Exhibit 10.1

BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST,
 
as Issuer
 
and
 
THE BANK OF NEW YORK,
 
as Indenture Trustee
 
BASE INDENTURE
 
Dated as of December 11, 1998
 

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TABLE OF CONTENTS
 
Page
 

ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
     
Section 1.1.
Definitions
1
Section 1.2.
Cross-References
1
Section 1.3.
Accounting and Financial Determinations; No Duplication
2
Section 1.4.
Rules of Construction
2
 
ARTICLE 2.
THE NOTES
     
Section 2.1.
Designation and Terms of Notes
2
Section 2.2.
Notes Issuable in Series
3
Section 2.3.
Supplement for Each Series
6
Section 2.4.
Execution and Authentication
6
Section 2.5.
Form of Notes; Book Entry Provisions; Title
7
Section 2.6.
Registrar and Paving Agent
9
Section 2.7.
Paying Agent to Hold Money in Trust
9
Section 2.8.
Noteholder List
11
Section 2.9.
Transfer and Exchange
11
Section 2.10.
Legending of Notes
20
Section 2.11.
Replacement Notes
21
Section 2.12.
Treasury Notes
22
Section 2.13.
Temporary Notes
22
Section 2.14.
Cancellation
23
Section 2.15.
Principal and Interest
23
Section 2.16.
Book-Entry Notes
24
Section 2.17.
Notices to Clearing Agency
25
Section 2.18.
Definitive Notes
26
Section 2.19.
Tax Treatment
27
Section 2.20.
CUSIP Numbers
27
 
ARTICLE 3.
SECURITY
     
Section 3.1.
Security Interest
27
Section 3.2.
Stamp, Other Similar Taxes and Filing Fees
27

 
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ARTICLE 4.
REPORTS
     
Section 4.1.
Agreement of the Issuer to Provide Reports and Instructions
28
 
ARTICLE 5.
ALLOCATION AND APPLICATION OF COLLECTIONS
     
Section 5.1.
Establishment of Accounts
29
Section 5.2.
Collections and Allocations
29
Section 5.3.
Determination of Monthly Interest
29
Section 5.4.
Determination of Principal
29
 
ARTICLE 6.
DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS
     
Section 6.1.
Distributions in General
29
Section 6.2.
Reserved
31
Section 6.3.
Optional Repurchase of Notes
31
Section 6.4.
Monthly Noteholders’ Statement; Annual Noteholders’ Tax Statement
31
 
ARTICLE 7.
REPRESENTATIONS AND WARRANTIES
     
Section 7.1.
Existence and Power
32
Section 7.2.
Business Trust and Governmental Authorization
32
Section 7.3.
Binding Effect
32
Section 7.4.
Financial Information; Financial Condition
33
Section 7.5.
Litigation
33
Section 7.6.
Compliance with ERISA
33
Section 7.7.
Tax Filings and Expenses
33
Section 7.8.
Full Disclosure
34
Section 7.9.
Investment Company Act; Trust Indenture Act; Securities Act
34
Section 7.10.
Regulations T, U and X
34
Section 7.11.
No Consent
34
Section 7.12.
Solvency
34
Section 7.13.
Subsidiary
35
Section 7.14.
Security Interests
35
Section 7.15.
Offering Memorandum
35
Section 7.16.
Non-Existence of Other Agreements
36
Section 7.17.
Eligible Mortgage Loans
36
Section 7.18.
Other Representations
36
Section 7.19.
Special Purpose Entity
36

 
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ARTICLE 8.
COVENANTS
     
Section 8.1.
Payment of Notes
36
Section 8.2.
Maintenance of Office or Agency
36
Section 8.3.
Information
37
Section 8.4.
Payment of Obligations
38
Section 8.5.
RESERVED
39
Section 8.6.
Conduct of Business and Maintenance of Existence
39
Section 8.7.
Compliance with Laws
39
Section 8.8.
Inspection of Property, Books and Records
39
Section 8.9.
Compliance with Program Documents
39
Section 8.10.
Notice of Defaults
39
Section 8.11.
Notices under Liquidity Agreement; Notice of Material Proceedings
40
Section 8.12.
Further Requests
40
Section 8.13.
Further Assurances
40
Section 8.14.
Certain Documents
41
Section 8.15.
Liens
41
Section 8.16.
Other Indebtedness
41
Section 8.17.
Mergers
42
Section 8.18.
Sales of Assets
42
Section 8.19.
Capital Expenditures
42
Section 8.20.
Dividends
42
Section 8.21.
Name; Principal Office
42
Section 8.22.
Organizational Documents
42
Section 8.23.
Investments
43
Section 8.24.
No Other Agreements
43
Section 8.25.
Other Business
43
Section 8.26.
Notes
43
Section 8.27.
Rule 144A Information Requirement
43
Section 8.28.
Use of Proceeds of Notes
43
Section 8.29.
Program Document Information
44
Section 8.30.
Year 2000 Issues
44
 
ARTICLE 9.
EVENTS OF DEFAULT AND REMEDIES
     
Section 9.1.
Events of Default
44
Section 9.2.
Rights upon Event of Default
47
Section 9.3.
[RESERVED]
47
Section 9.4.
[RESERVED]
47
Section 9.5.
Waiver of Past Events
47
Section 9.6.
[RESERVED]
47
Section 9.7.
Limitation on Suits
47
Section 9.8.
Unconditional Rights of Holders to Receive Payment:
   
Withholding Taxes
48

 
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Section 9.9.
Reserved
49
Section 9.10.
The Indenture Trustee May File Proofs of Claim
49
Section 9.11.
Priorities
49
Section 9.12.
Undertaking for Costs
50
Section 9.13.
Rights and Remedies Cumulative
50
Section 9.14.
Delay or Omission Not Waiver
50
 
ARTICLE 10.
THE INDENTURE TRUSTEE
     
Section 10.1.
Duties of the Indenture Trustee
50
Section 10.2.
Rights of the Indenture Trustee
52
Section 10.3.
Individual Rights of the Indenture Trustee
53
Section 10.4.
Notice of Events of Default and Potential Events of Default
53
Section 10.5.
Compensation
53
Section 10.6.
Replacement of the Indenture Trustee
54
Section 10.7.
Successor Indenture Trustee by Merger, etc.
55
Section 10.8.
Eligibility Disqualification
55
Section 10.9.
Appointment of Co-Indenture Trustee or Separate Indenture Trustee
55
Section 10.10.
Representations and Warranties of Indenture Trustee
56
Section 10.11.
The Issuer Indemnification of the Indenture Trustee
57
 
ARTICLE 11.
DISCHARGE OF INDENTURE
     
Section 11.1.
Termination of the Issuer’s Obligations
57
Section 11.2.
Application of Trust Money
58
Section 11.3.
Repayment to the Issuer
59
 
ARTICLE 12.
AMENDMENTS
     
Section 12.1.
Without Consent of the Noteholders
59
Section 12.2.
With Consent of the Noteholders
60
Section 12.3.
Supplements
61
Section 12.4.
Revocation and Effect of Consents
61
Section 12.5.
Notation on or Exchange of Notes
61
Section 12.6.
The Indenture Trustee to Sign Amendments, etc.
61
 
ARTICLE 13.
MISCELLANEOUS
     
Section 13.1.
Notices
62
Section 13.2.
Communication by Noteholders with Other Noteholders
63
Section 13.3.
Certificate and Opinion as to Conditions Precedent
63

 
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Section 13.4.
Statements Required in Certificate
63
Section 13.5.
Rules by the Indenture Trustee
64
Section 13.6.
No Recourse Against Others
64
Section 13.7.
Duplicate Originals
64
Section 13.8.
Benefits of Indenture
64
Section 13.9.
Payment on Business Day
64
Section 13.10.
Governing Law
65
Section 13.11.
No Adverse Interpretation of Other Agreements
65
Section 13.12.
Successors
65
Section 13.13.
Severability
65
Section 13.14.
Counterpart Originals
65
Section 13.15.
Table of Contents, Headings, etc.
65
Section 13.16.
Security Agreement
65
Section 13.17.
No Bankruptcy Petition Against the Issuer
66
Section 13.18.
No Recourse
66
Section 13.19.
Owner Trustee Limitation of Liability
66

 
SCHEDULES AND EXHIBITS
 
SCHEDULE I DEFINITIONS LIST
EXHIBIT A-1 FORM OF TRANSFER CERTIFICATE
EXHIBIT A-2 [RESERVED]
EXHIBIT A-3 [RESERVED]
EXHIBIT A-4 [RESERVED]
EXHIBIT A-5 [RESERVED]
EXHIBIT A-6 FORM OF TRANSFER CERTIFICATE FOR TRANSFER OR EXCHANGE FROM
DEFINITIVE NOTE TO PERMANENT GLOBAL NOTE
EXHIBIT A-7 FORM OF TRANSFER CERTIFICATE FOR TRANSFER OR EXCHANGE FROM
DEFINITIVE NOTE TO RESTRICTED GLOBAL NOTE
EXHIBIT B FORM OF CLEARING SYSTEM CERTIFICATE
EXHIBIT C FORM OF CERTIFICATE OF BENEFICIAL OWNERSHIP
EXHIBIT D FORM OF MONTHLY CERTIFICATE
EXHIBIT E FORM OF MONTHLY NOTEHOLDERS’ STATEMENT

 
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Residential Mortgage Loan Medium-Term Notes
 
(Issuable in Series)
 
BASE INDENTURE, dated as of December 11, 1998, between BISHOP’S GATE RESIDENTIAL
MORTGAGE TRUST, a business trust established under the laws of Delaware, as
issuer (the “Issuer”), and THE BANK OF NEW YORK, a New York banking corporation,
as indenture trustee (in such capacity, the “Indenture Trustee”).
 
W I T N E S S E T H:
 
WHEREAS, the Issuer has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of one or more series of
the Issuer’s Residential Mortgage Loan Medium-Term Notes (the “Notes”), issuable
as provided in this Indenture; and
 
WHEREAS, all things necessary to make this Indenture a legal, valid and binding
agreement of the Issuer, in accordance with its terms, have been done, and the
Issuer proposes to do all the things necessary to make the Notes, when executed
by the Issuer and authenticated and delivered by the Indenture Trustee hereunder
and duly issued by the Issuer, the legal, valid and binding obligations of the
Issuer as hereinafter provided;
 
NOW, THEREFORE, for and in consideration of the premises and the receipt of the
Notes by the Noteholders, it is mutually covenanted and agreed, for the equal
and proportionate benefit of all Noteholders, as follows:
 
ARTICLE 1.
 
DEFINITIONS AND INCORPORATION BY REFERENCE
 
Section 1.1.  Definitions
 
Certain capitalized terms used herein (including the preamble and the recitals
hereto) shall have the meanings assigned to such terms in the Definitions List
attached hereto as Schedule 1 (the “Definitions List”), as such Definitions List
may be amended or modified from time to time in accordance with the provisions
hereof.
 
Section 1.2.  Cross-References
 
Unless otherwise specified, references in this Indenture and in each other
Program Document to any Article or Section are references to such Article or
Section of this Indenture or such other Program Document, as the case may be
and, unless otherwise specified, references in any Article, Section or
definition to any clause are references to such clause of such Article, Section
or definition.
 
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Section 1.3.  Accounting and Financial Determinations; No Duplication
 
Where the character or amount of any asset or liability or item of income or
expense is required to be determined, or any accounting computation is required
to be made, for the purpose of this Indenture, such determination or calculation
shall be made, to the extent applicable and except as otherwise specified in
this Indenture, in accordance with GAAP. When used herein, the term “financial
statement” shall include the notes and schedules thereto. All accounting
determinations and computations hereunder or under any other Program Documents
shall be made without duplication.
 
Section 1.4.  Rules of Construction.
 
In this Indenture, unless the context otherwise requires:
 
(i) the singular includes the plural and vice versa;
 
(ii) reference to any Person includes such Person’s successors and assigns but,
if applicable, only if such successors and assigns are permitted by this
Indenture, and reference to any Person in a particular capacity only refers to
such Person in such capacity;
 
(iii) reference to any gender includes the other gender;
 
(iv) reference to any Requirement of Law means such Requirement of Law as
amended, modified, codified or reenacted, in whole or in part, and in effect
from time to time;
 
(v) “including” (and with correlative meaning “include”) means including without
limiting the generality of any description preceding such term; and
 
(vi) with respect to the determination of any period of time, “from” means “from
and including” and “to” means “to but excluding”.
 
ARTICLE 2.
 
THE NOTES
 
Section 2.1.  Designation and Terms of Notes.
 
Each Series of Notes shall be substantially in the form specified in the
applicable Supplement and shall bear, upon its face, the designation for such
Series to which it belongs so selected by the Issuer. All Notes of any Series
shall, except as specified in the related Supplement, be equally and ratably
entitled as provided herein to the benefits hereof without preference, priority
or distinction on account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions of this Indenture and
the applicable Supplement. Subject to the conditions contained herein and in the
other Program Documents, the aggregate principal amount of Notes which may be
authenticated and delivered under this Indenture is unlimited. Each Series of
Notes shall have Distribution Dates on the 20th day of
 
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each month. The Notes shall be in denominations of $200,000 and integral
multiples of $1,000 in excess thereof.
 
Section 2.2.  Notes Issuable in Series.
 
The Notes may be issued in one or more Series. Each Series of Notes shall be
created by a Supplement. Notes of a new Series may from time to time be executed
by the Issuer and delivered to the Indenture Trustee for authentication and
thereupon the same shall be authenticated and delivered by the Indenture Trustee
upon the receipt by the Indenture Trustee of a Trust Request at least two (2)
Business Days in advance of the related Series Closing Date and upon delivery by
the Issuer to the Indenture Trustee, and receipt by the Indenture Trustee, of
the following:
 
(a) a Trust Order authorizing and directing the authentication and delivery of
the Notes of such new Series by the Indenture Trustee and specifying the
designation of such new Series, the aggregate principal amount of Notes of such
new Series to be authenticated and the Note Rate (or the method for allocating
interest payments or other cash flow) with respect to such new Series;
 
(b) a Supplement in form satisfactory to the Indenture Trustee executed by the
Issuer and the Indenture Trustee and specifying the Principal Terms of such new
Series;
 
(c) the related Enhancement Agreement, if any, executed by each of the parties
thereto, other than the Indenture Trustee;
 
(d) written confirmation that the Rating Agency Confirmation Condition, the
Certificate Rating Agency Condition and the CP Rating Agency Condition shall
have been satisfied with respect to such issuance;
 
(e) an Officer’s Certificate of the Issuer dated as of the applicable Series
Closing Date to the effect that (i) no Event of Default, Enhancement Agreement
Event of Default, if applicable, Potential Event of Default, or Potential
Enhancement Agreement Event of Default, is continuing or will occur as a result
of the issuance of the new Series of Notes, (ii) the issuance of the new Series
of Notes will not result in any breach of any of the terms, conditions or
provisions of or constitute a default under any indenture, mortgage, deed of
trust or other agreement or instrument to which the Issuer is a party or by
which it or its property is bound or any order of any court or administrative
agency entered in any suit, action or other judicial or administrative
proceeding to which the Issuer is a party or by which it or its property may be
bound or to which it or its property may be subject and (iii) all conditions
precedent provided in this Base Indenture and the related Supplement with
respect to the authentication and delivery of the new Series of Notes have been
complied with;
 
(f) unless otherwise specified in the related Supplement, an Opinion of Counsel,
subject to the assumptions and qualifications stated therein, and in a form
substantially acceptable to the Indenture Trustee, dated the applicable Series
Closing Date, substantially to the effect that:
 
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(i) (x) the new Series of Notes will be treated as indebtedness of the Issuer
for Federal income tax purposes and, if applicable, (y) the issuance of such
Series will not adversely affect the Federal income tax characterization of the
outstanding Notes of any Series;
 
(ii) all instruments furnished to the Indenture Trustee conform in all material
respects to the requirements of this Base Indenture and the related Supplement
and constitute all the documents required to be delivered hereunder and
thereunder for the Indenture Trustee to authenticate and deliver the new Series
of Notes, and all conditions precedent provided for in this Base Indenture and
the related Supplement with respect to the authentication and delivery of the
new Series of Notes have been complied with in all material respects;
 
(iii) the Issuer is duly organized under the jurisdiction of its formation and
has the power and authority to execute and deliver the related Supplement, this
Base Indenture and each other Program Document to which it is a party and to
issue the new Series of Notes;
 
(iv) the related Supplement, this Base Indenture, and each of the other Program
Documents to which the Issuer is a party have been duly authorized, executed and
delivered by the Issuer,
 
(v) the new Series of Notes has been duly authorized and executed and, when
authenticated and delivered in accordance with the provisions of this Base
Indenture and the related Supplement, will constitute valid, binding and
enforceable obligations of the Issuer entitled to the benefits of this Base
Indenture and the related Supplement, subject, in the case of enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors’ rights generally and to general principles of equity;
 
(vi) this Base Indenture, the related Supplement and each of the other Program
Documents to which the Issuer is a party are legal, valid and binding agreements
of the Issuer enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors’ rights generally and to general principles of equity;
 
(vii) the Issuer is not, and is not controlled by, an “investment company”
within the meaning of, and is not required to register as an “investment
company” under, the Investment Company Act, and this Base Indenture and the
related Supplement are not required to be registered under the Trust Indenture
Act;
 
(viii) the offer and sale of the new Series of Notes is not required to be
registered under the Securities Act;
 
(ix) as to the new Series of Notes and any outstanding Series of Notes, the
opinions of counsel relating to (A) the validity, perfection and priority of
security interests, (B) the nature of the transfer of each of the Mortgage Loans
as a “true sale” and not as a financing arrangement, (C) the analysis of
substantive consolidation of the assets of the Issuer with the assets of Cendant
Mortgage Corporation, PHH Corporation or any of their respective Subsidiaries in
the event of the insolvency of Cendant Mortgage Corporation, PHH Corporation or
any of their respective Subsidiaries, (D) there being no pending or threatened
litigation which, if adversely determined, would materially and adversely affect
the ability of the Issuer to perform its obligations under any of the Program
Documents, and (E) the absence of any conflict with or violation of any court
decree, injunction, writ or order applicable to the Issuer or any breach or
default of any indenture, agreement or other instrument as a result of the
issuance of such Series of Notes by the Issuer, as furnished by counsel retained
by the Issuer in connection with the issuance of the initial Series of Notes,
are reaffirmed in all respects; and
 
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(x) such other matters as the Indenture Trustee may reasonably require;
 
(g) evidence that each of parties to the Program Documents and each party to any
Interest Rate Swap has covenanted and agreed that, prior to the date which is
one year and one day after the payment in full of the latest maturing Note, it
will not institute against, or join with any other Person in instituting,
against the Issuer any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings, under any Federal or state
bankruptcy or similar law;
 
(h) evidence of the grant by the Issuer to the Collateral Agent of a first
priority security interest in and to the Collateral;
 
(i) evidence that all filings (including filing of financing statements on form
UCC-1) and recordings have been accomplished as may be required by law to
establish, perfect, protect and preserve the rights, titles, interests,
remedies, powers, privileges, licenses and security interest of the Collateral
Agent in the Collateral for the benefit of the Secured Parties;
 
(j) an Opinion of Counsel to the Issuer to the effect that such issuance and
sale of such additional Series of Notes will not result in the withdrawal of, or
modification of the conclusions of, any opinion delivered in connection with the
issuance of any other outstanding Series of Notes, including any opinion that
any outstanding Series of Notes will be treated as indebtedness of the Trust for
federal income tax purposes;
 
(k) an Opinion of Counsel to the Issuer to the effect that such issuance and
sale of such additional Series of Notes will be treated as indebtedness of the
Issuer for Federal income tax purposes;
 
(l) written confirmation from each Rating Agency then rating any outstanding
Commercial Paper, any outstanding series of Certificates, or any outstanding
Series of Notes that the issuance of such new Series of Notes will not result in
the reduction or withdrawal of its then-current ratings on any outstanding
Commercial Paper, any outstanding series of Certificates or any outstanding
Series of Notes;
 
(m) any Depositary Incumbency Certificate furnished by the Trust from time to
time; and
 
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(n) such other documents, instruments, certifications, agreements or other items
as the Indenture Trustee may reasonably require.
 
Upon satisfaction of such conditions, the Indenture Trustee shall authenticate
and deliver, as provided above, such Series of Notes upon execution thereof by
the Issuer.
 
Section 2.3.  Supplement for Each Series
 
In conjunction with the issuance of a new Series, the parties hereto shall
execute a Supplement, which shall specify the relevant terms with respect to
such new Series of Notes, which shall include, as applicable: (i) its name or
designation, (ii) the aggregate principal amount of Notes of such Series, (iii)
the Note Rate (or the method for calculating such Note Rate) with respect to
such Series, (iv) the interest payment date or dates and the date or dates from
which interest shall accrue, (v) the method of allocating Collections with
respect to such Series and the method by which the principal amount of Notes of
such Series shall amortize or accrete, (vi) the names of any accounts to be used
by such Series and the terms governing the operation of any such account, (vii)
the terms of any Enhancement, (viii) the Enhancement Provider, if any, (ix)
whether the Notes may be issued in bearer form and any limitations imposed
thereon, (x) whether the Notes will be issued in multiple classes and, if so,
the method of allocating Collections among such classes, and (xi) any other
relevant terms of such Series of Notes that do not (subject to Article 12
hereof) change the terms of any outstanding Series of Notes or otherwise
materially conflict with in with the provisions of this Indenture and that do
not prevent the satisfaction of the Rating Agency Confirmation Condition with
respect to the issuance of such new Series (all such terms, the “Principal
Terms” of such Series).
 
Section 2.4.  Execution and Authentication
 
(a) An Authorized Officer shall sign the Notes for the Issuer by manual or
facsimile signature. If an Authorized Officer whose signature is on a Note no
longer holds that office at the time the Note is authenticated, the Note shall
nevertheless be valid.
 
(b) At any time and from time to time after the execution and delivery of this
Indenture, the Issuer may deliver Notes of any particular Series executed by the
Issuer to the Indenture Trustee for authentication, together with one or more
Trust Orders for the authentication and delivery of such Notes, and the
Indenture Trustee, in accordance with such Trust Order and this Indenture, shall
authenticate and deliver such Notes.
 
(c) No Note shall be entitled to any benefit under this Indenture or be valid
for any purpose unless there appears on such Note a certificate of
authentication substantially in the form provided for herein, duly executed by
the Indenture Trustee by the manual signature of an authorized signatory (and
the Luxembourg agent (the “Luxembourg Agent”), if such Notes are listed on the
Luxembourg Stock Exchange). Such signatures on such certificate shall be
conclusive evidence, and the only evidence, that the Note has been duly
authenticated under this Indenture. The Indenture Trustee may appoint an
authenticating agent acceptable to the Issuer to authenticate Notes. Unless
limited by the term of such appointment, an authenticating agent may
authenticate Notes whenever the Indenture Trustee may do so. Each reference in
this Indenture to authentication by the Indenture Trustee includes
authentication by such agent. An
 
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authenticating agent has the same rights as an agent to deal with the Issuer or
an Affiliate of the Issuer. The Indenture Trustee’s certificate of
authentication shall be in substantially the following form:
 
This is one of the Notes of a series referred to in the within mentioned
Indenture.
 
THE BANK OF NEW YORK,
as Indenture Trustee
 
By:
 
Authorized Signatory
 

(d) Each Note shall be dated and issued as of the date of its authentication by
the Indenture Trustee.
 
(e) Notwithstanding the foregoing, if any Note shall have been authenticated and
delivered hereunder but never issued and sold by the Issuer, and the Issuer
shall deliver such Note to the Indenture Trustee for cancellation as provided in
Section 2.14 together with a written statement (which need not comply with
Section 13.3 and need not be accompanied by an Opinion of Counsel) stating that
such Note has never been issued and sold by the Issuer, for all purposes of this
Indenture such Note shall be deemed never to have been authenticated and
delivered hereunder and shall not be entitled to the benefits of this Indenture.
 
Section 2.5.  Form of Notes; Book Entry Provisions; Title
 
(a) Restricted Global Note. Any Series of Notes (other than Variable Funding
Notes), or any class of such Series to be sold in the United States to qualified
institutional buyers within the meaning of, and in reliance on, Rule 144A under
the Securities Act (“Rule 144A”) in reliance on an exemption from the
registration requirements of the Securities Act will be issued in registered
form, and prior to any such sale, each such purchaser shall be deemed to have
represented and agreed as follows:
 
(1) It is a qualified institutional buyer as defined in Rule 144A and is
acquiring the Notes for its own institutional account or for the account of a
qualified institutional buyer;
 
(2) It understands that the Notes purchased by it will be offered, and may be
transferred, only in a transaction not involving any public offering within the
meaning of the Securities Act, and that, if in the future it decides to resell,
pledge or otherwise transfer any Notes, such Notes may be resold, pledged or
transferred only (a) to a person who the seller reasonably believes is a
qualified institutional buyer (as defined in Rule 144A under the Securities Act)
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, (b) outside the United States to a
non-U.S. Person (as such term is defined in Regulation S of the Securities Act)
in a transaction in compliance with Regulation S of the Securities Act, (c)
pursuant to an effective registration statement under the Securities Act or (d)
in reliance on another
 
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exemption under the Securities Act, in each case in accordance with any
applicable securities laws of any state of the United States;
 
(3) It understands that the Notes will bear a legend substantially as set forth
in Section 2.10;
 
(4) Either (i) no part of the assets used by it to acquire the Notes constitutes
assets of any Benefit Plan, or (ii) assuming that the Notes are treated as
indebtedness without substantial equity features for purposes of the “plan
asset” regulations under ERISA, its purchase of the Notes will not constitute a
non-exempt “prohibited transaction” under Section 406 of ERISA or Section 4975
of the Code by reason of the application of one or more statutory or
administrative exemptions from such prohibited transaction rules or otherwise;
and
 
(5) It acknowledges that the Indenture Trustee, the Issuer, each initial
purchaser for such Series of Notes, and their affiliates, and others will rely
upon the truth and accuracy of the foregoing acknowledgments, representations
and agreements. If it is acquiring any Notes for the account of one or more
qualified institutional buyers, it represents that it has sole investment
discretion with respect to each such account and that it has full power to make
the foregoing acknowledgments, representations and agreements on behalf of each
such account.
 
In addition, such purchaser shall be responsible for providing additional
information or certification, as shall be reasonably requested by the Issuer or
any initial purchaser for such Series of Notes, to support the truth and
accuracy of the foregoing acknowledgments, representations and agreements, it
being understood that such additional information is not intended to create
additional restrictions on the transfer of the Notes. Such Series of Notes
(other than the Variable Funding Note) shall be issued in the form of and
represented by one or more permanent global Notes in fully registered form
without interest coupons (each, a “Restricted Global Note”), substantially in
the form set forth in the applicable Supplement, with such legends as may be
applicable thereto, which shall be deposited on behalf of the subscribers for
the Notes represented thereby with a custodian for DTC, and registered in the
name of DTC or a nominee of DTC, duly executed by the Issuer and authenticated
by the Indenture Trustee as provided in Section 2.4 for credit to the accounts
of the subscribers at DTC. The aggregate initial principal amount of a
Restricted Global Note may from time to time be increased or decreased by
adjustments made on the records of the custodian for DTC, DTC or its nominee, as
the case may be, as hereinafter provided.
 
(b) Temporary Global Note: Permanent Global Note. Any Series of Notes (other
than Variable Funding Notes), or any class of such Series, offered and sold
outside of the United States will be offered and sold in reliance on Regulation
S (“Regulation S”) under the Securities Act and shall initially be issued in the
form of one or more temporary global Notes (each, a “Temporary Global Note”) in
fully registered form without interest coupons substantially in the form set
forth in the applicable Supplement with such legends as may be applicable
thereto, registered in the name of DTC or a nominee of DTC, duly executed by the
Issuer and authenticated by the Indenture Trustee as provided in Section 2.4,
for credit to the subscribers’ accounts at Morgan Guaranty Trust Company of New
York, Brussels Office, as
 
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operator of Euroclear or Cedel. Interests in a Temporary Global Note will be
exchangeable, in whole or in part, for interests in a permanent global note (a
“Permanent Global Note”) in fully registered form without interest coupons,
representing Notes of the same Series, substantially in the form set forth in
the applicable Supplement, in accordance with the provisions of the Temporary
Global Note and this Indenture. Until the Exchange Date, interests in a
Temporary Global Note may only be held by the agent members of Euroclear and
Cedel. The aggregate initial principal amount of the Temporary Global Note may
from time to time be increased or decreased by adjustments made on the records
of the custodian for DTC, DTC or its nominee, as the case may be, as hereinafter
provided.
 
(c) Variable Funding Note. Any Series of Variable Funding Notes shall initially
be sold to investors in reliance on an exemption from the registration
requirements of the Securities Act. Such Series of Notes shall be issued in the
form of one or more Variable Funding Notes (each, a “Variable Funding Note”) in
fully registered form without interest coupons substantially in the form set
forth in the applicable Supplement with such legends as may be applicable
thereto, duly executed by the Issuer and authenticated by the Indenture Trustee
as provided in Section 2.4. The aggregate initial principal amount of a Variable
Funding Note may from time to time be increased or decreased in accordance with
the applicable Supplement by adjustments made on the records of the Note
Register.
 
Section 2.6.  Registrar and Paving Agent
 
(a) The Issuer shall (i) maintain an office or agency where Notes may be
presented for registration of transfer or for exchange (“Registrar”) and (ii)
appoint a paying agent (which shall satisfy the eligibility criteria set forth
in Section 10.8(a)) (“Paying Agent”) at whose office or agency Notes may be
presented for payment. The Registrar shall keep a register of the Notes and of
their transfer and exchange (the “Note Register”). The Issuer may appoint one or
more co-registrars and one or more additional paying agents. The term “Paying
Agent” includes any additional paying agent and the term “Registrar” includes
any co-registrars. The Issuer may change any Paying Agent or Registrar without
prior notice to any Noteholder. The Issuer shall notify the Indenture Trustee in
writing of the name and address of any agent not a party to this Indenture. The
Indenture Trustee is hereby initially appointed as the Registrar, Paying Agent
and agent for service of notices and demands in connection with the Notes.
 
(b) The Issuer shall enter into an appropriate agency agreement with any agent
not a party to this Indenture. Such agency agreement shall implement the
provisions of this Indenture that relate to such agent. The Issuer shall notify
the Indenture Trustee in writing of the name and address of any such agent. If
the Issuer fails to maintain a Registrar or Paying Agent and a Trust Officer has
actual knowledge of such failure, or if the Issuer fails to give the foregoing
notice, the Indenture Trustee shall act as such, and shall be entitled to
appropriate compensation in accordance with this Indenture, until the Issuer
shall appoint a replacement Registrar and Paying Agent.
 
Section 2.7.  Paying Agent to Hold Money in Trust
 
(a) The Issuer will cause each Paying Agent other than the Indenture Trustee to
execute and deliver to the Indenture Trustee an instrument in which such Paying
Agent shall
 
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agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying
Agent, it hereby so agrees), subject to the provisions of this Section, that
such Paying Agent will:
 
(i) hold all sums held by it for the payment of amounts due with respect to the
Notes in trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
pay such sums to such Persons as herein provided;
 
(ii) give the Indenture Trustee notice of any default by the Issuer (or any
other obligor under the Notes) of which it (or, in the case of the Indenture
Trustee, a Trust Officer) has actual knowledge in the making of any payment
required to be made with respect to the Notes;
 
(iii) at any time during the continuance of any such default, upon the written
request of the Indenture Trustee, forthwith pay to the Indenture Trustee all
sums so held in trust by such Paying Agent;
 
(iv) immediately resign as a Paying Agent and forthwith pay to the Indenture
Trustee all sums held by it in trust for the payment of Notes if at any time it
ceases to meet the standards required to be met by an Indenture Trustee
hereunder at the time of its appointment; and
 
(v) comply with all requirements of the Code with respect to the withholding
from any payments made by it on any Notes of any applicable withholding taxes
imposed thereon and with respect to any applicable reporting requirements in
connection therewith.
 
(b) The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Trust Order direct
any Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which the sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
 
(c) Subject to applicable laws with respect to escheat of funds, any money held
by the Indenture Trustee or any Paying Agent in trust for the payment of any
amount due with respect to any Note and remaining unclaimed for two years after
such amount has become due and payable shall be discharged from such trust and
be paid to the Issuer on Trust Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Issuer cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in New York City, and London and Luxembourg (if the
related Series of Notes has been listed on the Luxembourg Stock Exchange), if
applicable, notice that such money remains unclaimed and that, after a date
specified therein, which shall not
 
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be less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Issuer.
 
Section 2.8.  Noteholder List
 
The Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders of each Series of Notes. If the Indenture Trustee is not the
Registrar, the Issuer shall furnish to the Indenture Trustee at least seven
Business Days before each Distribution Date and at such other time as the
Indenture Trustee may request in writing, a list in such form and as of such
date as the Indenture Trustee may reasonably require of the names and addresses
of Noteholders of each Series of Notes.
 
Section 2.9.  Transfer and Exchange
 
(a) When Notes of any particular Series are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an
equal principal amount of Notes of other authorized denominations of the same
Series, the Registrar shall register the transfer or make the exchange if its
requirements for such transaction are met; provided, however, that the Notes
surrendered for transfer or exchange (a) shall be duly endorsed or accompanied
by a written instrument of transfer in form satisfactory to the Issuer and the
Registrar, duly executed by the holder thereof or its attorney, duly authorized
in writing and (b) shall be transferred or exchanged in compliance with the
following provisions:
 
(i) Transfer of Restricted Global Notes.
 
(a) if such Note is being acquired for the account of such Holder, without
transfer, a certification from such Holder to that effect (in substantially the
form of Exhibit A-1, hereto); or
 
(b) if such Note is being transferred to a qualified institutional buyer (as
defined in Rule 144A) in accordance with Rule 144A, (i) a certification to that
effect (in substantially the form of Exhibit A-1 hereto) and (ii) each such
transferee of such Note shall be deemed to have represented and agreed as
follows:
 
(A) It is a qualified institutional buyer as defined in Rule 144A and is
acquiring the Notes for its own institutional account or for the account of a
qualified institutional buyer;
 
(B) It understands that the Notes purchased by it will be offered, and may be
transferred, only in a transaction not involving any public offering within the
meaning of the Securities Act, and that, if in the future it decides to resell,
pledge or otherwise transfer any Notes, such Notes may be resold, pledged or
transferred only (a) to a person who the seller reasonably believes is a
qualified institutional buyer (as defined in Rule 144A under the Securities Act)
that purchases for it own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, (b) outside the United States to a
non-U.S.
 
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Person (as such term is defined in Regulation S of the Securities Act) in a
transaction in compliance with Regulation S of the Securities Act, (c) pursuant
to an effective registration statement under the Securities Act or (d) in
reliance on another exemption under the Securities Act, in each case in
accordance with any applicable securities laws of any state of the United
States;
 
(C) It understands that the Notes will bear a legend substantially as set forth
in Section 2.10; and
 
(D) It acknowledges that the Indenture Trustee, the Issuer, each initial
purchaser for such Series of Notes, and their affiliates, and others will rely
upon the truth and accuracy of the foregoing acknowledgments, representations
and agreements. If it is acquiring any Notes for the account of one or more
qualified institutional buyers, it represents that it has sole investment
discretion with respect to each such account and that it has full power to make
the foregoing acknowledgments, representations and agreements on behalf of each
such account.
 
In addition, such transferee shall be responsible for providing additional
information or certification, as shall be reasonably requested by the Issuer or
any initial purchaser for such Series of Notes, to support the truth and
accuracy of the foregoing acknowledgments, representations and agreements, it
being understood that such additional information is not intended to create
additional restrictions on the transfer of the Notes; or
 
(c) if such Note is being transferred pursuant to an exemption from registration
in accordance with Regulation S, (i) a certification to that effect (in
substantially the form of Exhibit A-1 hereto) and (ii) each such transferee of
such Note shall be deemed to have represented and agreed as follows:
 
(A) It is aware that the sale to it of the Notes is being made in reliance on
the exemption from registration provided by Regulation S and understands that
the Notes offered in reliance on Regulation S will be represented by, initially,
one or more Temporary Global Notes. The Notes so represented may not at any time
be held by or on behalf of U.S. Persons as defined in Regulation S under the
Securities Act. It and each beneficial owner of the Notes sold to it will not be
a U.S. Person as defined in Regulation S under the Securities Act and its
purchase of the Notes will comply with all applicable laws in any jurisdiction
in which it resides or is located;
 
(B) It understands that the Notes purchased by it will be offered, and may be
transferred, only in a transaction not involving any public offering within the
meaning of the Securities Act, and that, if in the future it decides to resell,
pledge or otherwise transfer any Notes, such Notes may be resold, pledged or
transferred only (a) to a person who the seller reasonably believes is a
qualified institutional buyer (as defined in Rule 144A under the Securities Act)
that purchases for it own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is
 
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being made in reliance on Rule 144A, (b) outside the United States to a non-U.S.
Person (as such term is defined in Regulation S of the Securities Act) in a
transaction in compliance with Regulation S of the Securities Act, (c) pursuant
to an effective registration statement under the Securities Act or (d) in
reliance on another exemption under the Securities Act, in each case in
accordance with any applicable securities laws of any state of the United
States;
 
(C) It understands that the Notes will bear a legend substantially as set forth
in Section 2.10; and
 
(D) It acknowledges that the Indenture Trustee, the Issuer, each initial
purchaser for such Series of Notes, and their affiliates, and others will rely
upon the truth and accuracy of the foregoing acknowledgments, representations
and agreements. If it is acquiring any Notes for the account of one or more
qualified institutional buyers, it represents that it has sole investment
discretion with respect to each such account and that it has full power to make
the foregoing acknowledgments, representations and agreements on behalf of each
such account.
 
In addition, such transferee shall be responsible for providing additional
information or certification, as shall be reasonably requested by the Issuer or
any initial purchaser for such Series of Notes, to support the truth and
accuracy of the foregoing acknowledgments, representations and agreements, it
being understood that such additional information is not intended to create
additional restrictions on the transfer of the Notes; or
 
(d) if such Note is being transferred in reliance on another exemption from the
registration requirements of the Securities Act, (i) a certification to that
effect (in substantially the form of Exhibit A-1 hereto), and (ii) an opinion of
counsel in form and substance acceptable to the and to the Registrar to the
effect that such transfer is in compliance with the Securities Act.
 
(ii) Temporary Global Note to Permanent Global Note. Interests in a Temporary
Global Note as to which the Indenture Trustee has received from Euroclear or
Cedel, as the case may be, a certificate substantially in the form of Exhibit B
to the effect that Euroclear or Cedel, as applicable, has received a certificate
substantially in the form of Exhibit C from the holder of a beneficial interest
in such Note, will be exchanged, on and after the 40th day after the completion
of the distribution of the relevant Series (the “Exchange Date”), for interests
in a Permanent Global Note. To effect such exchange the Issuer shall execute and
the Indenture Trustee shall authenticate and hold as custodian for the Clearing
Agency, for the account of Euroclear or Cedel, as applicable, for credit to the
respective accounts of the holders of Notes, a duly executed and authenticated
Permanent Global Note, representing the principal amount of interests in the
Temporary Global Note initially exchanged for interests in the Permanent Global
 
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Note. The delivery to the Indenture Trustee by Euroclear or Cedel of the
certificate or certificates referred to above may be relied upon by the Issuer
and the Indenture Trustee as conclusive evidence that the certificate or
certificates referred to therein has or have been delivered to Euroclear or
Cedel pursuant to the terms of this Indenture and the Temporary Global Note.
Upon any exchange of interests in a Temporary Global Note for interests in a
Permanent Global Note, the Indenture Trustee shall endorse the Temporary Global
Note to reflect the reduction in the principal amount represented thereby by the
amount so exchanged and shall endorse the Permanent Global Note to reflect the
corresponding increase in the amount represented thereby. The Temporary Global
Note or the Permanent Global Note shall also be endorsed upon any cancellation
of principal amounts upon surrender of Notes purchased by the Issuer or any of
its respective subsidiaries or affiliates or upon any repayment of the principal
amount represented thereby or any payment of interest in respect of such Notes.
 
(iii) Restricted Global Note to Temporary Global Note During the Restricted
Period. If, prior to the Exchange Date, a holder of a beneficial interest in the
Restricted Global Note registered in the name of DTC or its nominee wishes at
any time to exchange its interest in such Restricted Global Note for an interest
in the Temporary Global Note, such holder may, subject to the rules and
procedures of DTC, exchange or cause the exchange or transfer of such interest
for an equivalent beneficial interest in the Temporary Global Note. Upon receipt
by the Indenture Trustee as Transfer Agent (“Transfer Agent”) of (1)
instructions given in accordance with DTC’s procedures from an agent member
directing the Indenture Trustee as Transfer Agent to credit or cause to be
credited a beneficial interest in the Temporary Global Note in an amount equal
to the beneficial interest in the Restricted Global Note to be exchanged or
transferred, and (2) a written order given in accordance with DTC’s procedures
containing information regarding the Euroclear or Cedel account to be credited
with such increase and the name of such account, DTC shall reduce the Restricted
Global Note by the aggregate principal amount of the beneficial interest in the
Restricted Global Note to be so exchanged or transferred and DTC shall,
concurrently with such reduction, increase the principal amount of the Temporary
Global Note by the aggregate principal amount of the beneficial interest in the
Restricted Global Note to be so exchanged or transferred, and to credit or cause
to be credited to the account of the person specified in such instructions (who
shall be the agent member of Euroclear or Cedel, or both, as the case may be) a
beneficial interest in the Temporary Global Note equal to the reduction in the
principal amount of the Restricted Global Note. In connection with any transfer
pursuant to this Section (iii), each such transferor of such Restricted Global
Note shall be deemed to have represented and agreed that such exchange or
transfer has been effected in accordance with the transfer restrictions set
forth in the related Series of Notes and pursuant to and in accordance with
Regulation S under the Securities Act, and that:
 
(1) the offer of the Notes was not made to a person in the United States;
 
(2) 1. at the time the buy order was originated, the transferee was outside the
United States or the transferor and any person acting on its behalf reasonably
believed that the transferee was outside the United States, or
 
(B) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither the transferor nor any
 
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person acting on its behalf knows that the transaction was prearranged with a
buyer in the United States;
 
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;
 
(4) the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act; and
 
(5) upon completion of the transaction, the beneficial interest being
transferred as described above was held with DTC through Euroclear or Cedel or
both.
 
(iv) Restricted Global Note to Permanent Global Note After the Exchange Date.
If, after the Exchange Date, a holder of a beneficial interest in the Restricted
Global Note registered in the name of DTC or its nominee wishes at any time to
exchange its interest in such Restricted Global Note for an interest in the
Permanent Global Note, or to transfer its interest in such Restricted Global
Note to a Person who wishes to take delivery thereof in the form of an interest
in the Permanent Global Note, such holder may, subject to the rules and
procedures of DTC, exchange or cause the exchange or transfer of such interest
for an equivalent beneficial interest in the Permanent Global Note. Upon receipt
by the Transfer Agent of (1) instructions given in accordance with DTC’s
procedures from an agent member directing the Indenture Trustee to credit or
cause to be credited a beneficial interest in the Permanent Global Note in an
amount equal to the beneficial interest in the Restricted Global Note to be
exchanged or transferred, and (2) a written order given in accordance with DTC’s
procedures containing information regarding the participant account of DTC and,
in the case of a transfer pursuant to and in accordance with Regulation S, the
Euroclear or Cedel account to be credited with such increase, DTC shall reduce
the Restricted Global Note by the aggregate principal amount of the beneficial
interest in the Restricted Global Note to be so exchanged or transferred and the
Transfer Agent shall instruct DTC, concurrently with such reduction, to increase
the principal amount of the Permanent Global Note by the aggregate principal
amount of the beneficial interest in the Restricted Global Note to be so
exchanged or transferred, and to credit or cause to be credited to the account
of the person specified in such instructions a beneficial interest in the
Permanent Global Note equal to the reduction in the principal amount of the
Restricted Global Note. In connection with any transfer pursuant to this Section
(iv), each such transferor of such Restricted Global Note shall be deemed to
have represented and agreed that such exchange or transfer has been effected in
accordance with the transfer restrictions set forth in the related Series of
Notes and pursuant to and in accordance with Regulation S under the Securities
Act, and that:
 
(1) the offer of the Notes was not made to a person in the United States;
 
(2) 2. at the time the buy order was originated, the transferee was outside the
United States or the transferor and any person acting on its behalf reasonably
believed that the transferee was outside the United States, or
 
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(B) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither the transferor nor any person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States;
 
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or 904(b ) of Regulation S, as applicable, and
 
(4) the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act;
 
or (ii) that, with respect to transfers made in reliance on Rule 144A under the
Securities Act, the Restricted Global Notes are being transferred in a
transaction permitted by Rule 144A under the Securities Act.
 
(v) Temporary Global Note to Restricted Global Note. If a holder of a beneficial
interest in the Temporary Global Note registered in the name of DTC or its
nominee wishes at any time to exchange its interest in such Temporary Global
Note for an interest in the Restricted Global Note, or to transfer its interest
in such Temporary Global Note to a Person who wishes to take delivery thereof in
the form of an interest in the Restricted Global Note, such holder may, subject
to the rules and procedures of Euroclear or Cedel and DTC, as the case may be,
exchange or cause the exchange or transfer of such interest for an equivalent
beneficial interest in the Restricted Global Note. Upon receipt by the Transfer
Agent of instructions from Euroclear or Cede! or DTC, as the case may be,
directing the Indenture Trustee to credit or cause to be credited a beneficial
interest in the Restricted Global Note equal to the beneficial interest in the
Temporary Global Note to be exchanged or transferred, such instructions to
contain information regarding the agent member’s account with DTC to be credited
with such increase, and, with respect to an exchange or transfer of an interest
in the Temporary Global Note after the Exchange Date, information regarding the
agent member’s account with DTC to be debited with such decrease, DTC shall
reduce the Temporary Global Note by the aggregate principal amount of the
beneficial interest in the Temporary Global Note to be exchanged or transferred,
and DTC shall, concurrently with such reduction, increase the principal amount
of the Restricted Global Note by the aggregate principal amount of the
beneficial interest in the Temporary Global Note to be so exchanged or
transferred, and credit or cause to be credited to the account of the applicable
Person a beneficial interest in the Restricted Global Note equal to the
reduction in the principal amount of the Temporary Global Note. In connection
with any transfer pursuant to this Section (v), each such transferor of such
Temporary Global Note shall be deemed to have represented and agreed that such
Temporary Global Notes are being transferred in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the “Securities Act”) to a
transferee that the transferor reasonably believes is purchasing such Notes for
its own account or an account with respect to which the transferee exercises
sole investment discretion and the transferee and any such account is a
“qualified institutional buyer” within the meaning of Rule 144A, in each case in
a transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction.
 
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(vi) Permanent Global Note to Restricted Global Note. Interests in the Permanent
Global Note may not be transferred for interests in the Restricted Global Note.
 
(vii) So long as a Definitive Note remains outstanding, transfers and exchanges
of a Definitive Note, in whole or in part, shall only be made in accordance with
this Section 2.9.
 
(A) Definitive Note to Permanent Global Note. If a holder of a beneficial
interest in a Definitive Note wishes at any time to exchange its interest in
such Note for an interest in a Permanent Global Note, or to transfer its
interest in such Definitive Note to a Person who wishes to take delivery thereof
in the form of an interest in a Permanent Global Note, such holder may exchange
or transfer or cause the exchange or transfer of such interest for an equivalent
beneficial interest in a Permanent Global Note. Definitive Notes may be
exchanged or transferred for beneficial interests in Permanent Global Notes in
minimum denominations of $200,000 and integral multiples of $1,000 in excess
thereof. Upon receipt by the Trustee as Note Registrar, of (A) such Definitive
Notes properly endorsed for such transfer and written instructions from such
holder directing the Trustee, as Note Registrar to cause to be credited a
beneficial interest in a Permanent Global Note in an amount equal to the
beneficial interest in the Definitive Notes but not less than the minimum
denomination applicable to such holder’s Notes held through a Permanent Global
Note, to be exchanged or transferred, (B) a written order containing information
regarding the Euroclear or Cedel account to be credited with such increase and
(C) a certificate in the form of Exhibit A-6 attached hereto given by the holder
of such beneficial interest stating that the exchange or transfer of such
interest has been made in compliance with the transfer restrictions applicable
to the Global Securities, including that the holder or the transferee, as
applicable, is not a U.S. Person and pursuant to and in accordance with
Regulation S, the Trustee, as Note Registrar, shall cancel such Definitive Notes
in accordance with Section 2.14, record the transfer in the Note Register in
accordance with Section 2.9(a) and instruct the Depository to increase the
principal amount of the Global Note by the aggregate principal amount of the
beneficial interest in the Definitive Notes to be exchanged or transferred, and
to credit or cause to be credited to the securities account of the Person
specified in such instructions a beneficial interest in the Regulation S Global
Security equal to the amount specified in the instructions received pursuant to
clause (A) above.
 
(B) Definitive Note to Restricted Global Note. If a holder of a beneficial
interest in a Definitive Note wishes at any time to exchange its interest in
such Definitive Note for an interest in a Restricted Global Note, or to transfer
its interest in such Definitive Note to a Person who wishes to take delivery
thereof in the form of an interest in a Restricted Global Note, such holder may
exchange or transfer or cause the exchange or transfer of such interest for an
equivalent beneficial interest in a Restricted Global Note. Definitive Notes may
be exchanged or transferred for beneficial interests in Restricted Global Note
only in minimum denominations of $200,000 and integral multiples in excess of
$1,000. Upon receipt by the Trustee, as Note Registrar, of (A) such holder’s
Definitive
 
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Notes properly endorsed for such transfer and written instructions from such
holder directing the Trustee, as Note Registrar, to cause to be credited a
beneficial interest in a Restricted Global Note in an amount equal to the
beneficial interest in the Definitive Notes, but not less than the minimum
denomination applicable to such holder’s Notes held through a Restricted Global
Note, to be exchanged or transferred, such instructions to contain information
regarding the participant account with the Depository to be credited with such
increase, and (B) a certificate in the form of Exhibit A-7 attached hereto given
by the holder of such beneficial interest and stating, among other things, that,
in the case of a transfer, such holder reasonably believes that the Person
acquiring such interest in a Restricted Global Note is a qualified institutional
buyer within the meaning of Rule 144A, is obtaining such beneficial interest in
a transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction or that, in the case of an exchange, the holder is a qualified
institutional buyer within the meaning of Rule 144A, then the Trustee, as Note
Registrar, shall cancel such Definitive Notes in accordance with Section 2.14
and instruct the Depository to credit or cause to be credited to the securities
account of the Person specified in such instructions a beneficial interest in a
Restricted Global Note equal to the amount specified in the instructions
received pursuant to clause (A) above.
 
(C) Transfer of Definitive Notes. If a holder of a beneficial interest in a
Definitive Note wishes at any time to transfer its interest in such Definitive
Note to a Person who wishes to take delivery thereof, such holder may transfer
or cause the transfer of such interest for an equivalent beneficial interest in
one Definitive Note, as provided below. Upon receipt by the Issuer and the
Trustee, as Note Registrar, of (A) such holder’s Definitive Note properly
endorsed for assignment to the transferee, (B) a certificate in the form of
Exhibit A-8, attached hereto given by the transferee of such beneficial interest
and (C) if such certificate does not include a certification that the transferee
is a qualified institutional buyer or a non-U.S. Person, either (i) a
certification of the transferor that the transfer is being made pursuant to Rule
144 under the Securities Act or (ii) an opinion of counsel acceptable to the
Trustee that such transfer may be made pursuant to an exemption from
registration under the Securities Act, then the Trustee, as Note Registrar,
shall cancel such Definitive Note in accordance with Section 2.14, record the
transfer in the Note Register in accordance with Section 2.5(a) and authenticate
and deliver one or more Definitive Notes bearing the same designation as the
Definitive Notes endorsed for transfer, registered in the names specified in the
assignment described in clause (A) above, in a principal amount to the
beneficial interest in the Definitive Note surrendered by the transferor. Any
purported transfer in violation of the foregoing requirements shall be null and
void ab initio, and the Trustee shall not register any such purported transfer
and shall not authenticate and deliver such Definitive Notes.
 
(viii) Transfers of Variable Funding Notes. The Variable Funding Notes shall not
be transferable except in the limited circumstances, if any, described in the
applicable Supplement; provided, however, that the Variable Funding Note may be
 
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pledged as security (and transferred) in accordance with the terms of the
applicable Supplement.
 
(ix) Other Transfers or Exchanges. In the event that a Global Note is exchanged
for Notes in definitive registered form without interest coupons, pursuant to
Section 2.18 hereof, such Notes may be exchanged or transferred for one another
only in accordance with such procedures as are substantially consistent with the
provisions of clauses (i) through (iv) above (including the certification
requirements intended to insure that such exchanges or transfers comply with
Rule 144A or Regulation S, as the case may be) and as may be from time to time
adopted by the Issuer and the Indenture Trustee.
 
(b) The Indenture Trustee shall not register the exchange of interests in a Note
for a Definitive Note or the transfer of or exchange of a Note during the period
beginning on any Record Date and ending on the next following Distribution Date.
 
(c) The Issuer or the Indenture Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any exchange or registration of transfer of Notes. No service charge shall
be made for any such transaction.
 
(d) If the Notes are listed on the Luxembourg Stock Exchange, the Indenture
Trustee shall send to the Issuer upon any transfer or exchange of any Note
information reflected in the copy of the register for the Notes maintained by
the Registrar, as the case may be.
 
(e) To permit registrations of transfers and exchanges, the Issuer shall execute
and the Indenture Trustee shall authenticate Notes, subject to such rules as the
Indenture Trustee may reasonably require. No service charge to the Noteholder
shall be made for any registration of transfer or exchange (except as otherwise
expressly permitted herein), but the Registrar may require payment of a sum
sufficient to cover any transfer tax or similar government charge payable in
connection therewith (other than any such transfer tax or similar governmental
charge payable upon exchanges pursuant to Section 2.13 hereof in which event the
Registrar will be responsible for the payment of any such taxes).
 
(f) All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
 
(g) Prior to due presentment for registration of transfer of any Note, the
Indenture Trustee, any agent and the Issuer may deem and treat the Person in
whose name any Note is registered (as of the day of determination) as the
absolute owner of such Note for the purpose of receiving payment of principal of
and interest on such Note and for all other purposes whatsoever, whether or not
such Note is overdue, and neither the Indenture Trustee, any agent nor the
Issuer shall be affected by notice to the contrary.
 
(h) Notwithstanding any other provision of this Section 2.9, the typewritten
Note or Notes representing Book-Entry Notes for any Series may be transferred,
in whole but not in part, only to another nominee of the Clearing Agency for
such Series, or to a successor
 
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Clearing Agency for such Series selected or approved by the Issuer or to a
nominee of such successor Clearing Agency, only if in accordance with this
Section 2.9 and Section 2.18.
 
(i) Each transferee of a Note shall be deemed to represent and warrant that
either (i) it is not (A) an employee benefit plan (as defined in Section 3(3) of
ERISA) that is subject to Title 1 of ERISA, (B) a plan (as defined in Section
4975 of the Code) that is subject to Section 4975 of the Code or (C) an entity
deemed to be investing the “plan assets” (within the meaning of 29 C.F.R.
Section 2510.3-101 (the “Plan Assets Regulation”) or otherwise under ERISA) of
any such employee benefit plan or plan; including, without limitation, an
insurance company general account, or (ii) assuming that the Notes constitute
indebtedness without substantial equity features for purposes of the Plan Assets
Regulation, its acquisition and holding of Notes will not constitute or
otherwise result in a non-exempt prohibited transaction under ERISA or Section
4975 of the Code by reason of the application of one or more statutory or
administrative exemptions from such prohibited transaction rules.
 
The Indenture Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer or any interest
in any Note (including any transfers between or among Depositary Participants or
beneficial owners of interests in any Global Note) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
 
Section 2.10.  Legending of Notes
 
(a)  Unless otherwise provided for in a Supplement and except as permitted by
the following sentence, each Note (other than any Variable Funding Note) shall
bear a legend in substantially the following form:
 
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”) OR ANY STATE SECURITIES OR “BLUE SKY” LAWS. THE HOLDER
HEREOF, BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF BISHOP’S GATE
RESIDENTIAL MORTGAGE TRUST (THE “TRUST”) THAT THIS NOTE IS BEING ACQUIRED FOR
ITS OWN ACCOUNT AND NOT WITH A VIEW TO DISTRIBUTION AND MAY BE RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED ONLY (1) TO THE TRUST (UPON REDEMPTION THEREOF OR
OTHERWISE), (2) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) OUTSIDE THE UNITED
STATES TO A NON-U.S. PERSON (AS SUCH TERM IS DEFINED IN REGULATION S OF THE
SECURITIES ACT) IN A TRANSACTION IN COMPLIANCE WITH REGULATION S OF THE
SECURITIES ACT OR (4) IN A TRANSACTION COMPLYING WITH OR EXEMPT FROM THE
REGISTRATION
 
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REQUIREMENTS OF THE SECURITIES ACT (SUBJECT IN THE CASE OF THIS CLAUSE (4) TO
RECEIPT OF SUCH CERTIFICATES AND OTHER DOCUMENTS AS THE INDENTURE TRUSTEE MAY
REQUIRE UNDER THE INDENTURE), IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
 
Upon any transfer, exchange or replacement of Notes bearing such legend, or if a
request is made to remove such legend on a Note, the Notes so issued shall bear
such legend, or such legend shall not be removed, as the case may be, unless
there is delivered to the Issuer and the Indenture Trustee such satisfactory
evidence, which may include an opinion of counsel, as may be reasonably required
by the Issuer that neither such legend nor the restrictions on transfer set
forth therein are required to ensure that transfers thereof comply with the
provisions of Rule 144A, Rule 144 or Regulation S. Upon provision of such
satisfactory evidence, the Indenture Trustee, at the direction of the Issuer,
shall authenticate and deliver a Note that does not bear such legend.
 
(b) Unless otherwise provided for in a Supplement, each Variable Funding Note
shall bear a legend in substantially the following form:
 
THIS VARIABLE FUNDING NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES OR “BLUE SKY”
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF
BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST (THE “TRUST”) THAT THIS NOTE IS BEING
ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO DISTRIBUTION. THIS VARIABLE
FUNDING NOTE IS NOT PERMITTED TO BE TRANSFERRED, ASSIGNED OR OTHERWISE PLEDGED
OR CONVEYED EXCEPT N COMPLIANCE WITH THE TERMS OF THE INDENTURE REFERRED TO
HEREIN.
 
Section 2.11.  Replacement Notes
 
(a) If (i) any mutilated Note is surrendered to the Indenture Trustee, or the
Indenture Trustee and Issuer receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (ii) there is delivered to the
Indenture Trustee such security or indemnity as may be required by it to hold
the Issuer and the Indenture Trustee harmless then, in the absence of notice to
the Issuer, the Registrar or the Indenture Trustee that such Note has been
acquired by a bona fide purchaser, and provided that the requirements of Section
8-405 of the UCC (which generally permit the Issuer to impose reasonable
requirements) are met, the Issuer shall execute and upon its written request the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Note, a replacement Note;
provided, however, that if any such destroyed, lost or stolen Note, but not a
mutilated Note, shall have become or within seven days shall be due and payable,
instead of issuing a replacement Note, the Issuer may pay such destroyed, lost
or stolen Note when so due or payable without surrender
 
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thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer
and the Indenture Trustee shall be entitled to recover such replacement Note (or
such payment) from the Person to whom it was delivered or any Person taking such
replacement Note from such Person to whom such replacement Note was delivered or
any assignee of such Person, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in
connection therewith.
 
(b) Upon the issuance of any replacement Note under this Section 2.11, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
 
(c) Every replacement Note issued pursuant to this Section 2.11 in replacement
of any mutilated, destroyed, lost or stolen Note shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Notes duly issued hereunder.
 
(d) The provisions of this Section 2.11 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
 
Section 2.12.  Treasury Notes
 
In determining whether the Noteholders of the required principal amount of Notes
have concurred in any direction, waiver or consent, Notes owned by the Issuer,
the Seller or the Servicer or any Affiliate of the Issuer, the Seller or the
Servicer shall be considered as though they are not outstanding, except that for
the purpose of determining whether the Indenture Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes of which a Trust
Officer of the Indenture Trustee has actually received written notice of such
ownership shall be so disregarded. Absent written notice to the Indenture
Trustee of such ownership, the Indenture Trustee shall not be deemed to have
knowledge of the identity of the individual beneficial owners of the Notes,
 
Section 2.13.  Temporary Notes
 
(a) Pending the preparation of Definitive Notes issued under Section 2.18
hereof, the Issuer may prepare and the Indenture Trustee, upon receipt of a
Trust Order, shall authenticate and deliver temporary Notes of such Series.
Temporary Notes shall be substantially in the form of Definitive Notes of like
Series but may have variations that are not inconsistent with the terms of this
Indenture as the officers executing such Notes may determine, as evidenced by
their execution of such Notes.
 
(b) If temporary Notes are issued pursuant to Section 2.13(a) above, the Issuer
will cause Definitive Notes to be prepared without unreasonable delay. After the
preparation of Definitive Notes, the temporary Notes shall be exchangeable for
Definitive Notes upon surrender of the temporary Notes at the office or agency
of the Issuer to be maintained as provided in
 
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Section 8.2, without charge to the Noteholder. Upon surrender for cancellation
of any one or more temporary Notes, the Issuer shall execute and the Indenture
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of Definitive Notes of authorized denominations. Until so exchanged, the
temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as Definitive Notes.
 
Section 2.14.  Cancellation
 
The Issuer may at any time deliver to the Indenture Trustee for cancellation any
Notes previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
cancelled by the Indenture Trustee. The Registrar and Paying Agent shall forward
to the Indenture Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Indenture Trustee shall cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation. The Issuer may not issue new Notes to replace Notes that it has
redeemed or paid or that have been delivered to the Indenture Trustee for
cancellation. All cancelled Notes held by the Indenture Trustee shall be
disposed of in accordance with the Indenture Trustee’s standard disposition
procedures.
 
Section 2.15.  Principal and Interest
 
(a) The principal of each Series of Notes shall be payable at the times and in
the amount set forth in the related Supplement and in accordance with Section
6.1.
 
(b) Each Series of Notes shall accrue interest as provided in the related
Supplement and such interest shall be payable on each Distribution Date for such
Series in accordance with Section 6.1 and the related Supplement.
 
(c) Except as provided in the following sentence, the Person in whose name any
Note is registered at the close of business on any Record Date with respect to a
Distribution Date for such Note shall be entitled to receive the principal and
interest payable on such Distribution Date notwithstanding the cancellation of
such Note upon any registration of transfer, exchange or substitution of such
Note subsequent to such Record Date. Any interest payable at maturity shall be
paid to the Person to whom the principal of such Note is payable.
 
(d) If the Issuer defaults in the payment of interest on the Notes of any
Series, such interest, to the extent paid on any date that is more than five (5)
Business Days after the applicable due date, shall cease to be payable to the
Persons who were Noteholders of such Series at the applicable Record Date and
the Issuer shall pay the defaulted interest in any lawful manner, plus, to the
extent lawful, interest payable on the defaulted interest, to the Persons who
are Noteholders of such Series on a subsequent special record date which date
shall be at least five (5) Business Days prior to the payment date, at the rate
provided in this Indenture and in the Notes of such Series. The Issuer shall fix
or cause to be fixed each such special record date and payment date, and at
least 15 days before the special record date, the Issuer (or the Indenture
Trustee, in the name of and at the expense of the Issuer) shall mail to
Noteholders of such Series a notice that states the special record date, the
related payment date and the amount of such interest to be paid.
 
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Section 2.16.  Book-Entry Notes
 
(a) For each Series of Notes to be issued in registered form (other than the
Variable Funding Note), the Issuer shall duly execute the Notes, and the
Indenture Trustee shall, in accordance with Section 2.4 hereof, authenticate and
deliver initially one or more Global Notes that (a) shall be registered on the
Note Register in the name of DTC or DTC’s nominee, and (b) shall bear legends
substantially to the following effect:
 
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. (“CEDE”) OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE, HAS AN INTEREST HEREIN.
 
So long as DTC or its nominee is the registered owner or holder of a Global
Note, DTC or its nominee, as the case may be, will be considered the sole owner
or holder of the Notes represented by such Global Note for purposes of this
Indenture and such Notes. Members of, or participants in, DTC shall have no
rights under this Indenture with respect to any Global Note held on their behalf
by DTC, and DTC may be treated by the Issuer, the Indenture Trustee, any agent
and any agent of such entities as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Issuer, the Indenture Trustee, any agent and any agent of such entities from
giving effect to any written certification, proxy or other authorization
furnished by DTC or impair, as between DTC and its agent members, the operation
of customary practices governing the exercise of the rights of a holder of any
Note.
 
(b) Subject to Section 2.9(g), the provisions of the “Operating Procedures of
the Euroclear System” and the “Terms and Conditions Governing Use of Euroclear”
and the “Management Regulations” and “Instructions to Participants” of Cedel,
respectively, shall be applicable to the Global Note insofar as interests in a
Global Note are held by the agent members of Euroclear or Cedel (which shall
only occur in the case of the Temporary Global Note and the Permanent Global
Note). Account holders or participants in Euroclear and Cedel shall have no
rights under this Indenture with respect to such Global Note, and the registered
holder may be treated by the Issuer, the Indenture Trustee and any agent of the
Issuer or the Indenture Trustee as the owner of such Global Note for all
purposes whatsoever.
 
(c) Title to the Notes shall pass only by registration in the Note Register
maintained by the Registrar pursuant to Section 2.6.
 
(d) Any typewritten Note or Notes representing Book Entry Notes shall provide
that they represent the aggregate or a specified amount of outstanding Notes
from time to time endorsed thereon and may also provide that the aggregate
amount of outstanding Notes
 
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represented thereby may from time to time be reduced to reflect exchanges. Any
endorsement of a typewritten Note or Notes representing Book-Entry Notes to
reflect the amount, or any increase or decrease in the amount, or changes in the
rights of Note Owners represented thereby, shall be made in such manner and by
such Person or Persons as shall be specified therein or in the Trust Order to be
delivered to the Indenture Trustee pursuant to Section 2.4. Subject to the
provisions of Section 2.5, the Indenture Trustee shall deliver and redeliver any
typewritten Note or Notes representing Book-Entry Notes in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Trust Order. Any instructions by the Issuer with respect to
endorsement or delivery or redelivery of a typewritten Note or Notes
representing the Book-Entry Notes shall be in writing but need not comply with
Section 13.3 hereof and need not be accompanied by an Opinion of Counsel.
 
(e) Unless and until definitive, fully registered Notes (“Definitive Notes”)
have been issued to Note Owners pursuant to Section 2.18:
 
(i) the provisions of this Section 2.16 shall be in full force and effect;
 
(ii) the Paying Agent, the Registrar and the Indenture Trustee may deal with the
Clearing Agency and the Clearing Agency Participants for all purposes of this
Indenture (including the making of payments on the Notes and the giving of
instructions or directions hereunder) as the authorized representatives of the
Note Owners;
 
(iii) to the extent that the provisions of this Section 2.16 conflict with any
other provisions of this Indenture, the provisions of this Section 2.16 shall
control;
 
(iv) whenever this Indenture requires or permits actions to be taken based upon
instructions or directions of Holders of Notes evidencing a specified percentage
of the outstanding principal amount of the Notes, the applicable Clearing Agency
shall be deemed to represent such percentage only to the extent that it has
received instructions to such effect from Note Owners and/or their related
Clearing Agency Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Notes and has delivered such
instructions to the Indenture Trustee; and
 
(v) the rights of Note Owners shall be exercised only through the applicable
Clearing Agency and their related Clearing Agency Participants and shall be
limited to those established by law and agreements between such Note Owners and
their related Clearing Agency and/or the Clearing Agency Participants. Unless
and until Definitive Notes are issued pursuant to Section 2.18, the applicable
Clearing Agencies will make book-entry transfers among their related Clearing
Agency Participants and receive and transmit payments of principal and interest
on the Notes to such Clearing Agency Participants.
 
Section 2.17.  Notices to Clearing Agency.
 
 
Whenever notice or other communication to the Noteholders is required under this
Indenture, unless and until Definitive Notes shall have been issued to Note
Owners pursuant to Section 2.18, the Indenture Trustee and the Issuer shall give
all such notices and communications specified herein to be given to Noteholders
to the applicable Clearing Agency for distribution to the Note Owners.
 
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Section 2.18.  Definitive Notes.
 
(a) Conditions for Issuance. Except as provided in Section 2.9, interests in a
Restricted Global Note or Permanent Global Note deposited with DTC pursuant to
Section 2.5 shall be transferred to the beneficial owners thereof in the form of
definitive registered Notes only if (x) DTC notifies the Issuer that it is
unwilling or unable to continue as depositary for such Restricted Global Note or
Permanent Global Note or at any time ceases to be a “clearing agency” registered
under the Exchange Act, and a successor depositary so registered is not
appointed by the Issuer within 90 days of such notice or (y) the Issuer
determines that the Restricted Global Note or Permanent Global Note with respect
to the relevant Series of Notes shall be exchangeable for definitive registered
Notes, in which case Definitive Notes shall be issuable or exchangeable only in
respect of such Global Notes or the category of Definitive Notes represented
thereby. Definitive registered Notes shall be issued without coupons in amounts
of U.S. $200,000 and integral multiples of U.S. $1,000, subject to compliance
with all applicable legal and regulatory requirements.
 
(b) Issuance. If interests in any Restricted Global Note or Permanent Global
Note, as the case may be, are to be transferred to the beneficial owners thereof
in the form of definitive registered Notes pursuant to this Section 2.18, such
Restricted Global Note or Permanent Global Note, as the case may be, shall be
surrendered by DTC to the office or agency of the Transfer Agent located in the
Borough of Manhattan, The City of New York, to be so transferred, without
charge. If interests in any Permanent Global Note are to be transferred to the
beneficial owners thereof in the form of definitive Notes pursuant to this
Section 2.18, such Permanent Global Note shall be surrendered by the custodian
for DTC to the Transfer Agent to be so transferred, without charge. The
Indenture Trustee shall authenticate and deliver, upon such transfer of
interests in such Restricted Global Note or Permanent Global Note, an equal
aggregate principal amount of definitive registered Notes of authorized
denominations; provided, that in the case of an interest in a Restricted Global
Note, no such interest will be transferred except upon (i) delivery of a
Transfer Certificate substantially in the form of Exhibit A-1 hereto and (ii)
compliance with the conditions set forth in Section 2.9. The definitive Notes
transferred pursuant to this Section 2.18 shall be executed, authenticated and
delivered only in the denominations specified in paragraph (a) above or in the
related Supplement, and definitive registered Notes shall be registered in such
names as DTC shall direct in writing. The Transfer Agent shall have at least 30
days from the date of its receipt of definitive Notes and registration
information to authenticate and deliver such definitive Notes. Any definitive
registered Note delivered in exchange for an interest in a Restricted Global
Note or Permanent Global Note shall, except as otherwise provided by Section
2.10, bear, and be subject to, the legend regarding transfer restrictions set
forth in Section 2.10. The Issuer will promptly make available to the Transfer
Agent a reasonable supply of definitive Notes. The Issuer shall bear the costs
and expenses of printing or preparing any definitive Notes.
 
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Section 2.19.  Tax Treatment.
 
The Issuer has structured this Indenture and the Notes have been (or will be)
issued with the intention that the Notes will qualify under applicable tax law
as indebtedness of the Issuer and any entity acquiring any direct or indirect
interest in any Note by acceptance of its Notes (or, in the case of a Note
Owner, by virtue of such Note Owner’s acquisition of a beneficial interest
therein) agrees to treat the Notes (or beneficial interests therein) for
purposes of Federal, state and local and income or franchise taxes and any other
tax imposed on or measured by income, as indebtedness of the Issuer. Each
Noteholder agrees that it will cause any Note Owner acquiring an interest in a
Note through it to comply with this Indenture as to treatment as indebtedness
for such tax purposes.
 
Section 2.20.  CUSIP Numbers.
 
The Issuer in issuing the Notes may use “CUSIP” numbers (if then generally in
use), and, if so, the Indenture Trustee shall use “CUSIP” numbers in notices of
redemption as a convenience to noteholders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Issuer will promptly notify the Indenture Trustee
of any change in the “CUSIP” numbers.
 
ARTICLE 3.
 
SECURITY
 
Section 3.1.  Security Interest.
 
(a) Pursuant to the Security Agreement, in order to secure the Issuer’s
Obligations, the Issuer has pledged, assigned, conveyed, delivered, transferred
and set over to the Collateral Agent, for the benefit of the Noteholders, the
Indenture Trustee, the Swap Counterparties, the Banks, the Agent and the holders
of the Commercial Paper Notes (collectively, the “Secured Parties”), and has
granted to the Collateral Agent, for the benefit of the Secured Parties, a
security interest in, all of the Issuer’s right, title and interest in and to
all of the Collateral assigned to the Collateral Agent pursuant to the Security
Agreement.
 
(b) This grant under the Security Agreement has been made in trust to secure the
Issuer’s Obligations and to secure compliance with the provisions of the
Security Agreement, all as provided in the Security Agreement.
 
Section 3.2.  Stamp, Other Similar Taxes and Filing Fees.
 
The Issuer shall indemnify and hold harmless the Collateral Agent, the Indenture
Trustee and each Noteholder from any present or future claim for liability for
any stamp or other similar tax and any penalties or interest with respect
thereto, that may be assessed, levied or collected by any jurisdiction in
connection with the Security Agreement, this Indenture or any Collateral. The
Issuer shall pay, or reimburse, the Collateral Agent and the Indenture Trustee
 
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for, any and all amounts in respect of, all search, filing, recording and
registration fees, taxes, excise taxes and other similar imposts that may be
payable or determined to be payable in respect of the execution, delivery,
performance and/or enforcement of the Security Agreement and this Indenture. The
foregoing shall not, however, be deemed to create any obligation whatsoever of
the Collateral Agent or the Indenture Trustee to pay any such amounts.
 
ARTICLE 4.
 
REPORTS
 
Section 4.1.  Agreement of the Issuer to Provide Reports and Instructions.
 
(a) Monthly Certificate. On each Determination Date, the Issuer shall forward to
the Collateral Agent, the Indenture Trustee, the Paying Agent, the Rating
Agencies and any Enhancement Provider, an Officer’s Certificate of the Issuer
substantially in the form of Exhibit D (each, a “Monthly Certificate”) setting
forth, inter alia, the following information (which, in the cases of clauses
(i), (ii) and (iii) below, will be expressed as a dollar amount per $1,000 of
the original principal amount of each Series of Notes and as a percentage of the
outstanding principal balance of the Notes as of such date): (i) for each Series
and each class of each Series, the total amount to be distributed to Noteholders
on the next succeeding Distribution Date; (ii) for each Series and each class of
each Series, the amount of such distribution allocable to principal on the
Notes; (iii) for each Series and each class of each Series, the amount of such
distribution allocable to interest on the Notes; (iv) for each Series and each
class of each Series, to the extent applicable, the amount of Enhancement used
or drawn in connection with the distribution to Noteholders of such Series or
class on the next succeeding Distribution Date, together with the aggregate
amount of remaining Enhancement not theretofore used or drawn; and (v) whether,
to the knowledge of the Issuer, any Lien exists on any of the Collateral (other
than Liens granted pursuant to the Security Agreement and the other Program
Documents or permitted thereunder);
 
(b) Monthly Noteholders’ Statement. On or before each Distribution Date, the
Issuer shall furnish to the Collateral Agent and the Indenture Trustee a Monthly
Noteholders’ Statement with respect to each Series of Notes substantially in the
form of Exhibit E;
 
(c) Instructions as to Withdrawals and Payments. The Issuer will furnish, or
cause to be furnished, to the Collateral Agent, the Indenture Trustee or the
Paying Agent, as applicable, written instructions to make withdrawals and
payments from any accounts specified in a Supplement and to make drawings under
any Enhancement, as contemplated herein and in any Supplement. The Indenture
Trustee and the Paying Agent shall promptly follow any such written
instructions.
 
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ARTICLE 5.
 
ALLOCATION AND APPLICATION OF COLLECTIONS
 
Section 5.1.  Establishment of Accounts.
 
To the extent specified in the Supplement with respect to any Series of Notes,
the Indenture Trustee may establish and maintain one or more accounts and/or
administrative sub-accounts to facilitate the proper allocation of Collections
in accordance with the terms of such Supplement.
 
Section 5.2.  Collections and Allocations.
 
Allocations of Collections to Noteholders will be as specified in the Security
Agreement and will be allocated among all Series of Notes outstanding as
specified in the related Series Supplements. The Security Agreement specifies
that, prior to the occurrence of an Event of Default, the Collateral Agent will,
on each Distribution Date, apply the funds on deposit in the Collateral Account
(up to the amount of Deposited Funds on deposit in the Collateral Account
relating to the Interest Period specified in the applicable Supplement for such
Distribution Date) in accordance with the priority set forth in Section 5.03(b)
of the Security Agreement. Further, following the occurrence of an Event of
Default, the Collateral Agent will apply the proceeds of all of the Collateral
of the Issuer in the order of priority set forth in Section 2.01 of the Security
Agreement.
 
Section 5.3.  Determination of Monthly Interest.
 
Monthly interest with respect to each Series of Notes shall be determined,
allocated and distributed in accordance with the procedures set forth in the
applicable Supplement.
 
Section 5.4.  Determination of Principal.
 
Principal with respect to each Series of Notes shall be determined, allocated
and distributed in accordance with the procedures set forth in the applicable
Supplement. However, all principal or interest with respect to any Series of
Notes shall be due and payable no later than the Final Distribution Date with
respect to such Series.
 
[THE REMAINDER OF ARTICLE 5 IS RESERVED AND MAY BE SPECIFIED IN ANY
 
SUPPLEMENT WITH RESPECT TO ANY SERIES.]
 
ARTICLE 6.
 
DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS
 
Section 6.1.  Distributions in General.
 
(a) Notwithstanding any provision hereof or of any Supplement, prior to
depositing any amounts into any Distribution Account, all amounts due and
payable to the
 
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Indenture Trustee pursuant to Section 10.5 and Section 10.11, to the extent not
already paid by the Issuer, shall be deducted from such amounts and paid to the
Indenture Trustee. Unless otherwise specified in the applicable Supplement, on
each Distribution Date with respect to each outstanding Series, after payment of
the amounts described in the preceding sentence, (i) the Collateral Agent shall
deposit (in accordance with the Monthly Certificate delivered to the Collateral
Agent and the Indenture Trustee) in the Distribution Account for each such
Series the amounts on deposit in the Collateral Account allocable to Noteholders
of such Series as interest and, if on the Final Distribution Date for such
Series, principal, and (ii) to the extent provided for in the applicable
Supplement, the Indenture Trustee shall deposit in the Distribution Account for
each such Series the amount of Enhancement for such Series drawn in connection
with such Distribution Date.
 
(b) Unless otherwise specified in the applicable Supplement, on each
Distribution Date, the Paying Agent shall distribute to the Noteholders of each
Series, to the extent amounts are on deposit in the Distribution Account for
such Series, an amount sufficient to pay all principal and interest due on such
Series on such Distribution Date in accordance with the Monthly Certificate
delivered to the Indenture Trustee. Such distribution shall be to each
Noteholder of record of such Series on the preceding Record Date based on such
Noteholder’s pro rata share of the aggregate principal amount of the Notes of
such Series held by such Noteholder; provided, however, that, the final
principal payment due on a Note shall only be paid to the holder of a Note on
due presentment of such Note for cancellation in accordance with the provisions
of the Note.
 
(c) Unless otherwise specified in the applicable Supplement, amounts
distributable to a Noteholder pursuant to this Section 6.1 shall be payable by
wire transfer of immediately available funds released by the Paying Agent from
the Distribution Account no later than 12:00 noon (New York City time) for
credit to the account designated in writing by such Noteholder at least 15 days
prior to the relevant Distribution Date.
 
(d) Unless otherwise specified in the applicable Supplement, (i) all
distributions to Noteholders of all classes within a Series of Notes will have
the same priority and (ii) in the event that on any date of determination the
amount available to make payments to the Noteholders of a Series is not
sufficient to pay all sums required to be paid to such Noteholders on such date,
then each class of Noteholders will receive its ratable share (based upon the
aggregate amount due to such class of Noteholders) of the aggregate amount
available to be distributed in respect of the Notes of such Series.
 
(e) All distributions in respect of Notes represented by a Temporary Global Note
will be made only with respect to that portion of the Temporary Global Note in
respect of which Euroclear or Cedel shall have delivered to the Indenture
Trustee a certificate or certificates substantially in the form of Exhibit B.
The delivery to the Indenture Trustee by Euroclear or Cedel of the certificate
or certificates referred to above may be relied upon by the Issuer and the
Indenture Trustee as conclusive evidence that the certificate or certificates
referred to therein or have been delivered to Euroclear or Cedel pursuant to the
terms of this Indenture and the Temporary Global Note. No payments of interest
will be made on a Temporary Global Note after the Exchange Date therefor.
 
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Section 6.2.  Reserved.
 
Section 6.3.  Optional Repurchase of Notes.
 
Unless otherwise specified in the related Supplements, in connection with the
termination of the Issuer’s Commercial Paper program (other than through the
replacement thereof with a facility having substantially similar terms (other
than interest rate spreads)) and upon satisfaction of the requirements included
in the Program Documents (including the payment of any amounts due and owing to
the Secured Parties), on any Distribution Date, the Issuer shall have the option
to purchase all outstanding Notes of all Series, in whole but not in part, at a
purchase price (determined after giving effect to any payment of principal and
interest on such Distribution Date) equal to (unless otherwise specified in the
related Supplements) the aggregate outstanding principal amount of the Notes of
all Series on such Distribution Date, plus accrued and unpaid interest on the
unpaid aggregate principal balance of the Notes of all Series (calculated at the
Note Rate of each such Series) through the day immediately prior to the date of
such purchase plus, if provided for in the related Supplements, any aggregate
premium payable at such time plus the aggregate amount of any Shortfalls payable
in respect of all outstanding Notes of all Series. The Issuer shall give the
Indenture Trustee and the Noteholders not more than sixty nor less than thirty
days’ prior written notice of the date on which the Issuer intends to exercise
such option to purchase. Not later than 12:00 noon, New York City time, on such
Distribution Date, with respect to each Series of Notes outstanding, an amount
of the purchase price equal to the outstanding principal amount of all Notes of
such Series on such Distribution Date and the amount of accrued and unpaid
interest with respect to such Notes, any applicable Shortfall and any applicable
premium will be deposited into the related Distribution Account for such Series
in immediately available funds. The funds deposited into such Distribution
Account or distributed to the Paying Agent will be passed through in full to the
Noteholders on such Distribution Date.
 
Section 6.4.  Monthly Noteholders’ Statement; Annual Noteholders’ Tax Statement.
 
(a) On each Distribution Date, the Paying Agent shall forward to each Noteholder
of record of each outstanding Series the Monthly Noteholders’ Statement
(substantially in the form of Exhibit E hereto) with respect to such Series,
with a copy to the Rating Agencies, the Indenture Trustee (if other than the
Paying Agent) and any Enhancement Provider with respect to such Series.
 
(b) On or before January 31 of each calendar year, beginning with calendar year
1999, the Paying Agent shall furnish to each Person who at any time during the
preceding calendar year was a Noteholder a statement prepared by the Issuer
containing the information which is required to be contained in the Monthly
Noteholders’ Statements with respect to each Series of Notes aggregated for such
calendar year or the applicable portion thereof during which such Person was a
Noteholder, together with such other customary information (consistent with the
treatment of the Notes as debt) as the Issuer deems necessary or desirable to
enable the Noteholders to prepare their tax returns (each such statement, an
“Annual Noteholders’ Tax Statement”). Such obligations of the Issuer to prepare
and the Paying Agent to distribute the Annual Noteholders’ Tax Statement shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Paying Agent pursuant to any requirements
of the Code as from time to time in effect.
 
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ARTICLE 7.
 
REPRESENTATIONS AND WARRANTIES
 
The Issuer hereby represents and warrants, for the benefit of the Collateral
Agent, the Indenture Trustee and the Noteholders, as follows as of each Series
Closing Date:
 
Section 7.1.  Existence and Power.
 
The Issuer (a) is a business trust duly formed, validly existing and in good
standing under the laws of the State of Delaware, (b) is duly qualified to do
business as a foreign business trust and in good standing under the laws of each
jurisdiction where the character of its property, the nature of its business or
the performance of its obligations make such qualification necessary, and (c)
has all trust powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted and
for purposes of the transactions contemplated by this Indenture and the other
Program Documents.
 
Section 7.2.  Business Trust and Governmental Authorization.
 
The execution, delivery and performance by the Issuer of this Indenture, the
related Supplement and the other Program Documents to which it is a party (a) is
within the Issuer’s trust powers, has been duly authorized by all necessary
trust action, (b) requires no action by or in respect of, or filing with, any
governmental body, agency or official which has not been obtained and (c) does
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of trust or the Trust Agreement of the
Issuer or of any law or governmental regulation, rule, contract, agreement,
judgment, injunction, order, decree or other instrument binding upon the Issuer
or any of its Assets or result in the creation or imposition of any Lien on any
Asset of the Issuer, except for Liens created by the Security Agreement or the
other Program Documents. This Indenture and each of the other Program Documents
to which the Issuer is a party has been executed and delivered by a duly
authorized signatory of the Issuer.
 
Section 7.3.  Binding Effect.
 
This Indenture and each other Program Document, and each Note when executed and
delivered in accordance with this Indenture, is a legal, valid and binding
obligation of the Issuer enforceable against the Issuer in accordance with its
terms (except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors’ rights generally or by general equitable principles,
whether considered in a proceeding at law or in equity and by an implied
covenant of good faith and fair dealing).
 
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Section 7.4.  Financial Information; Financial Condition.
 
All balance sheets, all statements of operations, of shareholders’ equity and of
cash flow, and other financial data (other than projections) which have been or
shall hereafter be furnished by the Issuer to the Indenture Trustee and the
Rating Agencies pursuant to Section 8.3 have been and will be prepared in
accordance with GAAP (to the extent applicable) and do and will present fairly
the financial condition of the entities involved as of the dates thereof and the
results of their operations for the periods covered thereby, subject, in the
case of all unaudited statements, to normal year-end adjustments and lack of
footnotes and presentation items.
 
Section 7.5.  Litigation.
 
There is no action, suit or proceeding pending against or, to the knowledge of
the Issuer, threatened against or affecting the Issuer or its assets before any
court or arbitrator or any Governmental Authority with respect to which there is
a reasonable possibility of an adverse decision that could materially adversely
affect the financial position, results of operations, business, properties,
performance, prospects or condition (financial or otherwise) of the Issuer or
which in any manner draws into question the validity or enforceability of this
Indenture, any Supplement or any other Program Document or the ability of the
Issuer to perform its obligations hereunder or thereunder.
 
Section 7.6.  Compliance with ERISA.
 
Each member of the ERISA Group has fulfilled its obligations under the minimum
funding standards of ERISA and the Internal Revenue Code with respect to each
Plan and is in compliance in all material respects with the presently applicable
provisions of ERISA and the Internal Revenue Code with respect to each Plan. No
member of the ERISA Group has (i) sought a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code in respect of any Plan,
(ii) failed to make any contribution or payment to any Plan or Multiemployer
Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan
or Benefit Arrangement, which in any such case has resulted or could reasonably
be expected to result in the imposition of a Lien or the posting of a bond or
other security under ERISA or the Internal Revenue Code or (iii) incurred any
liability under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA.
 
Section 7.7.  Tax Filings and Expenses.
 
The Issuer has filed all Federal, state and local tax returns and all other tax
returns which, to the knowledge of the Issuer, are required to be filed (whether
informational returns or not), and has paid all taxes due, if any, pursuant to
said returns or pursuant to any assessment received by the Issuer, except such
taxes, if any, as are being contested in good faith and for which adequate
reserves have been set aside on its books. The Issuer has paid all fees and
expenses required to be paid by it in connection with the conduct of its
business, the maintenance of its existence and its qualification as a foreign
business trust authorized to do business in each State in which it is required
to so qualify, except where the failure to pay any such fees and expenses is not
reasonably likely to have a material adverse effect.
 
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Section 7.8.  Full Disclosure.
 
All certificates, reports, statements, documents and other information furnished
to the Indenture Trustee by or on behalf of the Issuer pursuant to any provision
of this Indenture or any Program Document, or in connection with or pursuant to
any amendment or modification of, or waiver under, this Indenture or any Program
Document, shall, at the time the same are so furnished, be complete and correct
to the extent necessary to give the Indenture Trustee true and accurate
knowledge of the subject matter thereof in all material respects, and the
furnishing of the same to the Indenture Trustee shall constitute a
representation and warranty by the Issuer made on the date the same are
furnished to the Indenture Trustee to the effect specified herein.
 
Section 7.9.  Investment Company Act; Trust Indenture Act; Securities Act.
 
The Issuer is not, and is not controlled by, an “investment company” within the
meaning of, and is not required to register as an “investment company” under,
the Investment Company Act of 1940. It is not necessary in connection with the
offer, issuance and sale of the Notes under the circumstances contemplated in
the related Supplement to register any security under the Securities Act or to
qualify any indenture under the Trust Indenture Act.
 
Section 7.10.  Regulations T, U and X.
 
The proceeds of the Notes will not be used to purchase or carry any “margin
stock” (as defined or used in the regulations of the Board of Governors of the
Federal Reserve System, including Regulations T, U and X thereof). The Issuer is
not engaged in the business of extending credit for the purpose of purchasing or
carrying any margin stock.
 
Section 7.11.  No Consent.
 
No consent, action by or in respect of, approval or other authorization of, or
registration, declaration or filing with, any Governmental Authority or other
Person is required for the valid execution and delivery of this Indenture or any
Supplement or for the performance of any of the Issuer’s obligations hereunder
or thereunder or under any other Program Document other than such consents,
approvals, authorizations, registrations, declarations or filings as shall have
been obtained by the Issuer prior to the Initial Closing Date or as contemplated
in Section 7.14.
 
Section 7.12.  Solvency.
 
Both before and after giving effect to the transactions contemplated by this
Indenture and the other Program Documents, the Issuer is solvent within the
meaning of the Bankruptcy Code and the Issuer is not the subject of any
voluntary or involuntary case or proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under any bankruptcy or
insolvency law and no Event of Bankruptcy has occurred with respect to the
Issuer.
 
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Section 7.13.  Subsidiary.
 
The Issuer has no subsidiaries and owns no capital stock of, or other interest
in, any other Person, and during the term of the Indenture, the Issuer shall not
acquire or otherwise come to have one or more subsidiaries without the prior
consent of the Indenture Trustee (on behalf of the holders of the Notes).
 
Section 7.14.  Security Interests.
 
(a) All action necessary (including the filing of UCC-1 financing statements for
the Collateral Agent’s Lien for the benefit of the Secured Parties) to protect
and perfect the Collateral Agent’s security interest in the Collateral now in
existence and hereafter acquired or created has been duly and effectively taken.
 
(b) No security agreement, financing statement, equivalent security or lien
instrument or continuation statement listing the Issuer as debtor covering all
or any part of the Collateral and the Collateral Account is on file or of record
in any jurisdiction, except such as may have been filed, recorded or made by the
Issuer in favor of the Collateral Agent on behalf of the Secured Parties in
connection with the Security Agreement.
 
(c) The Security Agreement constitutes a valid and continuing Lien on the
Collateral and the Collateral Account in favor of the Collateral Agent on behalf
of the Secured Parties, which Lien will be prior to all other Liens (other than
Permitted Liens and as otherwise permitted in the Security Agreement), will be
enforceable as such as against creditors of and purchasers from the Issuer in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws affecting creditors’ rights generally or by general equitable
principles, whether considered in a proceeding at law or in equity and by an
implied covenant of good faith and fair dealing. All action necessary to perfect
such prior security interest has been duly taken.
 
(d) The Issuer’s principal place of business and chief executive office shall be
at: c/o First Union Trust Company National Association, attention: Corporate
Trust/Administration, 1 Rodney Square, 920 King Street, Wilmington, DE 19801,
and the place where its records concerning the Collateral are kept is at: c/o
First Union Trust Company National Association, attention: Corporate
Trust/Administration, 1 Rodney Square, 920 King Street, Wilmington, DE 19801.
The Issuer does not transact, and has not transacted, business under any other
name.
 
(e) All authorizations in this Indenture for the Collateral Agent or the
Indenture Trustee to endorse checks, instruments and securities and to execute
financing statements, continuation statements, security agreements, and other
instruments with respect to the Collateral are powers coupled with an interest
and are irrevocable.
 
Section 7.15.  Offering Memorandum.
 
No offering memorandum or information circular used by the Issuer in connection
with the offer or sale of the Notes contains any untrue statement of a material
fact and or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they are made,
not misleading.
 
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Section 7.16.  Non-Existence of Other Agreements.
 
As of the date of the issuance of the first Series of Notes, other than as
permitted by Section 8.24 hereof (i) the Issuer is not a party to any contract
or agreement of any kind or nature and (ii) the Issuer is not subject to any
obligations or liabilities of any kind or nature in favor of any third party,
including, without limitation, Contingent Obligations.
 
Section 7.17.  Eligible Mortgage Loans.
 
Based upon the representation of the Seller in the Mortgage Loan Purchase and
Servicing Agreement, each Mortgage Loan purchased by the Issuer is an Eligible
Loan (as defined in the Mortgage Loan Purchase and Servicing Agreement).
 
Section 7.18.  Other Representations.
 
All representations and warranties of the Issuer made in each Program Document
to which it is a party are true and correct and are repeated herein as though
fully set forth herein.
 
Section 7.19.  Special Purpose Entity.
 
The Issuer is a special purpose entity formed exclusively to enter into the
Program Documents and the transactions contemplated thereby or incident thereto.
 
ARTICLE 8.
 
COVENANTS
 
Section 8.1.  Payment of Notes.
 
The Issuer shall pay the principal of (and premium, if any) and interest on the
Notes pursuant to the provisions of this Indenture and any applicable
Supplement. Principal and interest shall be considered paid on the date due if
the Paying Agent holds on that date money designated for and sufficient to pay
all principal and interest then due.
 
Section 8.2.  Maintenance of Office or Agency.
 
The Issuer will maintain an office or agency (which may be an office of the
Indenture Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or exchange, where notices and demands to or upon the
Issuer in respect of the Notes and this Indenture may be served, and where, at
any time when the Issuer is obligated to make a payment of principal and premium
upon the Notes, the Notes may be surrendered for payment. The Issuer will give
prompt written notice to the Indenture Trustee of the location, and any change
in the location, of such office or agency. If at any time the Issuer shall fail
to maintain any such required office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Indenture Trustee.
 
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The Issuer may also from time to time designate one or more other offices or
agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations. The Issuer will
give prompt written notice to the Indenture Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
 
The Issuer hereby designates the Corporate Trust Office of the Indenture Trustee
as one such office or agency of the Issuer.
 
Section 8.3.  Information.
 
The Issuer will:
 
(a) promptly provide the Indenture Trustee, Moody’s, S&P and Fitch with all
financial and operational information with respect to the Program Documents or
the Issuer as the Indenture Trustee may reasonably request; and will promptly
provide, Moody’s, S&P, Fitch and the Indenture Trustee with all statements
delivered under the Interest Rate Swaps, the Liquidity Agreement, the Security
Agreement, the Mortgage Loan Purchase and Servicing Agreement and the
Certificates and within 105 days after the end of each fiscal year of the Issuer
and the Seller, the audited annual financial statements of each of the Issuer,
the Seller and PHH and within 60 days of each quarter end the unaudited
financial statements of PHH (which may be 10Q reports);
 
(b) deliver to the Indenture Trustee, if and when any member of the ERISA Group
(i) gives or is required to give notice to the PBGC of any “reportable event”
(as defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of ERISA, or
knows that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such reportable
event given or required to be given to the PBGC; (ii) receives notice of
complete or partial withdrawal liability under Title IV of ERISA or notice that
any Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the PBGC under
Title IV of ERISA of an intent to terminate, impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to
administrator any Plan, a copy of such notice; (iv) applies for a waiver of the
minimum funding standard under Section 412 of the Internal Revenue Code, a copy
of such application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information filed with
the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a Lien or the posting of a bond or
other security, a certificate of the Owner Trustee setting forth details as to
such occurrence and action, if any, which the Issuer or applicable member of the
ERISA Group is required or proposes to take;
 
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(c) provide the Indenture Trustee, on behalf of the Noteholders, with access to
the books and records of the Issuer and the books and records of the Servicer,
Custodian and/or the Collateral Agent relating to the assets of the Issuer,
without charge, but only (i) upon the reasonable request of the Indenture
Trustee (acting at the direction of the majority of the Noteholders) (for which
purposes one Business Day shall be deemed reasonable during the occurrence and
continuation of an Event of Default), (ii) during normal business hours, (iii)
subject to the relevant party’s normal security and confidentiality procedures
and (iv) at offices designated by the relevant party;
 
(d) provide Moody’s, S&P, Fitch, the Indenture Trustee and the Collateral Agent
with any information that it may have with respect to an Event of Default
hereunder or provide notice to Indenture Trustee of any default or event of
default under any other agreement between the Issuer and any of the Seller, the
Servicer, the Banks, the Swap Counterparties, the holders of the Certificates or
the Collateral Agent as promptly as practicable after the Issuer becomes aware
of the occurrence of any Event of Default or other default or event of default;
 
(e) promptly furnish to the Indenture Trustee (on behalf of the holders of the
Notes) after receipt thereof copies of all written communications received from
S&P, Moody’s or Fitch with respect to the Notes;
 
(f) promptly upon its knowledge thereof give notice to the Indenture Trustee (on
behalf of the holders of the Notes), Moody’s, S&P and Fitch of the existence of
any litigation against the Issuer;
 
(g) give prompt notice to the Indenture Trustee (on behalf of the holders of the
Notes), Moody’s, S&P and Fitch of any change to the articles of incorporation or
by-laws of the Seller; and
 
(h) provide, on or prior to June 30 of each year, to the Indenture Trustee a
certificate of the Issuer certifying that (i) the ratings assigned by the Rating
Agencies in respect of any outstanding Series of Notes, have not been withdrawn
or downgraded since the date of the related Supplement, and (ii) no Rating
Agency has determined that the amount of Enhancement for any outstanding Series
of Notes must be increased in order to maintain the then current rating of such
Series or, if any Rating Agency has made such a determination, the amount of
additional Enhancement that would be required in order to maintain such current
rating. Delivery of such reports, information and documents to Indenture Trustee
under this section is for informational purposes only and the Indenture
Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Issuer’s compliance with any of its covenants.
 
Section 8.4.  Payment of Obligations.
 
The Issuer will pay and discharge in a timely manner in accordance with the
terms of the Program Documents, at or before maturity, all of its respective
material obligations and liabilities, including, without limitation, tax
liabilities and other governmental claims, except where the same may be
contested in good faith by appropriate proceedings, will maintain, in accordance
with GAAP, reserves as appropriate for the accrual of any of the same, and will
comply in all material respects with its obligations in the Program Documents.
 
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Section 8.5.  RESERVED.
 
Section 8.6.  Conduct of Business and Maintenance of Existence.
 
The Issuer will maintain its existence as a business trust validly existing, and
in good standing under the laws of the State of Delaware and duly qualified as a
foreign business trust licensed under the laws of each state in which the
failure to so qualify would have a material adverse effect on the business and
operations of the Issuer.
 
Section 8.7.  Compliance with Laws.
 
The Issuer will comply in all respects with all Requirements of Law and all
applicable laws, ordinances, rules, regulations, and requirements of
Governmental Authorities (including, without limitation, ERISA and the rules and
regulations thereunder) except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings and where such noncompliance
would not materially and adversely affect the condition, financial or otherwise,
operations, performance, properties or prospects of the Issuer or its ability to
carry out the transactions contemplated in this Indenture and each other Program
Document; provided, however, such noncompliance will not result in a Lien (other
than a Permitted Lien) on any Assets of the Issuer.
 
Section 8.8.  Inspection of Property, Books and Records.
 
The Issuer will keep proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its Assets, business and activities in accordance with GAAP; and will permit the
Indenture Trustee to visit and inspect any of its properties, to examine and
make abstracts from any of its books and records and to discuss its affairs,
finances and accounts with its representatives, employees and independent public
accountants, all at such reasonable times upon reasonable notice and as often as
may reasonably be requested.
 
Section 8.9.  Compliance with Program Documents.
 
The Issuer will perform and comply with each and every obligation, covenant and
agreement required to be performed or observed by it in or pursuant to this
Indenture and each other Program Document to which it is a party and will not
take any action which would permit any party to have the right to refuse to
perform any of its respective obligations under any Program Document.
 
Section 8.10.  Notice of Defaults.
 
(a) Promptly upon becoming aware of any Potential Event of Default or Event of
Default under this Indenture, the Issuer shall give the Indenture Trustee, each
Enhancement Provider, and the Rating Agencies notice thereof, together with a
certificate of the Issuer setting forth the details thereof and any action with
respect thereto taken or contemplated to be taken by the Issuer, and
 
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(b) Promptly upon becoming aware of any default under any Program Document other
than this Indenture, the Issuer shall give the Indenture Trustee, each
Enhancement Provider, and the Rating Agencies notice thereof.
 
Section 8.11.  Notices under Liquidity Agreement; Notice of Material
Proceedings.
 
(a) The Issuer shall promptly provide the Indenture Trustee, each Enhancement
Provider and the Rating Agencies with copies of each of the notices delivered by
the Issuer pursuant to Section 8.01 (a), (e), (h), (i), (m) and (n) and Section
9.01 of the Liquidity Agreement.
 
(b) Promptly upon becoming aware thereof, the Issuer shall give the Indenture
Trustee, and the Rating Agencies written notice of the commencement or existence
of any proceeding by or before any Governmental Authority against or affecting
the Issuer which is reasonably likely to have a material adverse effect on the
business, condition (financial or otherwise), results of operations, properties
or performance of the Issuer or the ability of the Issuer to perform its
obligations under this Indenture or under any other Program Document to which it
is a party.
 
Section 8.12.  Further Requests.
 
The Issuer will promptly furnish to the Indenture Trustee, the Agent, the
Collateral Agent, each Enhancement Provider and the Rating Agencies such other
information as, and in such form as, the Indenture Trustee or the Agent or the
Collateral Agent or such Enhancement Provider or the Rating Agencies may
reasonably request in connection with the transactions contemplated hereby.
 
Section 8.13.  Further Assurances.
 
(a) The Issuer shall do such further acts and things, and execute and deliver to
the Indenture Trustee, the Collateral Agent and the Required Noteholders such
additional assignments, agreements, powers and instruments, as the Indenture
Trustee, the Collateral Agent, or the Required Noteholders reasonably determines
to be necessary to carry into effect the purposes of this Indenture or the other
Program Documents or to better assure and confirm unto the Indenture Trustee,
the Collateral Agent, or the Noteholders their rights, powers and remedies
hereunder including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code in effect in any
jurisdiction with respect to the liens and security interests granted hereby or
under the Security Agreement. The Issuer also hereby acknowledges that the
Collateral Agent has the right but not the obligation to file any such financing
statement or continuation statement without the signature of the Issuer to the
extent permitted by applicable law. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any promissory note,
chattel paper or other instrument, such note, chattel paper or instrument shall
be deemed to be held in trust and immediately pledged and physically delivered
to the Collateral Agent hereunder, and shall, subject to the rights of any
Person in whose favor a prior Lien has been perfected, be duly endorsed in a
manner satisfactory to the Collateral Agent and delivered to the Collateral
Agent promptly. Without limiting the generality of the foregoing provisions of
this Section 8.13(4, the Issuer shall take all actions that are required to
maintain the security interest of the Collateral Agent on behalf of the Secured
Parties in the Collateral pledged pursuant to the Security Agreement as a
perfected security interest subject to no prior Liens, including, without
limitation filing all Uniform Commercial Code financing statements, continuation
statements and amendments thereto necessary to achieve the foregoing. The Issuer
further agrees that it will not, without the prior written consent of the
Controlling Majority and without prior written notice to the Enhancement
Providers, if applicable, exercise any right, remedy, power or privilege
available to it with respect to any obligor under the Collateral, take any
action to compel or secure performance or observance by any obligor of its
obligations to the Issuer, or give any consent, request, notice, direction,
approval, extension or waiver with respect to any obligor.
 
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(b) The Issuer will warrant and defend the Collateral Agent’s right, title and
interest in and to the Collateral and the income, distributions and proceeds
thereof, for the benefit of the Collateral Agent on behalf of the Secured
Parties, against the claims and demands of all Persons whomsoever.
 
(c) The Issuer will provide to the Collateral Agent and the Indenture Trustee,
no more frequently than annually, an Opinion of Counsel to the effect that no
UCC financing or continuation statements are required to be filed with respect
to any of the Collateral in which a security interest may be perfected by the
filing of UCC financing statements.
 
Section 8.14.  Certain Documents.
 
The Issuer will not take any action that would permit (i) the Seller, the
Servicer or PHH to refuse to perform any of their respective obligations under
the Mortgage Loan Purchase and Servicing Agreement, the Guarantee and the
Custodial Agreement or (ii) the Administrator or Depositary to refuse to perform
their respective obligations under any other Program Documents to which they are
parties.
 
Section 8.15.  Liens.
 
The Issuer will not create, incur, assume or permit to exist any Lien upon any
of its Assets (including the Collateral), other than (i) Liens in favor of the
Collateral Agent for the benefit of the Secured Parties, (ii) Permitted Liens,
(iii) Liens permitted under the Program Documents and (iv) liabilities for
services supplied or furnished to the Issuer (including reasonable accountants’
and attorneys’ fees); provided that the aggregate amount of the liabilities
described in subpart (iv) shall not exceed $100,000 at any one time outstanding.
 
Section 8.16.  Other Indebtedness.
 
The Issuer will not create, assume, incur, suffer to exist or otherwise become
or remain liable in respect of any Indebtedness other than (i) Indebtedness
hereunder and (ii) Indebtedness permitted under any other Program Document.
 
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Section 8.17.  Mergers.
 
The Issuer will not merge or consolidate with or into any other Person.
 
Section 8.18.  Sales of Assets.
 
The Issuer will not sell, lease, transfer, liquidate or otherwise dispose of any
Assets, except as contemplated by the Program Documents.
 
Section 8.19.  Capital Expenditures.
 
The Issuer will not make any expenditure (by long-term or operating lease or
otherwise) for capital assets (both realty and personalty).
 
Section 8.20.  Dividends.
 
The Issuer shall not make any distributions to any holders of its securities
without the consent of the Indenture Trustee, acting at the direction of the
Required Noteholders, except as provided under the Program Documents, the
Certificates and the Notes.
 
Section 8.21.  Name; Principal Office.
 
The Issuer will neither (a) change the location of its chief executive office or
principal place of business (within the meaning of the applicable UCC) without
sixty (60) days’ prior written notice to the Indenture Trustee, and the
Collateral Agent nor (b) change its name without prior written notice to the
Indenture Trustee, and the Collateral Agent sufficient to allow the Collateral
Agent to make all filings (including filings of financing statements on form
UCC-1) and recordings necessary to maintain the perfection of the interest of
the Collateral Agent on behalf of the Secured Parties in the Collateral pursuant
to the Security Agreement. In the event that the Issuer desires to so change its
office or change its name, the Issuer will make any required filings and prior
to actually changing its office or its name the Issuer will deliver to the
Collateral Agent, and the Indenture Trustee (i) an Officer’s Certificate and
(except with respect to a change of the location of the Issuer’s chief executive
office or principal place of business to a new location in the same county) an
Opinion of Counsel confirming that all required filings have been made to
continue the perfected interest of the Collateral Agent on behalf of the Secured
Parties in the Collateral in respect of the new office or new name of the Issuer
and (ii) copies of all such required filings with the filing information duly
noted thereon by the office in which such filings were made.
 
Section 8.22.  Organizational Documents.
 
The Issuer will not amend any of its organizational documents, including its
certificate of trust or Trust Agreement unless, prior to such amendment, each
Rating Agency confirms that after such amendment the Rating Agency Consent
Condition will be met and the Required Noteholders consent to such amendment.
 
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Section 8.23.  Investments.
 
The Issuer will not make, incur, or suffer to exist any loan, advance,
guarantee, extension of credit or other investment in any Person other than
pursuant to the Program Documents and with respect to Eligible Investments and,
in addition, without limiting the generality of the foregoing, the Issuer will
not cause the Collateral Agent or the Indenture Trustee to make any Eligible
Investments on the Issuer’s behalf that would have the effect of causing the
Issuer to be an “investment company” within the meaning of the Investment
Company Act.
 
Section 8.24.  No Other Agreements.
 
The Issuer will not (a) enter into or be a party to any agreement or instrument
other than any Program Document or any documents related to any Enhancement or
documents and agreements incidental thereto or (b) except as provided for in
Sections 12.1 or 12.2, amend, modify or waive any provision of any Program
Document to which it is a party, or (c) give any approval or consent or
permission provided for in any Program Document, except as permitted in Section
3.2(a).
 
Section 8.25.  Other Business.
 
The Issuer will not engage in any business or enterprise or enter into any
transaction other than as contemplated by the Program Documents.
 
Section 8.26.  Notes.
 
The Issuer shall not issue Notes to the Seller, any Affiliate of the Seller or
any trust or other entity to which the Seller or any Affiliate of the Seller is
a depositor or servicer bearing interest (or at a discount) in excess of a
commercially reasonable rate.
 
Section 8.27.  Rule 144A Information Requirement.
 
For so long as any of the Notes remain outstanding and are “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act, the
Issuer covenants and agrees that it shall, during any period in which it is not
subject to Section 13 or 15(d) under the Exchange Act, make available to any
Noteholder in connection with any sale thereof and any prospective purchaser of
Notes from such Noteholder in each case upon request, the information specified
in, and meeting the requirements of, Rule 144A(d)(4) under the Securities Act.
 
Section 8.28.  Use of Proceeds of Notes.
 
The Issuer shall use the proceeds of Notes solely for one or more of the
following purposes: (a) to pay the Issuer’s Obligations when due, in accordance
with the Security Agreement; and (b) to acquire eligible Mortgage Loans from the
Seller.
 
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Section 8.29.  Program Document Information.
 
The Issuer shall, or shall cause the Seller to, provide the Indenture Trustee
with copies of all reports, statements and certificates delivered under the
Program Documents, and any other information that the Indenture Trustee shall
reasonably request. Delivery of such reports, information and documents to
Indenture Trustee under this section and Section 8.27 is for informational
purposes only and the Indenture Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Issuer’s compliance with any of its
covenants.
 
Section 8.30.  Year 2000 Issues.
 
The Issuer has initiated a commercially reasonable review of their operations
with a view to assessing whether their business or operations will, in the
receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data, be vulnerable to any significant
risk that computer hardware or software used in their business or operations
will not, in the case of dates or time periods occurring after December 31,
1999, function at least as effectively as in the case of dates or time periods
occurring prior to January 1, 2000. Based on such ongoing review, the Issuer has
no reason to believe that a Material Adverse Effect will occur with respect to
such business or operations resulting from any such risk.
 
ARTICLE 9.
 
EVENTS OF DEFAULT AND REMEDIES
 
Section 9.1.  Events of Default.
 
If any one of the following events shall occur with respect to any Series of
Notes (each, an “Event of Default”):
 
(a) Failure on the part of the Seller or the Servicer (i) to make any payment or
deposit on the date required under the Mortgage Loan Purchase and Servicing
Agreement; provided, however, that no grace period shall apply for purchase
obligations in respect of a breach of the covenant in Section 3.5(c) of the
Mortgage Loan Purchase and Servicing Agreement (on or before five Business Days
after the date such payment or deposit is required to be made) or (ii) to
observe or perform in any material respect any other material covenants or
agreements of the Seller or the Servicer under the Mortgage Loan Purchase and
Servicing Agreement, which failure continues unremedied for a period of 45 days
after written notice;
 
(b) Any representation or warranty made by the Seller or the Servicer in the
Mortgage Loan Purchase and Servicing Agreement or regarding corporate
organization or authority or the enforceability of the Mortgage Loan Purchase
and Servicing Agreement proves to have been incorrect in any material respect
when made, and, if such representation or warranty is correctable, which
continues to be incorrect in any material respect for a period of 45 days after
written notice;
 
(c) The Issuer defaults in the payment of any interest on any Note of such
Series when the same becomes due and payable;
 
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(d) The Issuer defaults in the payment of any principal or premium on any Note
of such Series when the same becomes due and payable;
 
(e) The Issuer fails to comply with any of its other agreements or covenants in,
or provisions of, the Notes of a Series or this Indenture and the failure to so
comply materially and adversely affects the interests of the Noteholders of any
Series and continues to materially and adversely affect the interests of the
Noteholders of such Series for a period of thirty (30) days after the earlier of
(i) the date on which the Issuer obtains knowledge thereof or (ii) the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Issuer by the Indenture Trustee or to the Issuer and the
Indenture Trustee by the Required Noteholders;
 
(f) the occurrence of an Event of Bankruptcy with respect to the Issuer, the
Seller, the Servicer or PHH, as guarantor,
 
(g) the Issuer shall have become an “investment company” or shall have become
under the “control” of an “investment company” under the Investment Company Act
of 1940, as amended;
 
(h) Any representation or warranty or statement made or deemed made by the
Issuer in the Indenture or in any other Program Document or in any written
certificates or statement made or entered into in connection herewith or
therewith shall prove to have been incorrect when made in any material respect,
and, if such representation, warranty or statement is capable of being
corrected, continues to be incorrect in any material respect for a period of 45
days after the Issuer shall have received written notice of such incorrect
representation, warranty or statement;
 
(i) Failure by the Issuer to observe or perform any covenant or agreement
contained (i) in the Indenture and the continuance of such failure for more than
thirty (30) days or (ii) any other covenant or agreement contained herein, in
any other Program Document or in the Mortgage Loan Purchase and Servicing
Agreement and not constituting an Event of Default under any other clause of
this Article IX and the continuance of such failure for 45 days after the Issuer
shall have become aware of such failure;
 
(j) A Servicer Event of Default shall have occurred and be continuing and such
default shall not have been cured or the Issuer shall not have replaced such
Servicer in accordance with Section 10.1 of the Mortgage Loan Purchase and
Servicing Agreement for a period of 45 days after the Issuer has notified the
Agent and the Indenture Trustee of such Servicer Event of Default;
 
(k) RESERVED.
 
(l) The Issuer shall not be in compliance with Articles II and V of its Trust
Agreement;
 
(m) The Security Agreement, Administration Agreement or the Interest Rate Swaps
shall cease, for any reason, to be in full force and effect in accordance with
their respective terms;
 
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(n) A termination event under the Mortgage Loan Purchase and Servicing Agreement
shall have occurred and be continuing and all applicable grace periods shall
have expired;
 
(o) At any time the aggregate outstanding principal amount of all Series of
Certificates plus the amount on deposit in the Reserve Fund, if any, shall equal
less than the Required Enhancement Amount and such shortfall continues for 90
days;
 
(p) At any time the Seller is not an approved seller/servicer of mortgage loans
for two of Freddie Mac, Fannie Mae and Ginnie Mae;
 
(q) At any time the Guarantee is rejected, repudiated or no longer in full force
and effect;
 
(r) At any time the funds on deposit in the Reserve Fund shall be less than
0.60% of the Program Size for 120 days or more;
 
(s) At any time (i) the rolling three month average of the ratio (calculated
daily) of the Outstanding Purchase Price of all Delinquent Loans to the
Outstanding Purchase Price of all Mortgage Loans owned by the Issuer at such
time shall exceed five percent (5%) or (ii) the ratio (calculated daily) of the
Outstanding Purchase Price of all Delinquent Loans to the Outstanding Purchase
Price of all Mortgage Loans owned by the Issuer at such time shall exceed seven
percent (7%);
 
(t) An event of default under the Liquidity Agreement shall have occurred and be
continuing and all applicable grace periods shall have expired;
 
(u) The failure to pay any amount due and owing on the Commercial Paper,
 
(v) The failure of any Swap Counterparty to pay amounts due and owing under an
Interest Rate Swap; or
 
(w) Any other event shall occur which may be specified in any Supplement as an
“Event of Default”;
 
then, at any time during the continuance of any Event of Default, the Indenture
Trustee may and shall, at the written request of the Required Noteholders, by
written notice to the Issuer, the Collateral Agent and the holders of the Notes,
(i) declare the principal and premium (if applicable) of and accrued interest in
respect of the Notes to be, whereupon the same shall become, forthwith due and
payable without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Issuer, anything contained herein or
in any Note to the contrary notwithstanding and (ii) instruct the Issuer and the
Depositary to cease purchasing Mortgage Loans and cease issuing Commercial Paper
and/or (iii) notify the Servicer and the Seller that an Event of Default has
occurred; provided, that if an Event of Default described in clause (f), (g),
(h) or (w) (with respect to clause (w) above, only to the extent such Event of
Default is not subject to waiver as set forth in the related Series Supplement),
above shall occur, the result of which would otherwise occur only upon giving of
written notice by the Indenture Trustee as specified in clauses (i) and (ii)
above shall occur automatically, without the giving of any such notice and the
Indenture Trustee shall promptly notify the Servicer and the Seller that an
Event of Default has occurred. Subject to certain conditions and to the Security
Agreement, upon the occurrence of an Event of Default, the holders of the Notes
may proceed to enforce their rights and remedies as permitted by the Security
Agreement, including bringing an action for specific performance by the Issuer
of any of the Issuer’s obligations under the Program Documents. The Issuer shall
provide prompt written notice to (i) the Collateral Agent, the Indenture
Trustee, Moody’s, S&P and Fitch of the occurrence of any Event of Default and
(ii) Moody’s, S&P and Fitch, of the occurrence of any event specified in clause
(f) above with respect to the Issuer.
 
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Section 9.2.  Rights upon Event of Default.
 
If and whenever an Event of Default shall have occurred and be continuing, the
Indenture Trustee at the direction of the Required Noteholders shall, exercise
from time to time any rights and remedies available to it under the Security
Agreement.
 
Section 9.3.  [RESERVED].
 
Section 9.4.  [RESERVED].
 
Section 9.5.  Waiver of Past Events.
 
Subject to Section 12.2 hereof, the Required Noteholders, by notice to the
Collateral Agent, and the Indenture Trustee, may waive any existing Potential
Event of Default or Event of Default other than any Potential Event of Default
or Event of Default related to clause (f), (g), (h), or (w) of Section 9.1 (with
respect to clause (w), only to the extent not subject to waiver as provided in
the applicable Supplement) which relate to such Series and its consequences and
except a continuing Potential Event of Default or Event of Default in the
payment of the principal of or interest on any Note. Upon any such waiver, such
Potential Event of Default shall cease to exist with respect to such Series, and
any Event of Default with respect to such Series arising therefrom shall be
deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Potential Event of Default or
impair any right consequent thereon.
 
Section 9.6.  [RESERVED].
 
Section 9.7.  Limitation on Suits.
 
Any other provision of this Indenture to the contrary notwithstanding, a
Noteholder may pursue a remedy with respect to this Indenture or the Notes only
if:
 
(a) The Noteholder gives to the Indenture Trustee written notice of a continuing
Event of Default;
 
(b) The Noteholders of at least 25% in principal amount of all then outstanding
Notes of such Series make a written request to the Indenture Trustee to pursue
the remedy;
 
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(c) Such Noteholder or Noteholders offer and, if requested, provide to the
Indenture Trustee indemnity satisfactory to the Indenture Trustee against any
loss, liability or expense;
 
(d) The Indenture Trustee does not comply with the request within 45 days after
receipt of the request and the offer and, if requested, the provision of
indemnity, and
 
(e) During such 45-day period the Required Noteholders does not give the
Indenture Trustee a direction inconsistent with the request.
 
A Noteholder may not use this Indenture to prejudice the rights of another
Noteholder or to obtain a preference or priority over another Noteholder.
 
Section 9.8.  Unconditional Rights of Holders to Receive Payment: Withholding
Taxes.
 
(a) Notwithstanding any other provision of this Indenture, except for clause (b)
below, the right of any Noteholder of a Note to receive payment of principal and
interest on the Note, on or after the respective due dates expressed in the
Note, or to bring suit for the enforcement of any such payment on or after such
respective dates, is absolute and unconditional and shall not be impaired or
affected without the consent of the Noteholder.
 
(b) The Paying Agent agrees, to the extent required by applicable law, to
withhold from each payment due hereunder or under any Note, United States
withholding taxes at the appropriate rate, and, on a timely basis, to deposit
such amounts with an authorized depository and make such reports, filings and
other reports in connection therewith, and in the manner, required under
applicable law. The Paying Agent shall promptly furnish each Noteholder (but in
no event later than the date 30 days after the due date thereof) a U.S. Treasury
Form 1042S and Form 8109-B (or similar forms as at any relevant time in effect),
if applicable, indicating payment in full of any taxes withheld from any
payments by the Paying Agent to such Persons together with all such other
information and documents reasonably requested by such Noteholder and necessary
or appropriate to enable such Noteholder to substantiate a claim for credit or
deduction with respect thereto for income tax purposes of any jurisdiction with
respect to which such Noteholder is required to file a tax return. In the event
that a Noteholder which is not a United States Person (as defined in Code
Section 7701(a)(30)) has furnished to the Paying Agent a properly completed and
currently effective U.S. Treasury Form 1001 (or such successor Form or Forms as
may be required by the United States Treasury Department) during the calendar
year in which the payment is made, or in either of the two preceding calendar
years, and has not notified the Paying Agent of the withdrawal or inaccuracy of
such Form prior to the date of each interest payment, only the amount, if any,
required by applicable law shall be withheld from payments under the Notes held
by such Noteholder in respect of United States federal income tax. In the event
that a Noteholder (x) which is not a United States Person has furnished to the
Paying Agent a properly completed and currently effective U.S. Treasury Form
4224 in duplicate (or such successor certificate or Form or Forms as may be
required by the United States Treasury Department as necessary in order to avoid
withholding of United States federal income tax), during the tax year of the
Noteholder in which payment is made and has not notified the Paying Agent of the
withdrawal or inaccuracy of such certificate or Form prior to the date of each
interest payment or (y) which is not a United States Person has furnished to the
Paying Agent a properly completed and currently effective U.S. Treasury Form W-8
during the calendar year in which the payment is made, or in either of the two
preceding calendar years, no amount shall be withheld from payments under the
Notes held by such Noteholder in respect of United States federal income tax.
Notwithstanding the foregoing, if any Noteholder has notified the Paying Agent
that any of the foregoing Forms or certificates is withdrawn or inaccurate, or
if the Code or the regulations thereunder or the administrative interpretation
thereof are at any time after the date hereof amended to require such
withholding of United States federal income taxes from payments under the Notes
held by such Noteholder, or if such withholding is otherwise required under
applicable law, the Paying Agent agrees to withhold from each payment due to the
relevant Noteholder withholding taxes at the appropriate rate under applicable
law, and will, as more fully provided above, on a timely basis, deposit such
amounts with an authorized depository and make such reports, filings and other
reports in connection therewith, and in the manner required under applicable
law. The Indenture Trustee hereby agrees to use its best efforts (without
incurring liability for a failure to do so) to inform the Paying Agent and the
affected Noteholder or Noteholders if the Indenture Trustee has failed to
receive any of Form 1001, 4224 or W-8 from a Noteholder prior to the date of an
interest payment to such Noteholder.
 
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Section 9.9.  Reserved.
 
Section 9.10.  The Indenture Trustee May File Proofs of Claim.
 
The Indenture Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel) allowed in any judicial proceedings relative to the Issuer (or any
other obligor upon the Notes), its creditors or its property, and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claim. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Indenture Trustee, its agents and counsel, and any other amounts due the
Indenture Trustee under Section 10.5 hereof out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a Lien on, and shall be paid out of, any and all distributions, dividends,
money, Notes and other properties which the Noteholders of the Notes may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Indenture Trustee to authorize or consent to or accept
or adopt on behalf of any Noteholder any plan of reorganization, arrangement,
adjustment or composition, affecting the Notes or the rights of any Noteholder
thereof, or to authorize the Indenture Trustee to vote in respect of the claim
of any Noteholder in any such proceeding.
 
Section 9.11.  Priorities.
 
If the Indenture Trustee collects any money pursuant to this Article, the
Indenture Trustee shall pay out the money to the Collateral Agent who shall
distribute such money in accordance with the provisions of Article 5 of this
Indenture.
 
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Section 9.12.  Undertaking for Costs.
 
In any suit for the enforcement of any right or remedy under this Indenture or
in any suit against the Indenture Trustee for any action taken or omitted by it
as an Indenture Trustee, a court in its discretion may require the filing by any
party litigant in the suit of any undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs, including reasonable
attorneys’ fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Indenture Trustee, or a
suit by a Noteholder pursuant to Section 9.7.
 
Section 9.13.  Rights and Remedies Cumulative.
 
No right or remedy herein conferred upon or reserved to the Indenture Trustee or
to the holders of Notes is intended to be exclusive of any other right or
remedy, and every right or remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given under this
Indenture or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy under this Indenture, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
 
Section 9.14.  Delay or Omission Not Waiver.
 
No delay or omission of the Indenture Trustee or of any holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article 9 or by law
to the Indenture Trustee or to the holders of Notes may be exercised from time
to time, and as often as may be deemed expedient, by the Indenture Trustee or by
the holders of Notes, as the case may be.
 
ARTICLE 10.
 
THE INDENTURE TRUSTEE
 
Section 10.1.  Duties of the Indenture Trustee.
 
(a) If an Event of Default has occurred and is continuing, the Indenture Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such person’s
own affairs; provided, however, that the Indenture Trustee shall have no
liability in connection with any action or inaction taken, or not taken, by it
upon the deemed occurrence of an Event of Default of which a Trust Officer has
not received written notice; and provided, further that the preceding sentence
shall not have the effect of insulating the Indenture Trustee from liability
arising out of the Indenture Trustee’s negligence or willful misconduct.
 
(b) Except during the occurrence and continuance of an Event of Default:
 
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(i) The Indenture Trustee undertakes to perform only those duties that are
specifically set forth in this Indenture and no others, and no implied covenants
or obligations shall be read into this Indenture against the Indenture Trustee;
and
 
(ii) In the absence of bad faith on its part, the Indenture Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Indenture Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Indenture Trustee, the
Indenture Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture. The Indenture Trustee
shall examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein).
 
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
 
(i) This clause does not limit the effect of clause (b) of this Section 10.1.
 
(ii) The Indenture Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts.
 
(iii) The Indenture Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it hereunder.
 
(iv) The Indenture Trustee shall not be charged with knowledge of any default
under any Program Document, unless a Trust Officer of the Indenture Trustee
receives written notice of such default.
 
(d) Notwithstanding anything to the contrary contained in this Indenture or any
of the Program Documents, no provision of this Indenture shall require the
Indenture Trustee to expend or risk its own funds or incur any liability. The
Indenture Trustee may refuse to perform any duty or exercise any right or power
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
 
(e) In the event that the Paying Agent or the Transfer Agent and Registrar shall
fail to perform any obligation, duty or agreement in the manner or on the day
required to be performed by the Paying Agent or the Transfer Agent and
Registrar, as the case may be, under this Indenture, the Indenture Trustee shall
be obligated as soon as practicable upon actual knowledge of a Trust Officer
thereof and receipt of appropriate records and information, if any, to perform
such obligation, duty or agreement in the manner so required.
 
(f) Subject to Section 10.3, all moneys received by the Indenture Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated from other funds except to
the extent required by law or the Program Documents. The Indenture Trustee may
allow and credit to the Issuer interest agreed upon in writing by the Issuer and
the Indenture Trustee from time to time as may be permitted by law.
 
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Section 10.2.  Rights of the Indenture Trustee.
 
Except as otherwise provided by Section 10.1:
 
(a) The Indenture Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting based upon any document believed by it to be
genuine and to have been signed by or presented by the proper person.
 
(b) The Indenture Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
 
(c) The Indenture Trustee may act through agents, custodians and nominees and
shall not be liable for any misconduct or negligence on the part of, or for the
supervision of, any such agent, custodian or nominee so long as such agent,
custodian or nominee is appointed with due care. The Indenture Trustee shall
provide written notice to S&P, Moody’s and Fitch of any such appointment and, if
practicable, shall provide prior written notice to S&P, Moody’s and Fitch of any
such appointment.
 
(d) The Indenture Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by the Indenture.
 
(e) The Indenture Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture or any Supplement, or to
institute, conduct or defend any litigation hereunder or in relation hereto, at
the request, order or direction of any of the Noteholders, pursuant to the
provisions of this Indenture or any Supplement, unless such Noteholders shall
have offered to the Indenture Trustee security or indemnity satisfactory to the
Indenture Trustee against the costs, expenses and liabilities which may be
incurred therein or thereby; nothing contained herein shall, however, relieve
the Indenture Trustee of the obligations, upon the occurrence of a default by
the Issuer (which has not been cured), to exercise such of the rights and powers
vested in it by this Indenture or any Supplement, and to use the same degree of
care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person’s own affairs.
 
(f) The Indenture Trustee shall not be bound to make any investigation into the
facts of matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing so to do by the Required Noteholders of
any Series which could be adversely affected if the Indenture Trustee does not
perform such acts.
 
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(g) The Indenture Trustee shall not be liable for any losses or liquidation
penalties in connection with Eligible Investments, unless such losses or
liquidation penalties were incurred through the Indenture Trustee’s own willful
misconduct, negligence or bad faith.
 
(h) The rights, privileges, protections, immunities and benefits given to the
Indenture Trustee, including, without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Indenture Trustee in each of
its capacities hereunder, and to each agent, custodian and other Person employed
to act hereunder.
 
Section 10.3.  Individual Rights of the Indenture Trustee.
 
The Indenture Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Issuer or an Affiliate
of the Issuer with the same rights it would have if it were not Indenture
Trustee. Any Agent may do the same with like rights. However, the Indenture
Trustee is subject to Section 10.8.
 
Section 10.4.  Notice of Events of Default and Potential Events of Default.
 
If an Event of Default or a Potential Event of Default occurs and is continuing
and if a Trust Officer of the Indenture Trustee receives written notice thereof,
the Indenture Trustee shall promptly provide the Collateral Agent, the
Noteholders and each Rating Agency with notice of such Event of Default or the
Potential Event of Default, if such Notes are represented by a Global Note, by
telephone and facsimile, and, if such Notes are represented by Definitive Notes,
by first class mail.
 
Section 10.5.  Compensation.
 
(a) The Issuer shall promptly pay to the Indenture Trustee from time to time
compensation for its acceptance of this Indenture and services hereunder as
agreed in writing between the Issuer and the Indenture Trustee, as may be
amended from time to time. The Indenture Trustee’s compensation shall not be
limited by any law on compensation of an Indenture Trustee of an express trust.
The Issuer shall reimburse the Indenture Trustee promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Indenture Trustee’s
agents and counsel.
 
(b) The Issuer shall not be required to reimburse any expense or indemnify the
Indenture Trustee against any loss, liability, or expense incurred by the
Indenture Trustee through the Indenture Trustee’s own willful misconduct, gross
negligence or bad faith.
 
(c) When the Indenture Trustee incurs expenses or renders services after an
Event of Default occurs, the expenses and the compensation for the services are
intended to constitute expenses of administration under the Bankruptcy Code.
 
(d) The provisions of this Section 10.5 shall survive the termination of this
Indenture and the resignation and removal of the Indenture Trustee.
 
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Section 10.6.  Replacement of the Indenture Trustee.
 
(a) A resignation or removal of the Indenture Trustee and appointment of a
successor Indenture Trustee shall become effective only upon the successor
Indenture Trustee’s acceptance of appointment as provided in this Section 10.6
and the satisfaction of the Rating Agency Consent Condition.
 
(b) The Indenture Trustee may, after giving sixty (60) days prior written notice
to the Issuer, each Noteholder and each Rating Agency, resign at any time and be
discharged from the trust hereby created by so notifying the Issuer, the
Collateral Agent and the Agent; provided, however, that no such resignation of
the Indenture Trustee shall be effective until a successor Indenture Trustee has
assumed the obligations of the Indenture Trustee hereunder. The Required
Noteholders may remove the Indenture Trustee by so notifying the Indenture
Trustee, the Collateral Agent, the Issuer and each Rating Agency. The Issuer may
remove the Indenture Trustee upon notice to each Rating Agency if:
 
(i) the Indenture Trustee fails to comply with Section 10.8;
 
(ii) the Indenture Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Indenture Trustee under the Bankruptcy
Code;
 
(iii) a custodian or public officer takes charge of the Indenture Trustee or its
property; or
 
(iv) the Indenture Trustee becomes incapable of acting.
 
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of the Indenture Trustee for any reason, the Issuer shall promptly
appoint a successor Indenture Trustee. Within one year after the successor
Indenture Trustee takes office, the Required Noteholders may appoint a successor
Indenture Trustee to replace the successor Indenture Trustee appointed by the
Issuer.
 
(c) If a successor Indenture Trustee does not take office within 30 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or any Noteholder may petition, at the expense of the
Issuer, any court of competent jurisdiction for the appointment of a successor
Indenture Trustee.
 
(d) If the Indenture Trustee after written request by any Noteholder who has
been a Noteholder for at least six months fails to comply with Section 10.8,
such Noteholder may petition any court of competent jurisdiction for the removal
of the Indenture Trustee and the appointment of a successor Indenture Trustee.
 
(e) A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, the Collateral Agent, and to the
Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture Trustee under this Indenture and any
Supplement. The successor Indenture Trustee shall mail a notice of its
succession to Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor Indenture
Trustee; provided, however, that all sums owing to the retiring Indenture
Trustee hereunder have been paid. Notwithstanding replacement of the Indenture
Trustee pursuant to this Section 10.6, the Issuer’s obligations under Section
10.5 hereof shall continue for the benefit of the retiring Indenture Trustee.
 
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Section 10.7.  Successor Indenture Trustee by Merger, etc.
 
Subject to Section 10.8, if the Indenture Trustee consolidates, merges or
converts into, or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation without any further
act shall be the successor Indenture Trustee.
 
Section 10.8.  Eligibility Disqualification.
 
(a) There shall at all times be an Indenture Trustee hereunder which shall (i)
be a corporation organized and doing business under the laws of the United
States of America or of any state thereof authorized under such laws to exercise
corporate Indenture Trustee power, (ii) be subject to supervision or examination
by Federal or state authority and shall have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent published annual report of
condition and (iii) so long as any Commercial Paper Notes are outstanding, have
a rating of not less than Baa3 from Moody’s.
 
(b) At any time the Indenture Trustee shall cease to satisfy the eligibility
requirements of clauses (a)(i) or (a)(ii) above, the Indenture Trustee shall
resign immediately in the manner and with the effect specified in Section 10.6.
 
Section 10.9.  Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.
 
(a) Notwithstanding any other provisions of this Indenture or any Supplement, at
any time, for the purpose of meeting any legal requirements of any jurisdiction,
the Indenture Trustee shall have the power and may execute and deliver all
instruments to appoint one or more persons to act as a co-Indenture Trustee or
co-Indenture Trustees, or separate Indenture Trustee or separate Indenture
Trustees, and to vest in such Person or Persons, subject to the other provisions
of this Section 10.9, such powers, duties, obligations, rights and trusts as the
Indenture Trustee may consider necessary or desirable. No co-Indenture Trustee
or separate Indenture Trustee hereunder shall be required to meet the terms of
eligibility as a successor Indenture Trustee under Section 10.8 and no notice to
Noteholders of the appointment of any co-Indenture Trustee or separate Indenture
Trustee shall be required under Section 10.6.
 
(b) Every separate Indenture Trustee and co-Indenture Trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
 
(i) The Notes of each Series shall be authenticated and delivered solely by the
Indenture Trustee or an authenticating agent appointed by the Indenture Trustee;
 
(ii) All rights, powers, duties and obligations conferred or imposed upon the
Indenture Trustee shall be conferred or imposed upon and exercised or performed
by the Indenture Trustee and such separate Indenture Trustee or co-Indenture
Trustee jointly (it being understood that such separate Indenture Trustee or
co-Indenture Trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed, the
Indenture Trustee shall be incompetent or unqualified to perform, such act or
acts, in which event such rights, powers, duties and obligations (including the
holding of title to the Assets or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate Indenture Trustee or
co-Indenture Trustee, but solely at the direction of the Indenture Trustee;
 
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(iii) No Indenture Trustee hereunder shall be personally liable by reason of any
act or omission of any other Indenture Trustee hereunder, and
 
(iv) The Indenture Trustee may at any time accept the resignation of or remove
any separate Indenture Trustee or co-Indenture Trustee.
 
(c) Any notice, request or other writing given to the Indenture Trustee shall be
deemed to have been given to each of the then separate Indenture Trustees and
co-Indenture Trustees, as effectively as if given to each of them. Every
instrument appointing any separate Indenture Trustee or co-Indenture Trustee
shall refer to this Indenture and the conditions of this Article 10. Each
separate Indenture Trustee and co-Indenture Trustee, upon its acceptance of the
trusts conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Indenture Trustee or
separately, as may be provided therein, subject to all the provisions of this
Indenture and any Supplement, specifically including every provision of this
Indenture or any Supplement relating to the conduct of, affecting the liability
of, or affording protection to, the Indenture Trustee. Every such instrument
shall be filed with the Indenture Trustee.
 
(d) Any separate Indenture Trustee or co-Indenture Trustee may at any time
constitute the Indenture Trustee, its agent or attorney-in-fact with full power
and authority, to the extent not prohibited by law, to do any lawful act under
or in respect to this Indenture or any Supplement on its behalf and in its name.
If any separate Indenture Trustee or co-Indenture Trustee shall die, become
incapable of acting, resign or be removed, all of its estates, properties,
rights, remedies and trusts shall vest in and be exercised by the Indenture
Trustee, to the extent permitted by law, without the appointment of a new or
successor Indenture Trustee.
 
(e) In connection with the appointment of a co-Indenture Trustee, the Indenture
Trustee may, at any time, without notice to the Noteholders, delegate its duties
under this Base Indenture and any Supplement to any Person who agrees to conduct
such duties in accordance with the terms hereof; provided, however, that no such
delegation shall relieve the Indenture Trustee of its obligations and
responsibilities hereunder with respect to any such delegated duties.
 
Section 10.10.  Representations and Warranties of Indenture Trustee.
 
The Indenture Trustee represents and warrants to the Collateral Agent, the
Issuer and the Noteholders that:
 
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(i) The Indenture Trustee is a banking corporation organized, existing and in
good standing under the laws of the State of New York;
 
(ii) The Indenture Trustee has full power, authority and right to execute,
deliver and perform this Indenture and any Supplement issued concurrently with
this Indenture and to authenticate the Notes, and has taken all necessary action
to authorize the execution, delivery and performance by it of this Indenture and
any Supplement issued concurrently with this Indenture and to authenticate the
Notes;
 
(iii) This Indenture has been duly executed and delivered by the Indenture
Trustee; and
 
(iv) The Indenture Trustee meets the requirements of eligibility as an Indenture
Trustee hereunder set forth in Section 10.8 hereof.
 
Section 10.11.  The Issuer Indemnification of the Indenture Trustee.
 
The Issuer shall indemnify and hold harmless the Indenture Trustee and its
directors, officers, agents and employees from and against any and all loss,
claim, liability, expense, including taxes (other than taxes based on the income
of the Indenture Trustee), damage or injury suffered or sustained by reason of
any acts, omissions or alleged acts or omissions arising out of the acceptance
of the trusts hereunder or activities of the Indenture Trustee pursuant to this
Indenture or any Supplement, including but not limited to any judgment, award,
settlement, reasonable attorneys’ fees and expenses and other costs or expenses
incurred in connection with the defense of any actual or threatened action,
proceeding or claim (whether asserted by the Company, the Issuer, a Note Owner
or any other Person); provided, however, that the Issuer shall not indemnify the
Indenture Trustee or its directors, officers, employees or agents if such acts,
omissions or alleged acts or omissions constitute bad faith, negligence or
willful misconduct by the Indenture Trustee. The indemnity provided herein shall
survive the termination of this Indenture and the resignation and removal of the
Indenture Trustee.
 
ARTICLE 11.
 
DISCHARGE OF INDENTURE
 
Section 11.1.  Termination of the Issuer’s Obligations.
 
(a) This Indenture shall cease to be of further effect (except that the Issuer’s
obligations under Section 10.5 and Section 10.11 and the Indenture Trustee’s and
Paying Agent’s obligations under Section 11.3 shall survive) when all
outstanding Notes theretofore authenticated and issued have been delivered
(other than destroyed, lost or stolen Notes which have been replaced or paid) to
the Indenture Trustee for cancellation and the Issuer has paid all sums payable
hereunder.
 
(b) In addition, except as may be provided to the contrary in any Supplement,
the Issuer may terminate all of its obligations under this Indenture if:
 
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(i) The Issuer irrevocably deposits in trust with the Indenture Trustee or
another trustee under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Indenture Trustee, money or U.S. Government
Obligations in an amount sufficient, in the opinion of a nationally recognized
firm of independent certified public accountants expressed in a written
certification thereof delivered to the Indenture Trustee, to pay, when due,
principal, premium, if any, and interest on the Notes to maturity or repurchase,
as the case may be, and to pay all other sums payable by it hereunder; provided,
however, that (1) such trustee of the irrevocable trust shall have been
irrevocably instructed to pay such money or the proceeds of such U.S. Government
Obligations to the Indenture Trustee and (2) such trustee shall have been
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Obligations to the payment of said principal and interest with
respect to the Notes;
 
(ii) The Issuer delivers to the Indenture Trustee an Officer’s Certificate
stating that all conditions precedent to satisfaction and discharge of this
Indenture have been complied with, and an Opinion of Counsel to the same effect;
 
(iii) The Issuer delivers to the Indenture Trustee an Officer’s Certificate
stating that no Potential Event of Default or Event of Default, in either case,
described in Section 9.1(d) shall have occurred and be continuing on the date of
such deposit; and
 
(iv) The Rating Agency Consent Condition, is satisfied.
 
Then, this Indenture shall cease to be of further effect (except as provided in
this Section 11.1), and the Indenture Trustee, on demand of the Issuer, shall
execute proper instruments acknowledging confirmation of and discharge under
this Indenture.
 
(c) After such irrevocable deposit made pursuant to Section 11.1(b) and
satisfaction of the other conditions set forth herein, the Indenture Trustee
upon request shall acknowledge in writing the discharge of the Issuer’s
obligations under this Indenture except for those surviving obligations
specified above.
 
In order to have money available on a payment date to pay principal, premium, if
any, or interest on the Notes, the U.S. Government Obligations shall be payable
as to principal or interest at least one Business Day before such payment date
in such amounts as will provide the necessary money. U.S. Government Obligations
shall not be callable at the Issuer’s option.
 
Section 11.2.  Application of Trust Money.
 
The Indenture Trustee or another trustee satisfactory to the Indenture Issuer
and the Issuer shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 11.1. The Indenture Trustee shall apply
the deposited money and the money from U.S. Government Obligations through the
Paying Agent in accordance with this Indenture to the payment of principal and
interest on the Notes.
 
The provisions of this Section 11.2 shall survive the expiration or earlier
termination of this Indenture.
 
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Money held by the Indenture Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Indenture Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Issuer.
 
Section 11.3.  Repayment to the Issuer.
 
The Indenture Trustee and the Paying Agent shall promptly pay to the Issuer upon
written request any excess money or, pursuant to Sections 2.11 and 2.14, return
any Notes held by them at any time.
 
Subject to Section 2.7(c), the Indenture Trustee and the Paying Agent shall pay
to the Issuer upon written request any money held by them for the payment of
principal or interest that remains unclaimed for two years after the date upon
which such payment shall have become due.
 
The provisions of this Section 11.3 shall survive the expiration or earlier
termination of this Indenture.
 
ARTICLE 12.
 
AMENDMENTS
 
Section 12.1.  Without Consent of the Noteholders.
 
Without the consent of any Noteholder, the Issuer, the Indenture Trustee, and
any applicable Enhancement Provider, at any time and from time to time, may
enter into one or more Supplements hereto, in form satisfactory to the Indenture
Trustee, for any of the following purposes, provided that (i) with respect to
clause (a) below, the Rating Agency Confirmation Condition is met and (ii) with
respect to clauses (b) to (f) below, the Rating Agency Consent Condition is met:
 
(a) to create a new Series of Notes;
 
(b) to cure any ambiguity, defect, or inconsistency or to correct or supplement
any provision contained herein or in any Supplement or in any Notes issued
hereunder;
 
(c) to provide for uncertificated Notes in addition to certificated Notes;
 
(d) to add to or change any of the provisions of the Indenture to such extent as
shall be necessary to permit or facilitate the issuance of Notes in bearer form,
registrable or not registrable as to principal, and with or without interest
coupons;
 
(e) to evidence and provide for the acceptance of appointment hereunder by a
successor Indenture Trustee with respect to the Notes of one or more Series and
to add to or change any of the provisions of the Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Indenture Trustee; or
 
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(f) to correct or supplement any provision herein which may be inconsistent with
any other provision herein or to make any other provisions with respect to
matters or questions arising under this Indenture;
 
provided, however, that, as evidenced by an Opinion of Counsel, such action
shall not adversely affect in any material respect the interests of any
Noteholders. Upon the request of the Issuer, and upon receipt by the Indenture
Trustee of the documents described in Section 2.2 hereof, the Indenture Trustee
shall join with the Issuer in the execution of any Supplement authorized or
permitted by the terms of this Indenture.
 
Section 12.2.  With Consent of the Noteholders.
 
Except as provided in Section 12.1 and except as may be provided in any other
Program Document, the provisions of this Indenture and any Supplement (unless
otherwise provided in such Supplement) and each other Program Document to which
the Issuer is a party may from time to time be amended, modified or waived, if
such amendment, modification or waiver is in writing and consented to in writing
by the Issuer, the Indenture Trustee, any applicable Enhancement Provider, and
Required Noteholders (and the Required Noteholders of a Series of Notes, in
respect of any amendment to this Indenture, the Supplement with respect to such
Series of Notes or any Program Document which affects only the Noteholders of
such Series of Notes and does not affect the Noteholders of any other Series of
Notes, as substantiated by an Opinion of Counsel to such effect, which Opinion
of Counsel may, to the extent same is based on any factual matter, rely upon an
Officer’s Certificate as to the truth of such factual matter) and provided that
the Rating Agency Consent Condition is satisfied. Notwithstanding the foregoing:
 
(i) any modification of this Section 12.2, any requirement hereunder that any
particular action be taken by Noteholders holding the relevant percentage in
principal amount of the Notes or any change in the applicable amount of
Enhancement shall require the consent of each affected Noteholder, and
 
(ii) any amendment, waiver or other modification that would (a) extend the due
date for, or reduce the amount of any scheduled repayment or prepayment of
principal of or interest on any Note (or reduce the principal amount of or rate
of interest on any Note) shall require the consent of each affected Noteholder;
(b) approve the assignment or transfer by the Issuer of any of its rights or
obligations hereunder or under any other Program Document to which it is a party
except pursuant to the express terms hereof or thereof shall require the consent
of each Noteholder; (c) release any obligor under any Program Document to which
it is a party except pursuant to the express terms of such Program Document
shall require the consent of each Noteholder; provided, however, that the Liens
on the Collateral may be released as provided in the Security Agreement; (d)
affect adversely the interests, rights or obligations of any Noteholder
individually in comparison to any other Noteholder shall require the consent of
such Noteholder; or (e) amend or otherwise modify any Event of Default shall
require the consent of each affected Noteholder.
 
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No failure or delay on the part of any Noteholder or the Indenture Trustee in
exercising any power or right under this Indenture or any other Program Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power or right preclude any other or further exercise thereof or the
exercise of any other power or right.
 
Section 12.3.  Supplements.
 
Each amendment or other modification to this Indenture or the Notes shall be set
forth in a Supplement. The initial effectiveness of each Supplement shall be
subject to the satisfaction of the Rating Agency Consent Condition. In addition
to the manner provided in Sections 12.1 and 12.2, each Supplement may be amended
as provided for in such Supplement.
 
Section 12.4.  Revocation and Effect of Consents.
 
Until an amendment or waiver becomes effective, a consent to it by a Noteholder
of a Note is a continuing consent by the Noteholder and every subsequent
Noteholder of a Note or portion of a Note that evidences the same debt as the
consenting Noteholder’s Note, even if notation of the consent is not made on any
Note. However, any such Noteholder or subsequent Noteholder may revoke the
consent as to his Note or portion of a Note if the Indenture Trustee receives
written notice of revocation before the date the amendment or waiver becomes
effective. An amendment or waiver becomes effective in accordance with its terms
and thereafter binds every Noteholder. The Issuer may fix a record date for
determining which Noteholders must consent to such amendment or waiver.
 
Section 12.5.  Notation on or Exchange of Notes.
 
The Indenture Trustee may place an appropriate notation about an amendment or
waiver on any Note thereafter authenticated. The Issuer in exchange for all
Notes may issue and the Indenture Trustee shall authenticate new Notes that
reflect the amendment or waiver. Failure to make the appropriate notation or
issue a new Note shall not affect the validity and effect of such amendment or
waiver.
 
Section 12.6.  The Indenture Trustee to Sign Amendments, etc.
 
The Indenture Trustee shall sign any Supplement authorized pursuant to this
Article 12 if the Supplement does not adversely affect the rights, duties,
liabilities or immunities of the Indenture Trustee. If it does, the Indenture
Trustee may, but need not, sign it. In signing such Supplement, the Indenture
Trustee shall receive an indemnity reasonably satisfactory to it and to receive
and, subject to Section 10.1, shall be fully protected in relying upon, an
Officer’s Certificate and an Opinion of Counsel as conclusive evidence that such
Supplement is authorized or permitted by this Indenture and that it will be
valid and binding upon the Issuer in accordance with its terms.
 
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ARTICLE 13.
 
MISCELLANEOUS
 
Section 13.1.  Notices.
 
(a) Any notice or communication by the Issuer or the Indenture Trustee to the
other shall be in writing and delivered in person or mailed by first-class mail
(registered or certified, return receipt requested), telecopier or overnight air
courier guaranteeing next day delivery, to the other’s address:
 
If to the Issuer:
 
BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST:
c/o First Union Trust Company National Association
Corporate Trust/Administration
1 Rodney Square
920 King Street
Wilmington, DE 19801
Attention: Edward L. Truitt, Jr.
Telecopy No.: (302) 888-7544
Telephone No.: (302) 888-7539
 
with a copy to:
 
Cendant Mortgage Corporation
c/o Cendant Mortgage Services
6000 Atrium Way
Mt. Laurel, NJ 08054
Attention: Joseph E. Suter
Telecopy No.: (609) 414-4540
Telephone No.: (609) 414-4170
 
If to the Indenture Trustee:
 
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attn: Corporate Trust Trustee Administration
Phone: (212) 815-5359
Fax: (212) 815-5915
 
If to an Enhancement Provider, at the address provided in the applicable
Enhancement Agreement.
 
The Issuer or the Indenture Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications;
provided however, the Issuer may not at any time designate more than a total of
three (3) addresses to which notices must be sent in order to be effective.
 
Any notice (i) given in person shall be deemed delivered on the date of delivery
of such notice, (ii) given by first class mail shall be deemed given five (5)
days after the date that such notice is mailed, (iii) delivered by telecopier
shall be deemed given on the date of delivery of such notice, and (iv) delivered
by overnight air courier shall be deemed delivered one Business Day after the
date that such notice is delivered to such overnight courier.
 
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Notwithstanding any provisions of this Indenture to the contrary, the Indenture
Trustee shall have no liability based upon or arising from the failure to
receive any notice required by or relating to this Indenture or the Notes.
 
If the Issuer mails a notice or communication to Noteholders, it shall mail a
copy to the Indenture Trustee at the same time.
 
(b) Where the Indenture provides for notice to Noteholders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if sent in writing and mailed, first-class postage prepaid, to each Noteholder
affected by such event, at its address as it appears in the Note Register, not
later than the latest date, and not earlier than the earliest date, prescribed
(if any) for the giving of such notice. In any case where notice to Noteholder
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Noteholder shall affect the sufficiency of
such notice with respect to other Noteholders, and any notice which is mailed in
the manner herein provided shall be conclusively presumed to have been duly
given. Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
 
In the case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made that is satisfactory to the Indenture Trustee
shall constitute a sufficient notification for every purpose hereunder.
 
Section 13.2.  Communication by Noteholders with Other Noteholders.
 
Noteholders may communicate with other Noteholders with respect to their rights
under this Indenture or the Notes.
 
Section 13.3.  Certificate and Opinion as to Conditions Precedent.
 
Upon any request or application by the Issuer to the Indenture Trustee to take
any action under this Indenture, the Issuer shall furnish to the Indenture
Trustee an Officer’s Certificate in form and substance reasonably satisfactory
to the Indenture Trustee (which shall include the statements set forth in
Section 13.4) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been complied with.
 
Section 13.4.  Statements Required in Certificate.
 
Each certificate with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
 
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(a) a statement that the Person giving such certificate has read such covenant
or condition;
 
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements contained in such certificate are based;
 
(c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
 
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
 
Section 13.5.  Rules by the Indenture Trustee.
 
The Indenture Trustee may make reasonable rules for action by or at a meeting of
Noteholders.
 
Section 13.6.  No Recourse Against Others.
 
An Authorized Officer, employee or holder of any securities of the Issuer, as
such, shall not have any liability for any obligations of the Issuer under the
Notes or this Indenture or for any claim based on, in respect of or by reason of
such obligations or their creation. Each Noteholder by accepting a Note waives
and releases all such liability.
 
Section 13.7.  Duplicate Originals.
 
The parties may sign any number of copies of this Indenture. One signed copy is
enough to prove this Indenture.
 
Section 13.8.  Benefits of Indenture.
 
Except as set forth in a Supplement, nothing in this Indenture or in the Notes,
expressed or implied, shall give to any Person, other than the parties hereto
and their successors hereunder and the Holders, any benefit or any legal or
equitable right, remedy or claim under the Indenture.
 
Section 13.9.  Payment on Business Day.
 
In any case where any Distribution Date, redemption date or maturity date of any
Note shall not be a Business Day, then (notwithstanding any other provision of
this Indenture) payment of interest or principal (and premium, if any), as the
case may be, need not be made on such date but may be made on the next
succeeding Business Day with the same force and effect as if made on the
Distribution Date, redemption date, or maturity date; provided, however, that no
interest shall accrue for the period from and after such Distribution Date,
redemption date, or maturity date, as the case may be.
 
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Section 13.10.  Governing Law.
 
The laws of the State of New York, including, without limitation, the UCC, but
excluding any conflicts of laws, shall govern and be used to construe this
Indenture and the Notes and the rights and duties of the Indenture Trustee,
Registrar, Paying Agent and Noteholders.
 
Section 13.11.  No Adverse Interpretation of Other Agreements.
 
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Issuer or an Affiliate of the Issuer. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
 
Section 13.12.  Successors.
 
All agreements of the Issuer in this Indenture and the Notes shall bind its
successor, provided, however, the Issuer may not assign its obligations or
rights under this Indenture or any Program Document. All agreements of the
Indenture Trustee in this Indenture shall bind its successor.
 
Section 13.13.  Severability.
 
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
 
Section 13.14.  Counterpart Originals.
 
The parties may sign any number of copies of this Indenture. Each signed copy
shall be an original, but all of them together represent the same agreement.
 
Section 13.15.  Table of Contents, Headings, etc.
 
The Table of Contents, Cross-Reference Table, and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
 
Section 13.16.  Security Agreement.
 
By acceptance of its Notes issued under this Indenture, each Noteholder agrees
to the terms and conditions contained in Section 8.01 of the Security Agreement
and such terms are incorporated by reference insofar as they relate to the
duties and obligations of the Noteholders. The Collateral Agent shall be a third
party beneficiary of the terms of this Section 13.16.
 
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Section 13.17.  No Bankruptcy Petition Against the Issuer.
 
Each of the Noteholders and the Indenture Trustee hereby covenants and agrees
that, prior to the date which is one year and one day after the payment in full
of the latest maturing Note and Commercial Paper, it will not institute against,
or join with any other Person in instituting, against the Issuer any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings, under any Federal or state bankruptcy or similar law; provided,
however, that nothing in this Section 13.17 shall constitute a waiver of any
right to indemnification, reimbursement or other payment from the Issuer
pursuant to this Indenture. In the event that any such Noteholder or the
Indenture Trustee takes action in violation of this Section 13.17, the Issuer
shall file an answer with the bankruptcy court or otherwise properly contesting
the filing of such a petition by any such Noteholder or the Indenture Trustee
against the Issuer or the commencement of such action and raising the defense
that such Noteholder or the Indenture Trustee has agreed in writing not to take
such action and should be estopped and precluded therefrom and such other
defenses, if any, as its counsel advises that it may assert. The provisions of
this Section 13.17 shall survive the termination of this Indenture, and the
resignation or removal of the Indenture Trustee. Nothing contained herein shall
preclude participation by any Noteholder or the Indenture Trustee in the
assertion or defense of its claims in any such proceeding involving the Issuer.
 
Section 13.18.  No Recourse.
 
The obligations of the Issuer under this Indenture are solely the obligations of
the Issuer. No recourse shall be had for the payment of any amount owing in
respect of any fee hereunder or any other obligation or claim arising out of or
based upon this Indenture or any other Program Document against any employee,
officer, trustee, senior, affiliate, agent or servant of the Issuer. Fees,
expenses or costs payable by the Issuer hereunder shall be payable by the Issuer
only on a Distribution Date and only to the extent that funds are then available
or thereafter become available for such purpose pursuant to Article 5.
 
Section 13.19.  Owner Trustee Limitation of Liability.
 
This document or instrument has been executed on behalf of a Delaware business
trust by First Union Trust Company, National Association solely in its capacity
as owner trustee of such trust, and not in its individual capacity. In no case
shall First Union Trust Company, National Association (or any entity acting as
successor or additional trustee) be personally liable for or on account of any
of the statements, representations, warranties, covenants or obligations of the
such trust hereunder or under any supplement, Note or other document executed in
such capacity in connection herewith, any right to assert any such liabilities
against First Union Trust Company, National Association (or any entity acting as
successor or additional trustee) being hereby waived by the other parties
hereto; provided, however, that such waiver shall not affect the liability of
First Union Trust Company, National Association (or any entity acting as
successor or additional trustee) to any Person under any agreement to which it
is a party to the extent expressly agreed to in its individual capacity
thereunder.
 

 

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IN WITNESS WHEREOF, the Indenture Trustee and the Issuer have caused, this Base
Indenture to be duly executed by their respective duly authorized officers as of
the day and year first written above.
 
BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST, as Issuer
 
By:
 
FIRST UNION TRUST COMPANY
 
NATIONAL ASSOCIATION, not in its individual capacity, but solely as Owner
 
Trustee under the Trust Agreement
 
 
 
By:__________________________________________________
 
Name:
   
Title:
   
THE BANK OF NEW YORK,
 
as Indenture Trustee
 
 
By:
   
Name:
   
Title
 

 

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IN WITNESS WHEREOF, the Indenture Trustee and the Issuer have caused, this Base
Indenture to be duly executed by their respective duly authorized officers as of
the day and year first written above.
 
BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST, as Issuer
 
By:
 
FIRST UNION TRUST COMPANY
 
NATIONAL ASSOCIATION, not in its individual capacity, but solely as Owner
 
Trustee under the Trust Agreement
 
 
 
By:
   
Name:
   
Title:
 
THE BANK OF NEW YORK,
 
as Indenture Trustee
 
 
By:
   
Name:
Mary Beth Lewicki
 
Title
Assistant Vice President

 

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SCHEDULE I
 
TO THE
 
BASE INDENTURE
 
DEFINITIONS LIST
 
For all purposes of this Base Indenture, except as otherwise expressly provided
herein or unless the context otherwise requires, capitalized terms not otherwise
defined herein shall have the meanings assigned to such terms in the Amended and
Restated Security Agreement (the “Security Agreement”), dated as of December 11,
1998, among Bishop’s Gate Residential Mortgage Trust (the “Issuer”), The Bank of
New York (the “Indenture Trustee”), The Chase Manhattan Bank (the “Agent”) and
The First National Bank of Chicago (the “Collateral Agent”). All other
capitalized terms used in the Base Indenture shall have the meanings specified
herein, and, if not defined therein, then in the Liquidity Agreement.
 
“Annual Noteholders’ Tax Statement” is defined in Section 6.4(b) of the Base
Indenture.
 
“Assets” means any interest of any kind in any assets or property of any kind
tangible or intangible, real, personal or mixed, now owned or hereafter acquired
by the Issuer or such other Person as the context may require.
 
“Authorized Officer” means as to the Issuer, any authorized employee or agent of
the Owner Trustee.
 
“Bankruptcy Code” means The Bankruptcy Reform Act of 1978, as amended from time
to time, and as codified as 11 U.S.C. Section 101 et seq.
 
“Base Indenture” means the Base Indenture, dated as of December 11, 1998,
between the Issuer and the Indenture Trustee, as amended, modified or
supplemented from time to time, exclusive of Supplements creating a new Series
of Notes.
 
“Benefit Plan” means (i) an employee benefit plan as defined in Section 3(3) of
ERISA and which is subject to Title I of ERISA, (ii) a “Plan” as defined in
Section 4975 of the Code and which is subject to Section 4975 of the Code or
(iii) an entity deemed to be investing the “plan assets” (within the meaning of
29 C.F.R. Section 2510.3-101 or otherwise under ERISA) of any such employee
benefit plan or plan, including without limitation an insurance company general
account.
 
“Book-Entry Notes” means beneficial interests in the Notes, ownership and
transfers of which shall be evidenced or made through book entries by a Clearing
Agency as described in Section 2.16 of the Base Indenture; provided that after
the occurrence of a condition whereupon book-entry registration and transfer are
no longer permitted and Definitive Notes are issued to the Note Owners, such
Definitive Notes shall replace Book-Entry Notes.
 
“Business Day” means any day on which dealings in deposits in U.S. dollars are
transacted in the London interbank market.
 

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“Cede” means Cede & Co., a nominee of DTC.
 
“Cede!” means Cedel Bank, société anonyme.
 
“Certificate Rating Agency Condition” means, with respect to any action,
notification to the Issuer, the Collateral Agent, the Agent and the Indenture
Trustee by each Rating Agency then rating any outstanding series of Certificates
that such action will not result in a reduction or withdrawal of such rating(s).
 
“Clearing Agency” means an organization registered as a “clearing agency”
pursuant to Section 17A of the Exchange Act or any successor provision thereto
or Euroclear and Cede!. The initial Clearing Agencies shall be DTC, Euroclear
and Cedel.
 
“Clearing Agency Participant” means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
 
“Code” means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any successor statute of similar
import, in each case as in effect from time to time. References to sections of
the Code also refer to any successor sections.
 
“Collateral” shall mean the “Assigned Collateral” as such term is defined in the
Security Agreement.
 
“Collections” means all payments on the Collateral.
 
“Contingent Obligation”, as applied to any Person, means any direct or indirect
liability, contingent or otherwise, of that Person (a) with respect to any
indebtedness, lease, dividend, letter of credit or other obligation of another
if the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof or (b) under any letter of credit issued for the account of that Person
or for which that Person is otherwise liable for reimbursement thereof.
Contingent Obligation shall include (a) the direct or indirect guarantee,
endorsement (otherwise than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another and (b) any liability of such Person for the
obligations of another through any agreement (contingent or otherwise) (i) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise), (ii) to maintain the solvency of any balance sheet item, level of
income or financial condition of another or (iii) to make take-or-pay or similar
payments if required regardless of non-performance by any other party or parties
to an agreement, if in the case of any agreement described under subclause (i)
or (ii) of this sentence the primary purpose or intent thereof is as described
in the preceding sentence. The amount of any Contingent Obligation shall be
equal to the amount of the obligation so guaranteed or otherwise supported.
 

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“Controlled Distribution Amount” means, with respect to any Class of Notes, the
amount (or amounts) specified in any applicable Supplement.
 
“Corporate Trust Office” shall mean the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered which office at the date of the execution of the Base Indenture is
located at [101 Barclay Street, New York, NY 10286, Attention: Corporate Trust
Trustee Administration], or at any other time at such other address as the
Indenture Trustee may designate from time to time by notice to the Noteholders
and the Issuer.
 
“CP Rating Agency Condition” means, with respect to any action and so long as
any Commercial Paper Notes are outstanding, that each Rating Agency shall have
notified the Issuer, the Collateral Agent, the Agent and the Indenture Trustee
in writing that such action will not result in a reduction or withdrawal of the
rating (in effect immediately before the taking of such action) of the
Commercial Paper Notes with respect to which it is a Rating Agency.
 
“Definitions List” means this Definitions List, as amended or modified from time
to time.
 
“Definitive Notes” is defined in Section 2.16(e) of the Base Indenture.
 
“Depositary Incumbency Certificate” shall have the meaning specified in Section
3.03(b) of the Amended and Restated Security Agreement, dated as of December 11,
1998, by and among the Trust, the Indenture Trustee, and The First National Bank
of Chicago, as Collateral Agent.
 
“Determination Date” means the date five days prior to each Distribution Date.
 
“Distribution Account” means, with respect to any Series of Notes, an account
established as such pursuant to the related Supplement.
 
“Distribution Date” means the twentieth day of each calendar month, or, if such
day is not a Business Day, the next succeeding Business Day, commencing
[December] 20, 1998.
 
“Dollar” and the symbol “$” mean the lawful currency of the United States.
 
“DTC” means The Depository Trust Company.
 
“Enhancement” means, with respect to any Series of Notes, the rights and
benefits provided to the Noteholders of such Series of Notes (other than the
benefit of the Reserve Fund and the subordination of the Certificates) pursuant
to any letter of credit, surety bond, cash collateral account, over
collateralization, issuance of subordinated Notes, spread account, guaranteed
rate agreement, maturity guaranty facility, tax protection agreement, interest
rate swap or any other similar arrangement.
 

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“Enhancement Agreement” means any contract, agreement, instrument or document
governing the terms of any Enhancement or pursuant to which any Enhancement is
issued or outstanding.
 
“Enhancement Agreement Event of Default” means with respect to any Series of
Notes any event of default under any Enhancement Agreement specified in the
related Supplement.
 
“Enhancement Provider” means the Person providing any Enhancement as designated
in the applicable Supplement, other than any Noteholders the Notes of which are
subordinated to any Series of Notes.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute of similar import, in each case as in effect from time
to time. References to sections of ERISA also refer to any successor sections.
 
“Euroclear” means Euroclear System.
 
“Event of Bankruptcy” shall be deemed to have occurred with respect to a Person
if:
 
(a) such Person shall become insolvent or admit in writing its inability to pay
its debts as they come due, or the commencement by such Person of a voluntary
case under the federal bankruptcy laws, as now or hereafter in effect, or any
other present or future federal or state bankruptcy, insolvency or similar law,
or the consent by such Person to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of such Person or of any substantial part of its property or
the making by such Person of an assignment for the benefit of creditors or the
failure by such Person generally to pay its debts as such debts become due or
the taking of action by such Person in furtherance of any of the foregoing; or
 
(b) an involuntary petition or an involuntary proceeding shall have been filed
or commenced against such Person under the federal bankruptcy laws, as now or
hereafter in effect, or any other present or future federal or state bankruptcy
laws, as now or hereafter in effect, or any other present or future federal or
state bankruptcy, insolvency or similar law, or seeding the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of such Person or of any substantial part of its property, or
seeding the winding up or liquidation of the affairs of such Person and such
petition or proceeding shall not have been dismissed for a period of 45
consecutive days, or an order or decree for relief against such Person shall be
entered in any such proceeding; or
 
(c) the board of directors of such Person (if such Person is a corporation or
similar entity) shall vote to implement any of the actions set forth in clause
(b) above.
 
“Event of Default” with respect to each Series of Notes, has the meaning
specified in Section 9.1 of the Base Indenture.
 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Exchange Date” is defined in Section 2.9 of the Base Indenture.
 
“Final Distribution Date” means, with respect to any Series of Notes, the final
Distribution Date for such Series of Notes established as such pursuant to the
related Supplement.
 
“Fitch” means Fitch IBCA, Inc.
 
“GAAP” means the generally accepted accounting principles promulgated or adopted
by the Financial Accounting Standards Board and its predecessors and successors
from time to time.
 
“Governmental Authority” means any Federal, state, local or foreign court or
governmental department, commission, board, bureau, agency, authority,
instrumentality or regulatory body.
 
“Holder” the holder of a Note.
 
“Indebtedness”, as applied to any Person, means, without duplication, (a) all
indebtedness for borrowed money, (b) that portion of obligations with respect to
any lease of any property (whether real, personal or mixed) that is properly
classified as a liability on a balance sheet in conformity with GAAP, (c) notes
payable and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money, (d) any obligation owed for all or
any part of the deferred purchase price for property or services, which purchase
price is (i) due more than six months from the date of the incurrence of the
obligation in respect thereof or (ii) evidenced by a note or similar written
instrument, (e) all indebtedness secured by any Lien on any property or asset
owned by that Person regardless of whether the indebtedness secured thereby
shall have been assumed by that Person or is nonrecourse to the credit of that
Person, and (f) all Contingent Obligations of such Person in respect of any of
the foregoing.
 
“Indenture” means the Base Indenture, together with all Supplements, as the same
may be amended, modified or supplemented from time to time.
 
“Indenture Trustee” means the party named as such in the Indenture until a
successor replaces it in accordance with the applicable provisions of the
Indenture and thereafter means the successor serving thereunder.
 
“Initial Closing Date” means December 11, 1998.
 
“Interest Period” means, with respect to any Series of Notes, the period
specified in the related Supplement.
 
“Investment Company Act” means the Investment Company Act of 1940, as amended.
 

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“Issuer” means Bishop’s Gate Residential Mortgage Trust, a Delaware business
trust, as issuer of the Notes.
 
“Lien” means, when used with respect to any Person, any interest in any real or
personal property, asset or other right held, owned or being purchased or
acquired by such Person which secures payment or performance of any obligation,
and shall include any mortgage, lien, pledge, encumbrance, charge, retained
security title of a conditional vendor or lessor, or other security interest of
any kind, whether arising under a security agreement, mortgage, lease, deed of
trust, chattel mortgage, assignment, pledge, retention or security title,
financing or similar statement, or notice or arising as a matter of law,
judicial process or otherwise.
 
“Liquidity Agreement” means the Amended and Restated Liquidity Agreement, dated
as of December 11, 1998, by and among the Trust, certain banks, and The Chase
Manhattan Bank, as Agent and Book Manager.
 
“Monthly Certificate” is defined in Section 4.1(a) of the Base Indenture.
 
“Monthly Noteholders Statement” means a statement substantially in the form of
Exhibit E to the Indenture.
 
“Moody’s” means Moody’s Investors Service, Inc.
 
“Noteholder” and “Holder” means the Person in whose name a Note is registered in
the Note Register.
 
“Note Owner” means, with respect to a Book-Entry Note, the Person who is the
beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an account with such
Clearing Agency (directly or as an indirect participant, in accordance with the
rules of such Clearing Agency).
 
“Note Rate” means, with respect to any Series of Notes, the annual rate at which
interest accrues on the Notes of such Series of Notes (or formula on the basis
of which such rate shall be determined) as stated in the applicable Supplement.
 
“Note Register” means the register maintained pursuant to Section 2.6(a) of the
Base Indenture, providing for the registration of the Notes and transfers and
exchanges thereof.
 
“Notes” is defined in the recitals to the Base Indenture.
 
“Officer’s Certificate” means a certificate signed by an Authorized Officer of
the Issuer.
 
“Opinion of Counsel” means a written opinion from legal counsel who is
acceptable to the Indenture Trustee. The counsel may be an employee of or
counsel to the Issuer, unless the Controlling Majority shall notify the
Indenture Trustee of objection thereto.
 
“Paving Agent” is defined in Section 2.6(a) of the Base Indenture.
 

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“Permanent Global Note” is defined in Section 2.5(b) of the Base Indenture.
 
“Permitted Liens” means (i) Liens for current taxes not delinquent or for taxes
being contested in good faith and by appropriate proceedings, and with respect
to which adequate reserves have been established, and are being maintained, in
accordance with GAAP, (ii) mechanics’, materialmen’s, landlords’, warehousemen’s
and carrier’s Liens, and other Liens imposed by law, securing obligations
arising in the ordinary course of business that are not more than thirty days
past due or are being contested in good faith and by appropriate proceedings and
with respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP, (iii) the Liens in favor of the Indenture
Trustee pursuant to the Indenture, and (iv) Liens in favor of an Enhancement
Provider, provided, however, that such Liens are subordinate to the Liens in
favor of the Indenture Trustee and have been consented to by the Indenture
Trustee.
 
“Potential Enhancement Agreement Event of Default” means an event which, with
the giving of notice, the passage of time or both, would constitute an
Enhancement Agreement Event of Default under any Enhancement Agreement.
 
“Potential Event of Default” means any occurrence or event which, with the
giving of notice, the passage of time or both, would constitute an Event of
Default.
 
“Principal Terms” is defined in Section 2.3 of the Base Indenture.
 
“Program Documents” has the meaning given it in the Liquidity Agreement.
 
“Qualified Institution” means a depositary institution or trust company (which
may include the Indenture Trustee) organized under the laws of the United States
of America or any one of the states thereof or the District of Columbia;
provided, however, that at all times such depositary institution or trust
company is a member of the FDIC and has (i) from S&P a long-term indebtedness
rating not lower than AA- and a short-term indebtedness rating of A-1+ and from
Moody’s a long-term indebtedness rating not lower than A2 and a short-term
indebtedness rating of P-1, or (ii) such other rating which satisfies the Rating
Agency Consent Condition.
 
“Rating Agency Confirmation Condition” means, with respect to any action, that
(i) each Rating Agency shall have notified the Issuer, the Collateral Agent, the
Agent, any Enhancement Provider and the Indenture Trustee in writing that such
action will not result in a reduction or withdrawal of the rating (in effect
immediately before the taking of such action) of any outstanding Series of Notes
with respect to which it is a Rating Agency and (ii) each Rating Agency shall
have notified any applicable Enhancement Provider entitled to such notification
pursuant to the relevant Supplement in writing that such action will not result
in a reduction or withdrawal of the rating (without regard to the presence of
the Enhancement provided by each such Enhancement Provider and in effect
immediately before the taking of such action) of any outstanding Series of Notes
issued pursuant to such related Supplement and, with respect to the issuance of
a Series of Notes, the “Rating Agency Confirmation Condition” also means, in
addition to the above, _that each Rating Agency that is referred to in the
related Supplement is being required to deliver its rating with respect to such
Series of Notes shall have notified the Issuer, the Collateral Agent, the Agent,
any Enhancement Provider and the Indenture Trustee in writing that such rating
has been issued by such Rating Agency.
 

--------------------------------------------------------------------------------

“Rating Agency Consent Condition” means, with respect to any action, that (i)
each Rating Agency shall have notified the Issuer, the Collateral Agent, the
Agent, any Enhancement Provider and the Indenture Trustee in writing that such
action will not result in a reduction or withdrawal of the rating (in effect
immediately before the taking of such action) of any outstanding Series of Notes
with respect to which it is a Rating Agency and, with respect to the issuance of
a Series of Notes, the “Rating Agency Consent Condition” also means that each
Rating Agency that is referred to in the related Supplement as being required to
deliver its rating with respect to such Series of Notes shall have notified the
Issuer, the Collateral Agent, the Agent, any Enhancement Provider and the
Indenture Trustee in writing that such rating has been issued by such Rating
Agency and (ii) any Enhancement Provider entitled to consent pursuant to the
related Supplement shall have consented in writing to such action.
 
“Record Date” means, with respect to any Distribution Date, the last day of the
Related Month.
 
“Registrar” is defined in Section 2.6(a) of the Base Indenture. “Regulation S”
is defined in Section 2.5(b) of the Base Indenture.
 
“Related Month” means, (i) with respect to any Payment Date, Determination Date
or Distribution Date, the most recently ended calendar month, (ii) with respect
to any other date, the calendar month in which such date occurs and (iii) with
respect to an Interest Period, the month in which such Interest Period
commences; provided, however, that with respect to the above clause (i), the
initial Related Month shall be the period from and including the date of
issuance of the first Series of Notes to and including the last day of the
calendar month in which such issuance occurs.
 
“Required Noteholders” means Noteholders holding in excess of 50% of the
aggregate principal amount of all Series of Notes voting as a single class,
unless the context specifically refers to a Series of Notes, then “Required
Noteholders” means Noteholders holding in excess of 50% of the aggregate
principal amount of such Series of Notes (excluding, for the purposes of making
the foregoing calculations, any Notes held by the Issuer, the Seller or the
Servicer or any Affiliate of the Issuer, the Seller or the Servicer).
 
“Requirements of Law” means, with respect to any Person or any of its property,
the certificate of incorporation or articles of association and by-laws or other
organizational or governing documents of such Person or any of its property, and
any law, treaty, rule or regulation, or determination of any arbitrator or
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject, whether Federal, state or local (including, without limitation, usury
laws, the Federal Truth in Lending Act and retail installment sales acts).
 
“Restricted Global Note” is defined in Section 2.5(a) of the Base Indenture.
 
“Rule 144A” is defined in Section 2.5(a) of the Base Indenture.
 

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“S&P” means Standard & Poor’s Ratings Service, a division of The McGraw-Hill
Companies, Inc.
 
“Secured Parties” is defined in Section 3.1 of the Base Indenture. “Securities
Act” means the Securities Act of 1933, as amended.
 
“Series Closing Date” means, with respect to any Series of Notes, the date of
issuance of such Series of Notes, as specified in the related Supplement.
 
“Series of Notes” or “Series” means each Series of Notes issued and
authenticated pursuant to the Base Indenture and a related Supplement.
 
“Shortfall” means, with respect to any Series of Notes, any interest shortfall
on such Series of Notes, as specified in the related Supplement.
 
“Supplement” means a supplement to the Base Indenture complying (to the extent
applicable) with the terms of Section 2.3, or Article 12 of the Base Indenture.
 
“Temporary Global Note” is defined in Section 2.5(b) of the Base Indenture.
 
“Transfer Agent” is defined in Section 2.9(a)(iii) of the Base Indenture.
 
“Trust” means Bishop’s Gate Residential Mortgage Trust, a special purpose
bankruptcy-remote Delaware business trust, together with its successors and
assigns.
 
“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.
 
“Trust Officer” means, with respect to the Indenture Trustee, any trust officer,
or any officer customarily performing functions similar to those performed by
the person who at the time shall be such officers, or to whom any corporate
trust matter is referred because of his knowledge of and familiarity with a
particular subject, or any successor thereto responsible for the administration
of the Base Indenture.
 
“Trust Order” and “Trust Request” means a written order or request signed in the
name of the Issuer by any one of its Authorized Officers and delivered to the
Indenture Trustee.
 
“UCC” means the Uniform Commercial Code as in effect from time to time in the
specified jurisdiction.
 
“United States” or “U.S.” means the United States of America, its fifty States
and the District of Columbia.
 
“U.S. Government Obligations” means direct obligations of the United States of
America, or any agency or instrumentality thereof for the payment of which the
full faith and credit of the United States of America is pledged as to full and
timely payment of such obligations.
 
“Variable Funding Note” is defined in Section 2.5(c) of the Base Indenture.
 

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“written” or “in writing” means any form of written communication, including,
without limitation, by means of telex, telecopier device, telegraph or cable.
 

 

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EXHIBIT A-1
 
FORM OF TRANSFER CERTIFICATE
 
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OF A BENEFICIAL
 
INTEREST IN THE RESTRICTED GLOBAL NOTE FOR DEFINITIVE
 
SECURITIES OR EXCHANGE OR REGISTRATION OF TRANSFER OF
 
DEFINITIVE SECURITIES
 
To:
The Bank of New York, as Indenture Trustee

 
Bishop’s Residential Mortgage Trust
 
Re:
Bishop’s Gate Residential Mortgage Trust Residential Mortgage Loan Medium-Term
Notes

 
This Certificate relates to $__________ principal amount of Notes held in *
book-entry or definitive form by __________ (the “Transferor”) (CUSIP No.__)
 
[insert name of transferor] issued pursuant to a Base Indenture dated as of
December 11, 1998 between BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST, as Issuer,
and THE BANK OF NEW YORK, as Indenture Trustee (the “Base Indenture”).
Capitalized terms used herein and not otherwise defined, shall have the meanings
given thereto in the Base Indenture.
 
The Transferor has requested the Indenture Trustee by written order to exchange
or register the transfer of a Note or Notes.
 
In connection with such request and in respect of each such Note, the Transferor
does hereby certify as follows:*
 
[  ] Such Note is being acquired for its own account, without transfer.
 
[  ] Such Note is being transferred to (i) a qualified institutional buyer (as
defined in Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”)) in reliance on Rule 144A, (ii) pursuant to an exemption from
registration in accordance with Regulation S under the Securities Act or (iii)
pursuant to Rule 144 of the Securities Act.
 
A-1-1

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[  ] Such Note is being transferred in reliance on and in compliance with an
exemption from the registration requirements of the Securities Act, other than
Rule 144A, Rule 144 or Regulation S under the Securities Act and in compliance
with other applicable state and federal securities laws and an opinion of
counsel is being furnished simultaneously with the delivery of this Certificate
as required under Section 2.9(a)(i)(D) of the Base Indenture.
 

 
[INSERT NAME OF TRANSFEROR]
 
 
By:
   
Name:
Mary Beth Lewicki
 
Title
Assistant Vice President

Date:
 
* Check applicable box.
 

 

A-1-2

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EXHIBIT A-2
 
[RESERVED]
 

 

A-2-1

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EXHIBIT A-6
 
FORM OF TRANSFER CERTIFICATE FOR TRANSFER OR
EXCHANGE FROM DEFINITIVE NOTES
TO PERMANENT GLOBAL NOTE
(exchanges or transfers pursuant to
Section 2.9 of the Base Indenture)
 
The Bank of New York,
as Indenture Trustee
101 Barclay Street
New York, New York 10286
Attn:
 
Re: Bishop’s Gate Residential Mortgage Trust (the “Issuer”)
Residential Mortgage Loan Medium-Term Notes
 
Reference is hereby made to the Base Indenture, dated as of December 11, 1998
(the “Base Indenture”), between the Issuer and The Bank of New York, as
Indenture Trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
 
This letter relates to ___________ principal amount of Series __ Notes which are
held in the form of the Series __ Definitive Notes (CUSIP (CINS) No. ) with
Euroclear/Cedel (ISIN Code [ ]) (Common Code [ ]) through DTC by or on behalf of
[transferor] as beneficial owner (the “Transferor”). The Transferor has
requested an exchange or transfer of its beneficial interest in the Series __
Notes for an interest in the Permanent Global Series __ Note (CUSIP No. [ ]).
 
In connection with such request and in respect of such Series __ Definitive
Notes, the Transferor does hereby certify that such exchange or transfer has
been effected in accordance with the transfer restrictions set forth in the
Series __ Notes and (i) that, with respect to transfers made in reliance on
Regulation S under the Securities Act:
 
(1) the offer of the Series __ Definitive Notes was not made to a person in the
United States;
 
(2) 3. at the time the buy order was originated, the transferee was outside the
United States or the Transferor and any person acting on its behalf reasonably
believed that the transferee was outside the United States, or
 
(B) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither the Transferor nor any person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States;
 
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or 904(b) of Regulation S, as applicable, and
 
A-6-1

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(4) the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act;
 
or (ii) that, with respect to transfers made in reliance on Rule 144A under the
Securities Act, the Series __ Definitive Notes are being transferred in a
transaction permitted by Rule 144A under the Securities Act.
 
This certificate and the statements contained herein are made for your benefit
and the benefit of the Issuer and the Dealers.
 
[Insert Name of Transferor)
 
[INSERT NAME OF TRANSFEROR]
 
 
By:
   
Name:
Mary Beth Lewicki
 
Title
Assistant Vice President

Dated: __________, 199__
 

 

A-6-2

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EXHIBIT A-7
 
FORM OF TRANSFER CERTIFICATE FOR TRANSFER OR
EXCHANGE FROM DEFINITIVE NOTE
TO RESTRICTED GLOBAL NOTE
(exchanges or transfers pursuant to
Section 2.9 of the Base Indenture)
 
The Bank of New York,
as Indenture Trustee
101 Barclay Street
New York, New York 10286
Attn:
 
Re: Bishop’s Gate Residential Mortgage Trust (the “Issuer”)
Residential Mortgage Loan Medium-Term Notes
 
Reference is hereby made to the Base Indenture, dated as of December 11, 1998
(the “Base Indenture”), between the Issuer and The Bank of New York, as
Indenture Trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
 
This letter relates to principal amount of Series __ Notes which are held in the
form of the Series __ Definitive Notes (CUSIP (CINS) No. ) with Euroclear/Cedel
(ISIN Code [ ]) (Common Code [ ]) through DTC by or on behalf of [transferor] as
beneficial owner (the “Transferor”). The Transferor has requested an exchange or
transfer of its beneficial interest in the Series __ Notes for an interest in
the Restricted Global Series __ Note (CUSIP No. [D.
 
In connection with such request, and in respect of such Series Definitive Notes,
the Transferor does hereby certify that such Series __ Definitive Notes are
being transferred in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the “Securities Act”) to a transferee that
the Transferor reasonably believes is purchasing the Series __ Notes for its own
account or an account with respect to which the transferee exercises sole
investment discretion and the transferee and any such account is a “qualified
institutional buyer” within the meaning of Rule 144A, in each case in a
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction.
 
This certificate and the statements contained herein are made for your benefit
and the benefit of the Issuer and the Dealers.
 
[INSERT NAME OF TRANSFEROR]
 
 
By:
   
Name:
   
Title
 

Dated: __________, 199__
 

 

A-7-1

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EXHIBIT B
 
FORM OF CLEARING SYSTEM CERTIFICATE
 
Bishop’s Gate Residential Mortgage Trust
c/o First Union Trust Company National Association
Corporate Trust/Administration 1 Rodney Square
920 King Street
Wilmington, DE 19801
Attention: Edward L. Truitt, Jr.
 
The Bank of New York,
as Indenture Trustee
101 Barclay Street
New York, New York 10286
 
Reference is hereby made to the Base Indenture, dated as of December 11, 1998
(the “Indenture”), among Bishop’s Gate Residential Mortgage Trust, as Issuer,
and The Bank of New York, as Indenture Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
 
This is to certify that, based solely on certificates we have received in
writing, by tested telex or by electronic transmissions from noteholders
appearing in our records as persons being entitled to a portion of the original
principal amount of the Series __ Notes (the “Notes”) equal to, as of the date
hereof, U.S. $________ (our “Noteholders”), certificates with respect to such
portion, substantially to the effect set forth in Exhibit C to the Indenture.
 
We further certify (i) that we are not making available herewith for exchange
any portion of the Temporary Global Note excepted in such certificates and (ii)
that as of the date hereof we have not received any notification from any of our
Noteholders to the effect that the statements made by such Noteholder with
respect to any portion of the part submitted herewith for exchange are no longer
true and cannot be relied upon as at the date hereof. We understand that this
certification is required in connection with certain securities laws of the
United States. In connection therewith, if administrative or legal proceedings
are commenced or threatened in connection with this certificate is or would be
relevant, we irrevocably authorized you to produce this certification to any
interested party in such proceedings.
 
Dated: __________, 199__* 
 
Yours faithfully,
 
B-1

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MORGAN GUARANTY TRUST COMPANY OF NEW YORK, Brussels office, as operator of the
Euroclear System
 
or
 
CEDEL, Société Anonyme
 
 
By:
   
Name:
   
Title
 

 

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*To be dated no earlier than the earliest of the Exchange Date or the relevant
Interest Payment Date or the redemption date (as the case may be).
 

B-2

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EXHIBIT C
 
FORM OF CERTIFICATE OF BENEFICIAL OWNERSHIP
 
Re:  Bishop’s Gate Residential Mortgage Trust
Residential Mortgage Loan Medium-Term Notes, Series [____] (the “Securities”)
 
If the Securities are of the category contemplated in Section 230.903(c)(3) of
Regulation S under the Securities Act of 1933, as amended (the “Act”), then this
is to certify that, except as set forth below, (i) in the case of debt
securities, the Securities are beneficially owned by (a) non-U.S. persons or (b)
U.S. persons who purchased the Securities in transactions which did not require
registration under the Act; or (ii) in the case of equity securities, the
Securities are owned by (x) non-U.S. persons (and such person(s) are not
acquiring the Securities for the account or benefit of U.S. person(s)) or (y)
U.S. person(s) who purchased the Securities in a transaction which did not
require registration under the Act. If this certification is being delivered in
connection with the exercise of warrants pursuant to Section 230.902(m) of
Regulation S under the Act, then this is further to certify that, except as set
forth below, the Securities are being exercised by and on behalf of non-U.S.
person(s). As used in this paragraph the terms “U.S. person” has the meaning
given to it by Regulation S under the Act.
 
As used herein, “United States” means the United States of America (including
the States and the District of Columbia); and its “possessions” include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
 
We undertake to advise you promptly by tested telex on or prior to the date on
which you intend to submit your certification relating to the Securities held by
you for our account in accordance with your operating procedures if any
applicable statement herein is not correct on such date, and in the absence of
any such notification it may be assumed that this certification applies as of
such date.
 
This certification excepts and does not relate to U.S. $ __________ of such
interest in the Securities in respect of which we are not able to certify and as
to which we understand exchange and delivery of definitive Securities (or, if
relevant, exercise of any rights or collection of any interest) cannot be made
until we do so certify.
 
C-1

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We understand that this certification is required in connection with certain tax
laws and, if applicable, certain securities laws of the United States. In
connection therewith, if administrative or legal proceedings are commenced or
threatened in connection with which this certification is or would be relevant,
we irrevocably authorize you to produce this certification to any interested
party in such proceedings.
 
Dated: __________, 199__* 
 
 
By:
   
As, or as agent for, the beneficial owner(s) of the Securities to which this
certificate relates.

 

 

--------------------------------------------------------------------------------

* Not earlier than 15 days prior to the certification event to which the
certification relates.
 

C-2

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EXHIBIT D
 
FORM OF MONTHLY CERTIFICATE
 
BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST
RESIDENTIAL MORTGAGE LOAN MEDIUM-TERM NOTES
 
The undersigned, duly authorized representatives of BISHOP’S GATE RESIDENTIAL
MORTGAGE TRUST, a Delaware business trust (the “Issuer”), pursuant to the Trust
Indenture, dated as of December 11, 1998 (hereinafter as such agreement may have
been, or may be from time to time, supplemented, amended or otherwise modified,
the “Base Indenture”), between the Issuer, as Issuer, and THE BANK OF NEW YORK,
as Indenture Trustee, do hereby certify to the best of their knowledge after
reasonable investigation that:
 
1. Capitalized terms used in this certificate have the respective meanings set
forth in the Base Indenture, or in the case of a particular Series of Notes, the
related Supplement. This certificate is delivered pursuant to Section 4.1(a) of
the Base Indenture.
 
2. The undersigned are Authorized Officers of the Issuer.
 
3. The date of this certificate is a Determination Date under the Base
Indenture. Attached hereto as Schedule I is a true and correct copy of the
Monthly Certificate to be delivered on the Determination Date pursuant to
Section 4.1(a) of the Base Indenture.
 
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
certificate this ____ day of __________, 199__.
 
BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST
 
 
By:
   
Name:
   
Title
 
 
By:
   
Name:
   
Title
 

D-1

--------------------------------------------------------------------------------

 
SCHEDULE I
 
1. The total amount to be distributed to the Noteholders (expressed as a dollar
amount per $1,000) on the next succeeding Distribution Date is equal to (for
each Series of Notes and each Class of each Series):
 
Series
%
 
Class
 
%
Class
 
%
Series
%
 
Class
 
%
Class
 
%
etc.     

 
 
2. (a) The aggregate amount to be distributed to the Noteholders (expressed as a
dollar amount per $1,000) on the next succeeding Distribution Date in respect of
principal is equal to (for each Series of Notes and each Class of each Series):
 
Series
%
 
Class
 
%
Class
 
%
Series
%
 
Class
 
%
Class
 
%
etc.     

 
 
(b) The aggregate amount to be distributed to the Noteholders (expressed as a
dollar amount per $1,000) on the next succeeding Distribution Date in respect of
interest is equal to (for each Series of Notes and each Class of each Series):
 
Series
%
 
Class
 
%
Class
 
%
Series
%
 
Class
 
%
Class
 
%
etc.     

 
 
3. The following Liens exist on the Collateral (excluding Liens granted pursuant
to the Indenture and the other Program Documents or permitted thereunder):
 
[List as applicable]
 

 

D-2

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EXHIBIT E
 
FORM OF MONTHLY NOTEHOLDERS’ STATEMENT
 
BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST
 
RESIDENTIAL MORTGAGE LOAN MEDIUM-TERM NOTES
 
Series _____
 
Under Section 4.1(b) of the Base Indenture, dated as of December 11, 1998
(hereinafter as such agreement may have been, or may be from time to time,
supplemented, amended or otherwise modified, the “Base Indenture”), between
BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST, a Delaware business trust (the
“Issuer”), and THE BANK OF NEW YORK, as Indenture Trustee (the “Indenture
Trustee”), the Issuer is required to prepare certain information each month for
the Indenture Trustee regarding current distributions to Noteholders. The
information which is required to be prepared with respect to the Distribution
Date of, 199_ is set forth below. Capitalized terms used herein have their
respective meanings set forth in the Definitions List attached as Schedule I to
the Base Indenture, or in the case of a particular Series of Notes, the related
Supplement.
 

 
NOTE:
Information contained herein with respect to each Series will only be

 
distributed to holders of Notes with respect to such Series.
 
I. DISTRIBUTIONS TO NOTEHOLDERS
 
As of __________, the distributions with respect to principal and interest are
computed as the result of the following:
 
A. With respect to Interest Payments on Series 1998-2 Notes:

 
(1)
The Series 1998-2 Note Rate: ____%, times

 
(2)
The outstanding principal amount of the Series 1998-2 Notes, times

  (3) The actual number of days in such Series 1998-2 Interest Period divided by
360: , plus 

 
(4)
Any unpaid Series 1998-2 Shortfall (plus interest accrued thereon): $______.

 
Series 1998-2 interest ((1) * (2) * (3)) + (4) = $_________
 
B. With respect to the Principal Payment on the Series 1998-2 Notes:
On the Series 1998-2 Final Distribution Date (otherwise $0): $_______
C. The total amount distributed to the: Series 1998-2 Noteholders: (A + B):
$______.
 
E-1

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II. LIENS AND DEFAULTS
 
The following Liens exist on the Collateral (excluding Liens granted pursuant to
the Indenture and the other Program Documents or permitted thereunder):
 
[List as applicable]
 
IN WITNESS WHEREOF, the undersigned have duly executed this certificate this day
of __________, 199__.
 
BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST
 
 
By:
   
Name:
   
Title
 
 
By:
   
Name:
   
Title
 

 

 
 E-2

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