Document:

To:               Wells Fargo Bank, N.A., as trustee on behalf of Banc of
                    America Mortgage 2007-1 Trust
Attn:             Client Manager - BOAMS 2007-1
Telephone:        410 884 2000
Fax:              410 715 2380

From:             Bank of America, N.A.
                  233 South Wacker Drive - Suite 2800
                  Chicago
                  Illinois 60606
                  U.S.A.
Department:       Swaps Operations
Telephone:        (+1) 312 234 2732
Fax:              (+1) 866 255 1444

Date:             27th February 2007

Our Reference No: 5069009 / 5069008
Reference Name:   Suzanne Buchta
Internal Tracking
No:               2447231 / 2447229

   Dear Sir/Madam,

The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between Wells Fargo Bank, N.A., as trustee on
behalf of Banc of America Mortgage 2007-1 Trust and Bank of America, N.A. (each
a "party" and together "the parties") on the Trade Date specified below (the
"Transaction"). This letter agreement constitutes a "Confirmation" as referred
to in the ISDA Master Agreement specified below (the "Agreement").

The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc., (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern.

   This Confirmation supplements, forms part of, and is subject to, the ISDA
Master Agreement dated as of 2nd February 2007, as amended and supplemented from
time to time, between the parties. All provisions contained in the Agreement
govern this Confirmation except as expressly modified below.

   In this Confirmation  "Party A"  means Bank of America, N.A. and
 "Party B"  means Wells Fargo Bank, N.A., as trustee on behalf of Banc
of America Mortgage 2007-1 Trust.

   General Terms:

The terms of the particular Transaction to which this Confirmation relates are
as follows:

   Notional Amount:                 For each Calculation Period, the
                                    Notional Amount shall equal the
                                    lesser of:

                                    (i)   the Scheduled Notional Amount for such
                                          Calculation Period as detailed in the
                                          Schedule of Notional Amounts attached
                                          hereto

                                    (ii)  the Class Certificate Balance of the
                                          Class 2-A-11 Certificates prior to
                                          distributions on the Distribution Date
                                          (as defined in the Pooling and
                                          Servicing Agreement dated February
                                          27th, 2007) related to the Calculation
                                          Period. The Trustee shall make
                                          available each month via its website a
                                          statement containing the Class
                                          Certificate Balance of the 2-A-11
                                          Certificates for such Calculation
                                          Period. The Trustee's internet website
                                          shall initially be located at
                                          www.ctslink.com and assistance in
                                          using the website can be obtained by
                                          calling the Trustee's investor
                                          relations desk at (301) 815-6600.

Trade Date:                         8th February 2007

Effective Date:                     25th February 2007

Termination Date:                   25th March 2013. No adjustment.

Fixed Amounts:

Fixed Rate Payer:                   Party B

Fixed Rate Payer
Payment Dates:                      28th  February 2007, subject to
                                    adjustment in accordance with the
                                    Following Business Day Convention.

Fixed Amount:                       USD [________]

Floating Amounts:

Floating Rate Payer:                Party A

Cap Rate I:                         5.40000 per cent

Cap Rate II:                        8.90000 per cent

Floating Rate Payer Payment
Dates:                              Early Payments shall be applicable
                                    - 2 Business Days prior to each
                                    Floating Rate Payer Period End Date

Floating Rate Payer
Period End Dates:                   The 25th of each Month, commencing
                                    on 25th March 2007 and ending on
                                    the Termination Date. No Adjustment.

Floating Amount:                    The product of (a) the Notional
                                    Amount (b) the Floating Rate Day
                                    Count Fraction and (c) the
                                    Settlement Spread which shall be
                                    calculated in accordance with the
                                    following formula:

                                    If USD-LIBOR-BBA is greater than the Cap
                                    Rate I for the applicable Calculation
                                    Period, then Settlement Spread =
                                    (USD-LIBOR-BBA - applicable Cap Rate I)
                                    provided, however, that if USD-LIBOR-BBA for
                                    any Calculation Period is greater than the
                                    Cap Rate II then the USD-LIBOR-BBA for such
                                    Calculation Period shall be deemed to be the
                                    Cap Rate II.

                                    If 1 Month USD-LIBOR-BBA is less than or
                                    equal to the Cap Rate I for the applicable
                                    Calculation Period, then Settlement Spread =
                                    Zero.

Floating Rate for initial
Calculation Period:                 to be set

Floating Rate Option:               USD-LIBOR-BBA

Designated Maturity:                1 month

Spread:                             None

Floating Rate Day
Count Fraction:                     30/360

Reset Dates:                        First day of each Calculation
                                    Period.

Business Days:                      New York

Calculation Agent:                  Party A

     Account Details:

Wells Fargo Bank, N.A. San Francisco, California
ABA: 121000248
Acct: 3970771416
Acct Name: SAS Clearing
FFC: 50987001

   Offices:

   The Office of Party A for this
   Transaction is: Charlotte - NC, United States
         Please send reset notices to fax no. (+1) 866 218 8487

   The Office of Party B for this
   Transaction is: Wells Fargo Bank, N.A.
                   9012 Old Annapolis Road
                   Columbia, MD, United States  21045
                   Attention: Client Manager - BOAMS 2007-1
                   Telphone: 410 884 2000
                   Facsimile: 410 715 2380

Please confirm that the foregoing correctly sets forth the terms and conditions
of our agreement by returning via telecopier an executed copy of this
Confirmation in its entirety to the attention of Global FX and Derivative
Operations (fax no.(+1) 866 255 1444).

 Accepted and confirmed as of the date first written:

Bank of America, N.A.               Wells Fargo Bank, N.A., as trustee on
                                    behalf of Banc of America Mortgage 2007-1
                                    Trust

By:   /s/ Mary Beth Knight          By:   /s/ Darron C. Woodus
   --------------------------------    ------------------------------------
   Name:  Mary Beth Knight             Name:  Darron C. Woodus
   Title: Asst. Vice President         Title: Assistant Vice President

                      Calculation Period
                            Scheduled to
                            Commence on:   Notional (USD)
                      ------------------   --------------
                               2/25/2007   117,689,000.00
                               3/25/2007   116,603,627.27
                               4/25/2007   115,386,929.79
                               5/25/2007   114,040,921.93
                               6/25/2007   112,567,943.98
                               7/25/2007   110,970,658.57
                               8/25/2007   109,252,046.01
                               9/25/2007   107,415,398.50
                              10/25/2007   105,464,313.33
                              11/25/2007   103,402,684.96
                              12/25/2007   101,234,696.06
                               1/25/2008    98,964,807.53
                               2/25/2008    96,597,747.51
                               3/25/2008    94,138,499.48
                               4/25/2008    91,592,289.23
                               5/25/2008    88,964,571.17
                               6/25/2008    86,261,013.63
                               7/25/2008    83,487,483.36
                               8/25/2008    80,650,029.33
                               9/25/2008    77,754,865.79
                              10/25/2008    74,808,354.68
                              11/25/2008    71,817,816.28
                              12/25/2008    68,834,126.24
                               1/25/2009    65,860,586.63
                               2/25/2009    62,927,538.02
                               3/25/2009    60,057,831.41
                               4/25/2009    57,255,088.87
                               5/25/2009    54,540,535.81
                               6/25/2009    51,912,210.18
                               7/25/2009    49,368,397.77
                               8/25/2009    46,907,201.44
                               9/25/2009    44,526,762.96
                              10/25/2009    42,225,262.35
                              11/25/2009    40,000,917.03
                              12/25/2009    37,851,981.13
                               1/25/2010    35,776,744.70
                               2/25/2010    33,773,533.07
                               3/25/2010    31,840,706.07
                               4/25/2010    29,976,657.39
                               5/25/2010    28,179,813.88
                               6/25/2010    26,448,634.88
                               7/25/2010    24,781,611.63
                               8/25/2010    23,177,266.51
                               9/25/2010    21,634,152.57
                              10/25/2010    20,150,852.78
                              11/25/2010    18,725,979.53
                              12/25/2010    17,358,173.99
                               1/25/2011    16,046,105.54
                               2/25/2011    14,788,471.22
                               3/25/2011    13,583,995.13
                               4/25/2011    12,431,427.98
                               5/25/2011    11,329,546.45
                               6/25/2011    10,277,152.77
                               7/25/2011     9,273,074.11
                               8/25/2011     8,316,162.13
                               9/25/2011     7,405,292.53
                              10/25/2011     6,539,364.47
                              11/25/2011     5,717,300.19
                              12/25/2011     4,938,044.48
                               1/25/2012     4,200,564.26
                               2/25/2012     3,503,848.14
                               3/25/2012     3,025,397.03
                               4/25/2012     2,584,125.61
                               5/25/2012     2,179,094.41
                               6/25/2012     1,809,383.88
                               7/25/2012     1,474,093.99
                               8/25/2012     1,172,343.85
                               9/25/2012       903,271.30
                              10/25/2012       666,032.55
                              11/25/2012       459,801.80
                              12/25/2012       283,770.90
                               1/25/2013       137,148.93
                               2/25/2013        19,161.93

Our Reference Number: 5069009 / 5069008
Internal Tracking No: 2447231 / 2447229

<PAGE>

                                    SCHEDULE

                                     to the

                                Master Agreement
                          (Multicurrency-Cross Border)

                                   dated as of

                                February 2, 2007

                                     between

      BANK OF AMERICA, N.A., a national banking association organized under
                          the laws of the United States
                                   ("Party A")

                                       and

        WELLS FARGO BANK, N.A., AS TRUSTEE, ON BEHALF OF BANC OF AMERICA
                              MORTGAGE 2007-1 TRUST

                                     a trust
         organized and existing under the laws of the State of New York
                                   ("Party B")

                                     Part 1
                                   Definitions

      Capitalized terms used herein and not otherwise defined shall have the
meaning specified in that certain Pooling and Servicing Agreement, dated
February 27, 2007 (the "Pooling and Servicing Agreement") among Banc of America
Mortgage Securities, Inc., as depositor, Wells Fargo Bank, N.A., as Trustee, and
Bank of America, National Association, as servicer. For the avoidance of doubt,
references herein to a particular "Section" of this Agreement are references to
the corresponding sections of the Master Agreement.

                             Termination Provisions

In this Agreement:

(a) "Specified Entity" means in relation to Party A for the purpose of:

      Section 5(a)(v),        Not Applicable
      Section 5(a)(vi),       Not Applicable
      Section 5(a)(vii),      Not Applicable
      Section 5(b)(iv),       Not Applicable

      in relation to Party B for the purpose of:

      Section 5(a)(v),        Not Applicable
      Section 5(a)(vi),       Not Applicable
      Section 5(a)(vii),      Not Applicable
      Section 5(b)(iv),       Not Applicable

(b)   "Specified Transaction" will have the meaning specified in Section 14 of
      this Agreement.

(c)   Application of Events of Default. The provisions of Section 5(a) of this
      Agreement will apply to Party A and Party B as follows:

      Section 5(a)                  Party A               Party B
      ------------                  -------               -------

      (i)   "Failure to Pay or      Applicable (except    Applicable.
            Deliver"                provided below in
                                    Part 1(e)(i)).

      (ii)  "Breach of Agreement"   Not Applicable.       Not Applicable.

      (iii) "Credit Support         Applicable (except    Applicable.
            Default"                as provided below in
                                    Part 1(e)(i).

      (iv)  "Misrepresentation"     Not Applicable.       Not Applicable.

      (v)   "Default Under          Not Applicable.       Not Applicable.
            Specified
            Transaction"

      (vi)  "Cross-Default"         Not Applicable.       Not Applicable.

      (vii) "Bankruptcy"            Applicable.           Applicable (the
                                                          provisions of
                                                          Section 5(a)(vii)
                                                          clause 2 will not be
                                                          applicable as an
                                                          Event of Default to
                                                          the extent such
                                                          event relates to
                                                          nonpayment of
                                                          indebtedness other
                                                          than that of the
                                                          related class of
                                                          Certificates.

      (viii) "Merger Without        Applicable.           Applicable.
             Assumption"

(d)   Section 5(a)(iii)(1) will apply in respect of Party B's obligations under
      Paragraph 3(b) of any credit support annex from time to time entered into
      between Party A and Party B in relation to this Agreement.

(e)   (i) Notwithstanding Sections 5(a)(i) and 5(a)(iii), any failure by Party A
      to comply with or perform any obligation to be complied with or performed
      by Party A under any credit support annex from time to time entered into
      between Party A and Party B in relation to this Agreement shall not be an
      Event of Default unless (A) the Second Rating Trigger Requirements
      (defined below) apply and at least 30 Local Business Days have elapsed
      since the last time the Second Rating Trigger Requirements did not apply
      and (B) such failure is not remedied on or before the third Local Business
      Day after notice of such failure is given to Party A.

      (ii) With respect to Section 5(a)(vi):

      "Specified Indebtedness" will have the meaning specified in Section 14,
      provided that Specified Indebtedness shall not include deposits received
      in the course of a party's ordinary banking business.

      "Threshold Amount" means, with respect to Party A, 3% of shareholders'
      equity of Bank of America Corporation as described in its most recently
      published audited financial statements or its equivalent in any currency
      (excluding deposits).

(f)   Application of Events of Termination Events. The provisions of Section
      5(b) of this Agreement will apply to Party A and Party B as follows:

      Section 5(b)                  Party A               Party B
      ------------                  -------               -------

      (i)   "Illegality"            Applicable.           Applicable.

      (ii)  "Tax Event"             Applicable.           Applicable.

      (iii) "Tax Event Upon Merger" Applicable.           Applicable.

      (iv)  "Credit Event Upon      Not Applicable.       Not Applicable.
            Merger"

(g)   Notwithstanding Section 5(b)(iii), Party A shall not be entitled to
      designate an Early Termination Date by reason of a Tax Event Upon Merger
      in respect of which it is the Affected Party.

(h)   Section 6(b)(ii) will apply, Provided that the words "or if a Tax Event
      Upon Merger occurs and the Burdened Party is the Affected Party" shall be
      deleted.

(i)   The "Automatic Early Termination" provision of Section 6(a) will not apply
      to either Party A or to Party B.

(j)   Payments on Early Termination. For the purpose of Section 6(e) of this
      Agreement:

      Market Quotation will apply and the Second Method will apply; provided,
      however, with respect to an early termination in which Party A is the
      Defaulting Party or sole Affected Party in respect of an Additional
      Termination Event or Tax Event Upon Merger, notwithstanding Section 6 of
      this Agreement, the following amendment to Agreement set forth in
      paragraphs (i) to (ix) below shall apply:

      (i) For the purposes of Section 6(d)(i), Party B's obligation with respect
      to the extent of information to be provided with its calculations is
      limited to information Party B has already received in writing which Party
      B is able to release without breaching any contractual obligations or the
      provisions of any law applicable to Party B.

      (ii) The definition of "Market Quotation" shall be deleted in its entirety
      and replaced with the following:

      ""Market Quotation" means, with respect to one or more Terminated
      Transactions, a Firm Offer which is (1) made by a Reference Market-maker
      that is an Eligible Replacement, (2) for an amount that would be paid to
      Party B (expressed as a negative number) or by Party B (expressed as a
      positive number) in consideration of an agreement between Party B and such
      Reference Market-maker to enter into a transaction (the "Replacement
      Transaction") that would have the effect of preserving for such party the
      economic equivalent of any payment or delivery (whether the underlying
      obligation was absolute or contingent and assuming the satisfaction of
      each applicable condition precedent) by the parties under Section 2(a)(i)
      in respect of such Terminated Transactions or group of Terminated
      Transactions that would, but for the occurrence of the relevant Early
      Termination Date, have been required after that date, (3) made on the
      basis that Unpaid Amounts in respect of the Terminated Transaction or
      group of Transactions are to be excluded but, without limitation, any
      payment or delivery that would, but for the relevant Early Termination
      Date, have been required (assuming satisfaction of each applicable
      condition precedent) after that Early Termination Date is to be included
      and (4) made in respect of a Replacement Transaction with commercial terms
      substantially the same as those of this Agreement (save for the exclusion
      of provisions relating to Transactions that are not Terminated
      Transactions)."

      (iii) The definition of "Settlement Amount" shall be deleted in its
      entirety and replaced with the following:

      ""Settlement Amount" means, with respect to any Early Termination Date, an
      amount (as determined by Party B) equal to:

      (a)   If a Market Quotation for the relevant Terminated Transaction or
            group of Terminated Transactions is accepted by Party B so as to
            become legally binding on or before the day falling ten Local
            Business Days after the day on which the Early Termination Date is
            designated (or such later day as Party B may specify in writing to
            Party A, which in any event will not be later than the Early
            Termination Date) (such day, the "Latest Settlement Amount
            Determination Day"), the Termination Currency Equivalent of the
            amount (whether positive or negative) of such Market Quotation; or

      (b)   If no Market Quotation for the relevant Terminated Transaction or
            group of Terminated Transactions is accepted by Party B so as to
            become legally binding on or before the Latest Settlement Amount
            Determination Day, Party B's Loss (whether positive or negative and
            without reference to any Unpaid amounts) for the relevant Terminated
            Transaction or group of Terminated Transactions.

      (iv) For the purpose of paragraph (4) of the definition of Market
      Quotation, Party B shall determine in its sole discretion, acting in a
      commercially reasonable manner, whether a Firm Offer is made in respect of
      a Replacement Transaction with commercial terms substantially the same as
      those of this Agreement (save for the exclusion of provisions relating to
      Transactions that are not Terminated Transactions).

      (v) Party B undertakes to use its reasonable efforts to obtain at least
      one Market Quotation before the Latest Settlement Amount Determination
      Day.

      (vi) Party B will be deemed to have discharged its obligations under (v)
      above if it requests Party A to obtain Market Quotations, where such
      request is made in writing within two Local Business Days after the day on
      which the Early Termination Date is designated.

      (vii) if Party B requests Party A in writing to obtain Market Quotations,
      Party A shall use its reasonable efforts to do so before the Latest
      Settlement Amount Determination Day.

      (viii) Any amount calculated as being due in respect of an Early
      Termination Date will be payable in accordance with Section 6(d)(ii),
      provided that if such payment is owed to Party B, it will be payable on
      the day that notice of the amount payable is given to Party A.

      (ix) If the Settlement Amount is a negative number, Section 6(e)(i)(3) of
      this Agreement shall be deleted in its entirety and replaced with the
      following:

      "Second Method and Market Quotation. If Second Method and Market Quotation
      apply, (1) Party B shall pay to Party A an amount equal to the absolute
      value of the Settlement Amount in respect of the Terminated Transactions,
      (2) Party B shall pay to Party A the Termination Currency Equivalent of
      the Unpaid Amounts owing to Party A and (3) Party A shall pay to Party B
      the Termination Currency Equivalent of the Unpaid Amounts owing to Party
      B, Provided that, (i) the amounts payable under (2) and (3) shall be
      subject to netting in accordance with Section 2(c) of this Agreement and
      (ii) notwithstanding any other provision of this Agreement, any amount
      payable by Party A under (3) shall not be netted-off against any amount
      payable by Party B under (1).".

(k)   "Termination Currency" means United States Dollars.

(l)   Additional Termination Event will apply. Each of the following events
      shall constitute an Additional Termination Event hereunder:

      (i)   If Party A determines that the Agreement or any Transaction
            hereunder constitutes a prohibited transaction under the Employee
            Retirement Income Security Act of 1974, as amended ("ERISA") or
            Section 4975 of the Internal Revenue Code of 1986 (the "Code") for
            which no exemption is available, or a violation of similar effect of
            any pension investment law applicable to one or more "governmental
            plans" as defined in ERISA and the Code then it shall be an
            Additional Termination Event as to which Party B shall be the sole
            Affected Party;"

      (ii)  A termination pursuant to Section 10.01 of the Pooling and Servicing
            Agreement. For purposes of Section 6 of this Agreement, Party B
            shall be the sole Affected Party.

      (iii) An amendment and/or supplement to the Pooling and Servicing
            Agreement is made without the prior written consent of Party A (such
            consent not to be unreasonably withheld), if such amendment and/or
            supplement would: (a) adversely affect any of Party A's rights or
            obligations under this Agreement; or (b) modify the obligations of,
            or impair the ability of, Party B to fully perform any of Party B's
            obligations under this Agreement. For purposes of Section 6 of this
            Agreement, Party B shall be the sole Affected Party.

      (iv)  Downgrade of Party A. The following shall constitute Additional
            Termination Event in which Party A is the sole Affected Party:

            (A) S&P Downgrade. If a Ratings Event (as defined below) shall occur
            and be continuing with respect to Party A, then Party A shall (A)
            within 5 Business Days of such Ratings Event, give notice to Party B
            of the occurrence of such Ratings Event, and (B) use reasonable
            efforts to transfer (at its own cost) Party A's rights and
            obligations under this Agreement and all Confirmations to another
            party, subject to satisfaction of the Rating Agency Condition (as
            defined below). Unless such a transfer by Party A has occurred
            within 20 Business Days after the occurrence of a Ratings Event,
            Party A post Eligible Collateral (as designated in the approved
            Credit Support Annex), to secure Party B's exposure or potential
            exposure to Party A, and such Eligible Collateral shall be provided
            in accordance with a Credit Support Annex attached hereto.
            Notwithstanding the posting of Eligible Collateral, Party A shall
            continue to use reasonable efforts to transfer its rights and
            obligations under this Agreement to an acceptable third party;
            provided, however, that Party A's obligations to find a transferee
            and to post Eligible Collateral under such Credit Support Annex
            shall remain in effect only for so long as a Ratings Event is
            continuing with respect to Party A. For the purpose of this Part
            1(l), a "Ratings Event" shall occur with respect to Party A if the
            long-term and short-term senior unsecured deposit ratings of Party A
            cease to be at least A and A-1 by Standard & Poor's Ratings Service
            or any successor thereto ("S&P"), to the extent such obligations are
            rated by S&P. "Rating Agency Condition" means, with respect to any
            action taken or to be taken, a condition that is satisfied when S&P
            has confirmed that such action would not result in the downgrade,
            qualification (if applicable) or withdrawal of the rating then
            assigned by such Rating Agency to the applicable class of
            Certificates. In addition, if the long-term unsecured and
            unsubordinated debt rating of Party A ceases to be at least BBB- or
            is withdrawn by S&P, then Party A shall (at its own cost) (A) within
            10 General Business Days of such event use reasonable efforts to
            transfer Party A's rights and obligations under this Agreement to
            another party, subject to satisfaction of the Rating Agency
            Condition or (B) obtain a guaranty or contingent agreement of
            another person, which has the ratings set forth in the definition of
            "Ratings Event" to honor Party A's obligations under this Agreement,
            subject to satisfaction of the Rating Agency Condition. The failure
            by Party A to post Eligible Collateral in accordance herewith or to
            transfer its rights and obligations hereunder shall constitute an
            Additional Termination Event for which Party A shall be the sole
            Affected Party.

            (B) Moody's First Rating Trigger Collateral. Party A has failed to
            comply with or perform any obligation to be complied with or
            performed by Party A in accordance with the Credit Support Annex
            from time to time entered into between Party A and Party B in
            relation to this Agreement and either (x) the Moody's Second Rating
            Trigger Requirements do not apply or (y) less than 30 Local Business
            Days have elapsed since the last time the Moody's Second Rating
            Trigger Requirements did not apply.

            (C) Moody's Second Rating Trigger Replacement. (x) The Moody's
            Second Rating Trigger Requirements apply and 30 or more Local
            Business Days have elapsed since the last time the Moody's Second
            Rating Trigger Requirements did not apply and (y) (i) at least one
            Eligible Replacement has made a Firm Offer (which remains capable of
            becoming legally binding upon acceptance) to be the transferee of a
            transfer to be made in accordance with Part 5(m) below and/or (ii)
            at least one entity with the Moody's First Trigger Required Ratings
            and/or the Moody's Second Trigger Required Ratings has made a Firm
            Offer (which remains capable of becoming legally binding upon
            acceptance by the offeree) to provide an Eligible Guarantee in
            respect of all of Party A's present and future obligations under
            this Agreement.

            For the purpose of sub-paragraph (B) and (C) above:

            "Eligible Guarantee" means an unconditional and irrevocable
            guarantee that is provided by a guarantor as principal debtor rather
            than surety and is directly enforceable by Party B, where either (A)
            a law firm has given a legal opinion confirming that none of the
            guarantor's payments to Party B under such guarantee will be subject
            to withholding for tax or (B) such guarantee provides that, in the
            event that any of such guarantor's payments to Party B are subject
            to withholding for tax, such guarantor is required to pay such
            additional amount as is necessary to ensure that the net amount
            actually received by Party B (free and clear of any withholding tax)
            will equal the full amount Party B would have received had no such
            withholding been required.

            "Eligible Replacement" means an entity (A) with the Moody's First
            Trigger Required Ratings and/or the Moody's Second Trigger Required
            Ratings that is the subject of a legal opinion given by a law firm
            confirming that none of its payments to Party B will be subject to
            withholding for tax or (B) whose present and future obligations
            owing to Party B are guaranteed pursuant to an Eligible Guarantee
            provided by a guarantor with the Moody's First Trigger Required
            Ratings and/or the Moody's Second Trigger Required Ratings.

            "Firm Offer" means an offer which, when made, was capable of
            becoming legally binding upon acceptance.

            "Moody's Short-term Rating" means a rating assigned by Moody's under
            its short-term rating scale in respect of an entity's short-term,
            unsecured and unsubordinated debt obligations

            "Relevant Entities" means Party A and any guarantor under an
            Eligible Guarantee in respect of all of Party A's present and future
            obligations under this Agreement.

            An entity shall have the "Moody's First Trigger Required Ratings"
            (x) where such entity is the subject of a Moody's Short-term Rating,
            if such rating is "Prime-1" and its long-term, unsecured and
            unsubordinated debt obligations are rated "A2" or above by Moody's
            and (y) where such entity is not the subject of a Moody's Short-term
            Rating, if its long-term, unsecured and unsubordinated debt
            obligations are rated "A1" or above by Moody's.

            (i) The "Moody's Second Rating Trigger Requirements" shall apply so
            long as no Relevant Entity has the Second Trigger Required Ratings.

            An entity shall have the "Moody's Second Trigger Required Ratings"
            (x) where such entity is the subject of a Moody's Short-term Rating,
            if such rating is "Prime-2" or above and its long-term, unsecured
            and unsubordinated debt obligations are rated "A3" or above by
            Moody's and (y) where such entity is not the subject of a Moody's
            Short-term Rating, if its long-term, unsecured and unsubordinated
            debt obligations are rated "A3" or above by Moody's.

            (ii) So long as the Moody's Second Rating Trigger Requirements
            apply, Party A will at its own cost use commercially reasonable
            efforts to, as soon as reasonably practicable, procure either (x) an
            Eligible Guarantee in respect of all of Party A's present and future
            obligations under this Agreement to be provided by a guarantor with
            the Moody's First Trigger Required Ratings and/or the Moody's Second
            Trigger Required Ratings or (y) a transfer in accordance with Part
            5(m)(ii) below.

                                     Part 2
                               Tax Representations

(a)   Payer Representations. For the purpose of Section 3(e) of this Agreement,
      Party A and Party B make the following representation:

      It is not required by any applicable law, as modified by the practice of
      any relevant governmental revenue authority, of any Relevant Jurisdiction
      to make any deduction or withholding for or on account of any Tax from any
      payment (other than interest under Section 2(e), 6(d)(ii), or 6(e) of this
      Agreement) to be made by it to the other party under this Agreement. In
      making this representation, it may rely on (i) the accuracy of any
      representations made by the other party pursuant to Section 3(f) of this
      Agreement, (ii) the satisfaction of the agreement contained in Section
      4(a)(i) or 4(a)(iii) of this Agreement, and the accuracy and effectiveness
      of any document provided by the other party pursuant to Section 4(a)(i) or
      4(a)(iii) of this Agreement, and (iii) the satisfaction of the agreement
      of the other party contained in Section 4(d) of this Agreement, provided
      that it shall not be a breach of this representation where reliance is
      placed on clause (ii) and the other party does not deliver a form or
      document under Section 4(a)(iii) by reason of material prejudice to its
      legal or commercial position.

(b)   Payee Representations. For the purpose of Section 3(f) of this Agreement,
      Party A and Party B make the following representations:

      (i)   Party A represents that it is a "U.S. Person" (as that term is used
            in section 1.1441-4(a)(3)(ii) of the United States Treasury
            Regulations for United States federal income tax purposes and an
            "Exempt recipient" (within the meaning of Section 1.6049-4(c)(1)(ii)
            of United States Treasury Regulations) for United States federal
            income tax purposes.

      (ii)  Party B represents that it is a New York law common trust and it is
            a "U.S Person" (as that term is used in section 1.1441-4(a)(3)(ii)
            of the United States Treasury Regulations for United States federal
            income tax purposes and an "Exempt recipient" (within the meaning of
            Section 1.6049-4(c)(1)(ii) of United States Treasury Regulations)
            for United States federal income tax purposes.

                                     Part 3

                         Agreement to Deliver Documents

For the purpose of Section 4(a)(i) and (ii) of this Agreement, each Party agrees
to deliver the following documents as applicable:

(a)   Tax forms, documents or certificates to be delivered are:

 Party Required to deliver                              Date by which to
          Document          Form/Document/Certificate   Delivered
--------------------------------------------------------------------------------
Party B.                    An executed U.S.            (i) Before the first
                            Internal Revenue Service    Payment Date under this
                            Form W-9 (or any            Agreement, (ii) promptly
                            successor thereto).         upon reasonable demand
                                                        by Party A and (iii)
                                                        promptly upon learning
                                                        that any such form
                                                        previously provided to
                                                        Party A has become
                                                        obsolete or incorrect.

(b)   Other documents to be delivered are:

                                                                    Covered by
Party Required to        Form/Document/        Date by which to    Section 3(d)
 deliver Document          Certificate           be Delivered     Representation
--------------------------------------------------------------------------------
Party B.           Credit Support Document,    Concurrently            Yes.
                   if any, specified in Part   with the
                   4 hereof, such Credit       execution of
                   Support Document being      this Agreement.
                   duly executed if required.

Party A/Party B.   Incumbency certificate or   Concurrently            Yes.
                   other documents evidencing  with the
                   the authority of the party  execution of
                   entering into this          this Agreement
                   Agreement or any other      or of any other
                   document executed in        documents
                   connection with this        executed in
                   Agreement.                  connection with
                                               this Agreement.

Party B.           Monthly statement setting   To be made              Yes.
                   forth the information       available on
                   specified in Section 5.04   www.ctslink.com
                   of the Pooling and          as soon as
                   Servicing Agreement         available.

Party A and        Legal opinion from counsel  Concurrently             No.
Party B.           (which may be in house      with the
                   counsel) concerning due     execution of
                   authorization,              this Agreement.
                   enforceability and related
                   matters, addressed to
                   the other party and
                   acceptable to such other
                   party.

Party A and        Certified copies of all    Upon execution            Yes
Party B.           corporate, partnership or  and delivery of
                   membership                 this Agreement or
                   authorizations, as the     promptly upon
                   case may be, and any       receipt in the
                   other documents with       case of Party B
                   respect to the execution,
                   delivery and performance
                   of this Agreement and any
                   Credit Support Document

Party A.           Annual Report of Bank of   To be made                Yes
                   America Corporation        available on
                   containing audited,        www.bankofamerica.com
                   consolidated financial     /investor/
                   statements certified by    as soon as
                   independent certified      available and in
                   public accountants and     any event within
                   prepared in accordance     90 days after the
                   with generally accepted    end of each
                   accounting principles in   fiscal year of
                   the country in which such  Party A
                   party is organized

Party A.           Quarterly Financial        To be made                Yes
                   Statements of Bank of      available on
                   America Corporation        www.bankofamerica.com
                   containing unaudited,      /investor/
                   consolidated financial     as soon as
                   statements of such         available and in
                   party's fiscal quarter     any event within
                   prepared in accordance     30 days after the
                   with generally accepted    end of each
                   accounting principles in   fiscal quarter of
                   the country in which such  Party A
                   party is organized

                  [remainder of page intentionally left blank]

<PAGE>

                                     Part 4
                                  Miscellaneous

(a)   Addresses for Notices: For the purpose of Section 12(a) of this Agreement:

      Address for notices or communications to Party A:

      Bank of America, N.A.
      Sears Tower
      233 South Wacker Drive, Suite 2800
      Chicago, IL 60606
      Attention: Swap Operations
      Telephone No.: 312-234-2732
      Facsimile No.: 866-255-1444
      with a copy to:

      Bank of America, N.A.
      100 N. Tryon St., NC1-007-13-01
      Charlotte, North Carolina  28255
      Attention: Global Markets Trading Agreements
      Facsimile No.: 704-386-4113

      (For all purposes).

      Address for notices or communications to Party B:

         c/o Wells Fargo Bank, N.A.
         9062 Old Annapolis Road
         Columbia, MD 21045
         Attention: Client Manager - BOAMS-2007-1
         Telephone No.: 410.884.2000
         Facsimile No.: 410.715.2380

      (For all purposes).

(b)   Process Agent. For the purpose of Section 13(c):

      Party A appoints as its Process Agent:    Not Applicable.

      Party B appoints as its Process Agent:    Not Applicable.

(c)   Offices. The provisions of Section 10(a) will apply to this Agreement.

(d)   Multibranch Party. For the purpose of Section 10(c) of this Agreement:

      Party A is a Multibranch Party and may act through its Charlotte, North
      Carolina, Chicago, Illinois, San Francisco, California, New York, New
      York, Boston, Massachusetts or London, England Office, or such other
      Office as may be agreed to by the parties in connection with a
      Transaction.

      Party B is not a Multibranch Party.

(e)   Calculation Agent. The Calculation Agent is Party A.

(f)   Credit Support Document. Details of any Credit Support Document:

      Each of the following, as amended, extended, supplemented or otherwise
      modified in writing from time to time, is a "Credit Support Document":

      Party A: the 1994 ISDA Credit Support Annex and paragraph 13 thereto dated
      as of the date hereof and attached hereto.

      Party B: the Pooling and Servicing Agreement.

      Party B agrees that any security interests in collateral granted to Party
      A under the foregoing Credit Support Documents shall secure the
      obligations of Party B to Party A under this Agreement.

(g)   Credit Support Provider.

      Credit Support Provider means in relation to Party A, Not Applicable

      Credit Support Provider means in relation to Party B, Not Applicable.

(h)   Governing Law. This Agreement will be governed by and construed in
      accordance with the laws of the State of New York (without reference to
      its conflict of laws provisions, except for Sections 5-1401 and 5-1402 of
      the New York General Obligations Law).

(i)   Netting of Payments. Subparagraph (ii) of Section 2(c) shall apply to all
      Transactions; provided, however, if the parties otherwise so agree, then
      subparagraph (ii) of Section 2(c) shall not apply.

(j)   "Affiliate" will have the meaning specified in Section 14 of this
      Agreement.

                                     Part 5
                                Other Provisions

(a)   Representations. Section 3(a)(iii) is hereby amended by inserting the
      words "or investment policies, or guidelines, procedures, or
      restrictions," immediately following the word "documents."

(b)   Financial Statements. Section 3(d) is hereby amended by adding in the
      third line thereof after the word "respect" and before the period:

      "or, in the case of financial statements, a fair presentation of the
      financial condition of the relevant party."

(c)   Additional Representations. For purposes of Section 3, the following shall
      be added, immediately following paragraph (f) thereto:

      (g)   It (in the case of Party B, the Issuing Entity) is an "eligible
            contract participant" within the meaning of Section 1(a)(12) of the
            Commodity Exchange Act, as amended.

      (h)   It (in the case of Party B, the Issuing Entity) has entered into
            this Agreement (including each Transaction evidenced hereby) in
            conjunction with its line of business (including financial
            intermediation services) or the financing of its business.

      (i)   It (in the case of Party B, the Issuing Entity) is entering into
            this Agreement, any Credit Support Document to which it is a party,
            each Transaction and any other documentation relating to this
            Agreement or any Transaction as principal (and not as agent or in
            any other capacity, fiduciary or otherwise).

      In addition, the parties each represent that:

            Non-Reliance. Each party (in the case of Party B, the Issuing
            Entity) represents to the other party (which representation will be
            deemed to be repeated by each party on each date on which a
            Transaction is entered into or amended, extended or otherwise
            modified) that: (1) it is acting for its own account and has made
            its own independent decisions to enter into this Agreement and any
            Transaction hereunder and as to whether this Agreement and any
            Transaction hereunder is appropriate or proper for it based on its
            own judgment and upon advice from such advisors as it has deemed
            necessary; (2) it is not relying on any communication (written or
            oral) of the other party as investment advice or as a recommendation
            to enter into this Agreement or any Transaction hereunder, it being
            understood that information and explanations related to the terms
            and conditions of this Agreement and any Transaction hereunder shall
            not be considered investment advice or a recommendation to enter
            into this Agreement or any Transaction hereunder; (3) no
            communication (written or oral) received from the other party shall
            be deemed to be an assurance or guarantee as to the expected results
            of any Transaction hereunder; and (4) it is capable of evaluation
            and understanding (on its own behalf or through independent
            professional advice), and understand and accepts, the terms,
            conditions and risks of that Transaction; and (5) it is capable of
            assuming, and assumes, the financial and other risks of that
            Transaction.

      In addition, Party B makes the following representations to Party A
            (which representations will be deemed to be repeated by Party B at
            all times until the termination of this Agreement):

            (A) ERISA Prohibited Transactions.

            this Agreement and the Transactions contemplated under this
            Agreement do not and will not constitute a prohibited transaction
            under the Employee Retirement Income Security Act of 1974, as
            amended ("ERISA") or the Internal Revenue Code of 1986, as amended
            (the "Code"), by reason that all of the conditions of the
            Underwriter Exemption, Prohibited Transaction Exemption 93-31, have
            been satisfied;

      In addition, Party A represents that:

            Pari Passu: Its obligations under this Agreement rank pari passu
            with all of its other unsecured, unsubordinated obligations except
            those obligations preferred by operation of law.

(d)   Method of Notice. Section 12(a)(ii) of this Agreement is deleted in its
      entirety.

(e)   Set-off. Without affecting the provisions of this Agreement requiring the
      calculation of certain net payment amounts, as a result of an Event of
      Default or Additional Termination Event or otherwise, all payments under
      this Agreement will be made without setoff or counterclaim. Section 6(f)
      of this Agreement is deleted in its entirety

(f)   Escrow. If by reason of the time difference between the cities in which
      payments are to be made, it is not possible for simultaneous payments to
      be made on any date on which both parties are required to make payments
      hereunder, either party may, at its option and in its sole discretion,
      notify the other party that payments on that date are to be made in
      escrow. In this case, deposit of the payment due earlier on that date
      shall be made by 2:00 p.m. (local time at the place for the earlier
      payment) on that date with an escrow agent selected by the notifying party
      (and reasonably acceptable to the notified party), accompanied by
      irrevocable payment instructions (i) to release the deposited payment to
      the intended recipient upon receipt by the escrow agent of the required
      deposit of the corresponding payment from the other party on the same date
      accompanied by irrevocable payment instructions to the same effect or (ii)
      if the required deposit of the corresponding payment is not made on that
      same date, to return the payment deposited to the party that paid it in
      escrow. The party that elects to have payments made in escrow shall pay
      the costs of the escrow arrangements and shall cause those arrangements to
      provide that the intended recipient of the payment due to be deposited
      first shall be entitled to interest on that deposited payment for each day
      in the period of its deposit at the rate offered by the escrow agent for
      that day for overnight deposits in the relevant currency in the office
      where it holds that deposited payment (at 11:00 a.m. local time on that
      day) if that payment is not released by 5:00 p.m. local time on the date
      it is deposited for any reason, other than the intended recipient's
      failure to make the escrow deposit it is required to make hereunder in a
      timely fashion.

(g)   Consent to Recording. The parties agree that each may electronically
      record all telephonic conversations between marketing and trading
      personnel in connection with this Agreement and that any such recordings
      may be submitted in evidence in any Proceedings relating to the Agreement.

(h)   Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL
      RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF
      OR RELATING TO THIS AGREEMENT, ANY CREDIT SUPPORT DOCUMENT OR ANY
      TRANSACTION CONTEMPLATED HEREUNDER.

(i)   Definitions. Capitalized terms used within this Agreement or in the
      Confirmations to the Transaction but not defined herein or therein shall
      have the meanings assigned to such terms in the Pooling and Servicing
      Agreement.

(j)   Additional Acknowledgments and Agreements of the Parties.

      (i)   No Amendment without Prior Confirmation by Rating Agencies. Section
            9(b) of this Agreement is hereby amended by adding the following at
            the end of such Section: ", and unless the Rating Agencies confirm
            that such amendment will not cause the reduction, suspension or
            withdrawal of the then current rating on any of the Certificates,
            unless such amendment clarifies any term or provision, corrects any
            inconsistency, cures any ambiguity, or corrects any typographical
            error in the Agreement (in which case copies of such proposed
            amendment will be provided to the Rating Agencies prior to the
            effectiveness of such amendment)."

      (ii)  Consent by Party A to Amendments to Certain Documents. Before any
            amendment or supplement is made to the Pooling and Servicing
            Agreement and/or any other Transaction Document which would
            adversely affect any of Party A's rights or obligations under this
            Agreement, or modify the obligations of or impair the ability of
            Party B to fully perform any of Party B's obligations under this
            Agreement, Party B shall provide Party A with a copy of the proposed
            amendment or supplement and shall obtain the written consent of
            Party A (which consent shall not be unreasonably withheld) to such
            amendment or supplement prior to its adoption, as well as
            satisfaction of the Rating Agency Condition. For the avoidance of
            doubt, any Transaction Document may be amended, supplemented or
            otherwise modified in accordance with the terms thereof without the
            consent of Party A to cure any typographical error or ambiguity,
            provided that such actions shall not adversely affect in any
            respects the interests of Party A.

(k) Transfers.

      (i)   Section 7 of this Agreement shall not apply to Party A and, subject
            to Section 6(b)(ii) and Part 5(m)(ii) below, Party A may not
            transfer (whether by way of security or otherwise) any interest or
            obligation in or under this Agreement without the prior written
            consent of Party B and satisfaction of Rating Agency Condition.

      (ii)  Party A may (at its own cost) transfer all or substantially all of
            its rights and obligations with respect to this Agreement to any
            other entity (a "Transferee") that is an Eligible Replacement,
            provided that Party B shall determine in its sole discretion, acting
            in a commercially reasonable manner, whether or not a transfer
            relates to all or substantially all of Party A's rights and
            obligations under this Agreement. Following such transfer, all
            references to Party A shall be deemed to be references to the
            Transferee and satisfaction of Rating Agency Condition.

      (iii) If an entity has made a Firm Offer (which remains capable of
            becoming legally binding upon acceptance) to be the transferee of a
            transfer to be made in accordance with (ii) above, Party B shall (at
            Party A's cost) at Party A's written request, take any reasonable
            steps required to be taken by it to effect such transfer and
            satisfaction of Rating Agency Condition.

(l)   Non-Petition. Party A hereby agrees that it will not, prior to the date
      which is one year and one day after all Certificates (as such term is
      defined in the Pooling and Servicing Agreement) issued by the Issuing
      Entity pursuant to the Pooling and Servicing Agreement have been paid in
      full, acquiesce, petition or otherwise invoke or cause Party B, or Banc of
      America Mortgage 2007-1 Trust (the "Issuing Entity") to invoke the process
      of any court or governmental authority for the purpose of commencing or
      sustaining a case against Party B or the Issuing Entity under any federal
      or state bankruptcy, insolvency or similar law or for the purpose of
      appointing a receiver, liquidator, assignee, trustee, custodian,
      sequestrator or other similar official for Party B or the Issuing Entity
      or any substantial part of the property of Party B or the Issuing Entity,
      or for the purpose of ordering the winding up or liquidation of the
      affairs of Party B or the Issuing Entity. Nothing herein shall prevent
      Party A from participating in any such proceeding once commenced.

(m)   USA PATRIOT Act Notice. Party A hereby notifies Party B that pursuant to
      the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
      (signed into law October 26, 2001)) (the "Act"), it is required to obtain,
      verify and record information that identifies Party B, which information
      includes the name and address of Party B and other information that will
      allow Party A to identify Party B in accordance with the Act.

(n)   Limited Recourse. The obligations of Party B under this Agreement
      are limited recourse obligations of the Issuing Entity, payable
      solely from the amounts provided under the Pooling and Servicing
      Agreement, subject to and in accordance with the terms of the
      Pooling and Servicing Agreement, and, following payment of such
      amounts, any claims of Party A against Party B shall be
      extinguished. It is understood that the foregoing provisions
      shall not (i) prevent recourse to the assets of the Issuing
      Entity for the sums due or to become due under any security,
      instrument or agreement which is secured by such assets (subject
      to the priority of payments set forth in the Pooling and
      Servicing Agreement) or (ii) constitute a waiver, release or
      discharge of any obligation of Party B arising under this
      Agreement until such assets have been realized and the proceeds
      applied in accordance with the Pooling and Servicing Agreement,
      whereupon any outstanding obligation of Party B under this
      Agreement shall be extinguished. Notwithstanding the foregoing
      (or anything to the contrary in this Agreement), Party B shall be
      liable for its own fraud, negligence, willful misconduct and/or
      bad faith.

(o)   Jurisdiction. Section 13(b) of this Agreement is hereby amended by: (i)
      deleting the word "non-" in the second line of subparagraph (i) thereof;
      and (ii) adding the words "except as necessary to pursue enforcement of
      the judgment of any such court in other jurisdictions" to the last line of
      subparagraph (i) thereof.

(p)   Delivery of Confirmations. For each Transaction entered into hereunder,
      Party A shall promptly send to Party B a Confirmation (which may be via
      facsimile transmission). Party B agrees to respond to such Confirmation
      promptly, either confirming agreement thereto or requesting a correction
      of any error(s) contained therein. Failure by Party A to send a
      Confirmation or of Party B to respond within such period shall not affect
      the validity or enforceability of such Transaction. Absent manifest error,
      there shall be a presumption that the terms contained in such Confirmation
      are the terms of the Transaction.

(q)   Additional Events of Default with respect to Party B. The occurrence of
      any of the following events shall constitute an Event of Default with
      respect to Party B as though specified as such in Section 5(a) of this
      Agreement:

      (i) Loss of Exemption and Prohibited Transaction. If Party A determines
      that the Underwriter Exemption (as defined above) does not apply to this
      Agreement or any Transaction hereunder and that the execution, delivery or
      performance of the Agreement or any Transaction hereunder constitutes a
      prohibited transaction under the Employee Retirement Income Security Act
      of 1974, as amended ("ERISA") or Section 4975 of the Internal Revenue Code
      of 1986 (the "Code") for which no exemption is available, or a violation
      of similar effect of any pension investment law applicable to one or more
      "governmental plans" as defined in ERISA and the Code.

(r)   Safe Harbors. Each party to this Agreement acknowledges that:

      (i)   This Agreement, including any Credit Support Document, is a "master
            netting agreement" as defined in the U.S. Bankruptcy Code (the
            "Code"), and a "netting contract" as defined in the netting
            provisions of the Federal Deposit Insurance Corporation Improvement
            Act of 1991 ("FDICIA"), and this Agreement, including any Credit
            Support Document, and each Transaction hereunder is of a type set
            forth in Section 561(a)(1)-(5) of the Code;

      (ii)  Party A is a "master netting agreement participant," a "financial
            institution," a "financial participant," a "forward contract
            merchant" and a "swap participant" as defined in the Code, and a
            "financial institution" as defined in the netting provisions of
            FDICIA;

      (iii) The remedies provided herein, and in any Credit Support Document,
            are the remedies referred to in Section 561(a), Sections 362(b)(6),
            (7), (17) and (27), and Section 362(o) of the Code, and in Section
            11(e)(8)(A) and (C) of the Federal Deposit Insurance Act;

      (iv)  All transfers of cash, securities or other property under or in
            connection with this Agreement, any Credit Support Document or any
            Transaction hereunder are "margin payments," "settlement payments"
            and "transfers" under Sections 546(e), (f), (g) or (j), and under
            Section 548(d)(2) of the Code; and

      (v)   Each obligation under this Agreement, any Credit Support Document or
            any Transaction hereunder is an obligation to make a "margin
            payment," "settlement payment" and "payment" within the meaning of
            Sections 362, 560 and 561 of the Code.

(s)   Tax.

      (i)   Notwithstanding the definition of "Indemnifiable Tax" in Section 14
            of this Agreement, in relation to payments by Party A, any Tax shall
            be an Indemnifiable Tax and, in relation to payments by Party B, no
            Tax shall be an Indemnifiable Tax.

      (ii)  Section 2(d)(i)(4) of this Agreement shall be deleted in its
            entirety and replaced with the words "if such Tax is an
            Indemnifiable Tax, pay to Y, in addition to the payment to which Y
            is otherwise entitled under this Agreement, such additional amount
            as is necessary to ensure that the net amount actually received by Y
            (free and clear of Indemnifiable Taxes, whether assessed against X
            or Y) will equal the full amount Y would have received had no such
            deduction or withholding been required".

(t)   Limitation of Trustee's Liability. It is expressly understood and agreed
      by the parties hereto that insofar as this Agreement or the Confirmation
      is executed by Wells Fargo Bank, N.A., (i) the same is executed and
      delivered by it not in its individual capacity but solely as Trustee under
      (and as defined in) the Pooling and Servicing Agreement, in the exercise
      of the powers and authority conferred upon and vested in it thereunder and
      pursuant to instructions set forth herein, (ii) each of the
      representations, undertakings and other agreements herein made on behalf
      of Party B is made and intended not as a personal representation,
      undertaking or agreement of Wells Fargo Bank, N.A. in its individual
      capacity, but is made and intended solely for the purpose of binding only
      Party B, and (iii) under no circumstances shall Wells Fargo Bank, N.A., in
      its individual capacity, be personally liable for the payment of any
      indebtedness or expenses or be personally liable for the breach or failure
      of any obligation, representation, warranty, covenant or other agreement
      made or undertaken by it on behalf of Party B under this Agreement or any
      Confirmation hereunder. Notwithstanding the foregoing (or anything to the
      contrary herein), the Trustee shall be liable for its own fraud,
      negligence, willful misconduct and/or bad faith

(u)   Compliance with Regulation AB. In connection with the Pooling and
      Servicing Agreement, Party B represents that this Agreement is a
      derivative instrument as described in Item 1115 of Regulation AB under the
      Securities Act of 1933 and the Securities Exchange Act of 1934, as amended
      ("Regulation AB"), and not a credit support contract described in Item
      1114 of Regulation AB.

      (a) In accordance with Regulation AB, Party A represents that: (i) the
      name of the derivative counterparty is Bank of America, N.A.; (ii) the
      organizational form of the derivative counterparty is a national banking
      association organized under the laws of the United States; and (iii) the
      general character of the business of the derivative counterparty is to be
      engaged in a general consumer banking, commercial banking and trust
      business, offering a wide range of commercial, corporate, international,
      financial market, retail and fiduciary banking services.

      (b) Party A has been advised that the Depositor and the Issuing Entity are
      required under Regulation AB to disclose certain financial information
      regarding Party A depending on the applicable "significance percentage" of
      this Agreement, as calculated from time to time in accordance with Item
      1115 of Regulation AB (as discussed in the Pooling and Servicing
      Agreement). Party A has been advised by the Sponsor that the applicable
      "significance percentage" of this Agreement is less than 10% as of the
      date of initial issuance of the Certificates, and accordingly, no
      financial information regarding Party A need be disclosed as of such date
      in accordance with Item 1115 of Regulation AB.

      (c) If required, Party A shall provide to the Trustee the applicable
      financial information described under Item 1115(b)(1) or (b)(2), as
      applicable, of Regulation AB, including agreed upon procedures letters and
      related consents of certified public accountants with respect thereto (the
      "Reg AB Information") within five (5) Local Business Days of receipt of a
      written request for such Reg AB Information by Party B (the "Response
      Period"), so long as the Sponsor has reasonably determined, in good faith,
      that such information is required under Regulation AB; provided, however,
      that if Party A, in good faith, determines that it is unable to provide
      the Reg AB Information within the Response Period, then, subject to the
      Rating Agency Condition, Party A shall use reasonable efforts to cause a
      Reg AB Approved Entity (as defined below) to replace Party A as party to
      this Agreement on terms substantially similar to this Agreement and
      provide the required Reg AB Information prior to the expiration of the
      Response Period; and provided, further, that if Party A makes such
      determination and is not able to cause such a replacement, an Additional
      Termination Event shall occur, as to which Party A shall be the sole
      Affected Party.

      (d) "Reg AB Approved Entity" means any entity that (i) has the ability to
      provide the Reg AB Information and (ii) meets or exceeds the Approved
      Rating Thresholds (as defined below). If Party B requests (in writing) the
      Reg AB Information from Party A, then Party B shall promptly (and in any
      event within two (2) Local Business Days of the date of the request for
      the Reg AB Information) provide Party A with a written explanation of how
      the significance percentage was calculated.

      (e) "Approved Rating Thresholds" means an entity that has a long-term and
      short-term senior unsecured deposit rating of at least A and A-1 by S&P
      and A1 and P-1 by Moody's, to the extent such obligations are rated by S&P
      and Moody's.

                  [remainder of page intentionally left blank]

<PAGE>

IN WITNESS WHEREOF, the parties have executed this Schedule by their duly
authorized officers as of the date hereof.

BANK OF AMERICA, N.A.                       WELLS FARGO BANK, N.A., AS TRUSTEE,
                                            ON BEHALF OF BANC OF AMERICA
                                            MORTGAGE 2007-1 TRUST

   /s/ Roger Heintzelman                      /s/ Darron C. Woodus
--------------------------------            ------------------------------------
Name:  Roger Heintzelman                    Name:  Darron C. Woodus
Title: Senior Vice President                Title: Assistant Vice President

<PAGE>

                                      ISDA

              International Swaps and Derivatives Association, Inc.

                              2002 MASTER AGREEMENT

                          dated as of February 2, 2007

                                         WELLS FARGO BANK,  N.A., AS TRUSTEE,
                                         ON  BEHALF OF BANC OF AMERICA MORTGAGE
BANK OF AMERICA, N.A.        and         2007-1 TRUST

have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this 2002 Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties or otherwise
effective for the purpose of confirming or evidencing those Transactions. This
2002 Master Agreement and the Schedule are together referred to as this "Master
Agreement".

Accordingly, the parties agree as follows:-

1. Interpretation

(a) Definitions. The terms defined in Section 14 and elsewhere in this Master
Agreement will have the meanings therein specified for the purpose of this
Master Agreement.

(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement, such Confirmation will prevail for the
purpose of the relevant Transaction.

(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.

2. Obligations

(a) General Conditions.

      (i) Each party will make each payment or delivery specified in each
      Confirmation to be made by it, subject to the other provisions of this
      Agreement.

      (ii) Payments under this Agreement will be made on the due date for value
      on that date in the place of the account specified in the relevant
      Confirmation or otherwise pursuant to this Agreement, in freely
      transferable funds and in the manner customary for payments in the
      required currency. Where settlement is by delivery (that is, other than by
      payment), such delivery will be made for receipt on the due date in the
      manner customary for the relevant obligation unless otherwise specified in
      the relevant Confirmation or elsewhere in this Agreement.

      (iii) Each obligation of each party under Section 2(a)(i) is subject to
      (1) the condition precedent that no Event of Default or Potential Event of
      Default with respect to the other party has occurred and is continuing,
      (2) the condition precedent that no Early Termination Date in respect of
      the relevant Transaction has occurred or been effectively designated and
      (3) each other condition specified in this Agreement to be a condition
      precedent for the purpose of this Section 2(a)(iii).

(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the Scheduled Settlement Date for the payment or delivery
to which such change applies unless such other party gives timely notice of a
reasonable objection to such change.

(c) Netting of Payments. If on any date amounts would otherwise be payable:-

      (i) in the same currency; and

      (ii) in respect of the same Transaction,

by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by which the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount
and payment obligation will be determined in respect of all amounts payable on
the same date in the same currency in respect of those Transactions, regardless
of whether such amounts are payable in respect of the same Transaction. The
election may be made in the Schedule or any Confirmation by specifying that
"Multiple Transaction Payment Netting" applies to the Transactions identified as
being subject to the election (in which case clause (ii) above will not apply to
such Transactions). If Multiple Transaction Payment Netting is applicable to
Transactions, it will apply to those Transactions with effect from the starting
date specified in the Schedule or such Confirmation, or, if a starting date is
not specified in the Schedule or such Confirmation, the starting date otherwise
agreed by the parties in writing. This election may be made separately for
different groups of Transactions and will apply separately to each pairing of
Offices through which the parties make and receive payments or deliveries.

(d) Deduction or Withholding for Tax.

      (i) Gross-Up. All payments under this Agreement will be made without any
      deduction or withholding for or on account of any Tax unless such
      deduction or withholding is required by any applicable law, as modified by
      the practice of any relevant governmental revenue authority, then in
      effect. If a party is so required to deduct or withhold, then that party
      ("X") will:-

            (1) promptly notify the other party ("Y") of such requirement;

            (2) pay to the relevant authorities the full amount required to be
            deducted or withheld (including the full amount required to be
            deducted or withheld from any additional amount paid by X to Y under
            this Section 2(d)) promptly upon the earlier of determining that
            such deduction or withholding is required or receiving notice that
            such amount has been assessed against Y;

            (3) promptly forward to Y an official receipt (or a certified copy),
            or other documentation reasonably acceptable to Y, evidencing such
            payment to such authorities; and

            (4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
            the payment to which Y is otherwise entitled under this Agreement,
            such additional amount as is necessary to ensure that the net amount
            actually received by Y (free and clear of Indemnifiable Taxes,
            whether assessed against X or Y) will equal the full amount Y would
            have received had no such deduction or withholding been required.
            However, X will not be required to pay any additional amount to Y to
            the extent that it would not be required to be paid but for:-

                  (A) the failure by Y to comply with or perform any agreement
                  contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

                  (B) the failure of a representation made by Y pursuant to
                  Section 3(f) to be accurate and true unless such failure would
                  not have occurred but for (I) any action taken by a taxing
                  authority, or brought in a court of competent jurisdiction,
                  after a Transaction is entered into (regardless of whether
                  such action is taken or brought with respect to a party to
                  this Agreement) or (II) a Change in Tax Law.

      (ii) Liability. If:-

            (1) X is required by any applicable law, as modified by the practice
            of any relevant governmental revenue authority, to make any
            deduction or withholding in respect of which X would not be required
            to pay an additional amount to Y under Section 2(d)(i)(4);

            (2) X does not so deduct or withhold; and

            (3) a liability resulting from such Tax is assessed directly against
            X,

      then, except to the extent Y has satisfied or then satisfies the liability
      resulting from such Tax, Y will promptly pay to X the amount of such
      liability (including any related liability for interest, but including any
      related liability for penalties only if Y has failed to comply with or
      perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

3. Representations

Each party makes the representations contained in Sections 3(a), 3(b), 3(c),
3(d), 3(e) and 3(f) and, if specified in the Schedule as applying, 3(g) to the
other party (which representations will be deemed to be repeated by each party
on each date on which a Transaction is entered into and, in the case of the
representations in Section 3(f), at all times until the termination of this
Agreement). If any "Additional Representation" is specified in the Schedule or
any Confirmation as applying, the party or parties specified for such Additional
Representation will make and, if applicable, be deemed to repeat such Additional
Representation at the time or times specified for such Additional
Representation.

(a) Basic Representations.

      (i) Status. It is duly organised and validly existing under the laws of
      the jurisdiction of its organisation or incorporation and, if relevant
      under such laws, in good standing;

      (ii) Powers. It has the power to execute this Agreement and any other
      documentation relating to this Agreement to which it is a party, to
      deliver this Agreement and any other documentation relating to this
      Agreement that it is required by this Agreement to deliver and to perform
      its obligations under this Agreement and any obligations it has under any
      Credit Support Document to which it is a party and has taken all necessary
      action to authorise such execution, delivery and performance;

      (iii) No Violation or Conflict. Such execution, delivery and performance
      do not violate or conflict with any law applicable to it, any provision of
      its constitutional documents, any order or judgment of any court or other
      agency of government applicable to it or any of its assets or any
      contractual restriction binding on or affecting it or any of its assets;

      (iv) Consents. All governmental and other consents that are required to
      have been obtained by it with respect to this Agreement or any Credit
      Support Document to which it is a party have been obtained and are in full
      force and effect and all conditions of any such consents have been
      complied with; and

      (v) Obligations Binding. Its obligations under this Agreement and any
      Credit Support Document to which it is a party constitute its legal, valid
      and binding obligations, enforceable in accordance with their respective
      terms (subject to applicable bankruptcy, reorganisation, insolvency,
      moratorium or similar laws affecting creditors' rights generally and
      subject, as to enforceability, to equitable principles of general
      application (regardless of whether enforcement is sought in a proceeding
      in equity or at law)).

(b) Absence of Certain Events. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.

(c) Absence of Litigation. There is not pending or, to its knowledge, threatened
against it, any of its Credit Support Providers or any of its applicable
Specified Entities any action, suit or proceeding at law or in equity or before
any court, tribunal, governmental body, agency or official or any arbitrator
that is likely to affect the legality, validity or enforceability against it of
this Agreement or any Credit Support Document to which it is a party or its
ability to perform its obligations under this Agreement or such Credit Support
Document.

(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.

(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.

(f) Payee Tax Representations. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.

(g) No Agency. It is entering into this Agreement, including each Transaction,
as principal and not as agent of any person or entity.

4. Agreements

Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:-

(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under clause (iii) below, to such government or taxing authority
as the other party reasonably directs:-

      (i) any forms, documents or certificates relating to taxation specified in
      the Schedule or any Confirmation;

      (ii) any other documents specified in the Schedule or any Confirmation;
      and

      (iii) upon reasonable demand by such other party, any form or document
      that may be required or reasonably requested in writing in order to allow
      such other party or its Credit Support Provider to make a payment under
      this Agreement or any applicable Credit Support Document without any
      deduction or withholding for or on account of any Tax or with such
      deduction or withholding at a reduced rate (so long as the completion,
      execution or submission of such form or document would not materially
      prejudice the legal or commercial position of the party in receipt of such
      demand), with any such form or document to be accurate and completed in a
      manner reasonably satisfactory to such other party and to be executed and
      to be delivered with any reasonably required certification,

in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.

(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.

(c) Comply With Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.

(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.

(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled or considered to have its seat, or where an Office through which it
is acting for the purpose of this Agreement is located ("Stamp Tax
Jurisdiction"), and will indemnify the other party against any Stamp Tax levied
or imposed upon the other party or in respect of the other party's execution or
performance of this Agreement by any such Stamp Tax Jurisdiction which is not
also a Stamp Tax Jurisdiction with respect to the other party.

5. Events of Default and Termination Events

(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes (subject to Sections 5(c)
and 6(e)(iv)) an event of default (an "Event of Default") with respect to such
party:-

      (i) Failure to Pay or Deliver. Failure by the party to make, when due, any
      payment under this Agreement or delivery under Section 2(a)(i) or
      9(h)(i)(2) or (4) required to be made by it if such failure is not
      remedied on or before the first Local Business Day in the case of any such
      payment or the first Local Delivery Day in the case of any such delivery
      after, in each case, notice of such failure is given to the party;

      (ii) Breach of Agreement; Repudiation of Agreement.

            (1) Failure by the party to comply with or perform any agreement or
            obligation (other than an obligation to make any payment under this
            Agreement or delivery under Section 2(a)(i) or 9(h)(i)(2) or (4) or
            to give notice of a Termination Event or any agreement or obligation
            under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or
            performed by the party in accordance with this Agreement if such
            failure is not remedied within 30 days after notice of such failure
            is given to the party; or

            (2) the party disaffirms, disclaims, repudiates or rejects, in whole
            or in part, or challenges the validity of, this Master Agreement,
            any Confirmation executed and delivered by that party or any
            Transaction evidenced by such a Confirmation (or such action is
            taken by any person or entity appointed or empowered to operate it
            or act on its behalf);

      (iii) Credit Support Default.

            (1) Failure by the party or any Credit Support Provider of such
            party to comply with or perform any agreement or obligation to be
            complied with or performed by it in accordance with any Credit
            Support Document if such failure is continuing after any applicable
            grace period has elapsed;

            (2) the expiration or termination of such Credit Support Document or
            the failing or ceasing of such Credit Support Document, or any
            security interest granted by such party or such Credit Support
            Provider to the other party pursuant to any such Credit Support
            Document, to be in full force and effect for the purpose of this
            Agreement (in each case other than in accordance with its terms)
            prior to the satisfaction of all obligations of such party under
            each Transaction to which such Credit Support Document relates
            without the written consent of the other party; or

            (3) the party or such Credit Support Provider disaffirms, disclaims,
            repudiates or rejects, in whole or in part, or challenges the
            validity of, such Credit Support Document (or such action is taken
            by any person or entity appointed or empowered to operate it or act
            on its behalf);

      (iv) Misrepresentation. A representation (other than a representation
      under Section 3(e) or 3(f)) made or repeated or deemed to have been made
      or repeated by the party or any Credit Support Provider of such party in
      this Agreement or any Credit Support Document proves to have been
      incorrect or misleading in any material respect when made or repeated or
      deemed to have been made or repeated;

      (v) Default Under Specified Transaction. The party, any Credit Support
      Provider of such party or any applicable Specified Entity of such party:-

            (1) defaults (other than by failing to make a delivery) under a
            Specified Transaction or any credit support arrangement relating to
            a Specified Transaction and, after giving effect to any applicable
            notice requirement or grace period, such default results in a
            liquidation of, an acceleration of obligations under, or an early
            termination of, that Specified Transaction;

            (2) defaults, after giving effect to any applicable notice
            requirement or grace period, in making any payment due on the last
            payment or exchange date of, or any payment on early termination of,
            a Specified Transaction (or, if there is no applicable notice
            requirement or grace period, such default continues for at least one
            Local Business Day);

            (3) defaults in making any delivery due under (including any
            delivery due on the last delivery or exchange date of) a Specified
            Transaction or any credit support arrangement relating to a
            Specified Transaction and, after giving effect to any applicable
            notice requirement or grace period, such default results in a
            liquidation of, an acceleration of obligations under, or an early
            termination of, all transactions outstanding under the documentation
            applicable to that Specified Transaction; or

            (4) disaffirms, disclaims, repudiates or rejects, in whole or in
            part, or challenges the validity of, a Specified Transaction or any
            credit support arrangement relating to a Specified Transaction that
            is, in either case, confirmed or evidenced by a document or other
            confirming evidence executed and delivered by that party, Credit
            Support Provider or Specified Entity (or such action is taken by any
            person or entity appointed or empowered to operate it or act on its
            behalf);

      (vi) Cross-Default. If "Cross-Default" is specified in the Schedule as
      applying to the party, the occurrence or existence of:-

            (1) a default, event of default or other similar condition or event
            (however described) in respect of such party, any Credit Support
            Provider of such party or any applicable Specified Entity of such
            party under one or more agreements or instruments relating to
            Specified Indebtedness of any of them (individually or collectively)
            where the aggregate principal amount of such agreements or
            instruments, either alone or together with the amount, if any,
            referred to in clause (2) below, is not less than the applicable
            Threshold Amount (as specified in the Schedule) which has resulted
            in such Specified Indebtedness becoming, or becoming capable at such
            time of being declared, due and payable under such agreements or
            instruments before it would otherwise have been due and payable; or

            (2) a default by such party, such Credit Support Provider or such
            Specified Entity (individually or collectively) in making one or
            more payments under such agreements or instruments on the due date
            for payment (after giving effect to any applicable notice
            requirement or grace period) in an aggregate amount, either alone or
            together with the amount, if any, referred to in clause (1) above,
            of not less than the applicable Threshold Amount;

      (vii) Bankruptcy. The party, any Credit Support Provider of such party or
      any applicable Specified Entity of such party:-

            (1) is dissolved (other than pursuant to a consolidation,
            amalgamation or merger); (2) becomes insolvent or is unable to pay
            its debts or fails or admits in writing its inability generally to
            pay its debts as they become due; (3) makes a general assignment,
            arrangement or composition with or for the benefit of its creditors;
            (4)(A) institutes or has instituted against it, by a regulator,
            supervisor or any similar official with primary insolvency,
            rehabilitative or regulatory jurisdiction over it in the
            jurisdiction of its incorporation or organisation or the
            jurisdiction of its head or home office, a proceeding seeking a
            judgment of insolvency or bankruptcy or any other relief under any
            bankruptcy or insolvency law or other similar law affecting
            creditors' rights, or a petition is presented for its winding-up or
            liquidation by it or such regulator, supervisor or similar official,
            or (B) has instituted against it a proceeding seeking a judgment of
            insolvency or bankruptcy or any other relief under any bankruptcy or
            insolvency law or other similar law affecting creditors' rights, or
            a petition is presented for its winding-up or liquidation, and such
            proceeding or petition is instituted or presented by a person or
            entity not described in clause (A) above and either (I) results in a
            judgment of insolvency or bankruptcy or the entry of an order for
            relief or the making of an order for its winding-up or liquidation
            or (II) is not dismissed, discharged, stayed or restrained in each
            case within 15 days of the institution or presentation thereof; (5)
            has a resolution passed for its winding-up, official management or
            liquidation (other than pursuant to a consolidation, amalgamation or
            merger); (6) seeks or becomes subject to the appointment of an
            administrator, provisional liquidator, conservator, receiver,
            trustee, custodian or other similar official for it or for all or
            substantially all its assets; (7) has a secured party take
            possession of all or substantially all its assets or has a distress,
            execution, attachment, sequestration or other legal process levied,
            enforced or sued on or against all or substantially all its assets
            and such secured party maintains possession, or any such process is
            not dismissed, discharged, stayed or restrained, in each case within
            15 days thereafter; (8) causes or is subject to any event with
            respect to it which, under the applicable laws of any jurisdiction,
            has an analogous effect to any of the events specified in clauses
            (1) to (7) above (inclusive); or (9) takes any action in furtherance
            of, or indicating its consent to, approval of, or acquiescence in,
            any of the foregoing acts; or

      (viii) Merger Without Assumption. The party or any Credit Support Provider
      of such party consolidates or amalgamates with, or merges with or into, or
      transfers all or substantially all its assets to, or reorganises,
      reincorporates or reconstitutes into or as, another entity and, at the
      time of such consolidation, amalgamation, merger, transfer,
      reorganisation, reincorporation or reconstitution:-

            (1) the resulting, surviving or transferee entity fails to assume
            all the obligations of such party or such Credit Support Provider
            under this Agreement or any Credit Support Document to which it or
            its predecessor was a party; or

            (2) the benefits of any Credit Support Document fail to extend
            (without the consent of the other party) to the performance by such
            resulting, surviving or transferee entity of its obligations under
            this Agreement.

(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes (subject to Section 5(c))
an Illegality if the event is specified in clause (i) below, a Force Majeure
Event if the event is specified in clause (ii) below, a Tax Event if the event
is specified in clause (iii) below, a Tax Event Upon Merger if the event is
specified in clause (iv) below, and, if specified to be applicable, a Credit
Event Upon Merger if the event is specified pursuant to clause (v) below or an
Additional Termination Event if the event is specified pursuant to clause (vi)
below:-

      (i) Illegality. After giving effect to any applicable provision,
      disruption fallback or remedy specified in, or pursuant to, the relevant
      Confirmation or elsewhere in this Agreement, due to an event or
      circumstance (other than any action taken by a party or, if applicable,
      any Credit Support Provider of such party) occurring after a Transaction
      is entered into, it becomes unlawful under any applicable law (including
      without limitation the laws of any country in which payment, delivery or
      compliance is required by either party or any Credit Support Provider, as
      the case may be), on any day, or it would be unlawful if the relevant
      payment, delivery or compliance were required on that day (in each case,
      other than as a result of a breach by the party of Section 4(b)):-

            (1) for the Office through which such party (which will be the
            Affected Party) makes and receives payments or deliveries with
            respect to such Transaction to perform any absolute or contingent
            obligation to make a payment or delivery in respect of such
            Transaction, to receive a payment or delivery in respect of such
            Transaction or to comply with any other material provision of this
            Agreement relating to such Transaction; or

            (2) for such party or any Credit Support Provider of such party
            (which will be the Affected Party) to perform any absolute or
            contingent obligation to make a payment or delivery which such party
            or Credit Support Provider has under any Credit Support Document
            relating to such Transaction, to receive a payment or delivery under
            such Credit Support Document or to comply with any other material
            provision of such Credit Support Document;

      (ii) Force Majeure Event. After giving effect to any applicable provision,
      disruption fallback or remedy specified in, or pursuant to, the relevant
      Confirmation or elsewhere in this Agreement, by reason of force majeure or
      act of state occurring after a Transaction is entered into, on any day:-

            (1) the Office through which such party (which will be the Affected
            Party) makes and receives payments or deliveries with respect to
            such Transaction is prevented from performing any absolute or
            contingent obligation to make a payment or delivery in respect of
            such Transaction, from receiving a payment or delivery in respect of
            such Transaction or from complying with any other material provision
            of this Agreement relating to such Transaction (or would be so
            prevented if such payment, delivery or compliance were required on
            that day), or it becomes impossible or impracticable for such Office
            so to perform, receive or comply (or it would be impossible or
            impracticable for such Office so to perform, receive or comply if
            such payment, delivery or compliance were required on that day); or

            (2) such party or any Credit Support Provider of such party (which
            will be the Affected Party) is prevented from performing any
            absolute or contingent obligation to make a payment or delivery
            which such party or Credit Support Provider has under any Credit
            Support Document relating to such Transaction, from receiving a
            payment or delivery under such Credit Support Document or from
            complying with any other material provision of such Credit Support
            Document (or would be so prevented if such payment, delivery or
            compliance were required on that day), or it becomes impossible or
            impracticable for such party or Credit Support Provider so to
            perform, receive or comply (or it would be impossible or
            impracticable for such party or Credit Support Provider so to
            perform, receive or comply if such payment, delivery or compliance
            were required on that day),

      so long as the force majeure or act of state is beyond the control of such
      Office, such party or such Credit Support Provider, as appropriate, and
      such Office, party or Credit Support Provider could not, after using all
      reasonable efforts (which will not require such party or Credit Support
      Provider to incur a loss, other than immaterial, incidental expenses),
      overcome such prevention, impossibility or impracticability;

      (iii) Tax Event. Due to (1) any action taken by a taxing authority, or
      brought in a court of competent jurisdiction, after a Transaction is
      entered into (regardless of whether such action is taken or brought with
      respect to a party to this Agreement) or (2) a Change in Tax Law, the
      party (which will be the Affected Party) will, or there is a substantial
      likelihood that it will, on the next succeeding Scheduled Settlement Date
      (A) be required to pay to the other party an additional amount in respect
      of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of
      interest under Section 9(h)) or (B) receive a payment from which an amount
      is required to be deducted or withheld for or on account of a Tax (except
      in respect of interest under Section 9(h)) and no additional amount is
      required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
      than by reason of Section 2(d)(i)(4)(A) or (B));

      (iv) Tax Event Upon Merger. The party (the "Burdened Party") on the next
      succeeding Scheduled Settlement Date will either (1) be required to pay an
      additional amount in respect of an Indemnifiable Tax under Section
      2(d)(i)(4) (except in respect of interest under Section 9(h)) or (2)
      receive a payment from which an amount has been deducted or withheld for
      or on account of any Tax in respect of which the other party is not
      required to pay an additional amount (other than by reason of Section
      2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating
      or amalgamating with, or merging with or into, or transferring all or
      substantially all its assets (or any substantial part of the assets
      comprising the business conducted by it as of the date of this Master
      Agreement) to, or reorganising, reincorporating or reconstituting into or
      as, another entity (which will be the Affected Party) where such action
      does not constitute a Merger Without Assumption;

      (v) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
      in the Schedule as applying to the party, a Designated Event (as defined
      below) occurs with respect to such party, any Credit Support Provider of
      such party or any applicable Specified Entity of such party (in each case,
      "X") and such Designated Event does not constitute a Merger Without
      Assumption, and the creditworthiness of X or, if applicable, the
      successor, surviving or transferee entity of X, after taking into account
      any applicable Credit Support Document, is materially weaker immediately
      after the occurrence of such Designated Event than that of X immediately
      prior to the occurrence of such Designated Event (and, in any such event,
      such party or its successor, surviving or transferee entity, as
      appropriate, will be the Affected Party). A "Designated Event" with
      respect to X means that:-

            (1) X consolidates or amalgamates with, or merges with or into, or
            transfers all or substantially all its assets (or any substantial
            part of the assets comprising the business conducted by X as of the
            date of this Master Agreement) to, or reorganises, reincorporates or
            reconstitutes into or as, another entity;

            (2) any person, related group of persons or entity acquires directly
            or indirectly the beneficial ownership of (A) equity securities
            having the power to elect a majority of the board of directors (or
            its equivalent) of X or (B) any other ownership interest enabling it
            to exercise control of X; or

            (3) X effects any substantial change in its capital structure by
            means of the issuance, incurrence or guarantee of debt or the
            issuance of (A) preferred stock or other securities convertible into
            or exchangeable for debt or preferred stock or (B) in the case of
            entities other than corporations, any other form of ownership
            interest; or

      (vi) Additional Termination Event. If any "Additional Termination Event"
      is specified in the Schedule or any Confirmation as applying, the
      occurrence of such event (and, in such event, the Affected Party or
      Affected Parties will be as specified for such Additional Termination
      Event in the Schedule or such Confirmation).

(c) Hierarchy of Events.

      (i) An event or circumstance that constitutes or gives rise to an
      Illegality or a Force Majeure Event will not, for so long as that is the
      case, also constitute or give rise to an Event of Default under Section
      5(a)(i), 5(a)(ii)(1) or 5(a)(iii)(1) insofar as such event or circumstance
      relates to the failure to make any payment or delivery or a failure to
      comply with any other material provision of this Agreement or a Credit
      Support Document, as the case may be.

      (ii) Except in circumstances contemplated by clause (i) above, if an event
      or circumstance which would otherwise constitute or give rise to an
      Illegality or a Force Majeure Event also constitutes an Event of Default
      or any other Termination Event, it will be treated as an Event of Default
      or such other Termination Event, as the case may be, and will not
      constitute or give rise to an Illegality or a Force Majeure Event.

      (iii) If an event or circumstance which would otherwise constitute or give
      rise to a Force Majeure Event also constitutes an Illegality, it will be
      treated as an Illegality, except as described in clause (ii) above, and
      not a Force Majeure Event.

(d) Deferral of Payments and Deliveries During Waiting Period. If an Illegality
or a Force Majeure Event has occurred and is continuing with respect to a
Transaction, each payment or delivery which would otherwise be required to be
made under that Transaction will be deferred to, and will not be due until:-

      (i) the first Local Business Day or, in the case of a delivery, the first
      Local Delivery Day (or the first day that would have been a Local Business
      Day or Local Delivery Day, as appropriate, but for the occurrence of the
      event or circumstance constituting or giving rise to that Illegality or
      Force Majeure Event) following the end of any applicable Waiting Period in
      respect of that Illegality or Force Majeure Event, as the case may be; or

      (ii) if earlier, the date on which the event or circumstance constituting
      or giving rise to that Illegality or Force Majeure Event ceases to exist
      or, if such date is not a Local Business Day or, in the case of a
      delivery, a Local Delivery Day, the first following day that is a Local
      Business Day or Local Delivery Day, as appropriate.

(e) Inability of Head or Home Office to Perform Obligations of Branch. If (i) an
Illegality or a Force Majeure Event occurs under Section 5(b)(i)(1) or
5(b)(ii)(1) and the relevant Office is not the Affected Party's head or home
office, (ii) Section 10(a) applies, (iii) the other party seeks performance of
the relevant obligation or compliance with the relevant provision by the
Affected Party's head or home office and (iv) the Affected Party's head or home
office fails so to perform or comply due to the occurrence of an event or
circumstance which would, if that head or home office were the Office through
which the Affected Party makes and receives payments and deliveries with respect
to the relevant Transaction, constitute or give rise to an Illegality or a Force
Majeure Event, and such failure would otherwise constitute an Event of Default
under Section 5(a)(i)or 5(a)(iii)(1) with respect to such party, then, for so
long as the relevant event or circumstance continues to exist with respect to
both the Office referred to in Section 5(b)(i)(1) or 5(b)(ii)(1), as the case
may be, and the Affected Party's head or home office, such failure will not
constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(1).

6. Early Termination; Close-Out Netting

(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(b) Right to Terminate Following Termination Event.

      (i) Notice. If a Termination Event other than a Force Majeure Event
      occurs, an Affected Party will, promptly upon becoming aware of it, notify
      the other party, specifying the nature of that Termination Event and each
      Affected Transaction, and will also give the other party such other
      information about that Termination Event as the other party may reasonably
      require. If a Force Majeure Event occurs, each party will, promptly upon
      becoming aware of it, use all reasonable efforts to notify the other
      party, specifying the nature of that Force Majeure Event, and will also
      give the other party such other information about that Force Majeure Event
      as the other party may reasonably require.

      (ii) Transfer to Avoid Termination Event. If a Tax Event occurs and there
      is only one Affected Party, or if a Tax Event Upon Merger occurs and the
      Burdened Party is the Affected Party, the Affected Party will, as a
      condition to its right to designate an Early Termination Date under
      Section 6(b)(iv), use all reasonable efforts (which will not require such
      party to incur a loss, other than immaterial, incidental expenses) to
      transfer within 20 days after it gives notice under Section 6(b)(i) all
      its rights and obligations under this Agreement in respect of the Affected
      Transactions to another of its Offices or Affiliates so that such
      Termination Event ceases to exist.

      If the Affected Party is not able to make such a transfer it will give
      notice to the other party to that effect within such 20 day period,
      whereupon the other party may effect such a transfer within 30 days after
      the notice is given under Section 6(b)(i).

      Any such transfer by a party under this Section 6(b)(ii) will be subject
      to and conditional upon the prior written consent of the other party,
      which consent will not be withheld if such other party's policies in
      effect at such time would permit it to enter into transactions with the
      transferee on the terms proposed.

      (iii) Two Affected Parties. If a Tax Event occurs and there are two
      Affected Parties, each party will use all reasonable efforts to reach
      agreement within 30 days after notice of such occurrence is given under
      Section 6(b)(i) to avoid that Termination Event.

      (iv) Right to Terminate.

            (1) If:-

                  (A) a transfer under Section 6(b)(ii) or an agreement under
                  Section 6(b)(iii), as the case may be, has not been effected
                  with respect to all Affected Transactions within 30 days after
                  an Affected Party gives notice under Section 6(b)(i); or

                  (B) a Credit Event Upon Merger or an Additional Termination
                  Event occurs, or a Tax Event Upon Merger occurs and the
                  Burdened Party is not the Affected Party,

            the Burdened Party in the case of a Tax Event Upon Merger, any
            Affected Party in the case of a Tax Event or an Additional
            Termination Event if there are two Affected Parties, or the
            Non-affected Party in the case of a Credit Event Upon Merger or an
            Additional Termination Event if there is only one Affected Party
            may, if the relevant Termination Event is then continuing, by not
            more than 20 days notice to the other party, designate a day not
            earlier than the day such notice is effective as an Early
            Termination Date in respect of all Affected Transactions.

            (2) If at any time an Illegality or a Force Majeure Event has
            occurred and is then continuing and any applicable Waiting Period
            has expired:-

                  (A) Subject to clause (B) below, either party may, by not more
                  than 20 days notice to the other party, designate (I) a day
                  not earlier than the day on which such notice becomes
                  effective as an Early Termination Date in respect of all
                  Affected Transactions or (II) by specifying in that notice the
                  Affected Transactions in respect of which it is designating
                  the relevant day as an Early Termination Date, a day not
                  earlier than two Local Business Days following the day on
                  which such notice becomes effective as an Early Termination
                  Date in respect of less than all Affected Transactions. Upon
                  receipt of a notice designating an Early Termination Date in
                  respect of less than all Affected Transactions, the other
                  party may, by notice to the designating party, if such notice
                  is effective on or before the day so designated, designate
                  that same day as an Early Termination Date in respect of any
                  or all other Affected Transactions.

                  (B) An Affected Party (if the Illegality or Force Majeure
                  Event relates to performance by such party or any Credit
                  Support Provider of such party of an obligation to make any
                  payment or delivery under, or to compliance with any other
                  material provision of, the relevant Credit Support Document)
                  will only have the right to designate an Early Termination
                  Date under Section 6(b)(iv)(2)(A) as a result of an Illegality
                  under Section 5(b)(i)(2) or a Force Majeure Event under
                  Section 5(b)(ii)(2) following the prior designation by the
                  other party of an Early Termination Date, pursuant to Section
                  6(b)(iv)(2)(A), in respect of less than all Affected
                  Transactions.

(c) Effect of Designation.

      (i) If notice designating an Early Termination Date is given under Section
      6(a) or 6(b), the Early Termination Date will occur on the date so
      designated, whether or not the relevant Event of Default or Termination
      Event is then continuing.

      (ii) Upon the occurrence or effective designation of an Early Termination
      Date, no further payments or deliveries under Section 2(a)(i) or 9(h)(i)
      in respect of the Terminated Transactions will be required to be made, but
      without prejudice to the other provisions of this Agreement. The amount,
      if any, payable in respect of an Early Termination Date will be determined
      pursuant to Sections 6(e) and 9(h)(ii).

(d) Calculations; Payment Date.

      (i) Statement. On or as soon as reasonably practicable following the
      occurrence of an Early Termination Date, each party will make the
      calculations on its part, if any, contemplated by Section 6(e) and will
      provide to the other party a statement (1) showing, in reasonable detail,
      such calculations (including any quotations, market data or information
      from internal sources used in making such calculations), (2) specifying
      (except where there are two Affected Parties) any Early Termination Amount
      payable and (3) giving details of the relevant account to which any amount
      payable to it is to be paid. In the absence of written confirmation from
      the source of a quotation or market data obtained in determining a
      Close-out Amount, the records of the party obtaining such quotation or
      market data will be conclusive evidence of the existence and accuracy of
      such quotation or market data.

      (ii) Payment Date. An Early Termination Amount due in respect of any Early
      Termination Date will, together with any amount of interest payable
      pursuant to Section 9(h)(ii)(2), be payable (1) on the day on which notice
      of the amount payable is effective in the case of an Early Termination
      Date which is designated or occurs as a result of an Event of Default and
      (2) on the day which is two Local Business Days after the day on which
      notice of the amount payable is effective (or, if there are two Affected
      Parties, after the day on which the statement provided pursuant to clause
      (i) above by the second party to provide such a statement is effective) in
      the case of an Early Termination Date which is designated as a result of a
      Termination Event.

(e) Payments on Early Termination. If an Early Termination Date occurs, the
amount, if any, payable in respect of that Early Termination Date (the "Early
Termination Amount") will be determined pursuant to this Section 6(e) and will
be subject to Section 6(f).

      (i) Events of Default. If the Early Termination Date results from an Event
      of Default, the Early Termination Amount will be an amount equal to (1)
      the sum of (A) the Termination Currency Equivalent of the Close-out Amount
      or Close-out Amounts (whether positive or negative) determined by the
      Non-defaulting Party for each Terminated Transaction or group of
      Terminated Transactions, as the case may be, and (B) the Termination
      Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting
      Party less (2) the Termination Currency Equivalent of the Unpaid Amounts
      owing to the Defaulting Party. If the Early Termination Amount is a
      positive number, the Defaulting Party will pay it to the Non-defaulting
      Party; if it is a negative number, the Non-defaulting Party will pay the
      absolute value of the Early Termination Amount to the Defaulting Party.

      (ii) Termination Events. If the Early Termination Date results from a
      Termination Event:-

            (1) One Affected Party. Subject to clause (3) below, if there is one
            Affected Party, the Early Termination Amount will be determined in
            accordance with Section 6(e)(i), except that references to the
            Defaulting Party and to the Non-defaulting Party will be deemed to
            be references to the Affected Party and to the Non-affected Party,
            respectively.

            (2) Two Affected Parties. Subject to clause (3) below, if there are
            two Affected Parties, each party will determine an amount equal to
            the Termination Currency Equivalent of the sum of the Close-out
            Amount or Close-out Amounts (whether positive or negative) for each
            Terminated Transaction or group of Terminated Transactions, as the
            case may be, and the Early Termination Amount will be an amount
            equal to (A) the sum of (I) one-half of the difference between the
            higher amount so determined (by party "X") and the lower amount so
            determined (by party "Y") and (II) the Termination Currency
            Equivalent of the Unpaid Amounts owing to X less (B) the Termination
            Currency Equivalent of the Unpaid Amounts owing to Y. If the Early
            Termination Amount is a positive number, Y will pay it to X; if it
            is a negative number, X will pay the absolute value of the Early
            Termination Amount to Y.

            (3) Mid-Market Events. If that Termination Event is an Illegality or
            a Force Majeure Event, then the Early Termination Amount will be
            determined in accordance with clause (1) or (2) above, as
            appropriate, except that, for the purpose of determining a Close-out
            Amount or Close-out Amounts, the Determining Party will:-

                  (A) if obtaining quotations from one or more third parties (or
                  from any of the Determining Party's Affiliates), ask each
                  third party or Affiliate (I) not to take account of the
                  current creditworthiness of the Determining Party or any
                  existing Credit Support Document and (II) to provide
                  mid-market quotations; and

                  (B) in any other case, use mid-market values without regard to
                  the creditworthiness of the Determining Party.

      (iii) Adjustment for Bankruptcy. In circumstances where an Early
      Termination Date occurs because Automatic Early Termination applies in
      respect of a party, the Early Termination Amount will be subject to such
      adjustments as are appropriate and permitted by applicable law to reflect
      any payments or deliveries made by one party to the other under this
      Agreement (and retained by such other party) during the period from the
      relevant Early Termination Date to the date for payment determined under
      Section 6(d)(ii).

      (iv) Adjustment for Illegality or Force Majeure Event. The failure by a
      party or any Credit Support Provider of such party to pay, when due, any
      Early Termination Amount will not constitute an Event of Default under
      Section 5(a)(i) or 5(a)(iii)(1) if such failure is due to the occurrence
      of an event or circumstance which would, if it occurred with respect to
      payment, delivery or compliance related to a Transaction, constitute or
      give rise to an Illegality or a Force Majeure Event. Such amount will (1)
      accrue interest and otherwise be treated as an Unpaid Amount owing to the
      other party if subsequently an Early Termination Date results from an
      Event of Default, a Credit Event Upon Merger or an Additional Termination
      Event in respect of which all outstanding Transactions are Affected
      Transactions and (2) otherwise accrue interest in accordance with Section
      9(h)(ii)(2).

      (v) Pre-Estimate. The parties agree that an amount recoverable under this
      Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such
      amount is payable for the loss of bargain and the loss of protection
      against future risks, and, except as otherwise provided in this Agreement,
      neither party will be entitled to recover any additional damages as a
      consequence of the termination of the Terminated Transactions.

(f) Set-Off. Any Early Termination Amount payable to one party (the "Payee") by
the other party (the "Payer"), in circumstances where there is a Defaulting
Party or where there is one Affected Party in the case where either a Credit
Event Upon Merger has occurred or any other Termination Event in respect of
which all outstanding Transactions are Affected Transactions has occurred, will,
at the option of the Non-defaulting Party or the Non-affected Party, as the case
may be ("X") (and without prior notice to the Defaulting Party or the Affected
Party, as the case may be), be reduced by its set-off against any other amounts
("Other Amounts") payable by the Payee to the Payer (whether or not arising
under this Agreement, matured or contingent and irrespective of the currency,
place of payment or place of booking of the obligation). To the extent that any
Other Amounts are so set off, those Other Amounts will be discharged promptly
and in all respects. X will give notice to the other party of any set-off
effected under this Section 6(f).

For this purpose, either the Early Termination Amount or the Other Amounts (or
the relevant portion of such amounts) may be converted by X into the currency in
which the other is denominated at the rate of exchange at which such party would
be able, in good faith and using commercially reasonable procedures, to purchase
the relevant amount of such currency.

If an obligation is unascertained, X may in good faith estimate that obligation
and set off in respect of the estimate, subject to the relevant party accounting
to the other when the obligation is ascertained.

Nothing in this Section 6(f) will be effective to create a charge or other
security interest. This Section 6(f) will be without prejudice and in addition
to any right of set-off, offset, combination of accounts, lien, right of
retention or withholding or similar right or requirement to which any party is
at any time otherwise entitled or subject (whether by operation of law, contract
or otherwise).

7. Transfer

Subject to Section 6(b)(ii) and to the extent permitted by applicable law,
neither this Agreement nor any interest or obligation in or under this Agreement
may be transferred (whether by way of security or otherwise) by either party
without the prior written consent of the other party, except that:-

(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and

(b) a party may make such a transfer of all or any part of its interest in any
Early Termination Amount payable to it by a Defaulting Party, together with any
amounts payable on or with respect to that interest and any other rights
associated with that interest pursuant to Sections 8, 9(h) and 11.

Any purported transfer that is not in compliance with this Section 7 will be
void.

8. Contractual Currency

(a) Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in good faith and using
commercially reasonable procedures in converting the currency so tendered into
the Contractual Currency, of the full amount in the Contractual Currency of all
amounts payable in respect of this Agreement. If for any reason the amount in
the Contractual Currency so received falls short of the amount in the
Contractual Currency payable in respect of this Agreement, the party required to
make the payment will, to the extent permitted by applicable law, immediately
pay such additional amount in the Contractual Currency as may be necessary to
compensate for the shortfall. If for any reason the amount in the Contractual
Currency so received exceeds the amount in the Contractual Currency payable in
respect of this Agreement, the party receiving the payment will refund promptly
the amount of such excess.

(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in clause (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purpose of such
judgment or order and the rate of exchange at which such party is able, acting
in good faith and using commercially reasonable procedures in converting the
currency received into the Contractual Currency, to purchase the Contractual
Currency with the amount of the currency of the judgment or order actually
received by such party.

(c) Separate Indemnities. To the extent permitted by applicable law, the
indemnities in this Section 8 constitute separate and independent obligations
from the other obligations in this Agreement, will be enforceable as separate
and independent causes of action, will apply notwithstanding any indulgence
granted by the party to which any payment is owed and will not be affected by
judgment being obtained or claim or proof being made for any other sums payable
in respect of this Agreement.

(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.

9. Miscellaneous

(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter. Each of the
parties acknowledges that in entering into this Agreement it has not relied on
any oral or written representation, warranty or other assurance (except as
provided for or referred to in this Agreement) and waives all rights and
remedies which might otherwise be available to it in respect thereof, except
that nothing in this Agreement will limit or exclude any liability of a party
for fraud.

(b) Amendments. An amendment, modification or waiver in respect of this
Agreement will only be effective if in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or by an exchange of electronic messages on an electronic
messaging system.

(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.

(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.

(e) Counterparts and Confirmations.

      (i) This Agreement (and each amendment, modification and waiver in respect
      of it) may be executed and delivered in counterparts (including by
      facsimile transmission and by electronic messaging system), each of which
      will be deemed an original.

      (ii) The parties intend that they are legally bound by the terms of each
      Transaction from the moment they agree to those terms (whether orally or
      otherwise). A Confirmation will be entered into as soon as practicable and
      may be executed and delivered in counterparts (including by facsimile
      transmission) or be created by an exchange of telexes, by an exchange of
      electronic messages on an electronic messaging system or by an exchange of
      e-mails, which in each case will be sufficient for all purposes to
      evidence a binding supplement to this Agreement. The parties will specify
      therein or through another effective means that any such counterpart,
      telex, electronic message or e-mail constitutes a Confirmation.

(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.

(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.

(h) Interest and Compensation.

      (i) Prior to Early Termination. Prior to the occurrence or effective
      designation of an Early Termination Date in respect of the relevant
      Transaction:-

            (1) Interest on Defaulted Payments. If a party defaults in the
            performance of any payment obligation, it will, to the extent
            permitted by applicable law and subject to Section 6(c), pay
            interest (before as well as after judgment) on the overdue amount to
            the other party on demand in the same currency as the overdue
            amount, for the period from (and including) the original due date
            for payment to (but excluding) the date of actual payment (and
            excluding any period in respect of which interest or compensation in
            respect of the overdue amount is due pursuant to clause (3)(B) or
            (C) below), at the Default Rate.

            (2) Compensation for Defaulted Deliveries. If a party defaults in
            the performance of any obligation required to be settled by
            delivery, it will on demand (A) compensate the other party to the
            extent provided for in the relevant Confirmation or elsewhere in
            this Agreement and (B) unless otherwise provided in the relevant
            Confirmation or elsewhere in this Agreement, to the extent permitted
            by applicable law and subject to Section 6(c), pay to the other
            party interest (before as well as after judgment) on an amount equal
            to the fair market value of that which was required to be delivered
            in the same currency as that amount, for the period from (and
            including) the originally scheduled date for delivery to (but
            excluding) the date of actual delivery (and excluding any period in
            respect of which interest or compensation in respect of that amount
            is due pursuant to clause (4) below), at the Default Rate. The fair
            market value of any obligation referred to above will be determined
            as of the originally scheduled date for delivery, in good faith and
            using commercially reasonable procedures, by the party that was
            entitled to take delivery.

            (3) Interest on Deferred Payments. If:-

                  (A) a party does not pay any amount that, but for Section
                  2(a)(iii), would have been payable, it will, to the extent
                  permitted by applicable law and subject to Section 6(c) and
                  clauses (B) and (C) below, pay interest (before as well as
                  after judgment) on that amount to the other party on demand
                  (after such amount becomes payable) in the same currency as
                  that amount, for the period from (and including) the date the
                  amount would, but for Section 2(a)(iii), have been payable to
                  (but excluding) the date the amount actually becomes payable,
                  at the Applicable Deferral Rate;

                  (B) a payment is deferred pursuant to Section 5(d), the party
                  which would otherwise have been required to make that payment
                  will, to the extent permitted by applicable law, subject to
                  Section 6(c) and for so long as no Event of Default or
                  Potential Event of Default with respect to that party has
                  occurred and is continuing, pay interest (before as well as
                  after judgment) on the amount of the deferred payment to the
                  other party on demand (after such amount becomes payable) in
                  the same currency as the deferred payment, for the period from
                  (and including) the date the amount would, but for Section
                  5(d), have been payable to (but excluding) the earlier of the
                  date the payment is no longer deferred pursuant to Section
                  5(d) and the date during the deferral period upon which an
                  Event of Default or Potential Event of Default with respect to
                  that party occurs, at the Applicable Deferral Rate; or

                  (C) a party fails to make any payment due to the occurrence of
                  an Illegality or a Force Majeure Event (after giving effect to
                  any deferral period contemplated by clause (B) above), it
                  will, to the extent permitted by applicable law, subject to
                  Section 6(c) and for so long as the event or circumstance
                  giving rise to that Illegality or Force Majeure Event
                  continues and no Event of Default or Potential Event of
                  Default with respect to that party has occurred and is
                  continuing, pay interest (before as well as after judgment) on
                  the overdue amount to the other party on demand in the same
                  currency as the overdue amount, for the period from (and
                  including) the date the party fails to make the payment due to
                  the occurrence of the relevant Illegality or Force Majeure
                  Event (or, if later, the date the payment is no longer
                  deferred pursuant to Section 5(d)) to (but excluding) the
                  earlier of the date the event or circumstance giving rise to
                  that Illegality or Force Majeure Event ceases to exist and the
                  date during the period upon which an Event of Default or
                  Potential Event of Default with respect to that party occurs
                  (and excluding any period in respect of which interest or
                  compensation in respect of the overdue amount is due pursuant
                  to clause (B) above), at the Applicable Deferral Rate.

            (4) Compensation for Deferred Deliveries. If:-

                  (A) a party does not perform any obligation that, but for
                  Section 2(a)(iii), would have been required to be settled by
                  delivery;

                  (B) a delivery is deferred pursuant to Section 5(d); or

                  (C) a party fails to make a delivery due to the occurrence of
                  an Illegality or a Force Majeure Event at a time when any
                  applicable Waiting Period has expired,

            the party required (or that would otherwise have been required) to
            make the delivery will, to the extent permitted by applicable law
            and subject to Section 6(c), compensate and pay interest to the
            other party on demand (after, in the case of clauses (A) and (B)
            above, such delivery is required) if and to the extent provided for
            in the relevant Confirmation or elsewhere in this Agreement.

      (ii) Early Termination. Upon the occurrence or effective designation of an
      Early Termination Date in respect of a Transaction:-

            (1) Unpaid Amounts. For the purpose of determining an Unpaid Amount
            in respect of the relevant Transaction, and to the extent permitted
            by applicable law, interest will accrue on the amount of any payment
            obligation or the amount equal to the fair market value of any
            obligation required to be settled by delivery included in such
            determination in the same currency as that amount, for the period
            from (and including) the date the relevant obligation was (or would
            have been but for Section 2(a)(iii) or 5(d)) required to have been
            performed to (but excluding) the relevant Early Termination Date, at
            the Applicable Close-out Rate.

            (2) Interest on Early Termination Amounts. If an Early Termination
            Amount is due in respect of such Early Termination Date, that amount
            will, to the extent permitted by applicable law, be paid together
            with interest (before as well as after judgment) on that amount in
            the Termination Currency, for the period from (and including) such
            Early Termination Date to (but excluding) the date the amount is
            paid, at the Applicable Close-out Rate.

      (iii) Interest Calculation. Any interest pursuant to this Section 9(h)
      will be calculated on the basis of daily compounding and the actual number
      of days elapsed.

10. Offices; Multibranch Parties

(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to and agrees with the other party that, notwithstanding the place of
booking or its jurisdiction of incorporation or organisation, its obligations
are the same in terms of recourse against it as if it had entered into the
Transaction through its head or home office, except that a party will not have
recourse to the head or home office of the other party in respect of any payment
or delivery deferred pursuant to Section 5(d) for so long as the payment or
delivery is so deferred. This representation and agreement will be deemed to be
repeated by each party on each date on which the parties enter into a
Transaction.

(b) If a party is specified as a Multibranch Party in the Schedule, such party
may, subject to clause (c) below, enter into a Transaction through, book a
Transaction in and make and receive payments and deliveries with respect to a
Transaction through any Office listed in respect of that party in the Schedule
(but not any other Office unless otherwise agreed by the parties in writing).

(c) The Office through which a party enters into a Transaction will be the
Office specified for that party in the relevant Confirmation or as otherwise
agreed by the parties in writing, and, if an Office for that party is not
specified in the Confirmation or otherwise agreed by the parties in writing, its
head or home office. Unless the parties otherwise agree in writing, the Office
through which a party enters into a Transaction will also be the Office in which
it books the Transaction and the Office through which it makes and receives
payments and deliveries with respect to the Transaction. Subject to Section
6(b)(ii), neither party may change the Office in which it books the Transaction
or the Office through which it makes and receives payments or deliveries with
respect to a Transaction without the prior written consent of the other party.

11. Expenses

A Defaulting Party will on demand indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees,
execution fees and Stamp Tax, incurred by such other party by reason of the
enforcement and protection of its rights under this Agreement or any Credit
Support Document to which the Defaulting Party is a party or by reason of the
early termination of any Transaction, including, but not limited to, costs of
collection.

12. Notices

(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner described below (except that a notice or
other communication under Section 5 or 6 may not be given by electronic
messaging system or e-mail) to the address or number or in accordance with the
electronic messaging system or e-mail details provided (see the Schedule) and
will be deemed effective as indicated:-

      (i) if in writing and delivered in person or by courier, on the date it is
      delivered;

      (ii) if sent by telex, on the date the recipient's answerback is received;

      (iii) if sent by facsimile transmission, on the date it is received by a
      responsible employee of the recipient in legible form (it being agreed
      that the burden of proving receipt will be on the sender and will not be
      met by a transmission report generated by the sender's facsimile machine);

      (iv) if sent by certified or registered mail (airmail, if overseas) or the
      equivalent (return receipt requested), on the date it is delivered or its
      delivery is attempted;

      (v) if sent by electronic messaging system, on the date it is received; or

      (vi) if sent by e-mail, on the date it is delivered,

unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication will be deemed given and
effective on the first following day that is a Local Business Day.

(b) Change of Details. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system or e-mail
details at which notices or other communications are to be given to it.

13.   Governing Law and Jurisdiction

(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.

(b) Jurisdiction. With respect to any suit, action or proceedings relating to
any dispute arising out of or in connection with this Agreement ("Proceedings"),
each party irrevocably:-

      (i) submits:-

            (1) if this Agreement is expressed to be governed by English law, to
            (A) the non-exclusive jurisdiction of the English courts if the
            Proceedings do not involve a Convention Court and (B) the exclusive
            jurisdiction of the English courts if the Proceedings do involve a
            Convention Court; or

            (2) if this Agreement is expressed to be governed by the laws of the
            State of New York, to the non-exclusive jurisdiction of the courts
            of the State of New York and the United States District Court
            located in the Borough of Manhattan in New York City;

      (ii) waives any objection which it may have at any time to the laying of
      venue of any Proceedings brought in any such court, waives any claim that
      such Proceedings have been brought in an inconvenient forum and further
      waives the right to object, with respect to such Proceedings, that such
      court does not have any jurisdiction over such party; and

      (iii) agrees, to the extent permitted by applicable law, that the bringing
      of Proceedings in any one or more jurisdictions will not preclude the
      bringing of Proceedings in any other jurisdiction.

(c) Service of Process. Each party irrevocably appoints the Process Agent, if
any, specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12(a)(i), 12(a)(iii) or 12(a)(iv).
Nothing in this Agreement will affect the right of either party to serve process
in any other manner permitted by applicable law.

(d) Waiver of Immunities. Each party irrevocably waives, to the extent permitted
by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction or order for specific performance or
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.

14. Definitions

As used in this Agreement:-

"Additional Representation" has the meaning specified in Section 3.

"Additional Termination Event" has the meaning specified in Section 5(b).

"Affected Party" has the meaning specified in Section 5(b).

"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Force Majeure Event, Tax Event or Tax Event Upon
Merger, all Transactions affected by the occurrence of such Termination Event
(which, in the case of an Illegality under Section 5(b)(i)(2) or a Force Majeure
Event under Section 5(b)(ii)(2), means all Transactions unless the relevant
Credit Support Document references only certain Transactions, in which case
those Transactions and, if the relevant Credit Support Document constitutes a
Confirmation for a Transaction, that Transaction) and (b) with respect to any
other Termination Event, all Transactions.

"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.

"Agreement" has the meaning specified in Section 1(c).

"Applicable Close-out Rate" means:-

(a) in respect of the determination of an Unpaid Amount:-

      (i) in respect of obligations payable or deliverable (or which would have
      been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

      (ii) in respect of obligations payable or deliverable (or which would have
      been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
      Rate;

      (iii) in respect of obligations deferred pursuant to Section 5(d), if
      there is no Defaulting Party and for so long as the deferral period
      continues, the Applicable Deferral Rate; and

      (iv) in all other cases following the occurrence of a Termination Event
      (except where interest accrues pursuant to clause (iii) above), the
      Applicable Deferral Rate; and

(b) in respect of an Early Termination Amount:-

      (i) for the period from (and including) the relevant Early Termination
      Date to (but excluding) the date (determined in accordance with Section
      6(d)(ii)) on which that amount is payable:-

            (1) if the Early Termination Amount is payable by a Defaulting
            Party, the Default Rate;

            (2) if the Early Termination Amount is payable by a Non-defaulting
            Party, the Non-default Rate; and

            (3) in all other cases, the Applicable Deferral Rate; and for the
            period from (and including) the date (determined in accordance with
            Section 6(d)

      (ii) on which that amount is payable to (but excluding) the date of
      actual payment:-

            (1) if a party fails to pay the Early Termination Amount due to the
            occurrence of an event or circumstance which would, if it occurred
            with respect to a payment or delivery under a Transaction,
            constitute or give rise to an Illegality or a Force Majeure Event,
            and for so long as the Early Termination Amount remains unpaid due
            to the continuing existence of such event or circumstance, the
            Applicable Deferral Rate;

            (2) if the Early Termination Amount is payable by a Defaulting Party
            (but excluding any period in respect of which clause (1) above
            applies), the Default Rate;

            (3) if the Early Termination Amount is payable by a Non-defaulting
            Party (but excluding any period in respect of which clause (1) above
            applies), the Non-default Rate; and

            (4) in all other cases, the Termination Rate.

"Applicable Deferral Rate" means:-

(a) for the purpose of Section 9(h)(i)(3)(A), the rate certified by the relevant
payer to be a rate offered to the payer by a major bank in a relevant interbank
market for overnight deposits in the applicable currency, such bank to be
selected in good faith by the payer for the purpose of obtaining a
representative rate that will reasonably reflect conditions prevailing at the
time in that relevant market;

(b) for purposes of Section 9(h)(i)(3)(B) and clause (a)(iii) of the definition
of Applicable Close-out Rate, the rate certified by the relevant payer to be a
rate offered to prime banks by a major bank in a relevant interbank market for
overnight deposits in the applicable currency, such bank to be selected in good
faith by the payer after consultation with the other party, if practicable, for
the purpose of obtaining a representative rate that will reasonably reflect
conditions prevailing at the time in that relevant market; and

(c) for purposes of Section 9(h)(i)(3)(C) and clauses (a)(iv), (b)(i)(3) and
(b)(ii)(1) of the definition of Applicable Close-out Rate, a rate equal to the
arithmetic mean of the rate determined pursuant to clause (a) above and a rate
per annum equal to the cost (without proof or evidence of any actual cost) to
the relevant payee (as certified by it) if it were to fund or of funding the
relevant amount.

"Automatic Early Termination" has the meaning specified in Section 6(a).

"Burdened Party" has the meaning specified in Section 5(b)(iv).

"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs after the parties enter into the relevant
Transaction.

"Close-out Amount" means, with respect to each Terminated Transaction or each
group of Terminated Transactions and a Determining Party, the amount of the
losses or costs of the Determining Party that are or would be incurred under
then prevailing circumstances (expressed as a positive number) or gains of the
Determining Party that are or would be realised under then prevailing
circumstances (expressed as a negative number) in replacing, or in providing for
the Determining Party the economic equivalent of, (a) the material terms of that
Terminated Transaction or group of Terminated Transactions, including the
payments and deliveries by the parties under Section 2(a)(i) in respect of that
Terminated Transaction or group of Terminated Transactions that would, but for
the occurrence of the relevant Early Termination Date, have been required after
that date (assuming satisfaction of the conditions precedent in Section
2(a)(iii)) and (b) the option rights of the parties in respect of that
Terminated Transaction or group of Terminated Transactions.

Any Close-out Amount will be determined by the Determining Party (or its agent),
which will act in good faith and use commercially reasonable procedures in order
to produce a commercially reasonable result. The Determining Party may determine
a Close-out Amount for any group of Terminated Transactions or any individual
Terminated Transaction but, in the aggregate, for not less than all Terminated
Transactions. Each Close-out Amount will be determined as of the Early
Termination Date or, if that would not be commercially reasonable, as of the
date or dates following the Early Termination Date as would be commercially
reasonable.

Unpaid Amounts in respect of a Terminated Transaction or group of Terminated
Transactions and legal fees and out-of-pocket expenses referred to in Section 11
are to be excluded in all determinations of Close-out Amounts.

In determining a Close-out Amount, the Determining Party may consider any
relevant information, including, without limitation, one or more of the
following types of information: -

(i) quotations (either firm or indicative) for replacement transactions supplied
by one or more third parties that may take into account the creditworthiness of
the Determining Party at the time the quotation is provided and the terms of any
relevant documentation, including credit support documentation, between the
Determining Party and the third party providing the quotation;

(ii) information consisting of relevant market data in the relevant market
supplied by one or more third parties including, without limitation, relevant
rates, prices, yields, yield curves, volatilities, spreads, correlations or
other relevant market data in the relevant market; or

(iii) information of the types described in clause (i) or (ii) above from
internal sources (including any of the Determining Party's Affiliates) if that
information is of the same type used by the Determining Party in the regular
course of its business for the valuation of similar transactions.

The Determining Party will consider, taking into account the standards and
procedures described in this definition, quotations pursuant to clause (i) above
or relevant market data pursuant to clause (ii) above unless the Determining
Party reasonably believes in good faith that such quotations or relevant market
data are not readily available or would produce a result that would not satisfy
those standards. When considering information described in clause (i), (ii) or
(iii) above, the Determining Party may include costs of funding, to the extent
costs of funding are not and would not be a component of the other information
being utilised. Third parties supplying quotations pursuant to clause (i) above
or market data pursuant to clause (ii) above may include, without limitation,
dealers in the relevant markets, end-users of the relevant product, information
vendors, brokers and other sources of market information.

Without duplication of amounts calculated based on information described in
clause (i), (ii) or (iii) above, or other relevant information, and when it is
commercially reasonable to do so, the Determining Party may in addition consider
in calculating a Close-out Amount any loss or cost incurred in connection with
its terminating, liquidating or re-establishing any hedge related to a
Terminated Transaction or group of Terminated Transactions (or any gain
resulting from any of them).

Commercially reasonable procedures used in determining a Close-out Amount may
include the following:-

(1) application to relevant market data from third parties pursuant to clause
(ii) above or information from internal sources pursuant to clause (iii) above
of pricing or other valuation models that are, at the time of the determination
of the Close-out Amount, used by the Determining Party in the regular course of
its business in pricing or valuing transactions between the Determining Party
and unrelated third parties that are similar to the Terminated Transaction or
group of Terminated Transactions; and

(2) application of different valuation methods to Terminated Transactions or
groups of Terminated Transactions depending on the type, complexity, size or
number of the Terminated Transactions or group of Terminated Transactions.

"Confirmation" has the meaning specified in the preamble.

"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.

"Contractual Currency" has the meaning specified in Section 8(a).

"Convention Court" means any court which is bound to apply to the Proceedings
either Article 17 of the 1968 Brussels Convention on Jurisdiction and the
Enforcement of Judgments in Civil and Commercial Matters or Article 17 of the
1988 Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil
and Commercial Matters.

"Credit Event Upon Merger" has the meaning specified in Section 5(b).

"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.

"Credit Support Provider" has the meaning specified in the Schedule.

"Cross-Default" means the event specified in Section 5(a)(vi).

"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.

"Defaulting Party" has the meaning specified in Section 6(a).

"Designated Event" has the meaning specified in Section 5(b)(v).

"Determining Party" means the party determining a Close-out Amount.

"Early Termination Amount" has the meaning specified in Section 6(e).

"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).

"electronic messages" does not include e-mails but does include documents
expressed in markup languages, and "electronic messaging system" will be
construed accordingly.

"English law" means the law of England and Wales, and "English" will be
construed accordingly.

"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.

"Force Majeure Event" has the meaning specified in Section 5(b).

"General Business Day" means a day on which commercial banks are open for
general business (including dealings in foreign exchange and foreign currency
deposits).

"Illegality" has the meaning specified in Section 5(b).

"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).

"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority),
and "unlawful" will be construed accordingly.

"Local Business Day" means (a) in relation to any obligation under Section
2(a)(i), a General Business Day in the place or places specified in the relevant
Confirmation and a day on which a relevant settlement system is open or
operating as specified in the relevant Confirmation or, if a place or a
settlement system is not so specified, as otherwise agreed by the parties in
writing or determined pursuant to provisions contained, or incorporated by
reference, in this Agreement, (b) for the purpose of determining when a Waiting
Period expires, a General Business Day in the place where the event or
circumstance that constitutes or gives rise to the Illegality or Force Majeure
Event, as the case may be, occurs, (c) in relation to any other payment, a
General Business Day in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment and, if that currency does not have a single recognised principal
financial centre, a day on which the settlement system necessary to accomplish
such payment is open, (d) in relation to any notice or other communication,
including notice contemplated under Section 5(a)(i), a General Business Day (or
a day that would have been a General Business Day but for the occurrence of an
event or circumstance which would, if it occurred with respect to payment,
delivery or compliance related to a Transaction, constitute or give rise to an
Illegality or a Force Majeure Event) in the place specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(e) in relation to Section 5(a)(v)(2), a General Business Day in the relevant
locations for performance with respect to such Specified Transaction.

"Local Delivery Day" means, for purposes of Sections 5(a)(i) and 5(d), a day on
which settlement systems necessary to accomplish the relevant delivery are
generally open for business so that the delivery is capable of being
accomplished in accordance with customary market practice, in the place
specified in the relevant Confirmation or, if not so specified, in a location as
determined in accordance with customary market practice for the relevant
delivery.

"Master Agreement" has the meaning specified in the preamble.

"Merger Without Assumption" means the event specified in Section 5(a)(viii).

"Multiple Transaction Payment Netting" has the meaning specified in Section
2(c).

"Non-affected Party" means, so long as there is only one Affected Party, the
other party.

"Non-default Rate" means the rate certified by the Non-defaulting Party to be a
rate offered to the Non-defaulting Party by a major bank in a relevant interbank
market for overnight deposits in the applicable currency, such bank to be
selected in good faith by the Non-defaulting Party for the purpose of obtaining
a representative rate that will reasonably reflect conditions prevailing at the
time in that relevant market.

"Non-defaulting Party" has the meaning specified in Section 6(a).

"Office" means a branch or office of a party, which may be such party's head or
home office.

"Other Amounts" has the meaning specified in Section 6(f).

"Payee" has the meaning specified in Section 6(f).

"Payer" has the meaning specified in Section 6(f).

"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

"Proceedings" has the meaning specified in Section 13(b).

"Process Agent" has the meaning specified in the Schedule.

"rate of exchange" includes, without limitation, any premiums and costs of
exchange payable in connection with the purchase of or conversion into the
Contractual Currency.

"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.

"Schedule" has the meaning specified in the preamble.

"Scheduled Settlement Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

"Specified Entity" has the meaning specified in the Schedule.

"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.

"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect to any such transaction) now existing or
hereafter entered into between one party to this Agreement (or any Credit
Support Provider of such party or any applicable Specified Entity of such party)
and the other party to this Agreement (or any Credit Support Provider of such
other party or any applicable Specified Entity of such other party) which is not
a Transaction under this Agreement but (i) which is a rate swap transaction,
swap option, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option, credit protection transaction, credit swap,
credit default swap, credit default option, total return swap, credit spread
transaction, repurchase transaction, reverse repurchase transaction,
buy/sell-back transaction, securities lending transaction, weather index
transaction or forward purchase or sale of a security, commodity or other
financial instrument or interest (including any option with respect to any of
these transactions) or (ii) which is a type of transaction that is similar to
any transaction referred to in clause (i) above that is currently, or in the
future becomes, recurrently entered into in the financial markets (including
terms and conditions incorporated by reference in such agreement) and which is a
forward, swap, future, option or other derivative on one or more rates,
currencies, commodities, equity securities or other equity instruments, debt
securities or other debt instruments, economic indices or measures of economic
risk or value, or other benchmarks against which payments or deliveries are to
be made, (b) any combination of these transactions and (c) any other transaction
identified as a Specified Transaction in this Agreement or the relevant
confirmation.

"Stamp Tax" means any stamp, registration, documentation or similar tax.

"Stamp Tax Jurisdiction" has the meaning specified in Section 4(e).

"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.

"Tax Event" has the meaning specified in Section 5(b).

"Tax Event Upon Merger" has the meaning specified in Section 5(b).

"Terminated Transactions" means, with respect to any Early Termination Date, (a)
if resulting from an Illegality or a Force Majeure Event, all Affected
Transactions specified in the notice given pursuant to Section 6(b)(iv), (b) if
resulting from any other Termination Event, all Affected Transactions and (c) if
resulting from an Event of Default, all Transactions in effect either
immediately before the effectiveness of the notice designating that Early
Termination Date or, if Automatic Early Termination applies, immediately before
that Early Termination Date.

"Termination Currency" means (a) if a Termination Currency is specified in the
Schedule and that currency is freely available, that currency, and (b)
otherwise, euro if this Agreement is expressed to be governed by English law or
United States Dollars if this Agreement is expressed to be governed by the laws
of the State of New York.

"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Close-out Amount is determined as of a later date, that later date,
with the Termination Currency at the rate equal to the spot exchange rate of the
foreign exchange agent (selected as provided below) for the purchase of such
Other Currency with the Termination Currency at or about 11:00 a.m. (in the city
in which such foreign exchange agent is located) on such date as would be
customary for the determination of such a rate for the purchase of such Other
Currency for value on the relevant Early Termination Date or that later date.
The foreign exchange agent will, if only one party is obliged to make a
determination under Section 6(e), be selected in good faith by that party and
otherwise will be agreed by the parties.

"Termination Event" means an Illegality, a Force Majeure Event, a Tax Event, a
Tax Event Upon Merger or, if specified to be applicable, a Credit Event Upon
Merger or an Additional Termination Event.

"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.

"Threshold Amount" means the amount, if any, specified as such in the Schedule.

"Transaction" has the meaning specified in the preamble.

"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii) or due but for Section 5(d)) to such party under Section 2(a)(i) or
2(d)(i)(4) on or prior to such Early Termination Date and which remain unpaid as
at such Early Termination Date, (b) in respect of each Terminated Transaction,
for each obligation under Section 2(a)(i) which was (or would have been but for
Section 2(a)(iii) or 5(d)) required to be settled by delivery to such party on
or prior to such Early Termination Date and which has not been so settled as at
such Early Termination Date, an amount equal to the fair market value of that
which was (or would have been) required to be delivered and (c) if the Early
Termination Date results from an Event of Default, a Credit Event Upon Merger or
an Additional Termination Event in respect of which all outstanding Transactions
are Affected Transactions, any Early Termination Amount due prior to such Early
Termination Date and which remains unpaid as of such Early Termination Date, in
each case together with any amount of interest accrued or other compensation in
respect of that obligation or deferred obligation, as the case may be, pursuant
to Section 9(h)(ii)(1) or (2), as appropriate. The fair market value of any
obligation referred to in clause (b) above will be determined as of the
originally scheduled date for delivery, in good faith and using commercially
reasonable procedures, by the party obliged to make the determination under
Section 6(e) or, if each party is so obliged, it will be the average of the
Termination Currency Equivalents of the fair market values so determined by both
parties.

"Waiting Period" means:-

(a) in respect of an event or circumstance under Section 5(b)(i), other than in
the case of Section 5(b)(i)(2) where the relevant payment, delivery or
compliance is actually required on the relevant day (in which case no Waiting
Period will apply), a period of three Local Business Days (or days that would
have been Local Business Days but for the occurrence of that event or
circumstance) following the occurrence of that event or circumstance; and

(b) in respect of an event or circumstance under Section 5(b)(ii), other than in
the case of Section 5(b)(ii)(2) where the relevant payment, delivery or
compliance is actually required on the relevant day (in which case no Waiting
Period will apply), a period of eight Local Business Days (or days that would
have been Local Business Days but for the occurrence of that event or
circumstance) following the occurrence of that event or circumstance.

IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.

                                         WELLS FARGO BANK,  N.A., AS TRUSTEE,
                                         ON  BEHALF OF BANC OF AMERICA
BANK OF AMERICA, N.A.                    MORTGAGE 2007-1 TRUST
------------------------------------     ---------------------------------------
          (Name of Party)                           (Name of Party)

By:   /s/ Roger Heintzelman              By:   /s/ Darron C. Woodus
   ---------------------------------        ------------------------------------
   Name:  Roger Heintzelman                 Name:  Darron C. Woodus
   Title: Senior Vice President             Title: Assistant Vice President
   Date:  3/14/07                           Date:

<PAGE>

(Unilateral Form)              (ISDA Agreements Subject to New York Law Only)

                                     ISDA(R)

              International Swaps and Derivatives Association, Inc.

                              CREDIT SUPPORT ANNEX

                             to the Schedule to the

                                MASTER AGREEMENT

                          dated as of February 2, 2007

                                     between

        BANK OF AMERICA, N.A.         and   WELLS FARGO BANK, N.A., AS TRUSTEE,
                                                ON BEHALF OF BANC OF AMERICA
                                                   MORTGAGE 2007-1 TRUST
------------------------------------        -----------------------------------
             ("Party A")                                ("Party B")

This Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under this
Agreement with respect to each party.

Accordingly, the parties agree as follows:

Paragraph 1. Interpretation

(a)   Definitions and Inconsistency. Capitalized terms not otherwise defined
      herein or elsewhere in this Agreement have the meanings specified
      pursuant to Paragraph 12, and all references in this Annex to
      Paragraphs are to Paragraphs of this Annex. In the event of any
      inconsistency between this Annex and the other provisions of this
      Schedule, this Annex will prevail, and in the event of any
      inconsistency between Paragraph 13 and the other provisions of this
      Annex, Paragraph 13 will prevail.

(b)   Secured Party and Pledgor. All references in this Annex to the "Secured
      Party" will be to either party when acting in that capacity and all
      corresponding references to the "Pledgor" will be to the other party
      when acting in that capacity; provided, however, that if Other Posted
      Support is held by a party to this Annex, all references herein to that
      party as the Secured Party with respect to that Other Posted Support
      will be to that party as the beneficiary thereof and will not subject
      that support or that party as the beneficiary thereof to provisions of
      law generally relating to security interests and secured parties.

Paragraph 2. Security Interest

Each party, as the Pledgor, hereby pledges to the other party, as the Secured
Party, as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-off against
all Posted Collateral Transferred to or received by the Secured Party hereunder.
Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral, the
security interest and lien granted hereunder on that Posted Collateral will be
released immediately and, to the extent possible, without any further action by
either party.

Paragraph 3. Credit Support Obligations

(a)   Delivery Amount. Subject to Paragraphs 4 and 5, upon a demand made by
      the Secured Party on or promptly following a Valuation Date, if the
      Delivery Amount for that Valuation Date equals or exceeds the Pledgor's
      Minimum Transfer Amount, then the Pledgor will Transfer to the Secured
      Party Eligible Credit Support having a Value as of the date of Transfer
      at least equal to the applicable Delivery Amount (rounded pursuant to
      Paragraph 13). Unless otherwise specified in Paragraph 13, the
      "Delivery Amount" applicable to the Pledgor for any Valuation Date will
      equal the amount by which:

      (i)   the Credit Support Amount

            exceeds

      (ii)  the Value as of that Valuation Date of all Posted Credit Support
            held by the Secured Party.

(b)   Return Amount. Subject to Paragraphs 4 and 5, upon a demand made by the
      Pledgor on or promptly following a Valuation Date, if the Return Amount
      for that Valuation Date equals or exceeds the Secured Party's Minimum
      Transfer Amount, then the Secured Party will Transfer to the Pledgor
      Posted Credit Support specified by the Pledgor in that demand having a
      Value as of the date of Transfer as close as practicable to the
      applicable Return Amount (rounded pursuant to Paragraph 13). Unless
      otherwise specified in Paragraph 13, the "Return Amount" applicable to
      the Secured Party for any Valuation Date will equal the amount by which:

      (i)   the Value as of that Valuation Date of all Posted Credit Support
            held by the Secured Party

            exceeds

      (ii)  the Credit Support Amount.

"Credit Support Amount" means, unless otherwise specified in Paragraph 13, for
any Valuation Date (i) the Secured Party's Exposure for that Valuation Date plus
(ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any,
minus (iii) all Independent Amounts applicable to the Secured Party, if any,
minus (iv) the Pledgor's Threshold; provided, however, that the Credit Support
Amount will be deemed to be zero whenever the calculation of Credit Support
Amount yields a number less than zero.

Paragraph 4. Conditions Precedent, Transfer Timing, Calculations and
Substitutions

(a)   Conditions Precedent. Each Transfer obligation of the Pledgor under
      Paragraphs 3 and 5 and of the Secured Party under Paragraphs 3, 4(d)(ii),
      5 and 6(d) is subject to the conditions precedent that:

      (i)   no Event of Default, Potential Event of Default or Specified
            Condition has occurred and is continuing with respect to the other
            party; and

      (ii)  no Early Termination Date for which any unsatisfied payment
            obligations exist has occurred or been designated as the result of
            an Event of Default or Specified Condition with respect to the other
            party.

(b)   Transfer Timing. Subject to Paragraphs 4(a) and 5 and unless otherwise
      specified, if a demand for the Transfer of Eligible Credit Support or
      Posted Credit Support is made by the Notification Time, then the relevant
      Transfer will be made not later than the close of business on the next
      Local Business Day; if a demand is made after the Notification Time, then
      the relevant Transfer will be made not later than the close of business on
      the second Local Business Day thereafter.

(c)   Calculations. All calculations of Value and Exposure for purposes of
      Paragraphs 3 and 6(d) will be made by the Valuation Agent as of the
      Valuation Time. The Valuation Agent will notify each party (or the other
      party, if the Valuation Agent is a party) of its calculations not later
      than the Notification Time on the Local Business Day following the
      applicable Valuation Date (or in the case of Paragraph 6(d), following the
      date of calculation).

(d)   Substitutions.

      (i)   Unless otherwise specified in Paragraph 13, upon notice to the
            Secured Party specifying the items of Posted Credit Support to be
            exchanged, the Pledgor may, on any Local Business Day, Transfer to
            the Secured Party substitute Eligible Credit Support (the
            "Substitute Credit Support"); and

      (ii)  subject to Paragraph 4(a), the Secured Party will Transfer to the
            Pledgor the items of Posted Credit Support specified by the Pledgor
            in its notice not later than the Local Business Day following the
            date on which the Secured Party receives the Substitute Credit
            Support, unless otherwise specified in Paragraph 13 (the
            "Substitution Date"); provided that the Secured Party only will be
            obligated to Transfer Posted Credit Support with a Value as of the
            date of Transfer of that Posted Credit Support equal to the Value as
            of that date of the Substitute Credit Support.

Paragraph 5. Dispute Resolution

If a party (a "Disputing Party") disputes (I) the Valuation Agent's calculation
of a Delivery Amount or a Return Amount or (II) the Value of any Transfer of
Eligible Credit Support or Posted Credit Support, then (1) the Disputing Party
will notify the other party and the Valuation Agent and the other party (if the
Valuation Agent is not the other party) not later than the close of business on
the Local Business Day following (X) the date that the demand is made under
Paragraph 3 in the case of (I) above or (Y) the date of Transfer in the case of
(II) above, (2) subject to Paragraph 4(a), the appropriate party will Transfer
the undisputed amount to the other party not later than the close of business on
the Local Business Day following (X) the date that the demand is made under
Paragraph 3 in the case of (I) above or (Y) the date of Transfer in the case of
(II) above, (3) the parties will consult with each other in an attempt to
resolve the dispute and (4) if they fail to resolve the dispute by the
Resolution Time, then:

      (i)   In the case of a dispute involving a Delivery Amount or Return
            Amount, unless otherwise specified in Paragraph 13, the Valuation
            Agent will recalculate the Exposure and the Value as of the
            Recalculation Date by:

            (A)   utilizing any calculations of Exposure for the Transactions
                  (or Swap Transactions) that the parties have agreed are not in
                  dispute;

            (B)   calculating the Exposure for the Transactions (or Swap
                  Transactions) in dispute by seeking four actual quotations
                  at mid-market from Reference Market-makers for purposes of
                  calculating Market Quotation, and taking the arithmetic
                  average of those obtained; provided that if four quotations
                  are not available for a particular Transaction (or Swap
                  Transaction), then fewer than four quotations may be used
                  for that Transaction (or Swap Transaction); and if no
                  quotations are available for a particular Transaction (or
                  Swap Transaction), then the Valuation Agent's original
                  calculations will be used for that Transaction (or Swap
                  Transaction); and

            (C)   utilizing the procedures specified in Paragraph 13 for
                  calculating the Value, if disputed, of Posted Credit Support.

      (ii)  In the case of a dispute involving the Value of any Transfer of
            Eligible Credit Support or Posted Credit Support, the Valuation
            Agent will recalculate the Value as of the date of Transfer pursuant
            to Paragraph 13.

Following a recalculation pursuant to this Paragraph, the Valuation Agent will
notify each party (or the other party, if the Valuation Agent is a party) not
later than the Notification Time on the Local Business Day following the
Resolution Time. The appropriate party will, upon demand following that notice
by the Valuation Agent or a resolution pursuant to (3) above and subject to
Paragraphs 4(a) and 4(b), make the appropriate Transfer.

Paragraph 6. Holding and Using Posted Collateral

(a)   Care of Posted Collateral. Without limiting the Secured Party's rights
      under Paragraph 6(c), the Secured Party will exercise reasonable care
      to assure the safe custody of all Posted Collateral to the extent
      required by applicable law, and in any event the Secured Party will be
      deemed to have exercised reasonable care if it exercises at least the
      same degree of care as it would exercise with respect to its own
      property. Except as specified in the preceding sentence, the Secured
      Party will have no duty with respect to Posted Collateral, including,
      without limitation, any duty to collect any Distributions, or enforce
      or preserve any rights pertaining thereto.

(b)   Eligibility to Hold Posted Collateral; Custodians.

      (i)   General. Subject to the satisfaction of any conditions specified
            in Paragraph 13 for holding Posted Collateral, the Secured Party
            will be entitled to hold Posted Collateral or to appoint an agent
            (a "Custodian") to hold Posted Collateral for the Secured Party.
            Upon notice by the Secured Party to the Pledgor of the
            appointment of a Custodian, the Pledgor's obligations to make any
            Transfer will be discharged by making the Transfer to that
            Custodian. The holding of Posted Collateral by a Custodian will
            be deemed to be the holding of that Posted Collateral by the
            Secured Party for which the Custodian is acting.

      (ii)  Failure to Satisfy Conditions. If the Secured Party or its Custodian
            fails to satisfy any conditions for holding Posted Collateral, then
            upon a demand made by the Pledgor, the Secured Party will, not later
            than five Local Business Days after the demand, Transfer or cause
            its Custodian to Transfer all Posted Collateral held by it to a
            Custodian that satisfies those conditions or to the Secured Party if
            it satisfies those conditions.

      (iii) Liability. The Secured Party will be liable for the acts or
            omissions of its Custodian to the same extent that the Secured Party
            would be liable hereunder for its own acts or omissions.

(c)   Use of Posted Collateral. Unless otherwise specified in Paragraph 13
      and without limiting the rights and obligations of the parties under
      Paragraphs 3, 4(d)(ii), 5, 6(d) and 8, if the Secured Party is not a
      Defaulting Party or an Affected Party with respect to a Specified
      Condition and no Early Termination Date has occurred or been designated
      as the result of an Event of Default or Specified Condition with
      respect to the Secured Party, then the Secured Party will,
      notwithstanding Section 9-207 of the New York Uniform Commercial Code,
      have the right to:

      (i)   sell, pledge, rehypothecate, assign, invest, use, commingle or
            otherwise dispose of, or otherwise use in its business any Posted
            Collateral it holds, free from any claim or right of any nature
            whatsoever of the Pledgor, including any equity or right of
            redemption by the Pledgor; and

      (ii)  register any Posted Collateral in the name of the Secured Party, its
            Custodian or a nominee for either.

For purposes of the obligation to Transfer Eligible Credit Support or Posted
Credit Support pursuant to Paragraphs 3 and 5 and any rights or remedies
authorized under this Agreement, the Secured Party will be deemed to continue to
hold all Posted Collateral and to receive Distributions made thereon, regardless
of whether the Secured Party has exercised any rights with respect to any Posted
Collateral pursuant to (i) or (ii) above.

(d) Distributions and Interest Amount.

      (i)   Distributions. Subject to Paragraph 4(a), if the Secured Party
            receives or is deemed to receive Distributions on a Local
            Business Day, it will Transfer to the Pledgor not later than the
            following Local Business Day any Distributions it receives or is
            deemed to receive to the extent that a Delivery Amount would not
            be created or increased by that Transfer, as calculated by the
            Valuation Agent (and the date of calculation will be deemed to be
            a Valuation Date for this purpose).

      (ii)  Interest Amount. Unless otherwise specified in Paragraph 13 and
            subject to Paragraph 4(a), in lieu of any interest, dividends or
            other amounts paid or deemed to have been paid with respect to
            Posted Collateral in the form of Cash (all of which may be retained
            by the Secured Party), the Secured Party will Transfer to the
            Pledgor at the times specified in Paragraph 13 the Interest Amount
            to the extent that a Delivery Amount would not be created or
            increased by that Transfer, as calculated by the Valuation Agent
            (and the date of calculation will be deemed to be a Valuation Date
            for this purpose). The Interest Amount or portion thereof not
            Transferred pursuant to this Paragraph will constitute Posted
            Collateral in the form of Cash and will be subject to the security
            interest granted under Paragraph 2.

Paragraph 7. Events of Default

For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will
exist with respect to a party if:

      (i)   that party fails (or fails to cause its Custodian) to make, when
            due, any Transfer of Eligible Collateral, Posted Collateral or the
            Interest Amount, as applicable, required to be made by it and that
            failure continues for two Local Business Days after notice of that
            failure is given to that party;

      (ii)  that party fails to comply with any restriction or prohibition
            specified in this Annex with respect to any of the rights specified
            in Paragraph 6(c) and that failure continues for five Local Business
            Days after notice of that failure is given to that party; or

      (iii) that party fails to comply with or perform any agreement or
            obligation other than those specified in Paragraphs 7(i) and 7(ii)
            and that failure continues for 30 days after notice of that failure
            is given to that party.

Paragraph 8. Certain Rights and Remedies

(a)   Secured Party's Rights and Remedies. If at any time (1) an Event of
      Default or Specified Condition with respect to the Pledgor has occurred
      and is continuing or (2) an Early Termination Date has occurred or been
      designated as the result of an Event of Default or Specified Condition
      with respect to the Pledgor, then, unless the Pledgor has paid in full all
      of its Obligations that are then due, the Secured Party may exercise one
      or more of the following rights and remedies:

      (i)   all rights and remedies available to a secured party under
            applicable law with respect to Posted Collateral held by the Secured
            Party;

      (ii)  any other rights and remedies available to the Secured Party under
            the terms of Other Posted Support, if any;

      (iii) the right to Set-off any amounts payable by the Pledgor with respect
            to any Obligations against any Posted Collateral or the Cash
            equivalent of any Posted Collateral held by the Secured Party (or
            any obligation of the Secured Party to Transfer that Posted
            Collateral); and

      (iv)  the right to liquidate any Posted Collateral held by the Secured
            Party through one or more public or private sales or other
            dispositions with such notice, if any, as may be required under
            applicable law, free from any claim or right of any nature
            whatsoever of the Pledgor, including any equity or right of
            redemption by the Pledgor (with the Secured Party having the right
            to purchase any or all of the Posted Collateral to be sold) and to
            apply the proceeds (or the Cash equivalent thereof) from the
            liquidation of the Posted Collateral to any amounts payable by the
            Pledgor with respect to any Obligations in that order as the Secured
            Party may elect.

Each party acknowledges and agrees that Posted Collateral in the form of
securities may decline speedily in value and is of a type customarily sold on a
recognized market, and, accordingly, the Pledgor is not entitled to prior notice
of any sale of that Posted Collateral by the Secured Party, except any notice
that is required under applicable law and cannot be waived.

(b)   Pledgor's Rights and Remedies. If at any time an Early Termination Date
      has occurred or been designated as the result of an Event of Default or
      Specified Condition with respect to the Secured Party, then (except in the
      case of an Early Termination Date relating to less than all Transactions
      (or Swap Transactions) where the Secured Party has paid in full all of its
      obligations that are then due under Section 6(e) of this Agreement):

      (i)   the Pledgor may exercise all rights and remedies available to a
            pledgor under applicable law with respect to Posted Collateral held
            by the Secured Party;

      (ii)  the Pledgor may exercise any other rights and remedies available to
            the Pledgor under the terms of Other Posted Support, if any;

      (iii) the Secured Party will be obligated immediately to Transfer all
            Posted Collateral and the Interest Amount to the Pledgor; and

      (iv)  to the extent that Posted Collateral or the Interest Amount is not
            so Transferred pursuant to (iii) above, the Pledgor may:

            (A)   Set-off any amounts payable by the Pledgor with respect to any
                  Obligations against any Posted Collateral or the Cash
                  equivalent of any Posted Collateral held by the Secured Party
                  (or any obligation of the Secured Party to Transfer that
                  Posted Collateral); and

            (B)   to the extent that the Pledgor does not Set-off under (iv)(A)
                  above, withhold payment of any remaining amounts payable by
                  the Pledgor with respect to any Obligations, up to the Value
                  of any remaining Posted Collateral held by the Secured Party,
                  until that Posted Collateral is Transferred to the Pledgor.

(c)   Deficiencies and Excess Proceeds. The Secured Party will Transfer to the
      Pledgor any proceeds and Posted Credit Support remaining after
      liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b)
      after satisfaction in full of all amounts payable by the Pledgor with
      respect to any Obligations; the Pledgor in all events will remain liable
      for any amounts remaining unpaid after any liquidation, Set-off and/or
      application under Paragraphs 8(a) and 8(b).

(d)   Final Returns. When no amounts are or thereafter may become payable by the
      Pledgor with respect to any Obligations (except for any potential
      liability under Section 2(d) of this Agreement), the Secured Party will
      Transfer to the Pledgor all Posted Credit Support and the Interest Amount,
      if any.

Paragraph 9. Representations

Each party represents to the other party (which representations will be deemed
to be repeated as of each date on which it, as the Pledgor, Transfers Eligible
Collateral) that:

      (i)   it has the power to grant a security interest in and lien on any
            Eligible Collateral it Transfers as the Pledgor and has taken all
            necessary actions to authorize the granting of that security
            interest and lien;

      (ii)  it is the sole owner of or otherwise has the right to Transfer all
            Eligible Collateral it transfers to the Secured Party hereunder,
            free and clear of any security interest, lien, encumbrance or other
            restrictions other than the security interest and lien granted under
            Paragraph 2;

      (iii) upon the Transfer of any Eligible Collateral to the Secured Party
            under the terms of this Annex, the Secured Party will have a valid
            and perfected first priority security interest therein (assuming
            that any central clearing corporation or any third-party financial
            intermediary or other entity not within the control of the Pledgor
            involved in the Transfer of that Eligible Collateral gives the
            notices and takes the action required of it under applicable law for
            perfection of that interest); and

      (iv)  the performance by it of its obligations under this Annex will not
            result in the creation of any security interest, lien or other
            encumbrance on any Posted Collateral other than the security
            interest and lien granted under Paragraph 2.

Paragraph 10. Expenses

(a)   General. Except as otherwise provided in Paragraphs 10(b) and 10(c), each
      party will pay its own costs and expenses in connection with performing
      its obligations under this Annex and neither party will be liable for any
      costs and expenses incurred by the other party in connection herewith.

(b)   Posted Credit Support. The Pledgor will promptly pay when due all taxes,
      assessments or charges of any nature that are imposed with respect to
      Posted Credit Support held by the Secured Party upon becoming aware of the
      same, regardless of whether any portion of that Posted Credit Support is
      subsequently disposed of under Paragraph 6(c), except for those taxes,
      assessments and charges that result from the exercise of the Secured
      Party's rights under Paragraph 6(c).

(c)   Liquidation/Application of Posted Credit Support. All reasonable costs and
      expenses incurred by or on behalf of the Secured Party or the Pledgor in
      connection with the liquidation and/or application of any Posted Credit
      Support under Paragraph 8 will be payable, on demand and pursuant to the
      Expenses Section of this Agreement, by the Defaulting Party or, if there
      is no Defaulting Party, equally by the parties.

Paragraph 11. Miscellaneous

(a)   Default Interest. A Secured Party that fails to make, when due, any
      Transfer of Posted Collateral or the Interest Amount will be obligated
      to pay the Pledgor (to the extent permitted under applicable law) an
      amount equal to interest at the Default Rate multiplied by the Value of
      the items of property that were required to be Transferred, from (and
      including) the date that Posted Collateral or Interest Amount was
      required to be Transferred to (but excluding) the date of Transfer of
      that Posted Collateral or Interest Amount. This interest will be
      calculated on the basis of daily compounding and the actual number of
      days elapsed.

(b)   Further Assurances. Promptly following a demand made by a party, the
      other party will execute, deliver, file and record any financing
      statement, specific assignment or other document and take any other
      action that may be necessary or desirable and reasonably requested by
      that party to create, preserve, perfect or validate any security
      interest or lien granted under Paragraph 2, to enable that party to
      exercise or enforce its rights under this Annex with respect to Posted
      Credit Support or an Interest Amount or to effect or document a release
      of a security interest on Posted Collateral or an Interest Amount.

(c)   Further Protection. The Pledgor will promptly give notice to the Secured
      Party of, and defend against, any suit, action, proceeding or lien that
      involves Posted Credit Support Transferred by the Pledgor or that could
      adversely affect the security interest and lien granted by it under
      Paragraph 2, unless that suit, action, proceeding or lien results from the
      exercise of the Secured Party's rights under Paragraph 6(c).

(d)   Good Faith and Commercially Reasonable Manner. Performance of all
      obligations under this Annex including, but not limited to, all
      calculations, valuations and determinations made by either party, will be
      made in good faith and in a commercially reasonable manner.

(e)   Demands and Notices. All demands and notices made by a party under this
      Annex will be made as specified in the Notices Section of this Agreement,
      except as otherwise provided in Paragraph 13.

(f)   Specifications of Certain Matters. Anything referred to in this Annex as
      being specified in Paragraph 13 also may be specified in one or more
      Confirmations or other documents and this Annex will be construed
      accordingly.

Paragraph 12. Definitions

As used in this Annex:--

"Cash" means the lawful currency of the United States of America.

"Credit Support Amount" has the meaning specified in Paragraph 3.

"Custodian" has the meaning specified in Paragraphs 6(b)(i) and 13.

"Delivery Amount" has the meaning specified in Paragraph 3(a).

"Disputing Party" has the meaning specified in Paragraph 5.

"Distributions" means with respect to Posted Collateral other than Cash, all
principal, interest and other payments and distributions of cash or other
property with respect thereto, regardless of whether the Secured Party has
disposed of that Posted Collateral under Paragraph 6(c). Distributions will not
include any item of property acquired by the Secured Party upon any disposition
or liquidation of Posted Collateral or, with respect to any Posted Collateral in
the form of Cash, any distributions on that collateral, unless otherwise
specified herein.

"Eligible Collateral" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.

"Eligible Credit Support" means Eligible Collateral and Other Eligible
Support.

"Exposure" means for any Valuation Date or other date for which Exposure is
calculated and subject to Paragraph 5 in the case of a dispute, the amount, if
any, that would be payable to a party that is the Secured Party by the other
party (expressed as a positive number) or by a party that is the Secured Party
to the other party (expressed as a negative number) pursuant to Section
6(e)(ii)(2)(A) of this Agreement as if all Transactions (or Swap Transactions)
were being terminated as of the relevant Valuation Time; provided that Market
Quotation will be determined by the Valuation Agent using its estimates at
mid-market of the amounts that would be paid for Replacement Transactions (as
that term is defined in the definition of "Market Quotation").

"Independent Amount" means, with respect to a party, the amount specified as
such for that party in Paragraph 13; if no amount is specified, zero.

"Interest Amount" means, with respect to an Interest Period, the aggregate sum
of the amounts of interest calculated for each day in that Interest Period on
the principal amount of Posted Collateral in the form of Cash held by the
Secured Party on that day, determined by the Secured Party for each such day as
follows:

      (x) the amount of that Cash on that day; multiplied by

      (y) the Interest Rate in effect for that day; divided by

      (z) 360.

"Interest Period" means the period from (and including) the last Local Business
Day on which an Interest Amount was Transferred (or, if no Interest Amount has
yet been Transferred, the Local Business Day on which Posted Collateral in the
form of Cash was Transferred to or received by the Secured Party) to (but
excluding) the Local Business Day on which the current Interest Amount is to be
Transferred.

"Interest Rate" means the rate specified in Paragraph 13.

"Local Business Day", unless otherwise specified in Paragraph 13, has the
meaning specified in the Definitions Section of this Agreement, except that
references to a payment in clause (b) thereof will be deemed to include a
Transfer under this Annex.

"Minimum Transfer Amount" means, with respect to a party, the amount specified
as such for that party in Paragraph 13; if no amount is specified, zero.

"Notification Time" has the meaning specified in Paragraph 13.

"Obligations" means, with respect to a party, all present and future obligations
of that party under this Agreement and any additional obligations specified for
that party in Paragraph 13.

"Other Eligible Support" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.

"Other Posted Support" means all Other Eligible Support Transferred to the
Secured Party that remains in effect for the benefit of that Secured Party.

"Pledgor" means either party, when that party (i) receives a demand for or is
required to Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has
Transferred Eligible Credit Support under Paragraph 3(a).

"Posted Collateral" means all Eligible Collateral, other property,
Distributions, and all proceeds thereof that have been Transferred to or
received by the Secured Party under this Annex and not Transferred to the
Pledgor pursuant to Paragraph 3(b), 4(d)(ii) or 6(d)(i) or released by the
Secured Party under Paragraph 8. Any Interest Amount or portion thereof not
Transferred pursuant to Paragraph 6(d)(ii) will constitute Posted Collateral in
the form of Cash.

"Posted Credit Support" means Posted Collateral and Other Posted Support.

"Recalculation Date" means the Valuation Date that gives rise to the dispute
under Paragraph 5; provided, however, that if a subsequent Valuation Date occurs
under Paragraph 3 prior to the resolution of the dispute, then the
"Recalculation Date" means the most recent Valuation Date under Paragraph 3.

"Resolution Time" has the meaning specified in Paragraph 13.

"Return Amount" has the meaning specified in Paragraph 3(b).

"Secured Party" means either party, when that party (i) makes a demand for or is
entitled to receive Eligible Credit Support under Paragraph 3(a) or (ii) holds
or is deemed to hold Posted Credit Support.

"Specified Condition" means, with respect to a party, any event specified as
such for that party in Paragraph 13.

"Substitute Credit Support" has the meaning specified in Paragraph 4(d)(i).

"Substitution Date" has the meaning specified in Paragraph 4(d)(ii).

"Threshold" means, with respect to a party, the amount specified as such for
that party in Paragraph 13; if no amount is specified, zero.

"Transfer" means, with respect to any Eligible Credit Support, Posted Credit
Support or Interest Amount, and in accordance with the instructions of the
Secured Party, Pledgor or Custodian, as applicable:

      (i)   in the case of Cash, payment or delivery by wire transfer into one
            or more bank accounts specified by the recipient;

      (ii)  in the case of certificated securities that cannot be paid or
            delivered by book-entry, payment or delivery in appropriate physical
            form to the recipient or its account accompanied by any duly
            executed instruments of transfer, assignments in blank, transfer tax
            stamps and any other documents necessary to constitute a legally
            valid transfer to the recipient;

      (iii) in the case of securities that can be paid or delivered by
            book-entry, the giving of written instructions to the relevant
            depository institution or other entity specified by the recipient,
            together with a written copy thereof to the recipient, sufficient if
            complied with to result in a legally effective transfer of the
            relevant interest to the recipient; and

      (iv)  in the case of Other Eligible Support or Other Posted Support, as
            specified in Paragraph 13.

"Valuation Agent" has the meaning specified in Paragraph 13.

"Valuation Date" means each date specified in or otherwise determined pursuant
to Paragraph 13.

"Valuation Percentage" means, for any item of Eligible Collateral, the
percentage specified in Paragraph 13.

"Valuation Time" has the meaning specified in Paragraph 13.

"Value" means for any Valuation Date or other date for which Value is calculated
and subject to Paragraph 5 in the case of a dispute, with respect to:

      (i) Eligible Collateral or Posted Collateral that is:

            (A) Cash, the amount thereof; and

            (B)   a security, the bid price obtained by the Valuation Agent
                  multiplied by the applicable Valuation Percentage, if any;

      (ii)  Posted Collateral that consists of items that are not specified as
            Eligible Collateral, zero; and

      (iii) Other Eligible Support and Other Posted Support, as specified in
            Paragraph 13.

Paragraph 13. Elections and Variables

(a)  Security Interest for "Obligations". The term "Obligations" as used in this
     Annex includes no additional obligations with respect to Party A or Party
     B.

(b)  Credit Support Obligations.

     (i)    "Delivery Amount", "Return Amount" will have the meanings specified
            in Paragraphs 3(a), 3(b) and 3, respectively, except that the words
            "upon a demand made by the Transferee on or promptly following a
            Valuation Date" shall be deleted and replaced by the words "on each
            Valuation Date".

     (ii)   "Credit Support Amount" (x) means the Amount required under
            Paragraph 13(o) (in the case of a Party A Rating Event relating
            to an action taken by S&P); (y) has the meaning specified under
            the relevant definition of Ratings Criteria (in the case of
            Moody's First Trigger Event or Moody's Second Trigger Event); or
            (z) means Party B's Exposure under the Agreement to which this
            Annex relates (in the case of a Party A Rating Event relating to
            an action taken by Fitch), in each case as calculated on a daily
            basis by the Valuation Agent. The Credit Support Amount shall be
            calculated by reference to the provisions set forth in this Annex
            which would result in Party A transferring the greatest amount of
            Eligible Credit Support to Party B. In circumstances where more
            than one of the Ratings Criteria apply, the Credit Support Amount
            shall be calculated by reference to the Ratings Criteria which
            would result in Party A transferring the greatest amount of
            Eligible Credit Support.

      (iii) Eligible Collateral. The following items will qualify as "Eligible
            Collateral":

<TABLE>
<CAPTION>
                                                 Moody's       Moody's
                                                  First        Second
                                    Valuation    Ratings       Ratings
                                   Percentage:*  Trigger       Trigger     S&P
                                   ------------  -------       -------     ---
<S>                                <C>           <C>      <C>              <C>
    (A)  Cash: US                                  100%         100%       100%
         Dollars in depository
         account form.

    (B)  U.S. Treasury                            100%%         100%       98%
         Securities: negotiable
         debt obligations issued
         by the U.S. Treasury
         Department
         ("Treasuries") having a
         remaining maturity of up
         to and not more than 1
         year.

    (C)  Treasuries having a                       100%      99% (1-2yr)   90%
         remaining maturity of                               98% (2-3yr)
         greater than 1 year but                             97% (3-5yr)
         not more than 10 years.                             95% (5-7yr)
                                                             94% (7-10yr)

    (D)  Treasuries having a                       100%     89% (10-20yr)  84%
         remaining maturity of                               87% (>20yr)
         greater than 10 years.

    (E)  Agency Securities:                        100%          99%       98%
         negotiable debt                                     94% (5-7yr)
         obligations of the                                 93% (7-10yr)
         Federal National
         Mortgage Association
         (FNMA), Federal Home
         Loan Mortgage
         Corporation (FHLMC),
         Federal Home Loan Banks
         (FHLB), Federal Farm
         Credit Banks (FFCB),
         Student Loan Marketing
         Association (SLMA),
         Tennessee Valley
         Authority (TVA)
         (collectively, "Agency
         Securities") having a
         remaining maturity of
         not more than 1 year.

    (F)  Agency Securities having                  100%      98% (1-2yr)   92%
         a remaining maturity of                             97% (2-3yr)
         greater than 1 year but                             96% (3-5yr)
         not more than 5 years.

    (G)  Agency Securities having                  100%      94% (5-7yr)   88%
         a remaining maturity of                            93% (7-10yr)
         greater than 5 years but
         not more than 10 years.

    (H)  Agency Securities having                  100%          88%       79%
         a remaining maturity of
         greater than 10 years
         but not more than 20
         years.

    (I)  Agency Securities having                  100%          86%       76%
         a remaining maturity of
         greater than 20 years
         but not more than 30
         years.

    (J)  FHLMC Certificates.                       81%           81%       81%
         Mortgage participation
         certificates issued by
         FHLMC evidencing
         undivided interests or
         participations in pools
         of first lien
         conventional or FHA/VA
         residential mortgages or
         deeds of trust,
         guaranteed by FHLMC, and
         having a remaining
         maturity of not more
         than 30 years.

    (K)  FNMA Certificates.                        81%           81%       81%
         Mortgage-backed
         pass-through
         certificates issued by
         FNMA evidencing
         undivided interests in
         pools of first lien
         mortgages or deeds of
         trust on residential
         properties, guaranteed
         by FNMA, having a
         remaining maturity of
         not more than 30 years.

    (L)  GNMA Certificates.                        81%           81%       81%
         Mortgage-backed
         pass-through
         certificates issued by
         private entities,
         evidencing undivided
         interests in pools of
         first lien mortgages or
         deeds of trust on single
         family residences,
         guaranteed by the
         Government National
         Mortgage Association
         (GNMA) with the full
         faith and credit of the
         United States, and
         having a remaining
         maturity of not more
         than 30 years.

    (M)  Commercial Paper.                         80%           80%      99.0%
         Commercial Paper with a
         rating of at least P-1
         by Moody's, at least F-1
         by Fitch and at least
         A-1+ by S&P and having a
         remaining maturity of
         not more than 30 days.

    (N)  Other. Other items of                 % to be      % to be       % to
         Credit Support approved               determined   determined    be
         by each applicable                                               determined
         rating agency with such
         valuation percentages as
         determined by each
         applicable rating agency.
</TABLE>

* The Valuation Percentage shall equal the percentage specified under such
Rating Agency's name above. If Party A is rated by more than one Rating Agency
specified above, the Valuation Percentage shall equal the lowest of the
applicable percentages specified above.

      (iv)  There shall be no "Other Eligible Support" for Party A for purposes
            of this Annex.

     (v)    Thresholds.

            (A)   "Independent Amount" means with respect to Party A: Not
                  Applicable.

                  "Independent Amount" means with respect to Party B: Not
                  Applicable.

            (B)   "Threshold" means with respect to Party A: Infinity;
                  provided that for so long as Party A is not above the
                  Moody's First Trigger Required Ratings and S&P's Ratings
                  Event and either (i) Party A had been below the Moody's
                  First Trigger Required Ratings or below S&P's Ratings Event
                  since this Annex was executed or (ii) at least 30 Local
                  calendar Days have elapsed since the last time Party A was
                  above both theMoody's First Trigger Required Ratings and
                  S&P's Ratings Event, the Threshold with respect to Party A
                  shall be zero; further, provided, if a Ratings Event has
                  occurred and is continuing pursuant to Part 1(l)(v) of the
                  Agreement, the Threshold shall be zero in the event Party A
                  fails to assign all of its rights and obligations under the
                  Agreement on or before the 20th day after the date of a
                  Ratings Event (as described in Part 1(l)(v) of the
                  Schedule) continues to exist. Party A will post Eligible
                  Collateral on or prior to the 20th day following a Ratings
                  Event.

                  "Threshold" means with respect to Party B: Not Applicable.

            (C)   "Minimum Transfer Amount" means with respect to Party A: $
                  10,000.

                  "Minimum Transfer Amount" means with respect to Party B: $
                  10,000.

            (D)   Rounding. The Delivery Amount will be rounded up and the
                  Return Amount will be rounded down to the nearest integral
                  multiple of $10,000.00, respectively.

(c)   Valuation and Timing.

      (i)   "Valuation Agent" means Party A; provided, however, that
            notwithstanding anything to the contrary set forth in this Annex,
            the Valuation Agent shall not be required to notify Party B of any
            of the Valuation Agent's calculations of Value, Exposure, Delivery
            Amount or Return Amount under this Annex unless requested to do so
            (either verbally or in writing) by Party B in each instance.

      (ii)  "Valuation Date" means: each local Business Day which if treated as
            a Valuation Date would result in a Delivery Amount or Return Amount.

      (iii) "Valuation Time" means:

            [___] the close of business in the city of the Valuation Agent on
                  the Valuation Date or date of calculation, as applicable;

            [ X ] the close of business on the Local Business Day before the
                  Valuation Date or date of calculation, as applicable;

      provided that the calculations of Value and Exposure will be made as of
      approximately the same time on the same date.

      (iv)  "Notification Time" means 1:00 p.m., New York time, on a Local
            Business Day.

(d)   Conditions Precedent. No event shall constitute a "Specified Condition".

(e)   Substitution.

      (i)   "Substitution Date" means the Local Business Day in New York on
            which the Secured Party is able to confirm irrevocable receipt of
            the Substitute Credit Support, provided that (x) such receipt is
            confirmed before 3:00 p.m. (New York time) on such Local Business
            Day in New York and (y) the Secured Party has received, before
            1:00 p.m. (New York time) on the immediately preceding Local
            Business Day in New York, the notice of substitution described in
            Paragraph 4(d)(i).

     (ii)   Consent. The Pledgor is not required to obtain the Secured Party's
            consent for any substitution pursuant to Paragraph 4(d).

(f)   Dispute Resolution.

     (i)    "Resolution Time" means 1:00 p.m., New York time, on the Local
            Business Day following the date on which a notice is given that
            gives rise to a dispute under Paragraph 5.

     (ii)   Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value
            of Posted Credit Support will be calculated as follows: for Cash,
            the U.S. dollar value thereof, and for each item of Eligible
            Collateral (except for Cash), an amount in U.S. dollars equal to
            the product of (i) either (A) the bid price for such security
            quoted on such day by a principal market-maker for such security
            selected in good faith by the Secured Party or (B) the most
            recent publicly available bid price for such security as reported
            by a quotation service or in a medium selected in good faith and
            in a commercially reasonable manner by Secured Party, multiplied
            by (ii) the percentage figure listed in Paragraph 13(b)(ii)
            hereof with respect to such security.

     (iii)  Alternative. The provisions of Paragraph 5 will apply.

(g)   Holding and Using Posted Collateral.

      (i)   Eligibility to Hold Posted Collateral; Custodians. Party B and its
            Custodian will be entitled to hold Posted Collateral, as applicable,
            pursuant to Paragraph 6(b); provided that the following conditions
            applicable to each party are satisfied:

            (A)   Party B, as the Secured Party, is not a Defaulting Party.

            (B)   Party B hereby covenants and agrees that it will cause all
                  Posted Collateral received from the other party to be
                  entered in one or more accounts (each, a "Collateral
                  Account") with a domestic office of a commercial bank,
                  trust company or financial institution organized under the
                  laws of the United States (or any state or a political
                  subdivision thereof) having assets of at least $10 billion
                  and a long term debt or deposit rating of at least (i) Baa2
                  from Moody's and (ii) BBB from S&P (a "Qualified
                  Institution"), each of which accounts may include property
                  of other parties but will bear a title indicating the
                  Secured Party's interest in said account and the Posted
                  Collateral in such account. In addition the Secured Party
                  may direct the Pledgor to transfer or deliver Eligible
                  Collateral directly into the Secured Party's Collateral
                  Account(s). If otherwise qualified, the Secured Party may
                  act as such Qualified Institution and the Secured Party may
                  move the Collateral Accounts from one Qualified Institution
                  to another upon reasonable notice to the Pledgor. The
                  Secured Party shall cause statements concerning the Posted
                  Collateral transferred or delivered by the Pledgor to be
                  sent to the Pledgor on request, which may not be made more
                  frequently than once in each calendar month.

      Initially, the Custodian for Party B is Wells Fargo Bank, N.A.

      (ii)  Use of Posted Collateral. The provisions of Paragraph 6(c) will not
            apply to Party B.

(h)   Distributions and Interest Amount.

      (i)   The "Interest Rate" with respect to Eligible Collateral in the form
            of Cash, for any day, will be the interest rate actually earned by
            Party B prior thereto.

      (ii)  The "Transfer of Interest Amount" will be made within 3 Local
            Business Days after the last Local Business Day of each calendar
            month.

      (iii) Alternative Interest Amount. The provisions of Paragraph 6(d)(ii)
            will apply.

      (iv)  Paragraph 12 is hereby amended by replacing the definition of
            "Interest Period" with the following:

            "'Interest Period' means the period from (and including) the first
            day of each calendar month to (and including) the last day of each
            calendar month."

(i)   Additional Representations. None.

(j)   Other Eligible Support and Other Posted Support. Not Applicable.

(k)   Demands and Notices. All demands, specifications and notices made by a
      party to this Annex will be made to the following:

     Party A:     Bank of America, N.A.
                  Sears Tower
                  233 South Wacker Drive, Suite 2800
                  Chicago, Illinois 60606-6306
                  Telephone No.: (312) 234-3030
                  Facsimile: (312) 234-2731

     Party B: As set forth in the Schedule.

(l)   Addresses for Transfers.

     Party A:   Cash/Interest Payments: (USD Only)
                Bank of America, New York
                ABA 026009593
                Account # 6550-619389
                F/O Bank of America, Charlotte-Collateral

                Eligible Collateral (other than cash):
                BK AMERICA NC/INV
                ABA # 053 000 196

     Party B:   Wells Fargo Bank, National Association
                San Francisco, CA

                ABA 121000248
                Account No.: 3970771416
                Account Name: SAS Clearing
                FFC: 50987002, BOAMS 2007-1 Posted Collateral Account
                Treasury Securities:

                Wells Fargo Bank, National Association

                San Francisco, CA

                ABA 121000248
                Account No. 50987002, BOAMS 2007-1 Posted Collateral Account

(m)   Other Provisions.

      (i)   This Credit Support Annex is a Security Agreement under the New York
            UCC.

      (ii)  Paragraph 1(b) of this Annex is amended by deleting it and restating
            it in full as follows:

            "(b) Secured Party and Pledgor. All references in this Annex to the
            "Secured Party" mean Party B, and all references in this Annex to
            the "Pledgor" mean Party A; provided, however, that if Other Posted
            Support is held by Party B, all references herein to the Secured
            Party with respect to that Other Posted Support will be to Party B
            as the beneficiary thereof and will not subject that support or
            Party B as the beneficiary thereof to provisions of law generally
            relating to security interests and secured parties."

      (iii) Paragraph 2 of this Annex is amended by deleting the first sentence
            thereof and restating that sentence in full as follows:

            "Party A, as the Pledgor, hereby pledges to Party B, as the Secured
            Party, as security for the Pledgor's Obligations, and grants to the
            Secured Party a first priority continuing security interest in, lien
            on and right of Set-off against all Posted Collateral Transferred to
            or received by the Secured Party hereunder."

      (iv)  Only Party A makes the representations contained in Paragraph 9 of
            this Annex.

      (v)   Paragraph 12 of this Annex is amended by deleting the definitions of
            "Pledgor" and "Secured Party" and replacing them with the
            following:"

            "'Secured Party' means Party B.

            'Pledgor' means Party A."

      (vi)  Paragraph 12 is hereby amended by adding, in alphabetical order, the
            following:

            "Moody's" means Moody's Investor Services, Inc., or any successor
            to the rating business of such entity."

            "S&P" means Standard and Poor's Ratings Services, a division of The
            McGraw-Hill Companies, Inc., or any successor to the rating business
            of such entity."

      (vii) The obligations of Party A, as Pledgor hereunder, to post Eligible
            Collateral for the benefit of Party B will only become effective if
            a Ratings Event has occurred and is continuing with respect to Party
            A and Party A has not satisfied the requirements of Part 1(l)(v) of
            the Agreement within 20 days of the occurrence of such Ratings Event
            or 30 Local Business Days from the occurrence of a Moody's First
            Trigger Event or Moody's Second Trigger Event.

(o)   S&P Credit Support Amount. With respect to a Ratings Event relating to an
      action taken by S&P, the "Credit Support Amount" shall mean with respect
      to a Pledgor on a Valuation Date the sum of:

      (i) the greater of MTM and $0, plus

      (ii) VB

      where:

      "MTM" means Secured Party's Exposure;

      "VB" means the Notional Amount (as defined in the Confirmation for each
      outstanding Transaction under this Agreement) times the relevant
      percentage set out in Table A below:

TABLE A

                                Volatility Buffer

                                            Less than 10
                                            years, but more   Greater than 10
                         Less than 5 years  than 5 years to   years to
                         to Termination     Termination Date  Termination Date
                         Date of the        of the            of the
      Counterparty       Transaction.       Transaction.      Transaction.
      -----------------  -----------------  ----------------  ------------------
      The rating by S&P               3.25%              4.00%             4.75%
      of Party A's
      long-term
      unsecured,
      unsubordinated
      obligations is at
      least equal to "A"

      The rating by S&P               4.00%              5.00%             6.25%
      of Party A's
      long-term
      unsecured,
      unsubordinated
      obligations is
      equal to "A-"

      The rating by S&P               4.50%              6.75%             7.50%
      of Party A's
      long-term
      unsecured,
      unsubordinated
      obligations is
      equal to or less
      than "BB+"

(p)   Moody's Ratings Criteria.

      "Ratings Criteria" means, the criteria used by Moody's ("Moody's
      Criteria") for the purposes of determining the amount of Eligible Credit
      Support Party A is required to transfer at any time when the Threshold
      with respect to Party A is zero.

      Moody's Criteria

      Moody's Credit Support Amount.* With respect to a Ratings Event relating
      to an action taken by Moody's, the "Credit Support Amount" shall mean with
      respect to a Pledgor on a Valuation Date the sum of:

      (i)   With respect to a Moody's First Trigger Event:

            (A)   the greater of the Secured Party's Exposure and $0, plus

            (B)   Notional Amount times the relevant percentage set out in Table
                  B below.

      (ii)  With respect to a Moody's Second Trigger Event:

            (A)   the greater of the Secured Party's Exposure, $0 or the amount
                  owed by Party A on the next Payment Date (as such term is
                  defined in the Confirmation for each outstanding Transaction
                  under this Agreement), plus

            (B)   Notional Amount times the relevant percentage set out in Table
                  B below.

* To the extent that both the Moody's Credit Support Amount and the S&P Credit
Support Amount apply, the greater of the two amounts shall be the Credit Support
Amount.

TABLE B

                              Moody's First
Weighted Average Life of      Trigger Event has      Moody's Second Trigger
Hedge in Years                Occurred               Event has Occurred
------------------------      -----------------      ----------------------
1                             0.15%                  0.50%
2                             0.30%                  1.00%
3                             0.40%                  1.50%
4                             0.60%                  1.90%
5                             0.70%                  2.40%
6                             0.80%                  2.80%
7                             1.00%                  3.20%
8                             1.10%                  3.60%
9                             1.20%                  4.00%
10                            1.30%                  4.40%
11                            1.40%                  4.70%
12                            1.50%                  5.00%
13                            1.60%                  5.40%
14                            1.70%                  5.70%
15                            1.80%                  6.00%
16                            1.90%                  6.30%
17                            2.00%                  6.60%
18                            2.00%                  6.90%
19                            2.00%                  7.20%
20                            2.00%                  7.50%
21                            2.00%                  7.80%
22                            2.00%                  8.00%
23                            2.00%                  8.00%
24                            2.00%                  8.00%
25                            2.00%                  8.00%
26                            2.00%                  8.00%
27                            2.00%                  8.00%
28                            2.00%                  8.00%
29                            2.00%                  8.00%
30                            2.00%                  8.00%

<PAGE>

Accepted and agreed:

BANK OF AMERICA, N.A.                    WELLS FARGO BANK, N.A., AS TRUSTEE,
                                         ON  BEHALF OF BANC OF AMERICA
                                         MORTGAGE 2007-1 TRUST

By:   /s/ Roger Heintzelman              By:   /s/ Darron C. Woodus
   ---------------------------------        ------------------------------------
   Name:  Roger Heintzelman                 Name:  Darron C. Woodus
   Title: Senior Vice President             Title: Assistant Vice President
   Date:  3/14/07                           Date:EX-10.30

     

    

    Exhibit
      10.30

    

    

    LOAN
      AGREEMENT

    

    BY
      AND BETWEEN

    

    THE
      STATE OF NEW JERSEY,

    

    ACTING
      BY AND THROUGH THE NEW JERSEY

    DEPARTMENT
      OF ENVIRONMENTAL PROTECTION,

    

    AND

    

    MIDDLESEX
      WATER COMPANY

    

    

    

    

    

    DATED
      AS OF NOVEMBER 1, 2006

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    TABLE
      OF CONTENTS

    

    

      

        
          	 	
                  Page

                
	
                  ARTICLE
                    I

                
	 	 
	
                  DEFINITIONS

                
	 	 
	
                  SECTION
                    1.01. Definitions

                	
                  2

                
	 	 
	
                  ARTICLE
                    II

                
	 	 
	
                  REPRESENTATIONS
                    AND COVENANTS OF BORROWER

                
	 	 
	
                  SECTION
                    2.01. Representations of Borrower

                	
                  6

                
	
                  SECTION
                    2.02. Particular Covenants of
                    Borrower

                	
                  9

                
	 	 
	
                  ARTICLE
                    III

                
	 	 
	
                  LOAN
                    TO BORROWER; AMOUNTS PAYABLE; GENERAL
                    AGREEMENTS

                
	 	 
	
                  SECTION
                    3.01. Loan; Loan Term

                	
                  14

                
	
                  SECTION
                    3.02. Disbursement of Loan
                    Proceeds

                	
                  14

                
	
                  SECTION
                    3.03. Amounts Payable

                	
                  15

                
	
                  SECTION
                    3.04. Unconditional Obligations

                	
                  16

                
	
                  SECTION
                    3.05. Loan Agreement to Survive
                    Loan

                	
                  16

                
	
                  SECTION
                    3.06. Disclaimer of Warranties and
                    Indemnification

                	
                  16

                
	
                  SECTION
                    3.07. Option to Prepay Loan
                    Repayments

                	
                  17

                
	
                  SECTION
                    3.08. Priority of Loan and Trust
                    Loan

                	
                  17

                
	
                  SECTION
                    3.09. Approval of the New Jersey State
                    Treasurer

                	
                  18

                
	 	 
	
                  ARTICLE
                    IV

                
	 	 
	
                  ASSIGNMENT
                    OF LOAN AGREEMENT AND BORROWER BOND

                
	 	 
	
                  SECTION
                    4.01. Assignment and Transfer by
                    State

                	
                  19

                
	
                  SECTION
                    4.02. Assignment by Borrower

                	
                  19

                
	 	 
	
                  ARTICLE
                    V

                
	 	 
	
                  EVENTS
                    OF DEFAULT AND REMEDIES

                
	 	 
	
                  SECTION
                    5.01. Events of Default

                	
                  20

                
	
                  SECTION
                    5.02. Notice of Default

                	
                  21

                
	
                  SECTION
                    5.03. Remedies on Default

                	
                  21

                
	
                  SECTION
                    5.04. Attorneys' Fees and Other
                    Expenses

                	
                  21

                
	
                  SECTION
                    5.05. Application of Moneys

                	
                  21

                

        

      

    

    

    
      
        
          
          

        

        
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              SECTION
                5.06. No Remedy Exclusive; Waiver;
                Notice

            	
              21

            
	
              SECTION
                5.07. Retention of State's Rights

            	
              22

            
	 	 
	
              ARTICLE
                VI

            
	 	 
	
              MISCELLANEOUS

            
	 	 
	
              SECTION
                6.01. Notices

            	
              23

            
	
              SECTION
                6.02. Binding Effect

            	
              23

            
	
              SECTION
                6.03. Severability

            	
              23

            
	
              SECTION
                6.04. Amendments, Supplements and
                Modifications

            	
              23

            
	
              SECTION
                6.05. Execution in Counterparts

            	
              24

            
	
              SECTION
                6.06. Applicable Law and
                Regulations

            	
              24

            
	
              SECTION
                6.07. Consents and Approvals

            	
              24

            
	
              SECTION
                6.08. Captions

            	
              24

            
	
              SECTION
                6.09. Further Assurances

            	
              24

            

    

    

    
      
        
        

      

      
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    NEW
      JERSEY ENVIRONMENTAL INFRASTRUCTURE FUND LOAN AGREEMENT

    

    THIS
      LOAN AGREEMENT, made
      and
      entered into as of November 1, 2006, by and between THE STATE OF NEW JERSEY,
      acting by and through the New Jersey Department of Environmental Protection,
      and
      the Borrower (capitalized terms used in this Loan Agreement shall have, unless
      the context otherwise requires, the meanings ascribed thereto in Section 1.01
      hereof);

    

    WITNESSETH
      THAT:

    

    WHEREAS,
      the
      Borrower has, in accordance with the Regulations, made timely application to
      the
      State for a Loan to finance a portion of the Cost of the Project;

    

    WHEREAS,
      the
      State
      has approved the Borrower's application for a Loan from Federal Funds, if and
      when received by and available to the State, and moneys from repayments of
      loans
      previously made from such Federal Funds, in the amount of the loan commitment
      set forth in Exhibit A-2 attached hereto and made a part hereof to finance
      a
      portion of the Cost of the Project;

    

    WHEREAS,
      the
      New
      Jersey State Legislature has approved an appropriations act that authorizes
      an
      expenditure of said proceeds, Federal Funds or related moneys to finance a
      portion of the Cost of the Project; 

    

    WHEREAS,
      the
      Borrower, in accordance with the Business Corporation Law and all other
      applicable law, will issue a Borrower Bond to the State evidencing said Loan
      at
      the Loan Closing; and

    

    WHEREAS,
      in
      accordance with the New Jersey Environmental Infrastructure Trust Act, P.L.
      1985, c. 334, as amended, and the Regulations, the Borrower has been awarded
      a
      Trust Loan for a portion of the Cost of the Project plus, if applicable to
      the
      Borrower, capitalized interest on the Trust Loan, certain costs of issuance
      and
      bond insurance premium related thereto.

    

    NOW,
      THEREFORE, for
      and
      in consideration of the award of the Loan by the State, the Borrower agrees
      to
      complete the Project and to perform under this Loan Agreement in accordance
      with
      the conditions, covenants and procedures set forth herein and attached hereto
      as
      part hereof, as follows:

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
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    ARTICLE
      I

    

    DEFINITIONS

    

    SECTION
      1.01. Definitions.
      The
      following terms as used in this Loan Agreement shall, unless the context clearly
      requires otherwise, have the following meanings:

    

    "Administrative
      Fee"
      means an
      annual fee of up to one percent (1.0%) of the initial principal amount of the
      Loan or such lesser amount, if any, as may be authorized by any act of the
      New
      Jersey State Legislature and as the State may approve from time to
      time.

    

    "Authorized
      Officer"
      means,
      in the case of the Borrower, any person or persons authorized pursuant to a
      resolution of the board of directors of the Borrower to perform any act or
      execute any document relating to the Loan, the Borrower Bond or this Loan
      Agreement.

    

    "Borrower"
      means
      the corporation that is a party to and is described in Schedule A to this Loan
      Agreement, and its successors and assigns.

    

    "Borrower
      Bond"
      means
      the general obligation bond, note, debenture or other evidence of indebtedness
      authorized, executed, attested and delivered by the Borrower to the State and
      authenticated, if applicable, on behalf of the Borrower to evidence the Loan,
      a
      specimen of which is attached hereto as Exhibit D and made a part
      hereof.

    

    "Borrowers"
      means
      any other Local Government Unit or Private Entity (as such terms are defined
      in
      the Regulations) authorized to construct, operate and maintain Environmental
      Infrastructure Facilities that have entered into Loan Agreements with the State
      pursuant to which the State will make Loans to such recipients from Federal
      Funds.

    

    "Business
      Corporation Law"
      means
      the "New Jersey Business Corporation Act", constituting Chapter 263 of the
      Pamphlet Laws of 1968 of the State (codified at N.J.S.A. 14A:1-1 et
      seq.),
      as the
      same may from time to time be amended and supplemented.

    

    "Code"
      means
      the Internal Revenue Code of 1986, as the same may from time to time be amended
      and supplemented, including any regulations promulgated thereunder, any
      successor code thereto and any administrative or judicial interpretations
      thereof.

    

    "Cost"
      means
      those costs that are eligible, reasonable, necessary, allocable to the Project
      and permitted by generally accepted accounting principles, including Allowances
      and Building Costs (as defined in the Regulations), as shall be determined
      on a
      project-specific basis in accordance with the Regulations as set forth in
      Exhibit B hereto, as the same may be amended by subsequent eligible costs as
      evidenced by a certificate of an authorized officer of the State.

    

    “Department”
      means
      the
      New Jersey Department of Environmental Protection

    

    "Environmental
      Infrastructure Facilities"
      means
      Water Supply Facilities (as such term is defined in the
      Regulations).

    

    
      
        
          
          

        

        
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    "Environmental
      Infrastructure System"
      means
      the Environmental Infrastructure Facilities of the Borrower, including the
      Project, described in Exhibit A-1 attached hereto and made a part hereof for
      which the Borrower is borrowing the Loan under this Loan Agreement.

    

    "Event
      of Default"
      means
      any occurrence or event specified in Section 5.01 hereof.

    

    “Excess
      Project Funds” shall
      have the meaning set forth in Section 3.03A hereof.

    

    "Federal
      Funds"
      means
      those funds awarded to the State pursuant to the Clean Water Act (33 U.S.C.
      §1251 et
      seq.)
      or the
      Safe Drinking Water Act (42 U.S.C. §300f et
      seq.),
      as the
      same may from time to time be amended and supplemented.

    

    "Loan"
      means
      the loan made by the State to the Borrower to finance or refinance a portion
      of
      the Cost of the Project pursuant to this Loan Agreement. For all purposes of
      this Loan Agreement, the principal amount of the Loan at any time shall be
      the
      amount of the loan commitment set forth in Exhibit A-2 attached hereto and
      made
      a part hereof (such amount being also specified as the initial aggregate
      principal amount of the Borrower Bond) less any amount of such principal amount
      that has been repaid by the Borrower under this Loan Agreement and less any
      adjustment made for low bid or final building costs pursuant to the provisions
      of N.J.A.C. 7:22-3.26 and the appropriations act of the New Jersey State
      Legislature authorizing the expenditure of moneys to finance a portion of the
      Cost of the Project.

    

    "Loan
      Agreement"
      means
      this Loan Agreement, including the Exhibits attached hereto, as it may be
      supplemented, modified or amended from time to time in accordance with the
      terms
      hereof.

    

    "Loan
      Agreements"
      means
      any other loan agreements entered into by and between the State and one or
      more
      of the Borrowers pursuant to which the State will make Loans to such Borrowers
      from Federal Funds.

    

    "Loan
      Closing"
      means
      the date upon which the Borrower shall deliver its Borrower Bond, as previously
      authorized, executed, attested and, if applicable, authenticated, to the
      State.

    

    "Loan
      Repayments"
      means
      the sum of (i) the repayments of the principal amount of the Loan payable by
      the
      Borrower pursuant to Section 3.03(a) of this Loan Agreement and (ii) any late
      charges incurred hereunder, but shall not include the Administrative
      Fee.

    

    "Loan
      Term"
      means
      the term of this Loan Agreement provided in Sections 3.01 and 3.03 hereof and
      in
      Exhibit A-2 attached hereto and made a part hereof.

    

    "Loans"
      means
      the loans made by the State to the Borrowers under the Loan Agreements from
      Federal Funds.

    

    "Master
      Program Trust Agreement"
      means
      that certain Master Program Trust Agreement, dated as of November 1, 1995,
      by
      and among the Trust, the State, United States

    

    
      
        
          
          

        

        
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    Trust
      Company of New York, as Master Program Trustee thereunder, The Bank of New
      York
      (NJ), in several capacities thereunder, and First Fidelity Bank, N.A.
      (predecessor to Wachovia Bank, National Association), in several capacities
      thereunder, as supplemented by that certain Agreement of Resignation of Outgoing
      Master Program Trustee, Appointment of Successor Master Program Trustee and
      Acceptance Agreement, dated as of November 1, 2001, by and among United States
      Trust Company of New York, as Outgoing Master Program Trustee, State Street
      Bank
      and Trust Company, N.A. (predecessor to U.S. Bank Trust National Association),
      as Successor Master Program Trustee, and the Trust, as the same may be amended
      and supplemented from time to time in accordance with its terms.

    

    "Prime
      Rate"
      means
      the prevailing commercial interest rate announced by the Trustee from time
      to
      time in the State as its prime lending rate.

    

    "Project"
      means
      the Environmental Infrastructure Facilities of the Borrower described in Exhibit
      A-1 attached hereto and made a part hereof, which constitutes a project for
      which the State is permitted to make a loan to the Borrower pursuant to the
      Regulations, all or a portion of the Cost of which is financed or refinanced
      by
      the State through the making of the Loan under this Loan Agreement and which
      may
      be identified under either the Drinking Water or Clean Water Project Lists
      with
      the Project Number specified in Exhibit A-1 attached hereto.

    

    "Regulations"
      means
      the rules and regulations, as applicable, now or hereafter promulgated under
      N.J.A.C. 7:22-3 et
      seq.,
      7:22-4
et
      seq.,
      7:22-5
et
      seq.,
      7:22-9
et
      seq.
      and
      7:22-10 et
      seq.,
      as the
      same may from time to time be amended and supplemented.

    

    "State"
      means
      the State of New Jersey, acting, unless otherwise specifically indicated, by
      and
      through the Department, and its successors and assigns.

    

    "Trust"
      means
      the New Jersey Environmental Infrastructure Trust, a public body corporate
      and
      politic with corporate succession duly created and validly existing under and
      by
      virtue of P.L. 1985, c. 334, as amended (N.J.S.A. 58:11B-1 et
      seq.).

    

    "Trust
      Loan"
      means
      the loan made to the Borrower by the Trust pursuant to the Trust Loan
      Agreement.

    

    "Trust
      Loan Agreement"
      means
      the loan agreement by and between the Borrower and the Trust dated as of
      November 1, 2006 to finance or refinance a portion of the Cost of the
      Project.

    

    "Trustee"
      means,
      initially, U.S. Bank National Association, the Trustee appointed by the Trust
      and its successors as Trustee under the Bond Resolution, as provided in Article
      X of the Bond Resolution.

    

    (b) In
      addition to the capitalized terms defined in subsection (a) of this Section
      1.01, certain additional capitalized terms used in this Loan Agreement shall,
      unless the context clearly requires otherwise, have the meanings ascribed to
      such additional capitalized terms in Schedule
      A
      attached
      hereto and made a part hereof.

    

    
      
        
          
          

        

        
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    (c) Except
      as
      otherwise defined herein or where the context otherwise requires, words
      importing the singular number shall include the plural number and vice versa,
      and words importing persons shall include firms, associations, corporations,
      agencies and districts. Words importing one gender shall include the other
      gender.

     

     

     

     

    

    
      
        
          
          

        

        
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    ARTICLE
      II

    

    REPRESENTATIONS
      AND COVENANTS OF BORROWER

    

    SECTION
      2.01. Representations of Borrower.
      The
      Borrower represents for the benefit of the State as follows:

    

    (a) Organization
      and Authority.

    

    (i) The
      Borrower is a corporation duly created and validly existing under and pursuant
      to the Constitution and statutes of the State, including the Business
      Corporation Law.

    

    (ii) The
      acting officers of the Borrower who are contemporaneously herewith performing
      or
      have previously performed any action contemplated in this Loan Agreement either
      are or, at the time any such action was performed, were the duly appointed
      or
      elected officers of such Borrower empowered by applicable New Jersey law and,
      if
      applicable, authorized by resolution of the Borrower to perform such actions.
      To
      the extent any such action was performed by an officer no longer the duly acting
      officer of such Borrower, all such actions previously taken by such officer
      are
      still in full force and effect.

    

    (iii) The
      Borrower has full legal right and authority and all necessary licenses and
      permits required as of the date hereof to own, operate and maintain its
      Environmental Infrastructure System, to carry on its activities relating
      thereto, to execute, attest and deliver this Loan Agreement and the Borrower
      Bond, to authorize the authentication of the Borrower Bond, to sell the Borrower
      Bond to the State, to undertake and complete the Project and to carry out and
      consummate all transactions contemplated by this Loan Agreement.

    

    (iv) The
      proceedings of the Borrower's board of directors approving this Loan Agreement
      and the Borrower Bond, authorizing the execution, attestation and delivery
      of
      this Loan Agreement and the Borrower Bond, authorizing the sale of the Borrower
      Bond to the State, authorizing the authentication of the Borrower Bond on behalf
      of the Borrower and authorizing the Borrower to undertake and complete the
      Project, including, without limitation, the Borrower Bond Resolution
      (collectively, the "Proceedings"), have been duly and lawfully adopted in
      accordance with the Business Corporation Law and other applicable New Jersey
      law
      at a meeting or meetings that were duly called and held in accordance with
      the
      Borrower By-Laws and at which quorums were present and acting
      throughout.

    

    (v) By
      official action of the Borrower taken prior to or concurrent with the execution
      and delivery hereof, including, without limitation, the Proceedings, the
      Borrower has duly authorized, approved and consented to all necessary action
      to
      be taken by the Borrower for: (A) the execution, attestation, delivery and
      performance of this Loan Agreement and the transactions contemplated hereby;
      (B)
      the issuance of the

    

    
      
        
          
          

        

        
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    Borrower
      Bond and the sale thereof to the State upon the terms set forth herein; and
      (C)
      the execution, delivery and due performance of any and all other certificates,
      agreements and instruments that may be required to be executed, delivered and
      performed by the Borrower in order to carry out, give effect to and consummate
      the transactions contemplated by this Loan Agreement.

    

    (vi) This
      Loan
      Agreement and the Borrower Bond have each been duly authorized by the Borrower
      and duly executed, attested and delivered by Authorized Officers of the
      Borrower, and the Borrower Bond has been duly sold by the Borrower to the State,
      duly authenticated by the trustee or paying agent, if applicable, under the
      Borrower Bond Resolution and duly issued by the Borrower in accordance with
      the
      terms of the Borrower Bond Resolution; and assuming that the State has all
      the
      requisite power and authority to authorize, execute, attest and deliver, and
      has
      duly authorized, executed, attested and delivered, this Loan Agreement, and
      assuming further that this Loan Agreement is the legal, valid and binding
      obligation of the State, enforceable against the State in accordance with its
      terms, each of this Loan Agreement and the Borrower Bond constitutes a legal,
      valid and binding obligation of the Borrower, enforceable against the Borrower
      in accordance with its respective terms, except as the enforcement thereof
      may
      be affected by bankruptcy, insolvency or other laws or the application by a
      court of legal or equitable principles affecting creditors' rights; and the
      information contained under "Description of Loan" in Exhibit A-2 attached hereto
      and made a part hereof is true and accurate in all respects.

    

    (b) Full
      Disclosure.
      There
      is no fact that the Borrower has not disclosed to the State in writing on the
      Borrower's application for the Loan or otherwise that materially adversely
      affects or (so far as the Borrower can now foresee) that will materially
      adversely affect the properties, activities, prospects or condition (financial
      or otherwise) of the Borrower or its Environmental Infrastructure System, or
      the
      ability of the Borrower to make all Loan Repayments or otherwise to observe
      and
      perform its duties, covenants, obligations and agreements under this Loan
      Agreement and the Borrower Bond.

    

    (c) Pending
      Litigation.
      There
      are no proceedings pending or, to the knowledge of the Borrower, threatened
      against or affecting the Borrower in any court or before any governmental
      authority or arbitration board or tribunal that, if adversely determined, would
      materially adversely affect (i) the undertaking or completion of the Project,
      (ii) the properties, activities, prospects or condition (financial or otherwise)
      of the Borrower or its Environmental Infrastructure System, (iii) the ability
      of
      the Borrower to make all Loan Repayments, (iv) the authorization, execution,
      attestation or delivery of this Loan Agreement or the Borrower Bond, (v) the
      issuance of the Borrower Bond and the sale thereof to the State, (vi) the
      adoption of the Borrower Bond Resolution, or (vii) the Borrower's ability
      otherwise to observe and perform its duties, covenants, obligations and
      agreements under this Loan Agreement and the Borrower Bond, which proceedings
      have not been previously disclosed in writing to the State either in the
      Borrower's application for the Loan or otherwise.

    

    (d) Compliance
      with Existing Laws and Agreements.
      (i) The
      authorization, execution, attestation and delivery of this Loan Agreement and
      the Borrower Bond by the

    

    
      
        
          
          

        

        
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    Borrower,
      (ii) the authentication of the Borrower Bond by the trustee or paying agent
      under the Borrower Bond Resolution, as the case may be, and the sale of the
      Borrower Bond to the State, (iii) the adoption of the Borrower Bond Resolution,
      (iv) the observation and performance by the Borrower of its duties, covenants,
      obligations and agreements hereunder and thereunder, (v) the consummation of
      the
      transactions provided for in this Loan Agreement, the Borrower Bond Resolution
      and the Borrower Bond, and (vi) the undertaking and completion of the Project
      will not (A) other than the lien, charge or encumbrance created hereby, by
      the
      Borrower Bond, by the Borrower Bond Resolution and by any other outstanding
      debt
      obligations of the Borrower that are at parity with the Borrower Bond as to
      lien
      on, and source and security for payment thereon from, the revenues of the
      Borrower's Environmental Infrastructure System, result in the creation or
      imposition of any lien, charge or encumbrance upon any properties or assets
      of
      the Borrower pursuant to, (B) result in any breach of any of the terms,
      conditions or provisions of, or (C) constitute a default under, any existing
      resolution, outstanding debt or lease obligation, trust agreement, indenture,
      mortgage, deed of trust, loan agreement or other instrument to which the
      Borrower is a party or by which the Borrower, its Environmental Infrastructure
      System or any of its properties or assets may be bound, nor will such action
      result in any violation of the provisions of the charter or other document
      pursuant to which the Borrower was established or any laws, ordinances,
      injunctions, judgments, decrees, rules, regulations or existing orders of any
      court or governmental or administrative agency, authority or person to which
      the
      Borrower, its Environmental Infrastructure System or its properties or
      operations is subject.

    

    (e) No
      Defaults.
      No
      event has occurred and no condition exists that, upon the authorization,
      execution, attestation and delivery of this Loan Agreement and the Borrower
      Bond, the issuance of the Borrower Bond and the sale thereof to the State,
      the
      adoption of the Borrower Bond Resolution or the receipt of the amount of the
      Loan, would constitute an Event of Default hereunder. The Borrower is not in
      violation of, and has not received notice of any claimed violation of, any
      term
      of any agreement or other instrument to which it is a party or by which it,
      its
      Environmental Infrastructure System or its properties may be bound, which
      violation would materially adversely affect the properties, activities,
      prospects or condition (financial or otherwise) of the Borrower or its
      Environmental Infrastructure System or the ability of the Borrower to make
      all
      Loan Repayments, to pay all other amounts due hereunder or otherwise to observe
      and perform its duties, covenants, obligations and agreements under this Loan
      Agreement and the Borrower Bond.

    

    (f) Governmental
      Consent.
      The
      Borrower has obtained all permits and approvals required to date by any
      governmental body or officer for the authorization, execution, attestation
      and
      delivery of this Loan Agreement and the Borrower Bond, for the issuance of
      the
      Borrower Bond and the sale thereof to the State, for the adoption of the
      Borrower Bond Resolution, for the making, observance and performance by the
      Borrower of its duties, covenants, obligations and agreements under this Loan
      Agreement and the Borrower Bond and for the undertaking or completion of the
      Project and the financing or refinancing thereof, including, but not limited
      to,
      if required, the approval by the New Jersey Board of Public Utilities (the
      "BPU") of the issuance by the Borrower of the Borrower Bond to the State and
      any
      other approvals required therefor by the BPU; and the Borrower has complied
      with
      all applicable provisions of law requiring any notification, declaration, filing
      or registration with any governmental body or officer in connection with the
      making, observance and performance by the Borrower of its duties,

    

    
      
        
          
          

        

        
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    covenants,
      obligations and agreements under this Loan Agreement and the Borrower Bond
      or
      with the undertaking or completion of the Project and the financing or
      refinancing thereof. No consent, approval or authorization of, or filing,
      registration or qualification with, any governmental body or officer that has
      not been obtained is required on the part of the Borrower as a condition to
      the
      authorization, execution, attestation and delivery of this Loan Agreement and
      the Borrower Bond, the issuance of the Borrower Bond and the sale thereof to
      the
      State, the undertaking or completion of the Project or the consummation of
      any
      transaction herein contemplated.

    

    (g) Compliance
      with Law.
      The
      Borrower:

    

    (i) is
      in
      compliance with all laws, ordinances, governmental rules and regulations to
      which it is subject, the failure to comply with which would materially adversely
      affect (A) the ability of the Borrower to conduct its activities or to undertake
      or complete the Project, (B) the ability of the Borrower to make the Loan
      Repayments and to pay all other amounts due hereunder, or (C) the condition
      (financial or otherwise) of the Borrower or its Environmental Infrastructure
      System; and

    

    (ii) has
      obtained all licenses, permits, franchises or other governmental authorizations
      presently necessary for the ownership of its properties or for the conduct
      of
      its activities that, if not obtained, would materially adversely affect (A)
      the
      ability of the Borrower to conduct its activities or to undertake or complete
      the Project, (B) the ability of the Borrower to make the Loan Repayments and
      to
      pay all other amounts due hereunder, or (C) the condition (financial or
      otherwise) of the Borrower or its Environmental Infrastructure
      System.

    

    (h) Use
      of
      Proceeds.
      The
      Borrower will apply the proceeds of the Loan from the State as described in
      Exhibit B attached hereto and made a part hereof (i) to finance or refinance
      a
      portion of the Cost of the Borrower's Project; and (ii) where applicable, to
      reimburse the Borrower for a portion of the Cost of the Borrower's Project,
      which portion was paid or incurred in anticipation of reimbursement by the
      State
      and is eligible for such reimbursement under and pursuant to the Regulations,
      the Code and any other applicable law. All of such costs constitute Costs for
      which the State is authorized to make Loans to the Borrower pursuant to the
      Regulations.

    

    SECTION
      2.02. Particular Covenants of
      Borrower.

    

    (a) Promise
      to Pay.
      The
      Borrower unconditionally promises, in accordance with the terms of and to the
      extent provided in the Borrower Bond Resolution, to make punctual payment of
      the
      principal of the Loan and the Borrower Bond and all other amounts due under
      this
      Loan Agreement and the Borrower Bond according to their respective
      terms.

    

    (b) Performance
      Under Loan Agreement; Rates.
      The
      Borrower covenants and agrees (i) to comply with all applicable State and
      federal laws, rules and regulations in the performance of this Loan Agreement;
      (ii) to maintain its Environmental Infrastructure System in good repair and
      operating condition; (iii) to cooperate with the State in the observance and
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    the
      respective duties, covenants, obligations and agreements of the Borrower and
      the
      State under this Loan Agreement; and (iv) to establish, levy and collect rents,
      rates and other charges for the products and services provided by its
      Environmental Infrastructure System, which rents, rates and other charges shall
      be at least sufficient to comply with all covenants pertaining thereto contained
      in, and all other provisions of, any bond resolution, trust indenture or other
      security agreement, if any, relating to any bonds, notes or other evidences
      of
      indebtedness issued or to be issued by the Borrower, including without
      limitation rents, rates and other charges, together with other available moneys,
      sufficient to pay the principal of and Interest on the Borrower Bond, plus
      all
      other amounts due hereunder.

    

    (c) Revenue
      Obligation; No Prior Pledges.
      The
      Borrower shall not be required to make payments under this Loan Agreement except
      from the revenues of its Environmental Infrastructure System and from such
      other
      funds of such Environmental Infrastructure System legally available therefor
      and
      from any other sources pledged to such payment pursuant to subsection (a) of
      this Section 2.02. In no event shall the Borrower be required to make payments
      under this Loan Agreement from any revenues or receipts not derived from its
      Environmental Infrastructure System or pledged pursuant to subsection (a) of
      this Section 2.02. Except for (i) loan repayments required with respect to
      the
      Trust Loan, (ii) the debt service on any future bonds or notes of the Borrower
      issued at parity with the Borrower Bond under the Borrower Bond Resolution,
      and
      (iii) the debt service on any bonds, notes or evidences of indebtedness of
      the
      Borrower at parity with the Borrower Bond under the Borrower Bond Resolution
      and
      currently outstanding or issued on the date hereof, the revenues derived by
      the
      Borrower from its Environmental Infrastructure System, after the payment of
      all
      costs of operating and maintaining the Environmental Infrastructure System,
      are
      and will be free and clear of any pledge, lien, charge or encumbrance thereon
      or
      with respect thereto prior to, or of equal rank with, the obligation of the
      Borrower to make Loan Repayments under this Loan Agreement and the Borrower
      Bond, and all corporate or other action on the part of the Borrower to that
      end
      has been and will be duly and validly taken.

    

    (d) Completion
      of Project and Provision of Moneys Therefor.
      The
      Borrower covenants and agrees (i) to exercise its best efforts in accordance
      with prudent environmental infrastructure utility practice to complete the
      Project and to accomplish such completion on or before the estimated Project
      completion date set forth in Exhibit G hereto and made a part hereof; (ii)
      to
      comply with the terms and provisions contained in Exhibit G hereto; and (iii)
      to
      provide from its own fiscal resources all moneys, in excess of the total amount
      of loan proceeds it receives under the Loan and Trust Loan, required to complete
      the Project.

    

    (e) See
      Section 2.02(e) as set forth in Schedule A attached hereto, made a part hereof
      and incorporated in this Section 2.02(e) by reference as if set forth in full
      herein.

    

    (f) Reserved.

    

    (g) Operation
      and Maintenance of Environmental Infrastructure System.
      The
      Borrower covenants and agrees that it shall, in accordance with prudent
      environmental infrastructure utility practice, (i) at all times operate the
      properties of its Environmental Infrastructure System and any business in
      connection therewith in an efficient manner, (ii)

    

    
      
        
          
          

        

        
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    maintain
      its Environmental Infrastructure System in good repair, working order and
      operating condition, and (iii) from time to time make all necessary and proper
      repairs, renewals, replacements, additions, betterments and improvements with
      respect to its Environmental Infrastructure System so that at all times the
      business carried on in connection therewith shall be properly and advantageously
      conducted.

    

    (h) Records
      and Accounts.
      The
      Borrower shall keep accurate records and accounts for its Environmental
      Infrastructure System (the "System Records") separate and distinct from its
      other records and accounts (the "General Records"). Such System Records shall be
      audited annually by an independent certified public accountant, which may be
      part of the annual audit of the General Records of the Borrower. Such System
      Records and General Records shall be made available for inspection by the State
      at any reasonable time upon prior written notice, and a copy of such annual
      audit(s) therefor, including all written comments and recommendations of such
      accountant, shall be furnished to the State within 150 days of the close of
      the
      fiscal year being so audited or, with the consent of the State, such additional
      period as may be provided by law.

    

    (i) Inspections;
      Information.
      The
      Borrower shall permit the State and any party designated by the State, at any
      and all reasonable times during construction of the Project and thereafter
      upon
      prior written notice, to examine, visit and inspect the property, if any,
      constituting the Project and to inspect and make copies of any accounts, books
      and records, including (without limitation) its records regarding receipts,
      disbursements, contracts, investments and any other matters relating thereto
      and
      to its financial standing, and shall supply such reports and information as
      the
      State may reasonably require in connection therewith.

    

    (j) Insurance.
      The
      Borrower shall maintain or cause to be maintained, in force, insurance policies
      with responsible insurers or self-insurance programs providing against risk
      of
      direct physical loss, damage or destruction of its Environmental Infrastructure
      System at least to the extent that similar insurance is usually carried by
      utilities constructing, operating and maintaining Environmental Infrastructure
      Facilities of the nature of the Borrower's Environmental Infrastructure System,
      including liability coverage, all to the extent available at reasonable cost
      but
      in no case less than will satisfy all applicable regulatory
      requirements.

    

    (k) Cost
      of Project.
      The
      Borrower certifies that the building cost of the Project, as listed in Exhibit
      B
      hereto and made a part hereof, is a reasonable and accurate estimation thereof,
      and it will supply to the State a certificate from a licensed professional
      engineer authorized to practice in the State stating that such building cost
      is
      a reasonable and accurate estimation and that the useful life of the Project
      exceeds the maturity date of the Borrower Bond.

    

    (l) Delivery
      of Documents.
      Concurrently with the delivery of this Loan Agreement (as previously authorized,
      executed and attested) at the Loan Closing, the Borrower will cause to be
      delivered to the State each of the following items:

    

    (i) an
      opinion of the Borrower's bond counsel substantially in the form of Exhibit
      E
      hereto; provided, however, that the State may permit portions of such opinion
      to
      be rendered by general counsel to the Borrower and may permit variances in
      such
      opinion from the form set forth in Exhibit E if such variances are acceptable
      to
      the State;

    

    
      
        
          
          

        

        
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    (ii) counterparts
      of this Loan Agreement as previously executed and attested by the parties
      hereto;

    

    (iii) copies
      of
      those resolutions finally adopted by the board of directors of the Borrower
      and
      requested by the State, including, without limitation, (A) the resolution of
      the
      Borrower authorizing the execution, attestation and delivery of this Loan
      Agreement, (B) the Borrower Bond Resolution, as amended and supplemented as
      of
      the date of the Loan Closing, authorizing the execution, attestation,
      authentication, sale and delivery of the Borrower Bond to the State, (C) the
      resolution of the Borrower confirming the details of the sale of the Borrower
      Bond to the State, each of said resolutions of the Borrower being certified
      by
      an Authorized Officer of the Borrower as of the date of the Loan Closing, (D)
      the resolution of the BPU approving the issuance by the Borrower of the Borrower
      Bond to the State and setting forth any other approvals required therefor by
      the
      BPU, if applicable, and (E) any other Proceedings; and

    

    (iv) the
      certificates of insurance coverage as required pursuant to the terms of Section
      3.06(c) hereof and such other certificates, documents, opinions and information
      as the State may require in Exhibit F hereto, if any.

    

    (m) Execution
      and Delivery of Borrower Bond.
      Concurrently with the delivery of this Loan Agreement at the Loan Closing,
      the
      Borrower shall also deliver to the State the Borrower Bond, as previously
      executed, attested and, if applicable, authenticated.

    

    (n) Notice
      of Material Adverse Change.
      The
      Borrower shall promptly notify the State of any material adverse change in
      the
      properties, activities, prospects or condition (financial or otherwise) of
      the
      Borrower or its Environmental Infrastructure System, or in the ability of the
      Borrower to make all Loan Repayments and otherwise to observe and perform its
      duties, covenants, obligations and agreements under this Loan Agreement and
      the
      Borrower Bond.

    

    (o) Continuing
      Representations.
      The
      representations of the Borrower contained herein shall be true at the time
      of
      the execution of this Loan Agreement and at all times during the term of this
      Loan Agreement.

    

    (p) Additional
      Covenants and Requirements.
      (i) No
      later than the Loan Closing and, if necessary, in connection with the making
      of
      the Loan, additional covenants and requirements have been included in Exhibit
      F
      hereto and made a part hereof. Such covenants and requirements may include,
      but
      need not be limited to, the maintenance of specified levels of Environmental
      Infrastructure System rates, the issuance of additional debt of the Borrower
      and
      the transfer of revenues and receipts from the Borrower's Environmental
      Infrastructure System. The Borrower agrees to observe and comply with each
      such
      additional covenant and requirement, if any, included in Exhibit F hereto.
      (ii)
      Additional defined terms, covenants, representations and requirements have
      been
      included in Schedule A attached hereto and made a part hereof. Such additional
      defined terms, covenants, representations and requirements are incorporated
      in
      this Loan Agreement by reference thereto as if set forth in full herein and
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    Borrower
      hereby agrees to observe and comply with each such additional term, covenant,
      representation and requirement included in Schedule A as if the same were set
      forth in its entirety where reference thereto is made in this Loan
      Agreement.

    

     

     

     

     

     

    

    
      
        
          
          

        

        
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    ARTICLE
      III

    

    LOAN
      TO BORROWER; AMOUNTS PAYABLE; GENERAL AGREEMENTS

    

    SECTION
      3.01. Loan; Loan Term.
      The
      State hereby agrees to make the Loan as described in Exhibit A-2 hereof and
      to
      disburse proceeds of the Loan to the Borrower in accordance with Section 3.02
      and Exhibit C hereof, and the Borrower hereby agrees to borrow and accept the
      Loan from the State upon the terms set forth in Exhibit A-2 attached hereto
      and
      made a part hereof; provided, however, that the State shall be under no
      obligation to make the Loan if (a) at the Loan Closing, the Borrower does not
      deliver to the State a Borrower Bond and such other documents required under
      Section 2.02(l) hereof, or (b) an Event of Default has occurred and is
      continuing under this Loan Agreement. Although the State intends to disburse
      proceeds of the Loan to the Borrower at the times and up to the amounts set
      forth in Exhibit C to pay a portion of the Cost of the Project, due to
      unforeseen circumstances there may not be sufficient Federal Funds on deposit
      on
      any date to make the disbursement in such amount. Nevertheless, the Borrower
      agrees that the aggregate principal amount set forth in Exhibit A-2 hereto
      shall
      constitute the initial principal amount of the Loan (as the same may be adjusted
      downward in accordance with the definition thereof), and the State shall have
      no
      obligation thereafter to loan any additional amounts to the
      Borrower.

    

    The
      Borrower shall have no legal or equitable interest in the Federal Funds received
      by and available to the State or in moneys from repayments of loans previously
      made from Federal Funds by the State.

    

    The
      Borrower shall use the proceeds of the Loan strictly in accordance with Section
      2.01(h) hereof.

    

    The
      payment obligations created under this Loan Agreement and the obligations to
      pay
      the principal of and other amounts due under the Borrower Bond are each direct,
      general, irrevocable and unconditional obligations of the Borrower payable
      from
      any source legally available to the Borrower in accordance with the terms of
      and
      to the extent provided in the Borrower Bond Resolution.

    

    SECTION
      3.02. Disbursement of Loan Proceeds.
      (a) The
      State shall disburse Federal Funds earmarked for the Loan to the Borrower in
      accordance with the terms hereof. Before each and every disbursement of the
      proceeds of the Loan by the State to the Borrower, the Borrower shall in
      accordance with the procedures set forth in the Regulations submit to the State
      a requisition executed by an Authorized Officer of the Borrower.

    

    (b) The
      State
      shall not be under any obligation to disburse any Loan proceeds to the Borrower
      under this Loan Agreement, unless:

    

    (i) the
      Loan
      Closing shall have occurred on the date established therefor by the
      State;

    

    
      
        
          
          

        

        
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    (ii) there
      shall be Federal Funds available from time to time to fund the Loan, as
      determined solely by the State;

    

    (iii) in
      accordance with the "New Jersey Environmental Infrastructure Trust Act", P.L.
      1985, c. 334, as amended (N.J.S.A. 58:11B-1 et
      seq.),
      and
      the Regulations, the Borrower shall have timely applied for, shall have been
      awarded and, prior to or simultaneously with the Loan Closing, shall have closed
      a Trust Loan for a portion of the Allowable Costs (as defined in such
      Regulations) of the Project in an amount not in excess of the amount of
      Allowable Costs of the Project financed by the Loan from the State, plus the
      amount of: (i) capitalized interest during the Project construction period,
      if
      any, (ii) the cost of funding reserve capacity for the Project, if any, as
      well
      as that portion of the Debt Service Reserve Fund (as defined in the Trust Loan
      Agreement) attributable to the cost of funding such reserve capacity for the
      Project, and (iii) certain issuance expenses related thereto, including, if
      applicable, a municipal bond insurance policy premium;

    

    (iv) the
      Borrower shall have on hand moneys to pay for the greater of (A) that portion
      of
      the total cost of the Project that is not eligible to be funded from the Loan
      or
      the Trust Loan, or (B) that portion of the total cost of the Project that
      exceeds the actual amounts of the loan commitments made by the State and the
      Trust, respectively, for the Loan and the Trust Loan; and

    

    (v) no
      Event
      of Default nor any event that, with the passage of time or service of notice
      or
      both, would constitute an Event of Default shall have occurred and be continuing
      hereunder.

    

    SECTION
      3.03. Amounts Payable.
      (a) The
      Borrower shall repay the Loan at zero-interest in principal installments payable
      to the Trustee semiannually on the Principal Payment Dates, in accordance with
      the schedule set forth in Exhibit A-2 attached hereto and made a part hereof,
      as
      the same may be amended or modified by the State, in particular, without
      limitation, to make any adjustments to the amount of the Loan in accordance
      with
      the definition thereof; provided, however, that the amount of any reduction in
      the principal amount of the Loan pursuant to N.J.A.C. 7:22-3.26 shall be
      credited to the principal payments set forth in Exhibit A-2 in inverse order
      of
      their maturity. The obligations of the Borrower under the Borrower Bond shall
      be
      deemed to be amounts payable under this Section 3.03. Each payment made to
      the
      Trustee pursuant to the Borrower Bond shall be deemed to be a credit against
      the
      corresponding obligation of the Borrower under this Section 3.03, and any such
      payment made to the Trustee shall fulfill the Borrower's obligation to pay
      such
      amount hereunder and under the Borrower Bond. Each payment made to the Trustee
      pursuant to this Section 3.03 shall be applied to the principal of the
      Loan.

    

    (b) In
      addition to the principal payments on the Loan required by subsection (a) of
      this Section 3.03, the Borrower shall pay a late charge for any such payment
      that is received by the Trustee later than the tenth (10th) day following its
      due date in an amount equal to the greater of twelve percent (12%) per annum
      or
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    such
      late
      payment from its due date to the date actually paid; provided, however, that
      such late charge payable on the Loan shall not be in excess of the maximum
      interest rate permitted by law.

    

    (c) In
      addition to the Loan Repayments payable under subsections (a) and (b) of this
      Section 3.03, the Borrower shall pay one-half of the Administrative Fee, if
      any,
      to the Trustee semiannually on each Principal Payment Date, commencing with
      the
      first Principal Payment Date subsequent to the Loan Closing.

    

    SECTION
      3.03A. Amounts on Deposit in Project Loan Account after Completion of Draw
      Schedule. (a)
      If,
      on the date which is one hundred eighty (180) days following the final date
      for
      which a disbursement of Loan proceeds is scheduled to be made pursuant to
      Exhibit C hereto, any amounts remain on deposit in the Borrower’s Project Loan
      Account, the Borrower must provide to the Trust and the Department a certificate
      of an Authorized Officer of the Borrower (i) stating that the Borrower has
      not
      yet completed the Project, (ii) stating that the Borrower intends to complete
      the Project, (iii) setting forth the amount of remaining Loan Proceeds required
      to complete the Project, and (iv) providing a revised draw schedule, in a form
      similar to Exhibit C hereto and approved by the Department.

    

    (b) If,
      on
      the date which is one hundred eighty (180) days following the final date for
      which a disbursement of Loan proceeds is scheduled to be made pursuant to a
      revised draw schedule certified to the Trust and the Department in accordance
      with Section 3.03A(a) hereof, any amounts remain on deposit in the Borrower’s
      Project Loan Account, the Borrower must provide to the Trust and the Department
      a certificate of an Authorized Officer of the Borrower (i) stating that the
      Borrower has not yet completed the Project, (ii) stating that the Borrower
      intends to complete the Project, (iii) setting forth the amount of remaining
      Loan Proceeds required to complete the Project, and (iv) providing a revised
      draw schedule, in a form similar to Exhibit C hereto and approved by the
      Department.

    

    (c) If
      the
      Borrower fails to provide the certificate described in paragraphs (a) or (b)
      of
      this Section 3.03A, when due, or if such certificate states that the Borrower
      does not require all or any portion of the amount on deposit in the Project
      Loan
      Account to complete the Project, such amounts on deposit in the Project Loan
      Account which are not certified by an Authorized Officer of the Borrower as
      being required to complete the Project (“Excess Project Funds”) shall be applied
      as follows:

    

    (i) If
      the
      Excess Project Funds are less than or equal to the greater of (A) $250,000
      or
      (B) the amount of Loan Repayments due from the Borrower to the Trust in the
      next
      succeeding calendar year, the Excess Project Funds shall be applied by the
      Trust
      toward the Borrower’s obligation to make the Loan Repayments next coming due;
      or

    

    (ii) If
      the
      Excess Project Funds are greater than the greater of (A) $250,000 or (B) the
      amount of Loan Repayments due from the Borrower to the Trust in the next
      succeeding calendar year, the Excess Project Funds shall be applied by the
      Trust
      as a prepayment of the Borrower’s Loan Repayments, and shall be applied to the
      principal payments (including premium, if any) on the Loan in inverse order
      of
      their maturity.

    

    
      
        
          
          

        

        
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    SECTION
      3.04. Unconditional Obligations.
      The
      obligation of the Borrower to make the Loan Repayments and all other payments
      required hereunder and the obligation to perform and observe the other duties,
      covenants, obligations and agreements on its part contained herein shall be
      absolute and unconditional, and shall not be abated, rebated, set-off, reduced,
      abrogated, terminated, waived, diminished, postponed or otherwise modified
      in
      any manner or to any extent whatsoever while any Loan Repayments remain unpaid,
      for any reason, regardless of any contingency, act of God, event or cause
      whatsoever, including (without limitation) any acts or circumstances that may
      constitute failure of consideration, eviction or constructive eviction, the
      taking by eminent domain or destruction of or damage to the Project or
      Environmental Infrastructure System, commercial frustration of the purpose,
      any
      change in the laws of the United States of America or of the State or any
      political subdivision of either or in the rules or regulations of any
      governmental authority, any failure of the State to perform and observe any
      agreement, whether express or implied, or any duty, liability or obligation
      arising out of or connected with the Project or this Loan Agreement, or any
      rights of set-off, recoupment, abatement or counterclaim that the Borrower
      might
      otherwise have against the State, the Trustee or any other party or parties;
      provided, however, that payments hereunder shall not constitute a waiver of
      any
      such rights. The Borrower shall not be obligated to make any payments required
      to be made by any other Borrowers under separate Loan Agreements.

    

    SECTION
      3.05. Loan Agreement to Survive Loan.
      The
      Borrower acknowledges that its duties, covenants, obligations and agreements
      set
      forth in Sections 3.06(a) and (b) hereof shall survive the payment in full
      of
      the Loan.

    

    SECTION
      3.06. Disclaimer of Warranties and
      Indemnification.
      (a) The
      Borrower acknowledges and agrees that: (i) the State does not make any warranty
      or representation, either express or implied, as to the value, design,
      condition, merchantability or fitness for particular purpose or fitness for
      any
      use of the Environmental Infrastructure System or the Project or any portions
      thereof or any other warranty or representation with respect thereto; (ii)
      in no
      event shall the State or its agents be liable or responsible for any incidental,
      indirect, special or consequential damages in connection with or arising out
      of
      this Loan Agreement or the Project or the existence, furnishing, functioning
      or
      use of the Environmental Infrastructure System or the Project or any item or
      products or services provided for in this Loan Agreement; and (iii) to the
      fullest extent permitted by law, the Borrower shall indemnify and hold the
      State
      harmless against, and the Borrower shall pay any and all, liability, loss,
      cost,
      damage, claim, judgment or expense of any and all kinds or nature and however
      arising and imposed by law, which the State may sustain, be subject to or be
      caused to incur by reason of any claim, suit or action based upon personal
      injury, death or damage to property, whether real, personal or mixed, or upon
      or
      arising out of contracts entered into by the Borrower, the Borrower's ownership
      of the Environmental Infrastructure System or the Project, or the acquisition,
      construction or installation of the Project.

    

    (b) It
      is
      mutually agreed by the Borrower and the State that the State and its
      commissioners, officers, agents, servants or employees shall not be liable
      for,
      and shall be indemnified and saved harmless by the Borrower in any event from,
      any action performed under this Loan Agreement and any claim or suit of
      whatsoever nature, except in the event of loss or damage resulting from their
      own negligence or willful misconduct.

    

    
      
        
          
          

        

        
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    (c) In
      connection with its obligation to provide the insurance required under Section
      2.02(j) hereof: (i) the Borrower shall include, or cause to be included, the
      State and its employees and officers as additional "named insureds" on (A)
      any
      certificate of liability insurance procured by the Borrower (or other similar
      document evidencing the liability insurance coverage procured by the Borrower)
      and (B) any certificate of liability insurance procured by any contractor or
      subcontractor for the Project, and from the later of the date of the Loan
      Closing or the date of the initiation of construction of the Project until
      the
      date the Borrower receives the written certificate of Project completion from
      the State, the Borrower shall maintain said liability insurance covering the
      State and said employees and officers in good standing; and (ii) the Borrower
      shall include the State as an additional "named insured" on any certificate
      of
      insurance providing against risk of direct physical loss, damage or destruction
      of the Environmental Infrastructure System, and during the Loan Term the
      Borrower shall maintain said insurance covering the State in good
      standing.

    

    The
      Borrower shall provide the State with a copy of each of any such original,
      supplemental, amendatory or reissued certificates of insurance (or other similar
      documents evidencing the insurance coverage) required pursuant to this Section
      3.06(c).

    

    SECTION
      3.07. Option to Prepay Loan Repayments.
The
      Borrower may prepay the Loan Repayments, in whole or in part, upon not less
      than
      ninety (90) days' prior written notice to the State; provided, however, that,
      with respect to any prepayment other than those required by Section 3.03A
      hereof, any such full or partial prepayment may only be made (i) if the Borrower
      is not then in arrears on its Trust Loan, (ii) if the Borrower is
      contemporaneously making a full or partial prepayment of the Trust Loan such
      that, after the prepayment of the Loan and the Trust Loan, the Trust gives
      its
      consent required under Section 3.07(iii) of the Trust Loan Agreement, and (iii)
      upon the prior written approval of the State. Prepayments shall be applied
      to
      the principal payments on the portion of the Loan to be prepaid in inverse
      order
      of their maturity.

    

    SECTION
      3.08. Priority of Loan and Trust Loan.
      (a) The
      Borrower hereby agrees that, to the extent allowed by law, including, without
      limitation, the appropriations act of the New Jersey State Legislature
      authorizing the expenditure of Trust bond proceeds to finance a portion of
      the
      Cost of the Project, or the Borrower Bond Resolution, any loan repayments then
      due and payable on the Borrower's Trust Loan, including, without limitation,
      any
      administrative fees and any late payment charges then due and payable under
      the
      Trust Loan Agreement, shall be satisfied by the Borrower before any Loan
      Repayments then due and payable hereunder on the Loan shall be satisfied by
      the
      Borrower.

    

    (b) The
      Borrower hereby acknowledges that in the event the Borrower fails or is unable
      to pay promptly to the Trust in full any loan repayments on the Trust Loan,
      then
      any Loan Repayments paid by the Borrower on the Loan under this Loan Agreement
      and received by the Trustee during the time of any such loan repayment
      deficiency under the Trust Loan Agreement shall be applied by the Trustee
first
      to
      satisfy such Trust Loan Agreement loan repayment deficiency as a credit against
      the obligations of the Borrower to make loan repayments of that portion of
      interest under the Trust Loan Agreement that is allocable to the interest
      payable on the Trust Bonds (as defined in the Trust Loan Agreement) and to
      make
      payments of that portion of interest under the bond or note issued by the
      Borrower to the Trust that is allocable to the interest

    

    
      
        
          
          

        

        
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    payable
      on the Trust Bonds, second,
      to the
      extent available, to make loan repayments of principal under the Trust Loan
      Agreement and payments of principal on the bond or note issued by the Borrower
      to the Trust pursuant to the Trust Loan Agreement, third,
      to the
      extent available, to the payment of the administrative fee payable under the
      Trust Loan Agreement and to make payments of that portion of interest under
      the
      bond or note issued by the Borrower to the Trust that is allocable to the
      administrative fee payable under the Trust Loan Agreement, fourth,
      to the
      extent available, to the payment of late charges payable under the Trust Loan
      Agreement and to make payments of that portion of interest under the bond or
      note issued by the Borrower to the Trust that is allocable to the late charges
      payable under the Trust Loan Agreement, and finally,
      to the
      extent available, to make Loan Repayments on the Loan.

    

    (c) The
      Borrower hereby further acknowledges that any Loan Repayments paid by the
      Borrower on the Loan under this Loan Agreement shall be applied according to
      the
      provisions of the Master Program Trust Agreement.

    

    SECTION
      3.09. Approval of the New Jersey State
      Treasurer.
      The
      Borrower and the State hereby acknowledge that prior to or simultaneously with
      the Loan Closing the New Jersey State Treasurer, in satisfaction of the
      requirements of Section 9a of the Act, issued the “Certificate of the New Jersey
      State Treasurer Regarding the Approval of the Trust Loan and the Fund Loan” (the
“Treasurer’s Certificate”). Pursuant to the terms of the Treasurer’s
      Certificate, the New Jersey State Treasurer approved the Loan and the terms
      and
      conditions thereof as established by the provisions of this Loan
      Agreement.

    

    

    
      
        
          
          

        

        
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    ARTICLE
      IV

    

    ASSIGNMENT
      OF LOAN AGREEMENT AND BORROWER BOND

    

    SECTION
      4.01. Assignment and Transfer by
      State.
      The
      Borrower hereby approves and consents to any assignment or transfer of this
      Loan
      Agreement and the Borrower Bond that the State deems to be necessary in
      connection with the environmental infrastructure loan program of the State
      under
      the Regulations.

    

    SECTION
      4.02. Assignment by Borrower.
      Neither
      this Loan Agreement nor the Borrower Bond may be assigned by the Borrower for
      any reason, unless the following conditions shall be satisfied: (i) the State
      shall have approved said assignment in writing; (ii) the assignee shall have
      expressly assumed in writing the full and faithful observance and performance
      of
      the Borrower's duties, covenants, obligations and agreements under this Loan
      Agreement and, to the extent permitted under applicable law, the Borrower Bond;
      and (iii) immediately after such assignment, the assignee shall not be in
      default in the observance or performance of any duties, covenants, obligations
      or agreements of the Borrower under this Loan Agreement or the Borrower
      Bond.

    

    
      
        
          
          

        

        
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    ARTICLE
      V

    

    EVENTS
      OF DEFAULT AND REMEDIES

    

    SECTION
      5.01. Events of Default.
      If any
      of the following events occur, it is hereby defined as and declared to be and
      to
      constitute an "Event of Default":

    

    (a) failure
      by the Borrower to pay, or cause to be paid, any Loan Repayment required to
      be
      paid hereunder when due, which failure shall continue for a period of fifteen
      (15) days;

    

    (b) failure
      by the Borrower to make, or cause to be made, any required payments of
      principal, redemption premium, if any, and interest on any bonds, notes or
      other
      obligations of the Borrower issued under the Borrower Bond Resolution (other
      than the Loan and the Borrower Bond) or otherwise secured by all or a portion
      of
      the property pledged under the Borrower Bond Resolution, after giving effect
      to
      the applicable grace period;

    

    (c) failure
      by the Borrower to pay, or cause to be paid, any late charges incurred hereunder
      or any portion thereof when due or to observe and perform any duty, covenant,
      obligation or agreement on its part to be observed or performed under this
      Loan
      Agreement, other than as referred to in subsection (a) of this Section 5.01
      or
      other than the obligations of the Borrower contained in Section 2.02(d)(ii)
      hereof and in Exhibit F hereto, which failure shall continue for a period of
      thirty (30) days after written notice, specifying such failure and requesting
      that it be remedied, is given to the Borrower by the State, unless the State
      shall agree in writing to an extension of such time prior to its expiration;
      provided, however, that if the failure stated in such notice is correctable
      but
      cannot be corrected within the applicable period, the State may not unreasonably
      withhold its consent to an extension of such time up to 120 days from the
      delivery of the written notice referred to above if corrective action is
      instituted by the Borrower within the applicable period and diligently pursued
      until the Event of Default is corrected;

    

    (d) any
      representation made by or on behalf of the Borrower contained in this Loan
      Agreement, or in any instrument furnished in compliance with or with reference
      to this Loan Agreement or the Loan, is false or misleading in any material
      respect;

    

    (e) a
      petition is filed by or against the Borrower under any federal or state
      bankruptcy or insolvency law or other similar law in effect on the date of
      this
      Loan Agreement or thereafter enacted, unless in the case of any such petition
      filed against the Borrower such petition shall be dismissed within thirty (30)
      days after such filing and such dismissal shall be final and not subject to
      appeal; or the Borrower shall become insolvent or bankrupt or shall make an
      assignment for the benefit of its creditors; or a custodian (including, without
      limitation, a receiver, liquidator or trustee) of the Borrower or any of its
      property shall be appointed by court order or take possession of the Borrower
      or
      its property or assets if such order remains in effect or such possession
      continues for more than thirty (30) days;

    

    (f) the
      Borrower shall generally fail to pay its debts as such debts become due;
      and

    

    
      
        
          
          

        

        
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    (g) failure
      of the Borrower to observe or perform such additional duties, covenants,
      obligations, agreements or conditions as are required by the State and specified
      in Exhibit F attached hereto and made a part hereof.

    

    SECTION
      5.02. Notice of Default.
      The
      Borrower shall give the State prompt telephonic notice of the occurrence of
      any
      Event of Default referred to in Section 5.01(d) or (e) hereof and of the
      occurrence of any other event or condition that constitutes an Event of Default
      at such time as any senior administrative or financial officer of the Borrower
      becomes aware of the existence thereof.

    

    SECTION
      5.03. Remedies on Default.
      Whenever an Event of Default referred to in Section 5.01 hereof shall have
      occurred and be continuing, the State shall have the right to take whatever
      action at law or in equity may appear necessary or desirable to collect the
      amounts then due and thereafter to become due hereunder or to enforce the
      observance and performance of any duty, covenant, obligation or agreement of
      the
      Borrower hereunder.

    

    In
      addition, if an Event of Default referred to in Section 5.01(a) hereof shall
      have occurred and be continuing, the State shall, to the extent allowed by
      applicable law, have the right to declare all Loan Repayments and all other
      amounts due hereunder (including, without limitation, payments under the
      Borrower Bond) to be immediately due and payable, and upon notice to the
      Borrower the same shall become due and payable without further notice or
      demand.

    

    SECTION
      5.04. Attorneys' Fees and Other
      Expenses.
      The
      Borrower shall on demand pay to the State the reasonable fees and expenses
      of
      attorneys and other reasonable expenses (including, without limitation, the
      reasonably allocated costs of in-house counsel and legal staff) incurred by
      the
      State in the collection of Loan Repayments or any other sum due hereunder or
      in
      the enforcement of the observation or performance of any other duties,
      covenants, obligations or agreements of the Borrower upon an Event of
      Default.

    

    SECTION
      5.05. Application of Moneys.
      Any
      moneys collected by the State pursuant to Section 5.03 hereof shall be applied
      (a) first
      to pay
      any attorneys' fees or other fees and expenses owed by the Borrower pursuant
      to
      Section 5.04 hereof, (b) second,
      to the
      extent available, to pay principal due and payable on the Loan, (c) third,
      to the
      extent available, to pay any other amounts due and payable hereunder, and (d)
      fourth,
      to the
      extent available, to pay principal on the Loan and other amounts payable
      hereunder as such amounts become due and payable.

    

    SECTION
      5.06. No Remedy Exclusive; Waiver;
      Notice.
      No
      remedy herein conferred upon or reserved to the State is intended to be
      exclusive, and every such remedy shall be cumulative and shall be in addition
      to
      every other remedy given under this Loan Agreement or now or hereafter existing
      at law or in equity. No delay or omission to exercise any right, remedy or
      power
      accruing upon any Event of Default shall impair any such right, remedy or power
      or shall be construed to be a waiver thereof, but any such right, remedy or
      power may be exercised from time to time and as often as may be deemed
      expedient. In order to entitle the State to exercise any remedy reserved to
      it
      in this Article V, it shall not be necessary to give any notice other than
      such
      notice as may be required in this Article V.

    

    
      
        
          
          

        

        
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    SECTION
      5.07. Retention of State's Rights.
      Notwithstanding any assignment or transfer of this Loan Agreement pursuant
      to
      the provisions hereof, or anything else to the contrary contained herein, the
      State shall have the right upon the occurrence of an Event of Default to take
      any action, including (without limitation) bringing an action against the
      Borrower at law or in equity, as the State may, in its discretion, deem
      necessary to enforce the obligations of the Borrower to the State pursuant
      to
      Section 5.03 hereof.

     

     

    

    
      
        
          
          

        

        
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    ARTICLE
      VI

    

    MISCELLANEOUS

    

    SECTION
      6.01. Notices.
      All
      notices, certificates or other communications hereunder shall be sufficiently
      given and shall be deemed given when hand delivered or mailed by registered
      or
      certified mail, postage prepaid, to the Borrower at the address specified in
      Exhibit A-1 attached hereto and made a part hereof and to the State and the
      Trustee at the following addresses:

    

    (a)     State:

    

    New
      Jersey Department of Environmental Protection

    Municipal
      Finance and Construction Element

    401
      East
      State Street - 3rd Floor

    Trenton,
      New Jersey 08625-0425

    Attention:
      Assistant Director

    

    New
      Jersey Department of the Treasury

    Office
      of
      Public Finance

    State
      Street Square - 5th Floor

    Trenton,
      New Jersey 08625-0002

    Attention:
      Director

    

    (b)     Trustee:

    

    U.S.
      Bank
      National Association

    21
      South
      Street, 3rd
      Floor

    Morristown,
      New Jersey 07960

    Attention:
      Corporate Trust Department

    

    Any
      of
      the foregoing parties may designate any further or different addresses to which
      subsequent notices, certificates or other communications shall be sent by notice
      in writing given to the others.

    

    SECTION
      6.02. Binding Effect.
      This
      Loan Agreement shall inure to the benefit of and shall be binding upon the
      State
      and the Borrower and their respective successors and assigns.

    

    SECTION
      6.03. Severability.
      In the
      event any provision of this Loan Agreement shall be held illegal, invalid or
      unenforceable by any court of competent jurisdiction, such holding shall not
      invalidate, render unenforceable or otherwise affect any other provision
      hereof.

    

    SECTION
      6.04. Amendments, Supplements and
      Modifications.
      This
      Loan Agreement may not be amended, supplemented or modified without the prior
      written consent of the State and the Borrower.

    

    
      
        
          
          

        

        
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    SECTION
      6.05. Execution in Counterparts.
      This
      Loan Agreement may be executed in several counterparts, each of which shall
      be
      an original and all of which shall constitute but one and the same
      instrument.

    

    SECTION
      6.06. Applicable Law and Regulations.
      This
      Loan Agreement shall be governed by and construed in accordance with the laws
      of
      the State, including the Regulations, which Regulations are, by this reference
      thereto, incorporated herein as part of this Loan Agreement.

    

    SECTION
      6.07. Consents and Approvals.
      Whenever the written consent or approval of the State shall be required under
      the provisions of this Loan Agreement, such consent or approval may only be
      given by the State.

    

    SECTION
      6.08. Captions.
      The
      captions or headings in this Loan Agreement are for convenience only and shall
      not in any way define, limit or describe the scope or intent of any provisions
      or sections of this Loan Agreement.

    

    SECTION
      6.09. Further Assurances.
      The
      Borrower shall, at the request of the State, authorize, execute, attest,
      acknowledge and deliver such further resolutions, conveyances, transfers,
      assurances, financing statements and other instruments as may be necessary
      or
      desirable for better assuring, conveying, granting, assigning and confirming
      the
      rights, security interests and agreements granted or intended to be granted
      by
      this Loan Agreement and the Borrower Bond.

    

    

    
      
        
          
            

          

          
          

        

        
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    IN
      WITNESS WHEREOF, the
      State
      and the Borrower have caused this Loan Agreement to be executed, sealed and
      delivered as of the date first above written.

    

    
      	 	
              THE
                STATE OF NEW JERSEY,

            
	 	
              ACTING
                BY AND THROUGH THE

            
	 	
              NEW
                JERSEY DEPARTMENT OF

            
	 	
              ENVIRONMENTAL
                PROTECTION

            
	 	 	 
	
              [SEAL]

            	 	 
	 	 	 
	 	
              /s/
                

            	
              Lisa
                P. Jackson

            
	
              ATTEST:

            	 	
              Lisa
                P. Jackson

            
	 	 	
              Commissioner,
                Department of

            
	 	 	
              Environmental
                Protection

            

    

    

    /s/
      Stanley V. Cach, Jr.

    Stanley
      V. Cach, Jr. P.E., P.P.

    Assistant
      Director,

    Municipal
      Finance and Construction Element,

    Department
      of Environmental Protection

    

    

    
      	 	
              MIDDLESEX
                WATER COMPANY

            
	 	 	 
	
              [SEAL]

            	 	 
	 	 	 
	 	
              /s/

            	
              Dennis
                W. Doll

            
	
              ATTEST:

            	 	
              Authorized
                Officer

            
	 	 	 

    

    

    

    /s/
      Kenneth
      J. Quinn

    Authorized
      Officer

     

     

    G-1

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