13

                
	
                  9/25/2006

                	
                  10/25/2006

                	
                  1,161,930,792.44
                    

                
	
                  10/25/2006

                	
                  11/25/2006

                	
                  1,145,785,800.08

                
	
                  11/25/2006

                	
                  12/25/2006

                	
                  1,126,763,153.16

                
	
                  12/25/2006

                	
                  1/25/2007

                	
                  1,104,900,639.31

                
	
                  1/25/2007

                	
                  2/25/2007

                	
                  1,080,265,783.57

                
	
                  2/25/2007

                	
                  3/25/2007

                	
                  1,052,949,418.39

                
	
                  3/25/2007

                	
                  4/25/2007

                	
                  1,023,063,506.23

                
	
                  4/25/2007

                	
                  5/25/2007

                	
                  990,736,693.98

                
	
                  5/25/2007

                	
                  6/25/2007

                	
                  956,239,002.01

                
	
                  6/25/2007

                	
                  7/25/2007

                	
                  922,398,909.89

                
	
                  7/25/2007

                	
                  8/25/2007

                	
                  889,538,756.83

                
	
                  8/25/2007

                	
                  9/25/2007

                	
                  857,420,397.95

                
	
                  9/25/2007

                	
                  10/25/2007

                	
                  826,488,382.22

                
	
                  10/25/2007

                	
                  11/25/2007

                	
                  796,737,568.40

                
	
                  11/25/2007

                	
                  12/25/2007

                	
                  768,087,905.04

                
	
                  12/25/2007

                	
                  1/25/2008

                	
                  740,646,821.96

                
	
                  1/25/2008

                	
                  2/25/2008

                	
                  714,456,008.13

                
	
                  2/25/2008

                	
                  3/25/2008

                	
                  689,246,392.17

                
	
                  3/25/2008

                	
                  4/25/2008

                	
                  664,626,146.27

                
	
                  4/25/2008

                	
                  5/25/2008

                	
                  625,400,586.92

                
	
                  5/25/2008

                	
                  6/25/2008

                	
                  585,958,920.20

                
	
                  6/25/2008

                	
                  7/25/2008

                	
                  549,415,897.86

                
	
                  7/25/2008

                	
                  8/25/2008

                	
                  515,514,629.27

                
	
                  8/25/2008

                	
                  9/25/2008

                	
                  484,221,275.58

                
	
                  9/25/2008

                	
                  10/25/2008

                	
                  463,314,603.96

                
	
                  10/25/2008

                	
                  11/25/2008

                	
                  444,975,206.24

                
	
                  11/25/2008

                	
                  12/25/2008

                	
                  427,412,827.19

                
	
                  12/25/2008

                	
                  1/25/2009

                	
                  410,604,600.46

                
	
                  1/25/2009

                	
                  2/25/2009

                	
                  394,509,051.77

                
	
                  2/25/2009

                	
                  3/25/2009

                	
                  379,090,285.41

                
	
                  3/25/2009

                	
                  4/25/2009

                	
                  364,318,905.22

                
	
                  4/25/2009

                	
                  5/25/2009

                	
                  350,166,652.76

                
	
                  5/25/2009

                	
                  6/25/2009

                	
                  336,605,854.27

                
	
                  6/25/2009

                	
                  7/25/2009

                	
                  323,611,301.25

                
	
                  7/25/2009

                	
                  8/25/2009

                	
                  311,157,273.32

                
	
                  8/25/2009

                	
                  9/25/2009

                	
                  299,219,882.63

                
	
                  9/25/2009

                	
                  10/25/2009

                	
                  287,776,813.13

                
	
                  10/25/2009

                	
                  11/25/2009

                	
                  276,806,634.72

                
	
                  11/25/2009

                	
                  12/25/2009

                	
                  266,288,412.74

                
	
                  12/25/2009

                	
                  1/25/2010

                	
                  256,202,374.00

                
	
                  1/25/2010

                	
                  2/25/2010

                	
                  246,529,726.04

                
	
                  2/25/2010

                	
                  3/25/2010

                	
                  237,252,544.56

                
	
                  3/25/2010

                	
                  4/25/2010

                	
                  228,353,729.71

                
	
                  4/25/2010

                	
                  5/25/2010

                	
                  219,816,918.83

                
	
                  5/25/2010

                	
                  6/25/2010

                	
                  211,626,488.32

                
	
                  6/25/2010

                	
                  7/25/2010

                	
                  203,767,489.65

                
	
                  7/25/2010

                	
                  8/25/2010

                	
                  196,225,669.42

                
	
                  8/25/2010

                	
                  9/25/2010

                	
                  188,987,394.34

                
	
                  9/25/2010

                	
                  10/25/2010

                	
                  182,039,674.67

                
	
                  10/25/2010

                	
                  11/25/2010

                	
                  175,370,083.09

                
	
                  11/25/2010

                	
                  12/25/2010

                	
                  168,966,674.60

                
	
                  12/25/2010

                	
                  1/25/2011

                	
                  162,818,130.12

                
	
                  1/25/2011

                	
                  2/25/2011

                	
                  156,913,602.90

                
	
                  2/25/2011

                	
                  3/25/2011

                	
                  151,242,793.90

                
	
                  3/25/2011

                	
                  4/25/2011

                	
                  145,795,802.47

                
	
                  4/25/2011

                	
                  5/25/2011

                	
                  140,563,166.47

                
	
                  5/25/2011

                	
                  6/25/2011

                	
                  135,535,842.36

                
	
                  6/25/2011

                	
                  7/25/2011

                	
                  130,697,109.07

                
	
                  7/25/2011

                	
                  8/25/2011

                	
                  126,047,283.74

                
	
                  8/25/2011

                	
                  Termination
                    Date

                	
                  121,578,619.05

                

        

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      APPENDIX
        A

       

      DEFINITIONS

       

      “Accepted
        Servicing Practices”: The servicing standards set forth in Section 3.01 of the
        Servicing Agreement.

       

      “Accrued
        Note Interest”: With respect to any Class A Note or Mezzanine Note and each
        Payment Date, interest accrued during the related Interest Accrual Period
        at the
        Note Rate for such Note for such Payment Date on the Note Balance immediately
        prior to such Payment Date. All payments of interest on the Class A Notes
        and
        the Mezzanine Notes will be calculated on the basis of a 360-day year and
        the
        actual number of days in the applicable Interest Accrual Period.

       

      “Adjustable-Rate
        Mortgage Loan”: Each of the Mortgage Loans identified in the Mortgage Loan
        Schedule as having a Mortgage Rate that is subject to adjustment.

       

      “Adjustment
        Date”: With respect to each Adjustable-Rate Mortgage Loan, the first day of the
        month in which the Mortgage Rate of such Mortgage Loan changes pursuant to
        the
        related Mortgage Note. The first Adjustment Date following the Cut-off Date
        as
        to each Adjustable-Rate Mortgage Loan is set forth in the Mortgage Loan
        Schedule. 

       

      “Additional
        Form 10-D Disclosure”: As defined in Section 4.02(b)(i) of the Servicing
        Agreement.

       

      “Additional
        Form 10-K Disclosure”: As defined in Section 4.02(b)(iii) of the Servicing
        Agreement.

       

      “Advancing
        Person”: As defined in Section 3.26(a) of the Servicing Agreement.

       

      “Administrator”:
        New Century Mortgage Corporation in the performance of its duties pursuant
        to
        Article VIII under the Servicing Agreement. 

       

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

       

      “Allocated
        Realized Loss Amount”: With respect to any Payment Date and any Class of
        Mezzanine Notes, the sum of (i) any Realized Losses allocated to such Class
        of
        Notes on such Payment Date and previous Payment Dates minus the amount of
        Subsequent Recoveries allocated to such Class on such Payment Date and previous
        Payment Dates as provided in Section 3.05 hereof minus the amount of Net
        Monthly
        Excess Cashflow applied to such Class for such Payment Date and previous
        Payment
        Dates pursuant to Section 3.05(d)(iv). 

       

      “Assignment”:
        An assignment of Mortgage, notice of transfer or equivalent instrument, in
        recordable form (excepting therefrom, if applicable, the mortgage recordation
        information which has not been required pursuant to Section 2.1 of the Mortgage
        Loan Purchase Agreement or returned by the applicable recorder’s office), 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.

       

      “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
        who is authorized to act for the Owner Trustee in matters relating to the
        Issuing Entity and who is identified on the list of Authorized Officers
        delivered by the Owner Trustee to the Indenture Trustee on the Closing Date
        (as
        such list may be modified or supplemented from time to time thereafter) and
        any
        authorized officer of the Servicer in its capacity as administrator of the
        Issuing Entity pursuant to Article VIII of the Servicing Agreement.

       

      “Available
        Funds Rate”: For any Payment Date with respect to the Group I Notes, a per annum
        rate equal to the product of (x) the weighted average of the Expense Adjusted
        Mortgage Rates of the then outstanding Group I Mortgage Loans minus an amount,
        expressed as a per annum rate, equal to the sum of (a) the product of (i)
        any
        Net Swap Payment owed to the Swap Provider divided by the aggregate Stated
        Principal Balance of the Mortgage Loans as of the last day of the prior Due
        Period and (ii) 12 and (b) the product of (i) any Swap Termination Payment
        (other than any Swap Termination Payment resulting from a Swap Provider Trigger
        Event), payable by the Issuing Entity, divided by the aggregate Stated Principal
        Balance of the Mortgage Loans as of the last day of the prior Due Period
        and
        (ii) 12, multiplied by a fraction the numerator of which is the aggregate
        Stated
        Principal Balance of the Mortgage Loans as of the last day of the prior Due
        Period and the denominator of which is the aggregate Note Balance of the
        Class A
        Notes and the Mezzanine Notes immediately prior to such Payment Date and
        (y) a
        fraction, the numerator of which is 30 and the denominator of which is the
        actual number of days elapsed in the related Interest Accrual
        Period.

       

      For
        any
        Payment Date with respect to the Group II Notes, a per annum rate equal to
        the
        product of (x) the weighted average of the Expense Adjusted Mortgage Rates
        of
        the then outstanding Group II Mortgage Loans, minus an amount, expressed
        as a
        per annum rate, equal to the sum of (a) the product of (i) any Net Swap Payment
        owed to the Swap Provider divided by the aggregate Stated Principal Balance
        of
        the Mortgage Loans as of the last day of the prior Due Period and (ii) 12
        and
        (b) the product of (i) any Swap Termination Payment (other than any Swap
        Termination Payment resulting from a Swap Provider Trigger Event), payable
        by
        the Issuing Entity, divided by the aggregate Stated Principal Balance of
        the
        Mortgage Loans as of the last day of the prior Due Period and (ii) 12,
        multiplied by a fraction the numerator of which is the aggregate Stated
        Principal Balance of the Mortgage Loans as of the last day of the prior Due
        Period and the denominator of which is the aggregate Note Balance of the
        Class A
        Notes and the Mezzanine Notes immediately prior to such Payment Date and
        (y) a
        fraction, the numerator of which is 30 and the denominator of which is the
        actual number of days elapsed in the related Interest Accrual
        Period.

       

      For
        any
        Payment Date with respect to the Mezzanine Notes, a per annum rate equal
        to the
        product of (i) the weighted average of the Available Funds Rate for the Group
        I
        Notes and Available Funds Rate for the Group II Notes (weighted in proportion
        to
        the results of subtracting from the aggregate Principal Balance of each loan
        group the current Note Principal Balance of the related Class A
        Notes).

       

      “Available
        Payment Amount”: With respect to any Payment Date, an amount equal to (1) the
        sum of (a) the aggregate of the amounts on deposit in the Collection Account
        and
        Payment Account as of the close of business on the related Determination
        Date,
        including any Subsequent Recoveries, (b) the aggregate of any amounts received
        in respect of an REO Property withdrawn from any REO Account and deposited
        in
        the Payment Account for such Payment Date pursuant to Section 3.23 of the
        Servicing Agreement, (c) the aggregate of any amounts deposited in the Payment
        Account by the Servicer in respect of Prepayment Interest Shortfalls for
        such
        Payment Date pursuant to Section 3.24 of the Servicing Agreement, (d) the
        aggregate of any P&I Advances made by the Servicer for such Payment Date
        pursuant to Section 4.01 of the Servicing Agreement, (e) the aggregate of
        any
        advances made by the Indenture Trustee as successor Servicer or any other
        successor Servicer for such Payment Date pursuant to Section 6.02 of the
        Servicing Agreement, (f) the amount of any Prepayment Charges collected by
        the
        Servicer in connection with the Principal Prepayment of any of the Mortgage
        Loans and (g) any Net Swap Payment or Swap Termination Payment (to the extent
        not applied to a replacement swap or required to be retained and applied
        as
        provided herein) received by the Indenture Trustee under the Interest Rate
        Swap
        Agreement reduced (to not less than zero), by (2) the portion of the amount
        described in clause (1)(a) above that represents (i) Monthly Payments on
        the
        Mortgage Loans received from a Mortgagor on or prior to the Determination
        Date
        but due during any Due Period subsequent to the related Due Period, (ii)
        Principal Prepayments on the Mortgage Loans received after the related
        Prepayment Period (together with any interest payments received with such
        Principal Prepayments to the extent they represent the payment of interest
        accrued on the Mortgage Loans during a period subsequent to the related
        Prepayment Period), (iii) Liquidation Proceeds and Insurance Proceeds received
        in respect of the Mortgage Loans after the related Prepayment Period, (iv)
        amounts reimbursable or payable to the Depositor, the Servicer, the Indenture
        Trustee, the Owner Trustee, the Swap Provider (other than any Swap Termination
        Payment owed to the Swap Provider resulting from a Swap Provider Trigger
        Event)
        the Seller or any Sub-Servicer pursuant to Section 3.11 or Section 3.12 of
        the
        Servicing Agreement, (v) the Indenture Trustee Fee, the Owner Trustee Fee
        (beginning on the 13th
        Payment
        Date) and other amounts payable from the Payment Account pursuant to Section
        6.07 hereof and (vi) amounts deposited in the Collection Account or the Payment
        Account in error. 

       

      “Bankruptcy
        Code”: The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code),
        as amended.

       

      “Bankruptcy
        Loss”: With respect to any Mortgage Loan, a Realized Loss resulting from a
        Deficient Valuation or Debt Service Reduction.

       

      “Basic
        Documents”: The Trust Agreement, the Certificate of Trust, the Indenture, the
        Servicing Agreement, the Mortgage Loan Purchase Agreement, the Interest Rate
        Swap Agreement and the other documents and certificates delivered in connection
        with any of the above.

       

      “Basis
        Risk Shortfall”: With respect to any Class of Notes and any Payment Date, the
        sum of (i) the excess, if any, of (x) the aggregate Accrued Note Interest
        thereon for such Payment Date (without regard to the related Available Funds
        Rate) over (y) interest accrued on such Class of Notes at the related Available
        Funds Rate and (ii) the unpaid portion of any Basis Risk Shortfall from the
        prior Payment Dates together with interest accrued on such unpaid portion
        for
        the most recently ended Interest Accrual Period at the related Note Rate
        (without regard to the related Available Funds Rate).

       

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

       

      “Book-Entry
        Notes”: Beneficial interests in the Notes, ownership and transfers of which
        shall be made through book entries by the Depository as described in Section
        4.06 hereof.

       

      “Business
        Day”: Any day other than a Saturday, a Sunday or a day on which banking or
        savings institutions in the State of Delaware, the State of New York, the
        State
        of California, or in the city in which the Corporate Trust Office of the
        Indenture Trustee is located are authorized or obligated by law or executive
        order to be closed.

       

      “Cash-Out
        Refinancing”: A Refinanced Mortgage Loan the proceeds of which are more than a
        nominal amount in excess of the principal balance of any existing first mortgage
        or subordinate mortgage on the related Mortgaged Property and related closing
        costs.

       

      “Certificate
        Distribution Account”: The account or accounts created and maintained pursuant
        to Section 3.10(c) of the Trust Agreement. The Certificate Distribution Account
        shall be an Eligible Account.

       

      “Certificate
        Paying Agent”: The meaning specified in Section 3.10 of the Trust
        Agreement.

       

      “Certificate
        Percentage Interest”: With respect to each Certificate, the Certificate
        Percentage Interest stated on the face thereof.

       

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

       

      “Certificate
        Registrar”: Initially, the Indenture Trustee, in its capacity as Certificate
        Registrar, or any successor to the Indenture Trustee in such
        capacity.

       

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

       

      “Certificates”
        or “Trust Certificates”: The New Century Home Equity Loan Trust 2006-2 Trust
        Certificates, evidencing the beneficial ownership interest in the Issuing
        Entity
        and executed by the Owner Trustee in substantially the form set forth in
        Exhibit
        A to the Trust Agreement.

       

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

       

      “Certification”:
        As defined in Section 4.02(b)(iii) of the Servicing Agreement.

       

      “Class”:
        Collectively, all of the Notes bearing the same class designation.

       

      “Class
        A
        Notes”: Any of the Group I Notes or the Group II Notes.

       

      “Class
        A-1 Notes”: Any one of the Class A-1 Notes executed, authenticated and delivered
        by the Indenture Trustee, substantially in the form annexed as Exhibit A-1
        to
        the Indenture.

       

      “Class
        A-2a Notes”: Any one of the Class A-2a Notes executed, authenticated and
        delivered by the Indenture Trustee, substantially in the form annexed as
        Exhibit
        A-2 to the Indenture.

       

      “Class
        A-2b Notes”: Any one of the Class A-2b Notes executed, authenticated and
        delivered by the Indenture Trustee, substantially in the form annexed as
        Exhibit
        A-3 to the Indenture.

       

      “Class
        A-2c Notes”: Any one of the Class A-2c Notes executed, authenticated and
        delivered by the Indenture Trustee, substantially in the form annexed as
        Exhibit
        A-4 to the Indenture.

       

      “Class
        M
        Principal Payment Amount”: Any of Class M-1 Principal Payment Amount, Class M-2
        Principal Payment Amount, Class M-3 Principal Payment Amount, Class M-4
        Principal Payment Amount, Class M-5 Principal Payment Amount, Class M-6
        Principal Payment Amount, Class M-7 Principal Payment Amount, Class M-8
        Principal Payment Amount, Class M-9 Principal Payment Amount or Class M-10
        Principal Payment Amount.

       

      “Class
        M-1 Note”: Any one of the Class M-1 Notes executed, authenticated and delivered
        by the Indenture Trustee, substantially in the form annexed as Exhibit A-5
        to
        the Indenture.

       

      “Class
        M-1 Principal Payment Amount”: With respect to any Payment Date, the excess of
        (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
        taking
        into account the payment of the Senior Principal Payment Amount on such Payment
        Date) and (ii) the Note Balance of the Class M-1 Notes immediately prior
        to such
        Payment Date over (y) the lesser of (A) the product of (i) 65.60% and (ii)
        the
        aggregate Stated Principal Balance of the Mortgage Loans as of the last day
        of
        the related Due Period and (B) the aggregate Stated Principal Balance of
        the
        Mortgage Loans as of the last day of the related Due Period minus
        $5,963,733.

       

      “Class
        M-2 Note”: Any one of the Class M-2 Notes executed, authenticated and delivered
        by the Indenture Trustee, substantially in the form annexed as Exhibit A-6
        to
        the Indenture.

       

      “Class
        M-2 Principal Payment Amount”: With respect to any Payment Date, the excess of
        (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
        taking
        into account the payment of the Senior Principal Payment Amount on such Payment
        Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
        the payment of the Class M-1 Principal Payment Amount on such Payment Date)
        and
        (iii) the Note Balance of the Class M-2 Notes immediately prior to such Payment
        Date over (y) the lesser of (A) the product of (i) 74.80% and (ii) the aggregate
        Stated Principal Balance of the Mortgage Loans as of the last day of the
        related
        Due Period and (B) the aggregate Stated Principal Balance of the Mortgage
        Loans
        as of the last day of the related Due Period minus $5,963,733.

       

      “Class
        M-3 Note”: Any one of the Class M-3 Notes executed, authenticated and delivered
        by the Indenture Trustee, substantially in the form annexed as Exhibit A-7
        to
        the Indenture.

       

      “Class
        M-3 Principal Payment Amount”: With respect to any Payment Date, the excess of
        (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
        taking
        into account the payment of the Senior Principal Payment Amount on such Payment
        Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
        the payment of the Class M-1 Principal Payment Amount on such Payment Date),
        (iii) the Note Balance of the Class M-2 Notes (after taking into account
        the
        payment of the Class M-2 Principal Payment Amount on such Payment Date) and
        (iv)
        the Note Balance of the Class M-3 Notes immediately prior to such Payment
        Date
        over (y) the lesser of (A) the product of (i) 77.70% and (ii) the aggregate
        Stated Principal Balance of the Mortgage Loans as of the last day of the
        related
        Due Period and (B) the aggregate Stated Principal Balance of the Mortgage
        Loans
        as of the last day of the related Due Period minus $5,963,733.

       

      “Class
        M-4 Note”: Any one of the Class M-4 Notes executed, authenticated and delivered
        by the Indenture Trustee, substantially in the form annexed as Exhibit A-8
        to
        the Indenture.

       

      “Class
        M-4 Principal Payment Amount”: With respect to any Payment Date, the excess of
        (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
        taking
        into account the payment of the Senior Principal Payment Amount on such Payment
        Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
        the payment of the Class M-1 Principal Payment Amount on such Payment Date),
        (iii) the Note Balance of the Class M-2 Notes (after taking into account
        the
        payment of the Class M-2 Principal Payment Amount on such Payment Date),
        (iv)
        the Note Balance of the Class M-3 Notes (after taking into account the payment
        of the Class M-3 Principal Payment Amount on such Payment Date) and (v) the
        Note
        Balance of the Class M-4 Notes immediately prior to such Payment Date over
        (y)
        the lesser of (A) the product of (i) 81.50% (ii) the aggregate Stated Principal
        Balance of the Mortgage Loans as of the last day of the related Due Period
        and
        (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the
        last
        day of the related Due Period minus $5,963,733.

       

      “Class
        M-5 Note”: Any one of the Class M-5 Notes executed, authenticated and delivered
        by the Indenture Trustee, substantially in the form annexed as Exhibit A-9
        of
        the Indenture.

       

      “Class
        M-5 Principal Payment Amount”: With respect to any Payment Date, the excess of
        (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
        taking
        into account the payment of the Senior Principal Payment Amount on such Payment
        Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
        the payment of the Class M-1 Principal Payment Amount on such Payment Date),
        (iii) the Note Balance of the Class M-2 Notes (after taking into account
        the
        payment of the Class M-2 Principal Payment Amount on such Payment Date),
        (iv)
        the Note Balance of the Class M-3 Notes (after taking into account the payment
        of the Class M-3 Principal Payment Amount on such Payment Date), (v) the
        Note
        Balance of the Class M-4 Notes (after taking into account the payment of
        the
        Class M-4 Principal Payment Amount on such Payment Date) and (vi) the Note
        Balance of the Class M-5 Notes immediately prior to such Payment Date over
        (y)
        the lesser of (A) the product of (i) 84.90% (ii) the aggregate Stated Principal
        Balance of the Mortgage Loans as of the last day of the related Due Period
        and
        (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the
        last
        day of the related Due Period minus $5,963,733.

       

      “Class
        M-6 Note”: Any one of the Class M-6 Notes executed, authenticated and delivered
        by the Indenture Trustee, substantially in the form annexed as Exhibit A-10
        of
        the Indenture.

       

      “Class
        M-6 Principal Payment Amount”: With respect to any Payment Date, the excess of
        (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
        taking
        into account the payment of the Senior Principal Payment Amount on such Payment
        Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
        the payment of the Class M-1 Principal Payment Amount on such Payment Date),
        (iii) the Note Balance of the Class M-2 Notes (after taking into account
        the
        payment of the Class M-2 Principal Payment Amount on such Payment Date),
        (iv)
        the Note Balance of the Class M-3 Notes (after taking into account the payment
        of the Class M-3 Principal Payment Amount on such Payment Date), (v) the
        Note
        Balance of the Class M-4 Notes (after taking into account the payment of
        the
        Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note Balance
        of the Class M-5 Notes (after taking into account the payment of the Class
        M-5
        Principal Payment Amount on such Payment Date) and (vii) the Note Balance
        of the
        Class M-6 Notes immediately prior to such Payment Date over (y) the lesser
        of
        (A) the product of (i) 86.70% (ii) the aggregate Stated Principal Balance
        of the
        Mortgage Loans as of the last day of the related Due Period and (B) the
        aggregate Stated Principal Balance of the Mortgage Loans as of the last day
        of
        the related Due Period minus $5,963,733.

       

      “Class
        M-7 Note”: Any one of the Class M-7 Notes executed, authenticated and delivered
        by the Indenture Trustee, substantially in the form annexed as Exhibit A-11
        of
        the Indenture.

       

      “Class
        M-7 Principal Payment Amount”: With respect to any Payment Date, the excess of
        (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
        taking
        into account the payment of the Senior Principal Payment Amount on such Payment
        Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
        the payment of the Class M-1 Principal Payment Amount on such Payment Date),
        (iii) the Note Balance of the Class M-2 Notes (after taking into account
        the
        payment of the Class M-2 Principal Payment Amount on such Payment Date),
        (iv)
        the Note Balance of the Class M-3 Notes (after taking into account the payment
        of the Class M-3 Principal Payment Amount on such Payment Date), (v) the
        Note
        Balance of the Class M-4 Notes (after taking into account the payment of
        the
        Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note Balance
        of the Class M-5 Notes (after taking into account the payment of the Class
        M-5
        Principal Payment Amount on such Payment Date), (vii) the Note Balance of
        the
        Class M-6 Notes (after taking into account the payment of the Class M-7
        Principal Payment Amount on such Payment Date) and (viii) the Note Balance
        of
        the Class M-6 Notes immediately prior to such Payment Date over (y) the lesser
        of (A) the product of (i) 89.30% (ii) the aggregate Stated Principal Balance
        of
        the Mortgage Loans as of the last day of the related Due Period and (B) the
        aggregate Stated Principal Balance of the Mortgage Loans as of the last day
        of
        the related Due Period minus $5,963,733. 

       

      “Class
        M-8 Note”: Any one of the Class M-8 Notes executed, authenticated and delivered
        by the Indenture Trustee, substantially in the form annexed as Exhibit A-12 of
        the Indenture.

       

      “Class
        M-8 Principal Payment Amount”: With respect to any Payment Date, the excess of
        (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
        taking
        into account the payment of the Senior Principal Payment Amount on such Payment
        Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
        the payment of the Class M-1 Principal Payment Amount on such Payment Date),
        (iii) the Note Balance of the Class M-2 Notes (after taking into account
        the
        payment of the Class M-2 Principal Payment Amount on such Payment Date),
        (iv)
        the Note Balance of the Class M-3 Notes (after taking into account the payment
        of the Class M-3 Principal Payment Amount on such Payment Date), (v) the
        Note
        Balance of the Class M-4 Notes (after taking into account the payment of
        the
        Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note Balance
        of the Class M-5 Notes (after taking into account the payment of the Class
        M-5
        Principal Payment Amount on such Payment Date), (vii) the Note Balance of
        the
        Class M-6 Notes (after taking into account the payment of the Class M-6
        Principal Payment Amount on such Payment Date), (viii) the Note Balance of
        the
        Class M-7 Notes (after taking into account the payment of the Class M-7
        Principal Payment Amount on such Payment Date) and (ix) the Note Balance
        of the
        Class M-8 Notes immediately prior to such Payment Date over (y) the lesser
        of
        (A) the product of (i) 90.70% and (ii) the aggregate Stated Principal Balance
        of
        the Mortgage Loans as of the last day of the related Due Period and (B) the
        aggregate Stated Principal Balance of the Mortgage Loans as of the last day
        of
        the related Due Period minus $5,963,733.

       

      “Class
        M-9 Note”: Any one of the Class M-9 Notes executed, authenticated and delivered
        by the Indenture Trustee, substantially in the form annexed as Exhibit A-13
        of
        the Indenture.

       

      “Class
        M-9 Principal Payment Amount”: With respect to any Payment Date, the excess of
        (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
        taking
        into account the payment of the Senior Principal Payment Amount on such Payment
        Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
        the payment of the Class M-1 Principal Payment Amount on such Payment Date),
        (iii) the Note Balance of the Class M-2 Notes (after taking into account
        the
        payment of the Class M-2 Principal Payment Amount on such Payment Date),
        (iv)
        the Note Balance of the Class M-3 Notes (after taking into account the payment
        of the Class M-3 Principal Payment Amount on such Payment Date), (v) the
        Note
        Balance of the Class M-4 Notes (after taking into account the payment of
        the
        Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note Balance
        of the Class M-5 Notes (after taking into account the payment of the Class
        M-5
        Principal Payment Amount on such Payment Date), (vii) the Note Balance of
        the
        Class M-6 Notes (after taking into account the payment of the Class M-6
        Principal Payment Amount on such Payment Date), (viii) the Note Balance of
        the
        Class M-7 Notes (after taking into account the payment of the Class M-7
        Principal Payment Amount on such Payment Date), (xi) the Note Balance of
        the
        Class M-8 Notes (after taking into account the payment of the Class M-8
        Principal Payment Amount on such Payment Date), (x) the Note Balance of the
        Class M-9 Notes immediately prior to such Payment Date over (y) the lesser
        of
        (A) the product of (i) 93.10% and (ii) the aggregate Stated Principal Balance
        of
        the Mortgage Loans as of the last day of the related Due Period and (B) the
        aggregate Stated Principal Balance of the Mortgage Loans as of the last day
        of
        the related Due Period minus $5,963,733.

       

      “Class
        M-10 Note”: Any one of the Class M-10 Notes executed, authenticated and
        delivered by the Indenture Trustee, substantially in the form annexed as
        Exhibit
        A-14 of the Indenture.

       

      “Class
        M-10 Principal Payment Amount”: With respect to any Payment Date, the excess of
        (x) the sum of (i) the aggregate Note Balance of the Class A Notes (after
        taking
        into account the payment of the Senior Principal Payment Amount on such Payment
        Date), (ii) the Note Balance of the Class M-1 Notes (after taking into account
        the payment of the Class M-1 Principal Payment Amount on such Payment Date),
        (iii) the Note Balance of the Class M-2 Notes (after taking into account
        the
        payment of the Class M-2 Principal Payment Amount on such Payment Date),
        (iv)
        the Note Balance of the Class M-3 Notes (after taking into account the payment
        of the Class M-3 Principal Payment Amount on such Payment Date), (v) the
        Note
        Balance of the Class M-4 Notes (after taking into account the payment of
        the
        Class M-4 Principal Payment Amount on such Payment Date), (vi) the Note Balance
        of the Class M-5 Notes (after taking into account the payment of the Class
        M-5
        Principal Payment Amount on such Payment Date), (vii) the Note Balance of
        the
        Class M-6 Notes (after taking into account the payment of the Class M-6
        Principal Payment Amount on such Payment Date), (viii) the Note Balance of
        the
        Class M-7 Notes (after taking into account the payment of the Class M-7
        Principal Payment Amount on such Payment Date), (ix) the Note Balance of
        the
        Class M-8 Notes (after taking into account the payment of the Class M-8
        Principal Payment Amount on such Payment Date), (x) the Note Balance of the
        Class M-9 Notes (after taking into account the payment of the Class M-9
        Principal Payment Amount on such Payment Date) and (xi) the Note Balance
        of the
        Class M-10 Notes immediately prior to such Payment Date over (y) the lesser
        of
        (A) the product of (i) 95.80% and (ii) the aggregate Stated Principal Balance
        of
        the Mortgage Loans as of the last day of the related Due Period and (B) the
        aggregate Stated Principal Balance of the Mortgage Loans as of the last day
        of
        the related Due Period minus $5,963,733.

       

      “Closing
        Date”: June 29, 2006.

       

      “Code”:
        The Internal Revenue Code of 1986.

       

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

       

      “Collection
        Account”: The account or accounts created and maintained, or caused to be
        created and maintained, by the Servicer pursuant to Section 3.10(a) of the
        Servicing Agreement, which shall be entitled “New Century Mortgage Corporation,
        as Servicer for Deutsche Bank National Trust Company, as Indenture Trustee,
        in
        trust for the registered holders of New Century Home Equity Loan Trust 2006-2,
        Asset Backed Notes, Series 2006-2.” The Collection Account must be an Eligible
        Account.

       

      “Commission”:
        The Securities and Exchange Commission.

       

      “Corporate
        Trust Office”: With respect to the Indenture Trustee, Certificate Registrar,
        Certificate Paying Agent and Paying Agent, the principal corporate trust
        office
        of the Indenture Trustee and Note Registrar at which at any particular time
        its
        corporate trust business shall be administered, which office at the date
        of the
        execution of this instrument is located at 1761 East St. Andrew Place, Santa
        Ana, California 92705, Attention: Trust Administration, NC0602. With respect
        to
        the Owner Trustee, the principal corporate trust office of the Owner Trustee
        at
        which at any particular time its corporate trust business shall be administered,
        which office at the date of the execution of this Trust Agreement is located
        at
        Wilmington Trust Company, 1100 North Market Street, Wilmington, Delaware
        19801,
        Attention: New Century Home Equity Loan Trust 2006-2 (NC0602).

       

      “Credit
        Enhancement Percentage”: For any Payment Date, the percentage equivalent of a
        fraction, the numerator of which is the sum of the aggregate Note Balance
        of the
        Mezzanine Notes and the Overcollateralization Amount calculated after taking
        into account payments of principal on the Mortgage Loans and payment of the
        Group I Principal Payment Amount and the Group II Principal Payment Amount
        to
        the Notes then entitled to payments of principal on such Payment Date, and
        the
        denominator of which is the aggregate Stated Principal Balance of the Mortgage
        Loans as of the last day of the related Due Period.

       

      “Cut-off
        Date”: The close of business on June 1, 2006.

       

      “Debt
        Service Reduction”: With respect to any Mortgage Loan, a reduction in the
        scheduled Monthly Payment for such Mortgage Loan by a court of competent
        jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
        constituting a Deficient Valuation or any reduction that results in a permanent
        forgiveness of principal.

       

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

       

      “Deferred
        Interest”: With respect to the Mezzanine Notes and any Payment Date, an amount
        equal to the sum of (a) the aggregate amount of interest accrued at the
        applicable Note Rate during the related Interest Accrual Period on any Allocated
        Realized Loss Amount for such Class, (b) any amounts described in clause
        (a) for
        such Class for prior Payment Dates that remain unpaid, and (c) interest accrued
        for the Interest Accrual Period related to such Payment Date on the amount
        in
        clause (b) at the Note Rate applicable to such Class

       

      “Deficient
        Valuation”: With respect to any Mortgage Loan, a valuation by a court of
        competent jurisdiction of the Mortgaged Property in an amount less than the
        then
        outstanding indebtedness under the Mortgage Loan, or any reduction in the
        amount
        of principal to be paid in connection with any scheduled Monthly Payment
        that
        constitutes a permanent forgiveness of principal, which valuation or reduction
        results from a proceeding under the Bankruptcy Code.

       

      “Definitive
        Notes”: The meaning specified in Section 4.06 hereof.

       

      “Deleted
        Mortgage Loan”: A Mortgage Loan replaced or to be replaced with a Qualified
        Substitute Mortgage Loan.

       

      “Delinquency
        Rate”: With respect to any calendar month, the percentage obtained by dividing
        (a) the sum of the aggregate Stated Principal Balance of (i) Mortgage Loans
        delinquent 60 days or more, (ii) Mortgage Loans in foreclosure, (iii) REO
        Properties and (iv) Mortgage Loans discharged due to bankruptcy by (b) the
        aggregate Stated Principal Balance of the Mortgage Loans as of the last day
        of
        such calendar month; provided, however, that any Mortgage Loan purchased
        by the
        Servicer pursuant to Section 3.16(c) of the Servicing Agreement shall not
        be
        included in either the numerator or the denominator for purposes of calculating
        the Delinquency Percentage.

       

      “Depositor”:
        New Century Mortgage Securities LLC, a Delaware limited liability company,
        or
        its successor in interest.

       

      “Depository”
        or “Depository Agency”: The Depository Trust Company or a successor appointed by
        the Indenture Trustee. Any successor to the Depository shall be an organization
        registered as a “clearing agency” pursuant to Section 17A of the Exchange Act
        and the regulations of the Securities and Exchange Commission
        thereunder.

       

      “Depository
        Institution”: Any depository institution or trust company, including the
        Indenture Trustee that (a) is incorporated under the laws of the United States
        of America or any State thereof, (b) is subject to supervision and examination
        by federal or state banking authorities and (c) has outstanding unsecured
        commercial paper or other short-term unsecured debt obligations (or, in the
        case
        of a depository institution that is the principal subsidiary of a holding
        company, such holding company has unsecured commercial paper or other short-term
        unsecured debt obligations) that are rated at least P-1 by Moody’s, A-1 by Fitch
        (if rated by Fitch), A-1+ by S&P and R-1.

       

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

       

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

       

      “Directly
        Operate”: With respect to any REO Property, the furnishing or rendering of
        services to the tenants thereof, the management or operation of such REO
        Property, the holding of such REO Property primarily for sale to customers,
        the
        performance of any construction work thereon or any use of such REO Property
        in
        a trade or business conducted by the Issuing Entity other than through an
        Independent Contractor; provided, however, that the Indenture Trustee (or
        the
        Servicer on behalf of the Indenture Trustee) shall not be considered to Directly
        Operate an REO Property solely because the Indenture Trustee (or the Servicer
        on
        behalf of the Indenture Trustee) establishes rental terms, chooses tenants,
        enters into or renews leases, deals with taxes and insurance, or makes decisions
        as to repairs or capital expenditures with respect to such REO
        Property

       

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

       

      “Due
        Period”: With respect to any Payment Date, the period commencing on the second
        day of the month immediately preceding the month in which such Payment Date
        occurs and ending on the related Due Date.

       

      “Eligible
        Account”: Any of (i) an account or accounts maintained with a Depository
        Institution, (ii) an account or accounts the deposits in which are fully
        insured
        by the FDIC or (iii) a segregated, non-interest bearing trust account or
        accounts maintained with the corporate trust department of a federal or state
        chartered depository institution or trust company acting in its fiduciary
        capacity. Eligible Accounts may bear interest.

       

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

       

      “Escrow
        Payment”: As defined in Section 3.09 of the Servicing Agreement.

       

      “Estate
        in Real Property”: A fee simple estate in a parcel of land.

       

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

       

      (i) a
        failure
        by the Issuing Entity to pay Accrued Note Interest on any of the Notes or
        the
        Group I Principal Payment Amount or Group II Principal Payment Amount on
        any
        Payment Date; or

       

      (ii) the
        failure by the Issuing Entity on a respective Final Stated Maturity Date
        to
        reduce the Note Balance of any of the Notes to zero; or

       

      (iii) there
        occurs a default in the observance or performance of any covenant or agreement
        of the 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 or to the Issuing Entity and the Indenture
        Trustee by the Holders of at least 25% of the aggregate Note Balance of the
        Outstanding Notes, a written notice specifying such default or incorrect
        representation or warranty and requiring it to be remedied and stating that
        such
        notice is a notice of default hereunder; or

       

      (iv) there
        occurs the filing of a decree or order for relief by a court having jurisdiction
        in the premises in respect of the 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; or

       

      (vi) the
        Issuing Entity becomes subject to federal income tax.

       

      “Excess
        Overcollateralized Amount”: With respect to the Class A Notes and the Mezzanine
        Notes and any Payment Date, the excess, if any, of (i) the Overcollateralized
        Amount for such Payment Date (calculated for this purpose only after assuming
        that 100% of the Principal Remittance Amount on such Payment Date has been
        paid)
        over (ii) the Overcollateralization Target Amount for such Payment
        Date.

       

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

       

      “Expense
        Adjusted Mortgage Rate”: With respect to any Mortgage Loan (or the related REO
        Property), as of any date of determination, a per annum rate of interest
        equal
        to the applicable Mortgage Rate thereon as of the close of business on the
        first
        day of the calendar month preceding the month in which the Payment Date occurs
        minus the sum of (x) the Indenture Trustee Fee Rate, (y) the Servicing Fee
        Rate
        and (z) a rate per annum equal to the product of (i) a fraction, the numerator
        of which is the Owner Trustee Fee for the related Payment Date and the
        denominator of which is the aggregate principal balance of the Mortgage Loans
        as
        of the first day of the calendar month preceding the month in which the Payment
        Date occurs and (ii) 12.

       

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

       

      “Fannie
        Mae”: Fannie Mae, formerly known as the Federal National Mortgage Association,
        or any successor thereto.

       

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

       

      “Final
        Stated Maturity Date”: With respect to each Class of Notes, the Payment Date in
        August 2036. 

       

      “Final
        Recovery Determination”: With respect to any defaulted Mortgage Loan or any REO
        Property (other than a Mortgage Loan or REO Property (i) purchased by NC
        Capital, the Depositor or the Servicer pursuant to or as contemplated by
        Section
        2.04 hereof, Section 3.16(c) of the Servicing Agreement or (ii) removed from
        the
        Trust pursuant to Section 8.07 hereof), a determination made by the Servicer
        that all Insurance Proceeds, Liquidation Proceeds and other payments or
        recoveries which the Servicer, in its reasonable good faith judgment, expects
        to
        be finally recoverable in respect thereof have been so recovered. The Servicer
        shall maintain records, prepared by a Servicing Officer, of each Final Recovery
        Determination made thereby.

       

      “Fitch”:
        Fitch Ratings or its successor in interest.

       

      “Fixed
        Swap Payment”: With respect to any Payment Date, the amount calculated based on
        a fixed rate as set forth in the Interest Rate Swap Agreement.

       

      “Floating
        Swap Payment”: With respect to any Payment Date, a floating amount equal to the
        product of (i) Swap LIBOR, (ii) the related Notional Amount (as defined in
        the
        Interest Rate Swap Agreement), (iii) 250 and (iv) a fraction, the numerator
        of
        which is the actual number of days elapsed from and including the previous
        Floating Rate Payer Payment Date (as defined in the Interest Rate Swap
        Agreement) to but excluding the current Floating Rate Payer Payment Date
        (or,
        for the first Floating Rate Payer Payment Date, the actual number of days
        elapsed from the Closing Date to but excluding the first Floating Rate Payer
        Payment Date), and the denominator of which is 360.

       

      “Form
        8-K
        Disclosure Information”: As defined in Section 4.02(b)(ii) of the Servicing
        Agreement.

       

      “Freddie
        Mac”: Freddie Mac, formerly known as the Federal Home Loan Mortgage Corporation,
        or any successor thereto.

       

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

       

      “Gross
        Margin”: With respect to each Adjustable-Rate Mortgage Loan, the fixed
        percentage set forth in the related Mortgage Note that is added to the Index
        on
        each Adjustment Date in accordance with the terms of the related Mortgage
        Note
        used to determine the Mortgage Rate for such Adjustable-Rate Mortgage
        Loan.

       

      “Group
        I
        Allocation Percentage”: With respect to any Payment Date, the percentage
        equivalent of a fraction, the numerator of which is (x) the Group I Principal
        Remittance Amount for such Payment Date and the denominator of which is (y)
        the
        Principal Remittance Amount for such Payment Date.

       

      “Group
        I
        Interest Remittance Amount”: With respect to any Payment Date, that portion of
        the Available Payment Amount for such Payment Date allocable to interest
        on the
        Group I Mortgage Loans.

       

      “Group
        I
        Mortgage Loan”: A first lien or second lien fixed-rate Mortgage Loan or
        Adjustable-Rate Mortgage Loan with a principal balance at origination that
        conforms to Fannie Mae or Freddie Mac loan limits. The Group I Mortgage Loans
        are identified as such on the Mortgage Loan Schedule.

       

      “Group
        I
        Notes”: The Class A-1 Notes.

       

      “Group
        I
        Principal Payment Amount”: With respect to any Payment Date, the sum of (i) the
        principal portion of each Monthly Payment on the Group I Mortgage Loans due
        during the related Due Period, actually received on or prior to the related
        Determination Date or advanced on or before the related Servicer Remittance
        Date; (ii) the Stated Principal Balance of any Group I Mortgage Loan that
        was
        purchased during the related Prepayment Period pursuant to or as contemplated
        by
        Section 2.03 or Section 3.16(c) of the Servicing Agreement and the amount
        of any
        shortfall deposited in the Collection Account in connection with the
        substitution of a Deleted Mortgage Loan in Loan Group I pursuant to Section
        2.03
        of the Servicing Agreement during the related Prepayment Period; (iii) the
        principal portion of all other unscheduled collections (including, without
        limitation, Principal Prepayments, Insurance Proceeds, Liquidation Proceeds
        and
        REO Principal Amortization) received during the related Prepayment Period
        on the
        Group I Mortgage Loans, net of any portion thereof that represents a recovery
        of
        principal for which an advance was made by the Servicer pursuant to Section
        4.01
        of the Servicing Agreement in respect of a preceding Payment Date; (iv)
on
        the
        Payment Date on which the Notes are to be redeemed pursuant to Section 8.07
        hereof, that portion of the Redemption Price, in respect of principal on
        the
        Group I Mortgage Loans; and
        (v)
        the Group I Allocation Percentage of the amount of any Overcollateralization
        Increase Amount for such Payment Date minus
        (vi) the
        Group I Allocation Percentage of the amount of any Overcollateralization
        Reduction Amount for such Payment Date.

       

      “Group
        I
        Principal Remittance Amount”: With respect to any Payment Date, the sum of the
        amounts set forth in clauses (i) through (iii) of the definition of Group
        I
        Principal Payment Amount.

       

      “Group
        I
        Senior Principal Payment Amount”: With respect to any Payment Date, the excess
        of (x) the aggregate Note Balance of the Group I Notes immediately prior
        to such
        Payment Date over (y) the lesser of (A) the product of (i) 56.80% and (ii)
        the
        aggregate Stated Principal Balance of the Group I Mortgage Loans as of the
        last
        day of the related Due Period and (B) the aggregate Stated Principal Balance
        of
        the Group I Mortgage Loans as of the last day of the related Due Period minus
        $2,775,013.

       

      “Group
        II
        Allocation Percentage”: With respect to any Payment Date, the percentage
        equivalent of a fraction, the numerator of which is (x) the Group II Principal
        Remittance Amount for such Payment Date and the denominator of which is (y)
        the
        Principal Remittance Amount for such Payment Date.

       

      “Group
        II
        Interest Remittance Amount”: With respect to any Payment Date, that portion of
        the Available Payment Amount for such Payment Date allocable to interest
        on the
        Group II Mortgage Loans.

       

      “Group
        II
        Mortgage Loan”: A first lien or second lien fixed-rate Mortgage Loan or
        Adjustable-Rate Mortgage Loan with a principal balance at origination that
        may
        or may not conform to Fannie Mae or Freddie Mac loan limits. The Group II
        Mortgage Loans are identified as such on the Mortgage Loan
        Schedule.

       

      “Group
        II
        Notes”: The Class A-2a Notes, the Class A-2b Notes and the Class A-2c
        Notes.

       

      “Group
        II
        Principal Payment Amount”: With respect to any Payment Date, the sum of (i) the
        principal portion of each Monthly Payment on the Group II Mortgage Loans
        due
        during the related Due Period, actually received on or prior to the related
        Determination Date or advanced on or before the related Servicer Remittance
        Date; (ii) the Stated Principal Balance of any Group II Mortgage Loan that
        was
        purchased during the related Prepayment Period pursuant to or as contemplated
        by
        Section 2.03 or Section 3.16(c) of the Servicing Agreement and the amount
        of any
        shortfall deposited in the Collection Account in connection with the
        substitution of a Deleted Mortgage Loan in Loan Group II pursuant to Section
        2.03 of the Servicing Agreement during the related Prepayment Period; (iii)
        the
        principal portion of all other unscheduled collections (including, without
        limitation, Principal Prepayments, Insurance Proceeds, Liquidation Proceeds,
        Subsequent Recoveries and REO Principal Amortization) received during the
        related Prepayment Period on the Group II Mortgage Loans, net of any portion
        thereof that represents a recovery of principal for which an advance was
        made by
        the Servicer pursuant to Section 4.01 of the Servicing Agreement in respect
        of a
        preceding Payment Date; (iv) on the Payment Date on which the Notes are to
        be
        redeemed pursuant to Section 8.07 hereof, that portion of the Redemption
        Price,
        in respect of principal on the Group II Mortgage Loans; and (v) the Group
        II
        Allocation Percentage of the amount of any Overcollateralization Increase
        Amount
        for such Payment Date minus
        (vi) the
        Group II Allocation Percentage of the amount of any Overcollateralization
        Reduction Amount for such Payment Date.

       

      “Group
        II
        Principal Remittance Amount”: With respect to any Payment Date, the sum of the
        amounts set forth in clauses (i) through (iii) of the definition of Group
        II
        Principal Payment Amount.

       

      “Group
        II
        Senior Principal Payment Amount”: With respect to any Payment Date, the excess
        of (x) the aggregate Note Balance of the Group II Notes immediately prior
        to
        such Payment Date over (y) the lesser of (A) the product of (i) 56.80% and
        (ii)
        the aggregate Stated Principal Balance of the Group II Mortgage Loans as
        of the
        last day of the related Due Period and (B) the aggregate Stated Principal
        Balance of the Group II Mortgage Loans as of the last day of the related
        Due
        Period minus $3,188,720.

       

      “Highest
        Priority”: As of any date of determination, the Class of Mezzanine Notes then
        outstanding with a Note Balance greater than zero, with the highest priority
        for
        payments pursuant to Section 3.05 hereof, in the following order: Class M-1,
        Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8,
        Class M-9 and Class M-10 Notes.

       

      “Indemnified
        Party”: The meaning specified in Section 7.02 of the Trust
        Agreement.

       

      “Indenture”:
        The indenture dated as of June 29, 2006, between the Issuing Entity and the
        Indenture Trustee, relating to the New Century Home Equity Loan Trust 2006-2,
        Asset-Backed Notes, Series 2006-2.

       

      “Indenture
        Trustee”: Deutsche Bank National Trust Company, and its successors and assigns
        or any successor indenture trustee appointed pursuant to the terms of the
        Indenture.

       

      “Indenture
        Trustee Fee”: With respect to any Payment Date, one month’s interest accrued at
        the Indenture Trustee Fee Rate on the Stated Principal Balance of each Mortgage
        Loan as of the first day of the related Due Period.

       

      “Indenture
        Trustee Fee Rate”: 0.0023% per annum. 

       

      “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 Seller,
        the Servicer, the Depositor and any Affiliate of any of the foregoing Persons,
        (ii) does not have any direct financial interest or any material indirect
        financial interest in the Issuing Entity, any such other obligor, the Seller,
        the Servicer, the Depositor or any Affiliate of any of the foregoing Persons
        and
        (iii) is not connected with the Issuing Entity, any such other obligor, the
        Seller, the Servicer, the Depositor or any Affiliate of any of the foregoing
        Persons as an officer, employee, promoter, underwriter, trustee, partner,
        director or person performing similar functions.

       

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

       

      “Independent
        Contractor”: Either (i) any Person (other than the Servicer) that would be an
“independent contractor” with respect to the Issuing Entity within the meaning
        of Section 856(d)(3) of the Code if the Issuing Entity were a real estate
        investment trust (except that the ownership tests set forth in that section
        shall be considered to be met by any Person that owns, directly or indirectly,
        35% or more of any Class of Notes), so long as the Issuing Entity does not
        receive or derive any income from such Person and provided that the relationship
        between such Person and the Issuing Entity is at arm’s length, all within the
        meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person
        (including the Servicer) if the Indenture Trustee has received an Opinion
        of
        Counsel to the effect that the taking of any action in respect of any REO
        Property by such Person, subject to any conditions therein specified, that
        is
        otherwise herein contemplated to be taken by an Independent Contractor will
        not
        cause such REO Property to cease to qualify as “foreclosure property” within the
        meaning of Section 860G(a)(8) of the Code (determined without regard to the
        exception applicable for purposes of Section 860D(a) of the Code), or cause
        any
        income realized in respect of such REO Property to fail to qualify as Rents
        from
        Real Property.

       

      “Index”:
        With respect to each Adjustable-Rate Mortgage Loan and each related Adjustment
        Date, the average of the interbank offered rates for six-month or one-month
        United States dollar deposits in the London market as published in The
        Wall Street Journal
        and as
        most recently available either (i) as of the first business day (as defined
        in
        the related Mortgage Note) 45 days prior to such Adjustment Date or (ii)
        as of
        the first business day (as defined in the related Mortgage Note) of the month
        preceding the month of such Adjustment Date, as specified in the related
        Mortgage Note.

       

      “Initial
        Note Balance”: As set forth in Section 2.02 hereof.

       

      “Insurance
        Proceeds”: Proceeds of any title policy, hazard policy or other insurance policy
        covering a Mortgage Loan to the extent such proceeds are not to be applied
        to
        the restoration of the related Mortgaged Property or released to the Mortgagor
        in accordance with the procedures that the Servicer would follow in servicing
        mortgage loans held for its own account, subject to the terms and conditions
        of
        the related Mortgage Note and Mortgage.

       

      “Interest
        Accrual Period”: With
        respect to any Payment Date and the Class A Notes and the Mezzanine Notes,
        the
period
        commencing on the Payment Date of the month immediately preceding the month
        in
        which such Payment Date occurs (or, in the case of the first Payment Date,
        commencing on the Closing Date) and ending on the day preceding such Payment
        Date.

       

      “Interest
        Carry Forward Amount”: With respect to any Payment Date and any Class of Class A
        Notes or Mezzanine Notes, the sum of (i) the amount, if any, by which (a)
        the
        Interest Payment Amount for such Class of Notes as of the immediately preceding
        Payment Date exceeded (b) the actual amount paid on such Class of Notes in
        respect of interest on such immediately preceding Payment Date, (ii) the
        amount
        of any Interest Carry Forward Amount for such Class of Notes remaining unpaid
        from the previous Payment Date and (iii) accrued interest on the sum of (i)
        and
        (ii) above calculated at the related Note Rate for the most recently ended
        Interest Accrual Period.

       

      “Interest
        Determination Date”: With respect to the Class A Notes and the Mezzanine Notes
        and any Interest Accrual Period therefor, the second London Business Day
        preceding the commencement of such Interest Accrual Period.

       

      “Interest
        Payment Amount”: With respect to any Payment Date and any Class of Class A Notes
        and Mezzanine Notes, the aggregate Accrued Note Interest on the Notes of
        such
        Class for such Payment Date.

       

      “Interest
        Rate Swap Agreement”: The 1992 ISDA Master Agreement (Multicurrency-Cross
        Border) dated as of June 29, 2006 (together with the schedule thereto, the
        Master Agreement) between the Swap Provider and the Trust and a confirmation
        of
        the same date, which supplements and forms part of the Master
        Agreement.

       

      “Interest
        Remittance Amount”: With respect to any Payment Date, that portion of the
        Available Payment Amount for such Payment Date allocable to interest received
        or
        advanced on the Mortgage Loans.

       

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

       

      “IRS”:
        The Internal Revenue Service.

       

      “Issuing
        Entity”: New Century Home Equity Loan Trust 2006-2, a Delaware statutory trust,
        or its successor in interest.

       

      “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.

       

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

       

      “Lien”:
        Any mortgage, deed of trust, pledge, conveyance, hypothecation, assignment,
        participation, deposit arrangement, encumbrance, lien (statutory or other),
        preference, priority right or interest or other security agreement or
        preferential arrangement of any kind or nature whatsoever, including, without
        limitation, any conditional sale or other title retention agreement, any
        financing lease having substantially the same economic effect as any of the
        foregoing and the filing of any financing statement under the UCC (other
        than
        any such financing statement filed for informational purposes only) or
        comparable law of any jurisdiction to evidence any of the foregoing; provided,
        however, that any assignment pursuant to Section 6.02 of the Servicing Agreement
        shall not be deemed to constitute a Lien.

       

      “Liquidation
        Event”: With respect to any Mortgage Loan, any of the following events: (i) such
        Mortgage Loan is paid in full; (ii) a Final Recovery Determination is made
        as to
        such Mortgage Loan; or (iii) such Mortgage Loan is removed from the Trust
        by
        reason of (A) its being purchased, sold or replaced pursuant to or as
        contemplated by Section 2.03 hereof or Section 3.16(c) of the Servicing
        Agreement or (B) the Servicer redeeming the Notes pursuant to Section 8.07
        hereof. With respect to any REO Property, either of the following events:
        (i) a
        Final Recovery Determination is made as to such REO Property; or (ii) such
        REO
        Property is removed from the Trust by reason of the Servicer redeeming the
        Notes
        pursuant to Section 8.07 hereof.

       

      “Liquidation
        Proceeds”: The amount (other than Insurance Proceeds or amounts received in
        respect of the rental of any REO Property prior to REO Disposition) received
        by
        the Servicer in connection with (i) the taking of all or a part of a Mortgaged
        Property by exercise of the power of eminent domain or condemnation, (ii)
        the
        liquidation of a defaulted Mortgage Loan through a trustee’s sale, foreclosure
        sale or otherwise, (iii) the repurchase, substitution or sale of a Mortgage
        Loan
        or an REO Property pursuant to or as contemplated by Section 2.03 hereof
        or
        Section 3.16(c) of the Servicing Agreement, or (iv) the removal from the
        Trust
        of a Mortgage Loan or an REO Property pursuant to Section 8.07
        hereof.

       

      “Loan
        Group”: Either Loan Group I or Loan Group II, as the context
        requires.

       

      “Loan
        Group I”: The group of Mortgage Loans identified in the Mortgage Loan Schedule
        as having been assigned to Loan Group I.

       

      “Loan
        Group II”: The group of Mortgage Loans identified in the Mortgage Loan Schedule
        as having been assigned to Loan Group II.

       

      “Loan-to-Value
        Ratio”: As of any date of determination, the fraction, expressed as a
        percentage, the numerator of which is the principal balance of the related
        Mortgage Loan at such date (and, with respect to any second lien Mortgage
        Loan,
        the principal balance of the related first lien Mortgage Loan plus the principal
        balance of such second lien Mortgage Loan) and the denominator of which is
        the
        Value of the related Mortgaged Property.

       

      “London
        Business Day”: Any day on which banks in the City of London and New York are
        open and conducting transactions in United States dollars.

       

      “Majority
        Certificateholder”: A Holder of a 50.01% or greater Certificate Percentage
        Interest of the Certificates.

       

      “Maximum
        Mortgage Rate”: With respect to each Adjustable-Rate Mortgage Loan, the
        percentage set forth in the related Mortgage Note as the maximum Mortgage
        Rate
        thereunder.

       

      “Mezzanine
        Note”: Any Class M-1 Note, Class M-2 Note, Class M-3 Note, Class M-4 Note, Class
        M-5 Note, Class M-6 Note, Class M-7 Note, Class M-8 Note, Class M-9 Note
        or
        Class M-10 Note.

       

      “Minimum
        Mortgage Rate”: With respect to each Adjustable-Rate Mortgage Loan, the
        percentage set forth in the related Mortgage Note as the minimum Mortgage
        Rate
        thereunder.

       

      “Monthly
        Payment”: With respect to any Mortgage Loan, the scheduled monthly payment of
        principal and interest on such Mortgage Loan which is payable by the related
        Mortgagor from time to time under the related Mortgage Note, determined:
        (a)
        after giving effect to (i) any Deficient Valuation and/or Debt Service Reduction
        with respect to such Mortgage Loan and (ii) any reduction in the amount of
        interest collectible from the related Mortgagor pursuant to the Relief Act;
        (b)
        without giving effect to any extension granted or agreed to by the Servicer
        pursuant to Section 3.07 of the Servicing Agreement and (c) on the assumption
        that all other amounts, if any, due under such Mortgage Loan are paid when
        due.

       

      “Moody’s”:
        Moody’s Investors Service, Inc. or its successor in interest.

       

      “Mortgage”:
        The mortgage, deed of trust or other instrument creating a first or second
        lien
        on, or first or second priority security interest in, a Mortgaged Property
        securing a Mortgage Note.

       

      “Mortgage
        File”: The mortgage documents listed in Section 2.1 of the Mortgage Loan
        Purchase Agreement pertaining to a particular Mortgage Loan and any additional
        documents required to be added to the Mortgage File pursuant to the Mortgage
        Loan Purchase Agreement.

       

      “Mortgage
        Loan”: Each mortgage loan transferred and assigned to the Trust and delivered
        to
        the Trust pursuant to Section 2.1 of the Mortgage Loan Purchase Agreement
        or
        Section 2.03(b) of the Servicing Agreement, as held from time to time as
        a part
        of the Trust, the Mortgage Loans so held being identified in the Mortgage
        Loan
        Schedule.

       

      “Mortgage
        Loan Schedule”: With respect to any date, the schedule of Mortgage Loans held by
        the Issuing Entity on such date. The schedule of Mortgage Loans as of the
        Cut-off Date is the schedule set forth in Exhibit B of the Indenture, which
        schedule sets forth as to each Mortgage Loan:

       

      
        	 	
                (i)

              	
                the
                  Mortgage Loan identifying number;

              
	 	 	 
	 	
                (ii)

              	
                the
                  state and zip code of the Mortgaged Property;

              
	 	 	 
	 	
                (iii)

              	
                a
                  code indicating whether the Mortgaged Property is
                  owner-occupied;

              
	 	 	 
	 	
                (iv)

              	
                the
                  type of Residential Dwelling constituting the Mortgaged
                  Property;

              
	 	 	 
	 	
                (v)

              	
                the
                  original months to maturity;

              
	 	 	 
	 	
                (vi)

              	
                the
                  stated remaining months to maturity from the Cut-off Date based
                  on the
                  original amortization schedule;

              
	 	 	 
	 	
                (vii)

              	
                the
                  Loan-to-Value Ratio at origination;

              
	 	 	 
	 	
                (viii)

              	
                the
                  Mortgage Rate in effect immediately following the Cut-off
                  Date;

              
	 	 	 
	 	
                (ix)

              	
                (A)
                  the date on which the first Monthly Payment was due on the Mortgage
                  Loan
                  and (B) if such date is not consistent with the Due Date currently
                  in
                  effect, such Due Date;

              
	 	 	 
	 	
                (x)

              	
                the
                  stated maturity date;

              
	 	 	 
	 	
                (xi)

              	
                the
                  amount of the Monthly Payment at origination;

              
	 	 	 
	 	
                (xii)

              	
                the
                  amount of the Monthly Payment due on the first Due Date after the
                  Cut-off
                  Date;

              
	 	 	 
	 	
                (xiii)

              	
                the
                  last Due Date on which a Monthly Payment was actually applied to
                  the
                  unpaid Stated Principal Balance;

              
	 	 	 
	 	
                (xiv)

              	
                the
                  original principal amount of the Mortgage Loan;

              
	 	 	 
	 	
                (xv)

              	
                the
                  Stated Principal Balance of the Mortgage Loan as of the close of
                  business
                  on the Cut-off Date;

              
	 	 	 
	 	
                (xvi)

              	
                with
                  respect to each Adjustable-Rate Mortgage Loan, the Adjustment Dates,
                  the
                  Gross Margin, the Maximum Mortgage Rate, the Minimum Mortgage Rate,
                  the
                  Periodic Rate Cap and the maximum first Adjustment Date Mortgage
                  Rate
                  adjustment and the first Adjustment Date immediately following
                  the
                  origination date;

              
	 	 	 
	 	
                (xvii)

              	
                a
                  code indicating the purpose of the Mortgage Loan (i.e., purchase
                  financing, Rate/Term Refinancing, Cash-Out
                  Refinancing);

              
	 	 	 
	 	
                (xviii)

              	
                the
                  Mortgage Rate at origination;

              
	 	 	 
	 	
                (xix)

              	
                a
                  code indicating the documentation program (i.e., Full Documentation,
                  Limited Documentation, Stated Income Documentation);

              
	 	 	 
	 	
                (xx)

              	
                the
                  risk grade;

              
	 	 	 
	 	
                (xxi)

              	
                the
                  Value of the Mortgaged Property;

              
	 	 	 
	 	
                (xxii)

              	
                the
                  sale price of the Mortgaged Property, if applicable;

              
	 	 	 
	 	
                (xxiii)
                  

              	
                the
                  actual unpaid Stated Principal Balance of the Mortgage Loan as
                  of the
                  Cut-off Date;

              
	 	 	 
	 	
                (xxiv)

              	
                the
                  type and term of the related Prepayment Charge;

              
	 	 	 
	 	
                (xxv)

              	
                the
                  rounding code (i.e., nearest 0.125%, next highest
                  0.125%);

              
	 	 	 
	 	
                (xxvi)

              	
                the
                  program code;

              
	 	 	 
	 	
                (xxvii)
                  

              	
                the
                  total amount of points and fees charged such Mortgage Loan;
                  and

              
	 	 	 
	 	
                (xxviii)
                  

              	
                a
                  code indicating whether the Mortgage Loan is a first-lien or second
                  lien
                  Mortgage Loan.

              
	 	 	 

      

      The
        Mortgage Loan Schedule shall set forth the following information with respect
        to
        the Mortgage Loans in the aggregate and by Loan Group as of the Cut-off Date:
        (1) the number of Mortgage Loans; (2) the current Stated Principal Balance
        of
        the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage
        Loans
        and (4) the weighted average maturity of the Mortgage Loans. With respect
        to any
        Qualified Substitute Mortgage Loan, the Cut-off Date shall refer to the related
        Cut-off Date for such Mortgage Loan, determined in accordance with the
        definition of Cut-off Date herein.

       

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

       

      “Mortgage
        Pool”: The pool of Mortgage Loans, identified on Exhibit B to the Indenture and
        existing from time to time thereafter, and any REO Properties acquired in
        respect thereof.

       

      “Mortgage
        Rate”: With respect to each Mortgage Loan, the annual rate at which interest
        accrues on such Mortgage Loan from time to time in accordance with the
        provisions of the related Mortgage Note, which rate (i) with respect to each
        fixed-rate Mortgage Loan shall remain constant at the rate set forth in the
        Mortgage Loan Schedule as the Mortgage Rate in effect immediately following
        the
        Cut-off Date and (ii) with respect to the Adjustable-Rate Mortgage Loans,
        (A) as
        of any date of determination until the first Adjustment Date following the
        Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as
        the
        Mortgage Rate in effect immediately following the Cut-off Date and (B) as
        of any
        date of determination thereafter shall be the rate as adjusted on the most
        recent Adjustment Date equal to the sum, rounded as provided in the Mortgage
        Note, of the Index, as most recently available as of a date prior to the
        Adjustment Date as set forth in the related Mortgage Note, plus the related
        Gross Margin; provided that the Mortgage Rate on such Adjustable-Rate Mortgage
        Loan on any Adjustment Date shall never be more than the lesser of (i) the
        sum
        of the Mortgage Rate in effect immediately prior to the Adjustment Date plus
        the
        related Periodic Rate Cap, if any, and (ii) the related Maximum Mortgage
        Rate,
        and shall never be less than the greater of (i) the Mortgage Rate in effect
        immediately prior to the Adjustment Date less the Periodic Rate Cap, if any,
        and
        (ii) the related Minimum Mortgage Rate. With respect to each Mortgage Loan
        that
        becomes an REO Property, as of any date of determination, the annual rate
        determined in accordance with the immediately preceding sentence as of the
        date
        such Mortgage Loan became an REO Property.

       

      “Mortgaged
        Property”: The underlying property securing a Mortgage Loan, including any REO
        Property, consisting of an Estate in Real Property improved by a Residential
        Dwelling.

       

      “Mortgagor”:
        The obligor on a Mortgage Note.

       

      “NC
        Capital” or “Responsible Party”: NC Capital Corporation, or its successor in
        interest.

       

      “Net
        Monthly Excess Cashflow”: With respect to any Payment Date, the sum of (i) any
        Overcollateralization Reduction Amount for such Payment Date, (ii) any
        Subsequent Recoveries and (iii) the excess of (x) the Available Payment Amount
        for such Payment Date over (y) the sum for such Payment Date of (A) the Senior
        Interest Payment Amount paid to the Holders of the Class A Notes and the
        Interest Payment Amount paid to the Holders of the Mezzanine Notes and (B)
        the
        Principal Remittance Amount.

       

      “Net
        Mortgage Rate”: With respect to any Mortgage Loan (or the related REO Property)
        as of any date of determination, a per annum rate of interest equal to the
        then
        applicable Mortgage Rate for such Mortgage Loan minus the Servicing Fee
        Rate.

       

      “Net
        Swap
        Payment”: In the case of payments made by the Trust, the excess, if any, of (x)
        the Fixed Swap Payment over (y) the Floating Swap Payment and in the case
        of
        payments made by the Swap Provider, the excess, if any, of (x) the Floating
        Swap
        Payment over (y) the Fixed Swap Payment. In each case, the Net Swap Payment
        shall not be less than zero.

       

      “New
        Lease”: Any lease of REO Property entered into on behalf of the Trust, including
        any lease renewed or extended on behalf of the Trust if the Trust has the
        right
        to renegotiate the terms of such lease.

       

      “Nonrecoverable
        P&I Advance”: Any P&I Advance previously made or proposed to be made in
        respect of a Mortgage Loan or REO Property that, in the good faith business
        judgment of the Servicer, will not or, in the case of a proposed P&I
        Advance, would not be ultimately recoverable from related Late Collections,
        Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property
        as provided herein.

       

      “Nonrecoverable
        Servicing Advance”: Any Servicing Advance previously made or proposed to be made
        in respect of a Mortgage Loan or REO Property that, in the good faith business
        judgment of the Servicer, will not or, in the case of a proposed Servicing
        Advance, would not be ultimately recoverable from related Late Collections,
        Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property
        as provided herein.

       

      “Note”:
        Any one of the Asset Backed Notes, Series 2006-2, Class A-1, Class A-2a,
        Class
        A-2b, Class A-2c, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
        Class
        M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Notes issued under the
        Indenture.

       

      “Note
        Balance”: With respect to each Class A Note or Mezzanine Note as of any date of
        determination, the Note Balance of such Note on the Payment Date immediately
        prior to such date of determination plus, with respect to each Class of
        Mezzanine Notes, any increase in the Note Balance of such Note pursuant to
        Section 3.05 hereof due to the receipt of Subsequent Recoveries, minus all
        payments of principal made thereon and in the case of each Class of Mezzanine
        Notes, Realized Losses allocated thereto on such immediately prior Payment
        Date
        (or, in the case of any date of determination up to and including the first
        Payment Date, the initial Note Balance of such Note, as stated on the face
        thereof).

       

      “Note
        Margin”: With respect to each Class of Class A and Mezzanine Notes, the margin
        set forth below:

       

      
        	 	
                Note
                  Margin

              
	
                Class

              	
                (1)
                  (%)

              	
                (2)
                  (%)

              
	
                A-1

              	
                0.140%

              	
                0.280%

              
	
                A-2a

              	
                0.070%

              	
                0.140%

              
	
                A-2b

              	
                0.160%

              	
                0.320%

              
	
                A-2c

              	
                0.250%

              	
                0.500%

              
	
                M-1

              	
                0.310%

              	
                0.465%

              
	
                M-2

              	
                0.320%

              	
                0.480%

              
	
                M-3

              	
                0.340%

              	
                0.510%

              
	
                M-4

              	
                0.400%

              	
                0.600%

              
	
                M-5

              	
                0.420%

              	
                0.630%

              
	
                M-6

              	
                0.480%

              	
                0.720%

              
	
                M-7

              	
                1.000%

              	
                1.500%

              
	
                M-8

              	
                1.120%

              	
                1.680%

              
	
                M-9

              	
                1.950%

              	
                2.925%

              
	
                M-10

              	
                2.000%

              	
                3.000%

              

      

       

      
        	 	
                _______________

              
	 	
                (1)

              	
                For
                  the Interest Accrual Period for each Payment Date through and including
                  the Payment Date on which the aggregate Stated Principal Balance
                  of the
                  Mortgage Loans (and properties acquired in respect thereof) remaining
                  in
                  the Trust is reduced to less than 10% of the aggregate Stated Principal
                  Balance of the Mortgage Loans as of the Cut-off Date.

              
	 	
                (2)

              	
                For
                  the Interest Accrual Period for each Payment Date
                  thereafter.

              
	 	 	 

      

      “Note
        Owner”: The Beneficial Owner of a Note.

       

      “Note
        Rate”: With respect to any Class of Notes and any Payment Date, a rate per annum
        equal to the least of (i) One-Month LIBOR plus the related Note Margin for
        such
        Payment Date, (ii) 12.50% per annum and (iii) the Available Funds Rate for
        such
        Payment Date.

       

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

       

      “Note
        Registrar”: The Indenture Trustee, in its capacity as Note Registrar, or any
        successor to the Indenture Trustee in such capacity.

       

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

       

      “Officer’s
        Certificate”: With respect to the Servicer, a certificate signed by the
        President, Managing Director, a Director, a Vice President or an Assistant
        Vice
        President, of the Servicer and delivered to the Indenture Trustee. With respect
        to the Issuing Entity, a certificate signed by any Authorized Officer of
        the
        Issuing Entity, under the circumstances described in, and otherwise complying
        with, the applicable requirements of Section 10.01 hereof, 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 Authorized
        Officer of the Issuing Entity.

       

      “One-Month
        LIBOR”: With respect to the Class A Notes and the Mezzanine Notes and any
        Interest Accrual Period therefor, the rate determined by the Indenture Trustee
        on the related Interest Determination Date on the basis of the offered rate
        for
        one-month U.S. dollar deposits, as such rate appears on Telerate Page 3750
        as of
        11:00 a.m. (London time) on such Interest Determination Date; provided that
        if
        such rate does not appear on Telerate Page 3750, the rate for such date will
        be
        determined on the basis of the offered rates of the Reference Banks for
        one-month U.S. dollar deposits, as of 11:00 a.m. (London time) on such Interest
        Determination Date. In such event, the Indenture Trustee will request the
        principal London office of each of the Reference Banks to provide a quotation
        of
        its rate. If on such Interest Determination Date, two or more Reference Banks
        provide such offered quotations, One-Month LIBOR for the related Interest
        Accrual Period shall be the arithmetic mean of such offered quotations (rounded
        upwards if necessary to the nearest whole multiple of 1/16%). If on such
        Interest Determination Date, fewer than two Reference Banks provide such
        offered
        quotations, One-Month LIBOR for the related Interest Accrual Period shall
        be the
        higher of (i) LIBOR as determined on the previous Interest Determination
        Date
        and (ii) the Reserve Interest Rate. Notwithstanding the foregoing, if, under
        the
        priorities described above, LIBOR for an Interest Determination Date would
        be
        based on LIBOR for the previous Interest Determination Date for the third
        consecutive Interest Determination Date, the Indenture Trustee, after
        consultation with the Servicer, shall select an alternative comparable index
        (over which the Indenture Trustee has no control), used for determining
        one-month Eurodollar lending rates that is calculated and published (or
        otherwise made available) by an independent party.

       

      “Opinion
        of Counsel”: A written opinion of counsel acceptable to the Indenture Trustee,
        in its reasonable discretion which counsel may be in-house counsel for the
        Servicer if acceptable to the Indenture Trustee and the Rating Agencies or
        counsel for the Depositor, as the case may be.

       

      “Originators”:
        New Century Mortgage Corporation and Home 123 Corporation, or, in each case,
        its
        successor in interest, in its capacity as originator of the Mortgage
        Loans.

       

      “Outstanding”:
        With respect to the Notes, as of the date of determination, all Notes
        theretofore executed, authenticated and delivered under this Indenture
        except:

       

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

       

      (ii) Notes
        in
        exchange for or in lieu of which other Notes have been executed, authenticated
        and delivered pursuant to the Indenture unless proof satisfactory to the
        Indenture Trustee is presented that any such Notes are held by a holder in
        due
        course;

       

      “Overcollateralization
        Deficiency Amount”: With respect to any Payment Date, the excess, if any, of (a)
        the Overcollateralization Target Amount applicable to such Payment Date over
        (b)
        the Overcollateralized Amount applicable to such Payment Date (calculated
        for
        this purpose only, after assuming that 100% of the Principal Remittance Amount
        on such Payment Date has been paid).

       

      “Overcollateralization
        Increase Amount”: With respect to any Payment Date, the lesser of (a) the
        Overcollateralization Deficiency Amount as of such Payment Date and (b) the
        Net
        Monthly Excess Cashflow Amount with respect to such Payment Date.

       

      “Overcollateralization
        Reduction Amount”: With respect to any Payment Date, an amount equal to the
        lesser of (a) the Excess Overcollateralized Amount and (b) the Principal
        Remittance Amount.

       

      “Overcollateralization
        Target Amount”: With respect to any Payment Date (a) prior to the Stepdown Date,
        an amount equal to 2.10% of the aggregate Stated Principal Balance of the
        Mortgage Loans as of the Cut-off Date; (b) on or after the Stepdown Date
        provided a Trigger Event is not in effect, the greater of (i) 4.20% of the
        aggregate Stated Principal Balance of the Mortgage Loans as of the last day
        of
        the related Due Period and (ii) $5,963,733; and (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. Notwithstanding the
        foregoing, on and after any Payment Date following the reduction of the
        aggregate Note Balance of the Notes to zero, the Overcollateralization Target
        Amount will be zero.

       

      “Overcollateralized
        Amount”: With respect to any Payment Date, the excess, if any, of (a) the
        aggregate Stated Principal Balance of the Mortgage Loans and REO Properties
        as
        of the last day of the related Due Period over (b) the aggregate Note Balance
        of
        the Class A Notes and the Mezzanine Notes (after giving effect to payments
        to be
        made on such 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, and its successors and assigns or any successor
        owner
        trustee appointed pursuant to the terms of the Trust Agreement.

       

      “Owner
        Trustee Fee”: The initial fee and the first year annual administration fee
        payable to the Owner Trustee on the Closing Date and with respect to each
        Payment Date beginning on the 13th
        Payment
        Date, one twelfth (1/12) of the Owner Trustee’s annual administration fee, which
        the Owner Trustee shall provide to the Servicer and the Indenture
        Trustee.

       

      “Paying
        Agent”: Any paying agent or co-paying agent appointed pursuant to Section 3.03
        hereof, which initially shall be the Indenture Trustee.

       

      “Payment
        Account”: The trust account or accounts created and maintained by the Indenture
        Trustee pursuant to Section 3.01 hereof, which shall be entitled “Deutsche Bank
        National Trust Company, as Indenture Trustee, in trust for the registered
        holders of New Century Home Equity Loan Trust 2006-2, Asset Backed Notes.” The
        Payment Account must be an Eligible Account.

       

      “Payment
        Date”: The 25th
        day of
        any month, or if such 25th
        day is
        not a Business Day, the Business Day immediately following such 25th
        day,
        commencing in July 2006.

       

      “Percentage
        Interest”: With respect to any Note, the percentage obtained by dividing the
        Note Balance of such Note by the aggregate Note Balances of all Notes of
        that
        Class. With respect to any Certificate, the percentage as stated on the face
        thereof.

       

      “Periodic
        Rate Cap”: With respect to each Adjustable-Rate Mortgage Loan and any Adjustment
        Date therefor, the fixed percentage set forth in the related Mortgage Note,
        which is the maximum amount by which the Mortgage Rate for such Mortgage
        Loan
        may increase or decrease (without regard to the Maximum Mortgage Rate or
        the
        Minimum Mortgage Rate) on such Adjustment Date from the Mortgage Rate in
        effect
        immediately prior to such Adjustment Date.

       

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

       

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

       

      (ii) demand
        and time deposits in, certificates of deposit of, or bankers’ acceptances issued
        by, any Depository Institution;

       

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

       

      (iv) securities
        bearing interest or sold at a discount that are issued by any corporation
        incorporated under the laws of the United States of America or any state
        thereof
        and that are rated by each Rating Agency that rates such securities in its
        highest long-term unsecured rating categories at the time of such investment
        or
        contractual commitment providing for such investment;

       

      (v) commercial
        paper (including both non-interest-bearing discount obligations and
        interest-bearing obligations payable on demand or on a specified date not
        more
        than 30 days after the date of acquisition thereof) that is rated by each
        Rating
        Agency that rates such securities in its highest short-term unsecured debt
        rating available at the time of such investment;

       

      (vi) units
        of
        money market funds that have been rated “AAAm” or “AAAm-G” by S&P;
        and

       

      (viii) if
        previously confirmed in writing to the Indenture Trustee, any other demand,
        money market or time deposit, or any other obligation, security or investment,
        as may be acceptable to the Rating Agencies as a permitted investment of
        funds
        backing securities having ratings equivalent to its highest initial rating
        of
        the Class A Notes;

       

      provided,
        however, that no instrument described hereunder shall evidence either the
        right
        to receive (a) only interest with respect to the obligations underlying such
        instrument or (b) both principal and interest payments derived from obligations
        underlying such instrument and the interest and principal payments with respect
        to such instrument provide a yield to maturity at par greater than 120% of
        the
        yield to maturity at par of the underlying obligations.

       

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

       

      “P&I
        Advance”: As to any Mortgage Loan or REO Property, any advance made by the
        Servicer in respect of any Payment Date pursuant to Section 4.01 of the
        Servicing Agreement.

       

      “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.

       

      “Prepayment
        Assumption”: As set forth in the Prospectus Supplement.

       

      “Prepayment
        Charge”: With respect to any Prepayment Period, any prepayment premium, penalty
        or charge payable by a Mortgagor in connection with any Principal Prepayment
        on
        a Mortgage Loan pursuant to the terms of the related Mortgage Note.

       

      “Prepayment
        Interest Shortfall”: With respect to any Payment Date, for each Mortgage Loan
        that was during the related Prepayment Period the subject of a Principal
        Prepayment in full or in part that was applied by the Servicer to reduce
        the
        outstanding Stated Principal Balance of such loan on a date preceding the
        Due
        Date in the succeeding Prepayment Period, an amount equal to one month’s
        interest at the applicable Net Mortgage Rate less any payments of interest
        made
        by the Mortgagor. The obligations of the Servicer in respect of any Prepayment
        Interest Shortfall are set forth in Section 3.24 of the Servicing
        Agreement.

       

      “Prepayment
        Period”: With respect to any Payment Date, the calendar month preceding the
        calendar month in which such Payment Date occurs.

       

      “Principal
        Payment Amount”: With respect to any Payment Date, the sum of the Group I
        Principal Payment Amount and the Group II Principal Payment Amount.

       

      “Principal
        Prepayment”: Any payment of principal made by the Mortgagor on a Mortgage Loan
        which is received in advance of its scheduled Due Date and which is not
        accompanied by an amount of interest representing the full amount of scheduled
        interest due on any Due Date in any month or months subsequent to the month
        of
        prepayment.

       

      “Proceeding”:
        Any suit in equity, action at law or other judicial or administrative
        proceeding.

       

      “Prospectus
        Supplement”: That certain Prospectus Supplement dated June 26, 2006, relating to
        the public offering of the Class A Notes and the Mezzanine Notes.

       

      “Purchase
        Price”: With respect to any Mortgage Loan or REO Property to be purchased
        pursuant to or as contemplated by Section 2.03 hereof or Section 3.16(c)
        of the
        Servicing Agreement, and as confirmed by an Officer’s Certificate from the
        Servicer to the Indenture Trustee, an amount equal to the sum of (i) 100%
        of the
        Stated Principal Balance thereof as of the date of purchase, (ii) in the
        case of
        (x) a Mortgage Loan, accrued interest on such Stated Principal Balance at
        the
        applicable Mortgage Rate in effect from time to time from the Due Date as
        to
        which interest was last covered by a payment by the Mortgagor or an advance
        by
        the Servicer, which payment or advance had as of the date of purchase been
        paid
        pursuant to Section 3.05 hereof, through the end of the calendar month in
        which
        the purchase is to be effected and (y) an REO Property, the sum of (1) accrued
        interest on such Stated Principal Balance at the applicable Mortgage Rate
        in
        effect from time to time from the Due Date as to which interest was last
        covered
        by a payment by the Mortgagor or an advance by the Servicer through the end
        of
        the calendar month immediately preceding the calendar month in which such
        REO
        Property was acquired, plus (2) REO Imputed Interest for such REO Property
        for
        each calendar month commencing with the calendar month in which such REO
        Property was acquired and ending with the calendar month in which such purchase
        is to be effected, net of the total of all net rental income, Insurance
        Proceeds, Liquidation Proceeds and P&I Advances that as of the date of
        purchase had been paid as or to cover REO Imputed Interest pursuant to Section
        3.05 hereof, (iii) any unreimbursed Servicing Advances and P&I Advances
        (including Nonrecoverable P&I Advances and Nonrecoverable Servicing
        Advances) and any unpaid Servicing Fees allocable to such Mortgage Loan or
        REO
        Property, (iv) any amounts previously withdrawn from the Collection Account
        in
        respect of such Mortgage Loan or REO Property pursuant to Section 3.11(a)(ix)
        and Section 3.16(b) of the Servicing Agreement, and (v) in the case of a
        Mortgage Loan required to be purchased pursuant to Section 2.03 hereof or
        purchased by the Servicer pursuant to Section 3.16(c) of the Servicing
        Agreement, expenses reasonably incurred or to be incurred by the Servicer
        or the
        Indenture Trustee in respect of the breach or defect giving rise to the purchase
        obligation including any costs and damages incurred by the Trust in connection
        with any violation by such loan of any predatory or abusive lending
        law.

       

      “Qualified
        Substitute Mortgage Loan”: A mortgage loan substituted for a Deleted Mortgage
        Loan which must, on the date of such substitution, (i) have an outstanding
        Stated Principal Balance, after application of all scheduled payments of
        principal and interest due during or prior to the month of substitution,
        not in
        excess of the Stated Principal Balance of the Deleted Mortgage Loan as of
        the
        Due Date in the calendar month during which the substitution occurs, (ii)
        have a
        Mortgage Rate not less than (and not more than one percentage point in excess
        of) the Mortgage Rate of the Deleted Mortgage Loan, (iii) with respect to
        any
        Adjustable-Rate Mortgage Loan, have a Maximum Mortgage Rate not less than
        the
        Maximum Mortgage Rate on the Deleted Mortgage Loan, (iv) with respect to
        any
        Adjustable-Rate Mortgage Loan, have a Minimum Mortgage Rate not less than
        the
        Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) with respect to any
        Adjustable-Rate Mortgage Loan, have a Gross Margin equal to the Gross Margin
        of
        the Deleted Mortgage Loan, (vi) with respect to any Adjustable-Rate Mortgage
        Loan, have a next Adjustment Date not more than two months later than the
        next
        Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining term
        to
        maturity not greater than (and not more than one year less than) that of
        the
        Deleted Mortgage Loan, (viii) have the same Due Date as the Due Date on the
        Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as of the date of
        substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
        Mortgage Loan as of such date, (x) have a risk grading determined by the
        Originator at least equal to the risk grading assigned on the Deleted Mortgage
        Loan and (xi) conform to each representation and warranty set forth in Mortgage
        Loan Purchase Agreement applicable to the Deleted Mortgage Loan. In the event
        that one or more mortgage loans are substituted for one or more Deleted Mortgage
        Loans, the amounts described in clause (i) hereof shall be determined on
        the
        basis of aggregate Stated Principal Balances, the Mortgage Rates described
        in
        clause (ii) hereof shall be determined on the basis of weighted average Mortgage
        Rates, the terms described in clause (vii) hereof shall be determined on
        the
        basis of weighted average remaining term to maturity, the Loan-to-Value Ratios
        described in clause (ix) hereof shall be satisfied as to each such mortgage
        loan, the risk gradings described in clause (x) hereof shall be satisfied
        as to
        each such mortgage loan and, except to the extent otherwise provided in this
        sentence, the representations and warranties described in clause (xi) hereof
        must be satisfied as to each Qualified Substitute Mortgage Loan or in the
        aggregate, as the case may be.

       

      “Rate/Term
        Refinancing”: A Refinanced Mortgage Loan, the proceeds of which are not more
        than a nominal amount in excess of the existing first mortgage loan and any
        subordinate mortgage loan on the related Mortgaged Property and related closing
        costs, and were used exclusively (except for such nominal amount) to satisfy
        the
        then existing first mortgage loan and any subordinate mortgage loan of the
        Mortgagor on the related Mortgaged Property and to pay related closing
        costs.

       

      “Rating
        Agency” or “Rating Agencies”: Moody’s and S&P or their successors. If such
        agencies or their successors are no longer in existence, “Rating Agencies” shall
        be such nationally recognized statistical rating agencies, or other comparable
        Persons, designated by the Depositor, notice of which designation shall be
        given
        to the Indenture Trustee and the Servicer.

       

      “Realized
        Loss”: With respect to each Mortgage Loan as to which a Final Recovery
        Determination has been made, an amount (not less than zero) equal to (i)
        the
        unpaid Stated Principal Balance of such Mortgage Loan as of the commencement
        of
        the calendar month in which the Final Recovery Determination was made, plus
        (ii)
        accrued interest from the Due Date as to which interest was last paid by
        the
        Mortgagor through the end of the calendar month in which such Final Recovery
        Determination was made, calculated in the case of each calendar month during
        such period (A) at an annual rate equal to the annual rate at which interest
        was
        then accruing on such Mortgage Loan and (B) on a principal amount equal to
        the
        Stated Principal Balance of such Mortgage Loan as of the close of business
        on
        the Payment Date during such calendar month, plus (iii) any amounts previously
        withdrawn from the Collection Account in respect of such Mortgage Loan pursuant
        to Section 3.11(a)(ix) and Section 3.16(b) of the Servicing Agreement, minus
        (iv) the proceeds, if any, received in respect of such Mortgage Loan during
        the
        calendar month in which such Final Recovery Determination was made, net of
        amounts that are payable therefrom to the Servicer with respect to such Mortgage
        Loan pursuant to Section 3.11(a)(iii) of the Servicing Agreement.

       

      If
        the
        Servicer receives Subsequent Recoveries with respect to any Mortgage Loan,
        the
        amount of the Realized Loss with respect to that Mortgage Loan will be reduced
        to the extent such recoveries are applied to principal payments on any Payment
        Date.

       

      With
        respect to any REO Property as to which a Final Recovery Determination has
        been
        made, an amount (not less than zero) equal to (i) the unpaid principal balance
        of the related Mortgage Loan as of the date of acquisition of such REO Property
        on behalf of the Trust, plus (ii) accrued interest from the Due Date as to
        which
        interest was last paid by the Mortgagor in respect of the related Mortgage
        Loan
        through the end of the calendar month immediately preceding the calendar
        month
        in which such REO Property was acquired, calculated in the case of each calendar
        month during such period (A) at an annual rate equal to the annual rate at
        which
        interest was then accruing on the related Mortgage Loan and (B) on a principal
        amount equal to the Stated Principal Balance of the related Mortgage Loan
        as of
        the close of business on the Payment Date during such calendar month, plus
        (iii)
        REO Imputed Interest for such REO Property for each calendar month commencing
        with the calendar month in which such REO Property was acquired and ending
        with
        the calendar month in which such Final Recovery Determination was made, plus
        (iv) any amounts previously withdrawn from the Collection Account in respect
        of
        the related Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b)
        of
        the Servicing Agreement, minus (v) the aggregate of all P&I Advances and
        Servicing Advances (in the case of Servicing Advances, without duplication
        of
        amounts netted out of the rental income, Insurance Proceeds and Liquidation
        Proceeds described in clause (vi) below) made by the Servicer in respect
        of such
        REO Property or the related Mortgage Loan for which the Servicer has been or, in
        connection with such Final Recovery Determination, will be reimbursed pursuant
        to Section 3.23 of the Servicing Agreement out of rental income, Insurance
        Proceeds and Liquidation Proceeds received in respect of such REO Property,
        minus (vi) the total of all net rental income, Insurance Proceeds and
        Liquidation Proceeds received in respect of such REO Property that has been,
        or
        in connection with such Final Recovery Determination, will be transferred
        to the
        Payment Account pursuant to Section 3.23 of the Servicing
        Agreement.

       

      With
        respect to each Mortgage Loan which has become the subject of a Deficient
        Valuation, the difference between the principal balance of the Mortgage Loan
        outstanding immediately prior to such Deficient Valuation and the Stated
        Principal Balance of the Mortgage Loan as reduced by the Deficient
        Valuation.

       

      With
        respect to each Mortgage Loan which has become the subject of a Debt Service
        Reduction, the portion, if any, of the reduction in each affected Monthly
        Payment attributable to a reduction in the Mortgage Rate imposed by a court
        of
        competent jurisdiction. Each such Realized Loss shall be deemed to have been
        incurred on the Due Date for each affected Monthly Payment.

       

      “Record
        Date”: With respect to each Payment Date and any Book-Entry Note, the Business
        Day immediately preceding such Payment Date. With respect to each Payment
        Date
        and any other Notes, including any Definitive Notes, the last Business Day
        of
        the month immediately preceding the month in which such Payment Date
        occurs.

       

      “Redemption
        Price”: As defined in Section 8.07 hereof.

       

      “Reference
        Banks”: Deutsche Bank AG, Barclay’s Bank PLC, The Tokyo Mitsubishi Bank and
        National Westminster Bank PLC and their successors in interest; provided,
        however, that if any of the foregoing banks are not suitable to serve as
        a
        Reference Bank, then any leading banks selected by the Indenture Trustee,
        after
        consultation with the Depositor, which are engaged in transactions in Eurodollar
        deposits in the international Eurocurrency market (i) with an established
        place
        of business in London and (ii) not controlling, under the control of or under
        common control with the Depositor or any Affiliate thereof.

       

      “Refinanced
        Mortgage Loan”: A Mortgage Loan the proceeds of which were not used to purchase
        the related Mortgaged Property.

       

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

       

      “Regulation
        AB”: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject
        to
        such clarification and interpretation as have been provided by the Commission
        in
        the adopting release (Asset-Backed Securities, Securities Act Release No.
        33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
        Commission and publicly available, or as may be provided by the Commission
        or
        its staff from time to time and publicly available. 

       

      “Related
        Documents”: With respect to each Mortgage Loan, the documents specified in
        Section 2.1(b) of the Mortgage Loan Purchase Agreement and any documents
        required to be added to such documents pursuant to the Mortgage Loan Purchase
        Agreement, the Trust Agreement, Indenture or the Servicing
        Agreement.

       

      “Relief
        Act”: The Servicemembers Civil Relief Act or similar state law.

       

      “Relief
        Act Interest Shortfall”: With respect to any Payment Date and any Mortgage Loan,
        any reduction in the amount of interest collectible on such Mortgage Loan
        for
        the most recently ended calendar month as a result of the application of
        the
        Relief Act.

       

      “Remittance
        Report”: A report in form and substance acceptable to the Indenture Trustee on a
        magnetic disk or tape prepared by the Servicer pursuant to Section 4.01 of
        the
        Servicing Agreement with such additions, deletions and modifications as agreed
        to by the Indenture Trustee and the Servicer.

       

      “Rents
        from Real Property”: With respect to any REO Property, gross income of the
        character described in Section 856(d) of the Code as being included in the
        term
“rents from real property.”

       

      “REO
        Account”: The account or accounts maintained, or caused to be maintained, by the
        Servicer in respect of an REO Property pursuant to Section 3.23 of the Servicing
        Agreement.

       

      “REO
        Disposition”: The sale or other disposition of an REO Property on behalf of the
        Trust.

       

      “REO
        Imputed Interest”: As to any REO Property, for any calendar month during which
        such REO Property was at any time part of the Trust, one month’s interest at the
        applicable Net Mortgage Rate on the Stated Principal Balance of such REO
        Property (or, in the case of the first such calendar month, of the related
        Mortgage Loan, if appropriate) as of the close of business on the Payment
        Date
        in such calendar month.

       

      “REO
        Principal Amortization”: With respect to any REO Property, for any calendar
        month, the excess, if any, of (a) the aggregate of all amounts received in
        respect of such REO Property during such calendar month, whether in the form
        of
        rental income, sale proceeds (including, without limitation, that portion
        of the
        proceeds paid in connection with a purchase of all of the Notes pursuant
        to
        Section 8.07 hereof that is allocable to such REO Property) or otherwise,
        net of
        any portion of such amounts (i) payable pursuant to Section 3.23(c) of the
        Servicing Agreement in respect of the proper operation, management and
        maintenance of such REO Property or (ii) payable or reimbursable to the Servicer
        pursuant to Section 3.23(d) of the Servicing Agreement for unpaid Servicing
        Fees
        in respect of the related Mortgage Loan and unreimbursed Servicing Advances
        and
        P&I Advances in respect of such REO Property or the related Mortgage Loan,
        over (b) the REO Imputed Interest in respect of such REO Property for such
        calendar month.

       

      “REO
        Property”: A Mortgaged Property acquired by the Servicer on behalf of the Trust
        Fund through foreclosure or deed-in-lieu of foreclosure, as described in
        Section
        3.23 of the Servicing Agreement.

       

      “Reportable
        Event”: As defined in Section 4.02(b)(ii) of the Servicing
        Agreement.

       

      “Request
        for Release”: A release signed by a Servicing Officer, in the form of Exhibit B
        attached to the Servicing Agreement.

       

      “Reserve
        Interest Rate”: With respect to any Interest Determination Date, the rate per
        annum that the Indenture Trustee determines to be either (i) the arithmetic
        mean
        (rounded upwards if necessary to the nearest whole multiple of 1/16%) of
        the
        one-month U.S. dollar lending rates which New York City banks selected by
        the
        Indenture Trustee, after consultation with the Servicer, are quoting on the
        relevant Interest Determination Date to the principal London offices of leading
        banks in the London interbank market or (ii) in the event that the Indenture
        Trustee can determine no such arithmetic mean, the lowest one-month U.S.
        dollar
        lending rate which New York City banks selected by the Indenture Trustee,
        after
        consultation with the Servicer, are quoting on such Interest Determination
        Date
        to leading European banks.

       

      “Residential
        Dwelling”: Any one of the following: (i) an attached, detached or semi-detached
        one-family dwelling, (ii) an attached, detached or semi-detached two-to
        four-family dwelling, (iii) a one-family dwelling unit in a Fannie Mae eligible
        condominium project, or (iv) an attached, detached or semi-detached one-family
        dwelling in a planned unit development, none of which is a co-operative or
        mobile home (as defined in 42 United States Code, Section 5402(6)).

       

      “Responsible
        Officer”: When used with respect to the Indenture Trustee or the Owner Trustee,
        any vice president, managing director, director, any assistant vice president,
        the Secretary, any assistant secretary, the Treasurer, any assistant treasurer,
        any associate, any trust officer or assistant trust officer or any other
        officer
        of the Trustee having direct responsibility over this Agreement or otherwise
        engaged in performing functions similar to those performed by any of the
        above
        designated officers and, with respect to a particular matter, to whom such
        matter is referred because of such officer’s knowledge of and familiarity with
        the particular subject.

       

      “Rolling
        Three Month Delinquency Rate”: As of any Payment Date, the sum of the
        Delinquency Rates for the previous three calendar months divided by 3 (or
        1 or
        2, in the case of the first or second Payment Date, respectively).

       

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

       

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

       

      “Seller”:
        New Century Credit Corporation, and its successors and assigns, in its capacity
        as seller under the Mortgage Loan Purchase Agreement.

       

      “Senior
        Interest Payment Amount”: With respect to any Payment Date and any Class of
        Class A Notes, an amount equal to the sum of (i) the Interest Payment Amount
        for
        such Payment Date for that Class and (ii) the Interest Carry Forward Amount,
        if
        any, for such Payment Date for that Class.

       

      “Senior
        Principal Payment Amount”: The sum of the Group I Senior Principal Payment
        Amount and the Group II Senior Principal Payment Amount.

       

      “Servicer”:
        New Century Mortgage Corporation, or any successor servicer appointed as
        provided in the Servicing Agreement, in its capacity as Servicer under the
        Servicing Agreement.

       

      “Servicer
        Event of Default”: One or more of the events described in Section 6.01 of the
        Servicing Agreement.

       

      “Servicer
        Remittance Date”: With respect to any Payment Date, by 1:00 p.m. New York time
        on the Business Day preceding the related Payment Date.

       

      “Servicer
        Termination Test”: The Servicer Termination Test will be failed with respect to
        any Payment Date if the aggregate amount of Realized Losses incurred since
        the
        Cut-off Date through the last day of the related Due Period (reduced by the
        aggregate amount of Subsequent Recoveries received from the Cut-off Date
        through
        the last day of the related Due Period) divided by aggregate Stated Principal
        Balance of the Mortgage Loans as of the Cut-off Date exceeds the applicable
        percentages set forth below with respect to such Payment Date:

      

      
        	
                 

                Payment
                  Date Occurring In

              	
                Percentage

              
	
                July
                  2008 - June 2009

              	
                1.35%
                  for
                  the first month, plus an additional 1/12th of 1.65%
                  for each month thereafter 

              
	
                July
                  2009 - June 2010

              	
                3.00%
                  for
                  the first month, plus an additional 1/12th of 1.70%
                  for each month thereafter 

              
	
                July
                  2010 - June 2011

              	
                4.70%
                  for
                  the first month, plus an additional 1/12th of 1.40%
                  for each month thereafter 

              
	
                July
                  2011 - June 2012

              	
                6.10%
                  for
                  the first month, plus an additional 1/12th of 0.75%
                  for each month thereafter 

              
	
                July
                  2012 and thereafter

              	
                6.85%

              

      

      

      “Servicing
        Account”: The account or accounts created and maintained pursuant to Section
        3.09 of the Servicing Agreement.

       

      “Servicing
        Advances”: The reasonable “out-of-pocket” costs and expenses incurred by the
        Servicer in connection with a default, delinquency or other unanticipated
        event
        by the Servicer in the performance of its servicing obligations, including,
        but
        not limited to, the cost of (i) the preservation, restoration and protection
        of
        a Mortgaged Property, (ii) any enforcement or judicial proceedings, including
        but not limited to foreclosures, in respect of a particular Mortgage Loan,
        (iii)
        the management (including reasonable fees in connection therewith) and
        liquidation of any REO Property and (iv) the performance of its obligations
        under Section 3.01, Section 3.09, Section 3.14, Section 3.16 and Section
        3.23 of
        the Servicing Agreement. The Servicer shall not be required to make any
        Nonrecoverable Servicing Advances.

       

      “Servicing
        Agreement”: The Servicing Agreement dated as of June 29, 2006, among the
        Servicer, the Issuing Entity and the Indenture Trustee.

       

      “Servicing
        Criteria”: As set forth in Exhibit E of the Servicing Agreement.

       

      “Servicing
        Fee”: With respect to each Mortgage Loan and for any calendar month, an amount
        equal to the Servicing Fee Rate accrued for one month (or in the event of
        any
        payment of interest which accompanies a Principal Prepayment in full or in
        part
        made by the Mortgagor during such calendar month, interest for the number
        of
        days covered by such payment of interest) on the same principal amount on
        which
        interest on such Mortgage Loan accrues for such calendar month, calculated
        on
        the basis of a 360-day year consisting of twelve 30-day months. A portion
        of
        such Servicing Fee may be retained by any Sub-Servicer as its servicing
        compensation.

       

      “Servicing
        Fee Rate”: 0.50% per annum.

       

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

       

      “Significance
        Percentage”: The percentage equivalent of a fraction, the numerator of which is
        the net present value of the estimated future amounts payable under the Interest
        Rate Swap Agreement and the denominator of which is the aggregate Certificate
        Principal Balance of the Class A and Mezzanine Notes on such Distribution
        Date
        (after giving effect to all distributions on such Payment Date), in each
        case as
        determined pursuant to Section 7.05(c). 

       

      “S&P”:
        Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., or its
        successor in interest.

       

      “Stated
        Principal Balance”: With respect to any Mortgage Loan: (a) as of any date of
        determination up to but not including the Payment Date on which the proceeds,
        if
        any, of a Liquidation Event with respect to such Mortgage Loan would be paid,
        the principal balance of such Mortgage Loan as of the Cut-off Date, as shown
        in
        the Mortgage Loan Schedule, minus the sum of (i) the principal portion of
        each
        Monthly Payment due on a Due Date subsequent to the Cut-off Date, to the
        extent
        received from the Mortgagor or advanced by the Servicer and paid pursuant
        to
        Section 3.05 hereof on or before such date of determination, (ii) all Principal
        Prepayments received after the Cut-off Date, to the extent paid pursuant
        to
        Section 3.05 hereof on or before such date of determination, (iii) all
        Liquidation Proceeds and Insurance Proceeds applied by the Servicer as
        recoveries of principal in accordance with the provisions of Section 3.16
        of the
        Servicing Agreement, to the extent paid pursuant to Section 3.05 hereof on
        or
        before such date of determination, and (iv) any Realized Loss incurred with
        respect thereto as a result of a Deficient Valuation made during or prior
        to the
        Prepayment Period for the most recent Payment Date coinciding with or preceding
        such date of determination; and (b) as of any date of determination coinciding
        with or subsequent to the Payment Date on which the proceeds, if any, of
        a
        Liquidation Event with respect to such Mortgage Loan would be paid, zero.
        With
        respect to any REO Property: (a) as of any date of determination up to but
        not
        including the Payment Date on which the proceeds, if any, of a Liquidation
        Event
        with respect to such REO Property would be paid, an amount (not less than
        zero)
        equal to the Stated Principal Balance of the related Mortgage Loan as of
        the
        date on which such REO Property was acquired on behalf of the Trust, minus
        the
        sum of (i) if such REO Property was acquired before the Payment Date in any
        calendar month, the principal portion of the Monthly Payment due on the Due
        Date
        in the calendar month of acquisition, to the extent advanced by the Servicer
        and
        paid pursuant to Section 3.05 hereof on or before such date of determination,
        and (ii) the aggregate amount of REO Principal Amortization in respect of
        such
        REO Property for all previously ended calendar months, to the extent paid
        pursuant to Section 3.05 hereof on or before such date of determination;
        and (b)
        as of any date of determination coinciding with or subsequent to the Payment
        Date on which the proceeds, if any, of a Liquidation Event with respect to
        such
        REO Property would be paid, zero.

       

      “Statutory
        Trust Statute”: Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code §§3801
        et seq., as the same may be amended from time to time.

       

      “Stepdown
        Date”: The earlier to occur of (i) the Payment Date on which the aggregate Note
        Balance of the Class A Notes has been reduced to zero and (ii) the later
        to
        occur of (a) the Payment Date occurring in July 2009 and (b) the first Payment
        Date on which the Credit Enhancement Percentage (calculated for this purpose
        only after taking into account payments of principal on the Mortgage Loans
        but
        prior to any payment of the Group I Principal Payment Amount and the Group
        II
        Principal Payment Amount on the Notes then entitled to payments of principal
        on
        such Payment Date) is equal to or greater than 43.20%.

       

      “Sub-Servicer”:
        Any Person with which the Servicer has entered into a Sub-Servicing Agreement
        and which meets the qualifications of a Sub-Servicer pursuant to Section
        3.02 of
        the Servicing Agreement.

       

      “Sub-Servicing
        Account”: An account established by a Sub-Servicer which meets the requirements
        set forth in Section 3.08 of the Servicing Agreement and is otherwise acceptable
        to the Servicer.

       

      “Sub-Servicing
        Agreement”: The written contract between the Servicer and a Sub-Servicer
        relating to servicing and administration of certain Mortgage Loans as provided
        in Section 3.02 of the Servicing Agreement.

       

      “Subsequent
        Recoveries”: As of any Payment Date, unanticipated amounts received by the
        Servicer (net of any related expenses permitted to be reimbursed pursuant
        to
        Section 3.11 of the Servicing Agreement) specifically related to a Mortgage
        Loan
        that was the subject of a liquidation or an REO Disposition prior to the
        related
        Prepayment Period that resulted in a Realized Loss.

       

      “Substitution
        Shortfall Amount”: As defined in Section 2.03(b) of the Servicing
        Agreement.

       

      “Swap
        LIBOR”: A per annum rate equal to the floating rate payable by the Swap Provider
        under the Interest Rate Swap Agreement.

       

      “Swap
        Notional Amount”: The Swap Notional Amount for any Payment Date is equal to the
        lesser of (i) the applicable scheduled notional amount as set forth in Annex
        III
        of the Prospectus Supplement (the “Scheduled Notional Amount”) and (ii) the
        aggregate principal balance of the Mortgage Loans as of the close of business
        on
        the last day of the related Due Period. 

       

      “Swap
        Provider”: Deutsche Bank AG, New York branch.

       

      “Swap
        Provider Trigger Event”: A Swap Termination Payment that is triggered upon: (i)
        an Event of Default under the Interest Rate Swap Agreement with respect to
        which
        the Swap Provider is a Defaulting Party (as defined in the Interest Rate
        Swap
        Agreement), (ii) a Termination Event under the Interest Rate Swap Agreement
        with
        respect to which the Swap Provider is the sole Affected Party (as defined
        in the
        Interest Rate Swap Agreement) or (iii) an Additional Termination Event under
        the
        Interest Rate Swap Agreement with respect to which the Swap Provider is the
        sole
        Affected Party.

       

      “Swap
        Termination Payment”: The payment due to either party under the Interest Rate
        Swap Agreement upon the early termination of the Interest Rate Swap
        Agreement.

       

      “Telerate
        Screen Page 3750”: The display designated as page “3750” on the Dow Jones
        Telerate Capital Markets Report (or such other page as may replace page 3750
        on
        that report for the purpose of displaying London interbank offered rates
        of
        major banks).

       

      “Trigger
        Event”: A Trigger Event is in effect with respect to any Payment Date on or
        after the Stepdown Date if:

       

      (a) the
        Rolling Three Month Delinquency Rate exceeds 37.00% of the Credit Enhancement
        Percentage for the prior Payment Date; or

       

      (b) the
        aggregate amount of Realized Losses incurred since the Cut-off Date through
        the
        last day of the related Due Period (reduced by the aggregate amount of
        Subsequent Recoveries received from the Cut-off Date through the last day
        of the
        related Due Period) divided by aggregate Stated Principal Balance of the
        Mortgage Loans as of the Cut-off Date exceeds the applicable percentages
        set
        forth below with respect to such Payment Date:

       

      
        	
                 

                Payment
                  Date Occurring In

              	
                Percentage

              
	
                July
                  2008 - June 2009

              	
                1.31.35%
                  for
                  the first month, plus an additional 1/12th of 1.65%
                  for each month thereafter 

              
	
                July
                  2009 - June 2010

              	
                3.03.00%
                  for
                  the first month, plus an additional 1/12th of 1.70%
                  for each month thereafter 

              
	
                July
                  2010 - June 2011

              	
                4.74.70%
                  for
                  the first month, plus an additional 1/12th of 1.40%
                  for each month thereafter 

              
	
                July
                  2011 - June 2012

              	
                6.16.10%
                  for
                  the first month, plus an additional 1/12th of 0.75%
                  for each month thereafter 

              
	
                July
                  2012 and thereafter

              	
                6.85%

              

      

      

       

      “Trust”:
        The New Century Home Equity Loan Trust 2006-2 to be created pursuant to the
        Trust Agreement.

       

      “Trust
        Agreement”: The Trust Agreement, dated June 27, 2006, between the Owner Trustee
        and the Depositor together with the Amended and Restated Trust Agreement
        dated
        as of June 29, 2006, among the Owner Trustee, the Depositor and Deutsche
        Bank
        National Trust Company, as Certificate Registrar and Certificate Paying Agent,
        relating to the Trust.

       

      “Trust
        Estate”: The meaning specified in the Granting Clause of the
        Indenture.

       

      “Trust
        Indenture Act” or “TIA”: The Trust Indenture Act of 1939, as amended from time
        to time, as in effect on any relevant date.

       

      “UCC”:
        The Uniform Commercial Code, as amended from time to time, as in effect in
        any
        specified jurisdiction.

       

      “Underwriters”:
        Deutsche Bank Securities Inc., Lehman Brothers Inc., Barclays Capital Inc.,
        Credit Suisse Securities (USA) LLC and Northeast Securities, Inc.

       

      “Uninsured
        Cause”: Any cause of damage to a Mortgaged Property such that the complete
        restoration of such property is not fully reimbursable by the hazard insurance
        policies required to be maintained pursuant to Section 3.14 of the Servicing
        Agreement.

       

      “Value”:
        With respect to any Mortgaged Property, the lesser of (i) the lesser of (a)
        the
        value thereof as determined by an appraisal made for the Originator of the
        Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser
        who met the minimum requirements of Fannie Mae and Freddie Mac and (b) the
        value
        thereof as determined by a review appraisal conducted by the Originator in
        accordance with the Originator’s underwriting guidelines, and (ii) the purchase
        price paid for the related Mortgaged Property by the Mortgagor with the proceeds
        of the Mortgage Loan; provided, however, (A) in the case of a Refinanced
        Mortgage Loan, such value of the Mortgaged Property is based solely upon
        the
        lesser of (1) the value determined by an appraisal made for the Originator
        of
        such Refinanced Mortgage Loan at the time of origination of such Refinanced
        Mortgage Loan by an appraiser who met the minimum requirements of Fannie
        Mae and
        Freddie Mac and (2) the value thereof as determined by a review appraisal
        conducted by the Originator in accordance with the Originator’s underwriting
        guidelines, and (B) in the case of a Mortgage Loan originated in connection
        with
        a “lease-option purchase,” such value of the Mortgaged Property is based on the
        lower of the value determined by an appraisal made for the Originator of
        such
        Mortgage Loan at the time of origination or the sale price of such Mortgaged
        Property if the “lease option purchase price” was set less than 12 months prior
        to origination, and is based on the value determined by an appraisal made
        for
        the Originator of such Mortgage Loan at the time of origination if the “lease
        option purchase price” was set 12 months or more prior to
        origination.

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