HOME LOAN TRUST 2003-HI1

                                     Issuer

                                       AND

                               JPMORGAN CHASE BANK

                                Indenture Trustee

                                    INDENTURE

                           Dated as of March 28, 2003
                   __________________________________________

                             HOME LOAN-BACKED NOTES

                                  _____________




<PAGE>



                        RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
                            ACT OF 1939 AND INDENTURE PROVISIONS*

TRUST INDENTURE
ACT SECTION                                          INDENTURE SECTION
  310(a)(1).......................................             6.11
      (a)2).......................................             6.11
     (a)(3).......................................             6.10
     (a)(4).......................................        Not Applicable
     (a)(5).......................................             6.11
        (b).......................................          6.08, 6.11
        (c).......................................        Not Applicable
     311(a).......................................             6.12
        (b).......................................             6.12
        (c).......................................        Not Applicable
     312(a).......................................         7.01, 7.02(a)
        (b).......................................            7.02(b)
        (c).......................................            7.02(c)
     313(a).......................................             7.04
        (b).......................................             7.04
        (c).......................................      7.03(a)(iii), 7.04
        (d).......................................             7.04
     314(a).......................................         3.10, 7.03(a)
        (b).......................................             3.07
     (c)(1).......................................       8.05(c), 10.01(a)
     (c)(2).......................................       8.05(c), 10.01(a)
     (c)(3).......................................        Not Applicable
     (d)(1).......................................       8.05(c), 10.01(b)
     (d)(2).......................................       8.05(c), 10.01(b)
     (d)(3).......................................       8.05(c), 10.01(b)
        (e).......................................           10.01(a)
     315(a).......................................            6.01(b)
        (b).......................................             6.05
        (c).......................................            6.01(a)
        (d).......................................            6.01(c)
     (d)(1).......................................            6.01(c)
     (d)(2).......................................            6.01(c)
     (d)(3).......................................            6.01(c)
        (e).......................................             5.13
316(a)(1)(A)......................................             5.11
316(a)(1)(B)......................................             5.12
  316(a)(2).......................................        Not applicable
     316(b).......................................             5.07
  317(a)(1).......................................             5.04
  317(a)(2).......................................            5.03(d)
     317(b).......................................            3.03(a)
     318(a).......................................             10.07

*This reconciliation and tie shall not, for any purpose, be deemed to be part of
the within indenture.



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<TABLE>

<CAPTION>



                                TABLE OF CONTENTS

Section                                                                                   Page


                                         Definitions
<S>              <C>                                                                        <C>
        Section  1.01.Definitions............................................................2
        Section  1.02.Incorporation by Reference of Trust Indenture Act......................2
        Section  1.03.Rules of Construction..................................................2

                                          Article II

                                  Original Issuance of Notes
        Section  2.01.Form...................................................................4
        Section  2.02.Execution, Authentication and Delivery.................................4

                                         Article III

                                          Covenants
        Section  3.01.Collection of Payments with respect to the Grantor Trust Certificate...5
        Section  3.02.Maintenance of Office or Agency........................................5
        Section  3.03.Money for Payments To Be Held in Trust; Paying Agent...................5
        Section  3.04.Existence..............................................................6
        Section  3.05.Payment of Principal and Interest; Defaulted Interest..................7
        Section  3.07.Opinions as to Trust Estate...........................................10
        Section  3.08.Performance of Obligations; Servicing Agreement.......................11
        Section  3.09.Negative Covenants....................................................11
        Section  3.10.Annual Statement as to Compliance.....................................12
        Section  3.11.Recording of Assignments..............................................12
        Section  3.12.Representations and Warranties Concerning the Grantor Trust Certificate
         ...................................................................................12
        Section  3.13.Reserved..............................................................13
        Section  3.14.Reserved..............................................................13
        Section  3.15.Investment Company Act................................................13
        Section  3.16.Issuer May Consolidate, etc...........................................13
        Section  3.17.Successor or Transferee...............................................14
        Section  3.18.No Other Business.....................................................15
        Section  3.19.No Borrowing..........................................................15
        Section  3.20.Guarantees, Loans, Advances and Other Liabilities.....................15
        Section  3.21.Capital Expenditures..................................................15
        Section  3.22.Owner Trustee Not Liable for the Certificate or Related Documents.....15
        Section  3.23.Restricted Payments...................................................15
        Section  3.24.Notice of Events of Default...........................................16
        Section  3.25.Further Instruments and Acts..........................................16
        Section  3.26.Statements to Noteholders.............................................16
        Section  3.27.Allocation of Liquidation Loss Amounts


                                              i

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        Section  3.28.Reserved..............................................................17
        Section  3.29.Determination of Class A-1 Note Rate..................................17
        Section  3.30.Liquidation on Final Scheduled Payment Date
        Section  3.31.No Recourse
        Section  3.32.Additional UCC Representations and Warranties

                                          Article IV

                      The Notes; Satisfaction and Discharge of Indenture

        Section  4.01.The Notes.............................................................19
        Section  4.02.Registration of and Limitations on Transfer and Exchange of Notes;
        Appointment of Certificate Registrar................................................19
        Section  4.03.Mutilated, Destroyed, Lost or Stolen Notes............................21
        Section  4.04.Persons Deemed Owners.................................................21
        Section  4.05.Cancellation..........................................................21
        Section  4.06.Book-Entry Notes......................................................22
        Section  4.07.Notices to Depository.................................................23
        Section  4.08.Definitive Notes......................................................23
        Section  4.09.Tax Treatment.........................................................23
        Section  4.10.Satisfaction and Discharge of Indenture...............................23
        Section  4.11.Application of Trust Money............................................24
        Section  4.12.Reserved..............................................................25
        Section  4.13.Repayment of Monies Held by Paying Agent..............................25
        Section  4.14.Temporary Notes.......................................................25


                                          Article V
                                     Default and Remedies


        Section  5.01.Events of Default.....................................................26
        Section  5.02.Acceleration of Maturity; Rescission and Annulment....................26
        Section  5.03.Collection of Indebtedness and Suits for Enforcement by Indenture Trustee
         ...................................................................................26
        Section  5.04.Remedies; Priorities..................................................28
        Section  5.05.Optional Preservation of the Trust Estate.............................30
        Section  5.06.Limitation of Suits...................................................30
        Section  5.07.Rights of Noteholders to Receive Principal and Interest...............31
        Section  5.08.Restoration of Rights and Remedies....................................31
        Section  5.09.Rights and Remedies Cumulative........................................31
        Section  5.10.Delay or Omission Not a Waiver........................................31
        Section  5.11.Control by Noteholders................................................31
        Section  5.12.Waiver of Past Defaults...............................................32
        Section  5.13.Undertaking for Costs.................................................32
        Section  5.14.Waiver of Stay or Extension Laws......................................32


                                              ii

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        Section  5.15.Sale of Trust Estate..................................................33
        Section  5.16.Action on Notes.......................................................34

        Section  6.01.Duties of Indenture Trustee...........................................35
        Section  6.02.Rights of Indenture Trustee...........................................36
        Section  6.03.Individual Rights of Indenture Trustee................................36
        Section  6.04.Indenture Trustee's Disclaimer........................................36
        Section  6.05.Notice of Event of Default............................................37
        Section  6.06.Reports by Indenture Trustee to Holders...............................37
        Section  6.07.Compensation and Indemnity............................................37
        Section  6.08.Replacement of Indenture Trustee......................................37
        Section  6.09.Successor Indenture Trustee by Merger.................................38
        Section  6.10.Appointment of Co-Indenture Trustee or Separate Indenture Trustee.....39
        Section  6.11.Eligibility; Disqualification.........................................40
        Section  6.12.Preferential Collection of Claims Against Issuer......................40
        Section  6.13.Representations and Warranties........................................40
        Section  6.14.Directions to Indenture Trustee.......................................41
        Section  6.15.Indenture Trustee May Own Securities..................................41

                                         Article VII
                                Noteholders' Lists and Reports

        Section  7.01.Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders
         ...................................................................................42
        Section  7.02.Preservation of Information; Communications to Noteholders............42
        Section  7.03.Reports by Issuer.....................................................42
        Section  7.04.Reports by Indenture Trustee..........................................43
        Section  7.05.Exchange Act Reporting.

                                         Article VIII

                             Accounts, Disbursements and Releases


        Section  8.01.Collection of Money...................................................44
        Section  8.02.Trust Accounts........................................................44
        Section  8.03.Officer's Certificate.................................................44
        Section  8.04.Termination Upon Distribution to Noteholders..........................45
        Section  8.05.Release of Trust Estate...............................................45
        Section  8.06.Surrender of Notes Upon Final Payment.................................45

                                          Article IX

                                   Supplemental Indentures




                                             iii

<PAGE>



        Section  9.01.Supplemental Indentures Without Consent of Noteholders................46
        Section  9.02.Supplemental Indentures With Consent of Noteholders...................47
        Section  9.03.Execution of Supplemental Indentures..................................49
        Section  9.04.Effect of Supplemental Indenture......................................49
        Section  9.05.Conformity with Trust Indenture Act...................................49
        Section  9.06.Reference in Notes to Supplemental Indentures.........................49

                                          Article X

                                        Miscellaneous


        Section  10.01.      Compliance Certificates and Opinions, etc......................50
        Section  10.02.      Form of Documents Delivered to Indenture Trustee...............51
        Section  10.03.      Acts of Noteholders............................................52
        Section  10.04.      Notices, etc., to Indenture Trustee, Issuer and Rating Agencies
         ...................................................................................52
        Section  10.05.      Notices to Noteholders; Waiver.................................53
        Section  10.06.      Alternate Payment and Notice Provisions........................54
        Section  10.07.      Conflict with Trust Indenture Act..............................54
        Section  10.08.      Effect of Headings.............................................54
        Section  10.09.      Successors and Assigns.........................................54
        Section  10.10.      Separability...................................................54
        Section  10.11.      Benefits of Indenture..........................................54
        Section  10.12.      Legal Holidays.................................................54
        Section  10.13.      GOVERNING LAW..................................................55
        Section  10.14.      Counterparts...................................................55
        Section  10.15.      Recording of Indenture.........................................55
        Section  10.16.      Issuer Obligation..............................................55
        Section  10.17.      No Petition....................................................55
        Section  10.18.      Inspection.....................................................55
</TABLE>

Signatures and Seals
Acknowledgments

EXHIBITS

Exhibit A-1       Form of Class A Notes (other than the Class A-IO Notes)

Exhibit A-2       Form of Class A-IO Notes

Exhibit A-3       Form of Class M Notes

Exhibit B         Form of Back-up Certification to Form 10-K Certificate

Appendix A        Definitions



                                              iv

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                  This is the  Indenture,  dated as of March 28,  2003,  between
HOME LOAN TRUST 2003-HI1,  a Delaware statutory trust, as Issuer (the "Issuer"),
and JPMorgan Chase Bank, as Indenture Trustee (the "Indenture Trustee"),

                                       WITNESSETH THAT:

                  Each party  hereto  agrees as follows  for the  benefit of the
other party and for the equal and ratable benefit of the Holders of the Issuer's
Series 2003-HI1 Home Loan-Backed Notes (the "Notes").

                                 GRANTING CLAUSE

                  The  Issuer  hereby  Grants to the  Indenture  Trustee  at the
Closing Date, as trustee for the benefit of the Holders of the Notes, all of the
Issuer's  right,  title and interest in and to whether now existing or hereafter
created (a) the Grantor Trust Certificate, (b) all funds on deposit from time to
time in the Payment Account and in all proceeds thereof; and (c) all present and
future claims,  demands, causes and choses in action in respect of any or all of
the foregoing  and all payments on or under,  and all proceeds of every kind and
nature whatsoever in respect of, any or all of the foregoing and all payments on
or under, and all proceeds of every kind and nature whatsoever in the conversion
thereof, voluntary or involuntary,  into cash or other liquid property, all cash
proceeds,  accounts, accounts receivable,  notes, drafts,  acceptances,  checks,
deposit  accounts,  rights to payment of any and every kind,  and other forms of
obligations  and  receivables,  instruments and other property which at any time
constitute  all  or  part  of or are  included  in  the  proceeds  of any of the
foregoing (collectively, the "Trust Estate" or the "Collateral").

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

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


                                              1

<PAGE>



                                          Article I

                                         Definitions

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

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

                  "Commission" means the Securities and Exchange Commission.

                  "indenture securities" means the Notes.

                  "indenture security holder" means a Noteholder.

                  "indenture to be qualified" means this Indenture.

          "indenture  trustee" or  "institutional  trustee"  means the Indenture
     Trustee.

          "obligor" on the indenture  securities  means the Issuer and any other
     obligor on the indenture securities.

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

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

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

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

                      (iii) "or" is not exclusive;

                      (iv) "including" means including without limitation;

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



                                              2

<PAGE>



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



                                              3

<PAGE>



                                          Article II

                                  Original Issuance of Notes

        Section  2.01.Form.  The Notes,  together with the  Indenture  Trustee's
certificate of  authentication,  shall be in substantially the form set forth in
Exhibit  A-1,  A-2  and  A-3,  with  such  appropriate  insertions,   omissions,
substitutions  and  other  variations  as are  required  or  permitted  by  this
Indenture  and may have such letters,  numbers or other marks of  identification
and such legends or endorsements placed thereon as may,  consistently  herewith,
be  determined  by the  officers  executing  such Notes,  as  evidenced by their
execution of the Notes.  Any portion of the text of any Note may be set forth on
the reverse thereof,  with an appropriate  reference  thereto on the face of the
Note.

        The Notes shall be  typewritten,  printed,  lithographed  or engraved or
produced by any  combination  of these methods  (with or without steel  engraved
borders),  all as determined by the Authorized Officers executing such Notes, as
evidenced by their execution of such Notes.  The terms of the Notes set forth in
Exhibit A-1, A-2 and A-3 are part of the terms of this Indenture.

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

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

        The Indenture Trustee shall upon Issuer Request authenticate and deliver
Notes for original issue in an aggregate initial principal amount of $53,583,000
with respect to the Class A-1 Notes,  $29,892,000  with respect to the Class A-2
Notes,  $32,633,000 with respect to the Class A-3 Notes, $9,962,000 with respect
to the  Class  A-4  Notes,  $9,910,000  with  respect  to the  Class A- 5 Notes,
$18,829,000 with respect to the Class A-6 Notes, $15,066,000 with respect to the
Class A-7 Notes,  18,000,000  with  respect to the Class M-1 Notes,  $15,750,000
with  respect to the Class M-2 Notes and  $13,500,000  with respect to the Class
M-3 Notes.  The Indenture  Trustee shall upon Issuer  Request  authenticate  and
deliver  Notes for original  issue in an aggregate  initial  notional  amount of
$9,000,000 with respect to the Class A-IO Notes.

        The  Notes  shall be dated the date of their  authentication.  The Notes
shall be issuable as registered  Notes.  The Class A Notes (other than the Class
A-IO Notes) and the Class M-1 Notes  shall be  issuable  in the minimum  initial
Note Balances of $25,000 and in integral multiples of $1 in excess thereof.  The
Class M-2 Notes and Class M-3 Notes shall be  issuable  in the  minimum  initial
Note Balances of $250,000 and in integral multiples of $1 in excess thereof. The
Class A-IO Notes shall be issuable in the  minimum  initial  Notional  Amount of
$1,000,000 and in integral multiples of $1 in excess thereof.



                                              4

<PAGE>



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


                                              5

<PAGE>



                                         Article III

                                          Covenants

        Section  3.01.Collection  of Payments  with respect to the Grantor Trust
Certificate.  The Indenture Trustee shall establish and maintain with itself the
Payment  Account in which the Indenture  Trustee shall,  subject to the terms of
this  paragraph,  deposit,  on the same day as it is  received  from the Grantor
Trustee,  each remittance  received by the Indenture Trustee with respect to the
Grantor  Trust  Certificate.  The  Indenture  Trustee shall make all payments of
principal of and interest on the Notes,  subject to Section 3.03, as provided in
Section 3.05 herein from monies on deposit in the Payment Account.

        Section  3.02.Maintenance  of Office or Agency. The Issuer will maintain
in the City of New York, an office or agency where,  subject to  satisfaction of
conditions  set forth  herein,  Notes may be  surrendered  for  registration  of
transfer  or  exchange,  and where  notices and demands to or upon the Issuer in
respect  of the  Notes and this  Indenture  may be  served.  The  Issuer  hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes.  If at any time the Issuer  shall fail to maintain  any such office or
agency or shall fail to furnish the Indenture  Trustee with the address thereof,
such  surrenders,  notices and  demands  may be made or served at the  Corporate
Trust Office,  and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.

        Section  3.03.Money for Payments To Be Held in Trust;  Paying Agent. (a)
As  provided in Section  3.01,  all  payments  of amounts  due and payable  with
respect to any Notes that are to be made from amounts withdrawn from the Payment
Account  pursuant  to Section  3.01 shall be made on behalf of the Issuer by the
Indenture  Trustee or by the Paying Agent,  and no amounts so withdrawn from the
Payment Account for payments of Notes shall be paid over to the Issuer except as
provided in this  Section  3.03.  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 agree with the  Indenture  Trustee
(and if the Indenture Trustee acts as Paying Agent it hereby so agrees), subject
to the provisions of this Section 3.03, that such Paying Agent will:

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

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

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



                                              6

<PAGE>



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

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

                      (vi) deliver to the Indenture Trustee a copy of the report
        to Noteholders  prepared with respect to each Payment Date by the Master
        Servicer pursuant to Section 4.01 of the Servicing Agreement.

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

        Subject to applicable  laws with respect to escheat of funds,  any money
held by the  Indenture  Trustee or any Paying  Agent in trust for the payment of
any amount due with  respect to any Note and  remaining  unclaimed  for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer  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,
shall at the expense and direction of the Issuer cause to be published  once, in
an  Authorized  Newspaper,  notice that such money  remains  unclaimed and that,
after a date  specified  therein,  which shall not be less than 30 days from the
date of such  publication,  any unclaimed  balance of such money then  remaining
will be repaid to the Issuer.  The Indenture  Trustee may also adopt and employ,
at the  expense  and  direction  of the Issuer,  any other  reasonable  means of
notification of such repayment (including, but not limited to, mailing notice of
such  repayment  to  Holders  whose  Notes  have been  called  but have not been
surrendered  for  redemption  or whose  right to or  interest  in monies due and
payable  but not  claimed is  determinable  from the  records  of the  Indenture
Trustee  or of any  Paying  Agent,  at the last  address of record for each such
Holder).

        Section  3.04.Existence.  The  Issuer  will  keep  in  full  effect  its
existence,  rights and  franchises  as a  statutory  trust under the laws of the
State of Delaware  (unless it becomes,  or any successor  Issuer hereunder is or
becomes,  organized under the laws of any other state or of the United States of
America, in which case the Issuer will keep in full effect its existence, rights
and franchises  under the laws of such other  jurisdiction)  and will obtain and
preserve its  qualification  to do business in each  jurisdiction  in which such
qualification   is  or  shall  be   necessary   to  protect  the   validity  and
enforceability  of this Indenture,  the Notes, the Grantor Trust Agreement,  the
Grantor Trust Certificate and each other instrument or agreement included in the
Trust Estate.


                                              7

<PAGE>




        Section 3.05.Payment of Principal and Interest;  Defaulted Interest. (a)
On each Payment Date from amounts on deposit in the Payment  Account (other than
amounts deposited  constituting  prepayment charges), the Paying Agent shall pay
to  the   Noteholders,   the   Certificate   Paying   Agent  on  behalf  of  the
Certificateholder  and to other  Persons the amounts to which they are entitled,
as set forth in the statements  delivered to the Indenture  Trustee  pursuant to
Section 4.01 of the Servicing Agreement, as set forth in this Section 3.05.

        (b) On each Payment Date,  Interest  Collections shall be distributed to
the Notes and the B Component in the following order of priority:

                      (i) first,  to the Senior Notes,  Accrued Note Interest on
        that Class for such Payment Date,  plus any unpaid Accrued Note Interest
        remaining unpaid from any prior Payment Date, pro rata, to the extent of
        the Interest Collections for that Payment Date;

                      (ii) second, to the Class M-1 Notes, Accrued Note Interest
        on that  Class for such  Payment  Date,  plus any  unpaid  Accrued  Note
        Interest  remaining unpaid from any prior Payment Date, to the extent of
        Interest  Collections  for  the  Payment  Date  after  distributions  of
        interest to the Senior Notes;

                      (iii) third, to the Class M-2 Notes, Accrued Note Interest
        on that  Class for such  Payment  Date,  plus any  unpaid  Accrued  Note
        Interest  remaining unpaid from any prior Payment Date, to the extent of
        Interest  Collections  for  the  Payment  Date  after  distributions  of
        interest to the Senior Notes and the Class M-1 Notes;

                      (iv) fourth, to the Class M-3 Notes, Accrued Note Interest
        on that  Class for such  Payment  Date,  plus any  unpaid  Accrued  Note
        Interest  remaining unpaid from any prior Payment Date, to the extent of
        Interest  Collections  for  the  Payment  Date  after  distributions  of
        interest  to the  Senior  Notes,  the  Class M-1 Notes and the Class M-2
        Notes; and

                      (v) fifth,  to the  Certificate  Paying Agent on behalf of
        the  Certificateholder in respect of the B Component,  Accrued Component
        Interest  thereon  for  such  Payment  Date,  plus  any  unpaid  Accrued
        Component Interest thereon remaining unpaid from any prior Payment Date,
        to the  extent of  Interest  Collections  for that  Payment  Date  after
        distributions of interest to the Senior Notes and Class M Notes.

        (c) On each Payment Date, other than the Payment Date in April 2028, the
Principal  Distribution  Amount shall be distributed  in the following  order of
priority:

                  (i) first, the Senior Principal  Distribution  Amount shall be
        distributed  sequentially to the Class A-1 Notes, Class A-2 Notes, Class
        A-3 Notes,  Class A-4 Notes,  Class A-5 Notes, Class A-6 Notes and Class
        A-7 Notes,  in that order,  in each case until the Note Balance  thereof
        has been reduced to zero;

                  (ii)second,  the Class M-1 Principal Distribution Amount shall
        be distributed to the Class M-1 Notes until the Note Balance thereof has
        been reduced to zero;


                                              8

<PAGE>



                  (iii) third, the Class M-2 Principal Distribution Amount shall
        be distributed to the Class M-2 Notes until the Note Balance thereof has
        been reduced to zero;

                  (iv) fourth, the Class M-3 Principal Distribution Amount shall
        be distributed to the Class M-3 Notes until the Note Balance thereof has
        been reduced to zero;

                  (v) fifth, the B Component Principal Distribution Amount shall
        be  distributed  to  the  Certificate  Paying  Agent  on  behalf  of the
        Certificateholder  in respect  of the B  Component  until the  Component
        Principal Balance thereof has been reduced to zero; and

                  (vi) sixth,  the balance,  if any,  remaining of the Principal
        Distribution  Amount  after the  distributions  described in clauses (i)
        through  (v)  hereof  above  shall be paid to the  Class M Notes and the
        Certificate in accordance with the provisions for the payment of the Net
        Monthly   Excess  Cash  Flow  as  described  in  subsection  (d)  below,
        commencing with clause (iii) thereof.

        In the event that the Class M Notes and B Component have been reduced to
zero while any Class A Note is  outstanding,  all priorities  relating to Senior
Principal Distribution Amount referenced above will be disregarded.  Instead, an
amount equal to the Senior Principal  Distribution Amount will be distributed to
the Class A Notes  remaining  (other  than the Class  A-IO  Notes),  pro rata in
accordance with their respective outstanding Note Balances.

        On the Payment Date in April 2028,  principal will be due and payable on
each Class of Notes  (other than the Class A-IO  Notes) and the B  Component  in
amounts equal to the related Note Balance and Component  Principal  Balance,  if
any.  In no  event  will  principal  payments  on any  Class  of  Notes or the B
Component  on any  Payment  Date exceed the related  Note  Balance or  Component
Principal Balance on that date.

        (d) On each  Payment  Date,  the Net  Monthly  Excess  Cash Flow will be
distributed in the following order of priority:

                      (i)  first,   to  pay  the  aggregate   Liquidation   Loss
        Distribution  Amount for that  Payment Date to the Notes (other than the
        Class A-IO Notes) and the B Component;

                      (ii)  second,  to pay to the Reserve  Increase  Amount for
        that Payment Date to the Notes (other than the Class A-IO Notes) and the
        B  Component,  with  any  amount  payable  to  the B  Component  to  the
        Certificate Paying Agent on behalf of the  Certificateholder  in respect
        of the B Component;

                      (iii) third,  to pay any  Allocable  Loss  Interest on the
        Class M-1 Notes until fully reimbursed;

                      (iv)  fourth,   to  reimburse  the  Class  M-1  Notes  for
        Liquidation  Loss Amounts  (other than Excess Loss  Amounts)  previously
        allocated thereto pursuant to Section 3.27 until fully reimbursed;



                                              9

<PAGE>



                      (v) fifth, to pay any Allocable Loss Interest on the Class
        M-2 Notes until fully reimbursed;

                      (vi)  sixth,   to  reimburse   the  Class  M-2  Notes  for
        Liquidation  Loss Amounts  (other than Excess Loss  Amounts)  previously
        allocated thereto pursuant to Section 3.27 until fully reimbursed;

                      (vii)  seventh,  to pay any Allocable Loss Interest on the
        Class M-3 Notes, until fully reimbursed;

                      (viii)  eighth,  to  reimburse  the  Class  M-3  Notes for
        Liquidation  Loss Amounts  (other than Excess Loss  Amounts)  previously
        allocated thereto pursuant to Section 3.27 until fully reimbursed;

                      (ix) ninth,  to pay any  Allocable  Loss Interest on the B
        Component   to  the   Certificate   Paying   Agent  on   behalf  of  the
        Certificateholder in respect of the B Component until fully reimbursed;

                      (x) tenth,  to reimburse the B Component  for  Liquidation
        Loss  Amounts  (other  than Excess Loss  Amounts)  previously  allocated
        thereto  pursuant to Section  3.27 to the  Certificate  Paying  Agent on
        behalf of the  Certificateholder  in  respect of the B  Component  until
        fully reimbursed;

                      (xi) eleventh,  any remaining  amounts will be distributed
        to the Certificate  Paying Agent on behalf of the  Certificateholder  in
        respect of the Residual Component.


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

        (f) The amounts paid to Noteholders shall be paid to the Notes and the B
Component  in  accordance  with the  applicable  percentage  as set forth in the
definition of Note Rate and Component Interest Rate, respectively. Interest will
accrue on the Notes  (other than the Class A-1 Notes) and the B Component on the
basis of a 360-day year consisting of twelve 30-day months. Interest will accrue
on the Class A-1 Notes on the basis of a 360-day  year and the actual  number of
days in the related Interest Accrual Period.

        (g) Any  installment  of interest or principal,  if any,  payable on any
Note  that  is  punctually  paid  or  duly  provided  for by the  Issuer  on the
applicable  Payment  Date  shall,  if such Holder  holds  Notes of an  aggregate
initial  Note  Balance  or,  with  respect to the Class A-IO  Notes,  an initial
Notional Amount, of at least $1,000,000, be paid to each Holder of record on the
preceding  Record Date, by wire  transfer to an account  specified in writing by
such Holder reasonably satisfactory to the Indenture Trustee as of the preceding
Record Date or in all other cases or if no such instructions have been delivered
to the Indenture  Trustee,  by check or money order to such Noteholder mailed to
such Holder's  address as it appears in the Note Register the amount required to
be distributed to


                                              10

<PAGE>



such Holder on such Payment Date pursuant to such Holder's Securities; provided,
however,  that the  Indenture  Trustee  shall not pay to such Holders any amount
required to be withheld from a payment to such Holder by the Code.

        (h) The Note  Balance of each Note  shall be due and  payable in full on
the Final  Scheduled  Payment  Date as provided in the related  form of Note set
forth in Exhibit A-1 and A-3. All principal  payments on the Notes shall be made
to the Noteholders  entitled thereto in accordance with the Percentage Interests
represented by such Notes.  Upon written notice to the Indenture  Trustee by the
Issuer (or by the Master  Servicer on behalf of the Issuer,  pursuant to Section
8.08(c) of the Servicing  Agreement) of the Final Scheduled Payment Date for the
Notes or other final  Payment  Date,  the  Indenture  Trustee  shall  notify the
related Noteholders of record of the Final Scheduled Payment Date or other final
Payment Date,  by mail or  facsimile,  no later than five Business Days prior to
the Final Scheduled Payment Date or other final Payment Date and shall specify:

                      (i) that the  Record  Date  otherwise  applicable  to such
        Payment Date is not applicable;

                      (ii) that payment of the principal amount and any interest
        due with  respect to such Note at the Final  Scheduled  Payment  Date or
        other final  Payment  Date will be payable  only upon  presentation  and
        surrender  of such Note and shall  specify the place where such Note may
        be presented and surrendered for such final payment; and

                      (iii) the amount of any such final payment, if known.

        Section  3.06.Protection  of Trust Estate. (a) The Issuer will from time
to time execute and deliver all such  supplements and amendments  hereto and all
such  financing  statements,  continuation  statements,  instruments  of further
assurance and other  instruments,  and will take such other action  necessary or
advisable to:

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

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

                      (iii)   enforce  any   provision  of  the  Grantor   Trust
        Certificate or Grantor Trust Agreement; and

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

        (b)  Except as  otherwise  provided  in this  Indenture,  the  Indenture
Trustee  shall not remove any portion of the Trust Estate that consists of money
or is  evidenced  by an  instrument,  certificate  or  other  writing  from  the
jurisdiction  in which it was held at the  date of the most  recent  Opinion  of
Counsel delivered pursuant to Section 3.07 (or from the jurisdiction in which it
was held as


                                              11

<PAGE>



described in the Opinion of Counsel  delivered  at the Closing Date  pursuant to
Section  3.07(a),  if no Opinion of Counsel has yet been  delivered  pursuant to
Section  3.07(b))  unless the  Trustee  shall have first  received an Opinion of
Counsel  to the  effect  that the lien and  security  interest  created  by this
Indenture  with respect to such property  will  continue to be maintained  after
giving  effect to such  action or  actions.  The Issuer  hereby  designates  the
Indenture  Trustee  its agent and  attorney-in-fact  to  execute  any  financing
statement,  continuation  statement or other instrument  required to be executed
pursuant to this Section 3.06.

        Section  3.07.Opinions as to Trust Estate.  (a) On the Closing Date, the
Issuer shall furnish to the  Indenture  Trustee and the Owner Trustee an Opinion
of Counsel at the expense of the Issuer  either  stating that, in the opinion of
such  counsel,  such  action has been taken with  respect to the  recording  and
filing of this  Indenture,  any indentures  supplemental  hereto,  and any other
requisite  documents,  and with  respect  to the  execution  and  filing  of any
financing  statements and continuation  statements,  as are necessary to perfect
and  make  effective  the  lien  and  security  interest  in the  Grantor  Trust
Certificate  and reciting the details of such action,  or stating  that,  in the
opinion  of such  counsel,  no such  action is  necessary  to make such lien and
security interest effective.

        (b) On or before December 31st in each calendar year, beginning in 2003,
the Issuer shall furnish to the  Indenture  Trustee an Opinion of Counsel at the
expense of the Issuer either stating that, in the opinion of such counsel,  such
action has been taken with respect to the  recording,  filing,  rerecording  and
refiling of this  Indenture,  any indentures  supplemental  hereto and any other
requisite  documents  and  with  respect  to the  execution  and  filing  of any
financing statements and continuation statements as is necessary to maintain the
lien and security  interest in the Grantor  Trust  Certificate  and reciting the
details of such action or stating  that in the  opinion of such  counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording,  filing, re-recording and refiling of
this  Indenture,  any  indentures  supplemental  hereto and any other  requisite
documents  and  the  execution  and  filing  of  any  financing  statements  and
continuation  statements that will, in the opinion of such counsel,  be required
to maintain  the lien and  security  interest in the Grantor  Trust  Certificate
until December 31 in the following calendar year.

        Section  3.08.Performance of Obligations;  Servicing Agreement.  (a) The
Issuer will punctually perform and observe all of its obligations and agreements
contained in this  Indenture,  the Basic  Documents and in the  instruments  and
agreements included in the Trust Estate.

        (b)  The  Issuer  may  contract  with  other  Persons  to  assist  it in
performing its duties under this  Indenture,  and any performance of such duties
by a Person identified to the Indenture  Trustee in an Officer's  Certificate of
the Issuer shall be deemed to be action taken by the Issuer.

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


                                              12

<PAGE>




        (d) The Issuer may retain an administrator  and may enter into contracts
with other Persons for the  performance of the Issuer's  obligations  hereunder,
and  performance  of such  obligations  by such  Persons  shall be  deemed to be
performance of such obligations by the Issuer.

        Section 3.09.Negative  Covenants.  So long as any Notes are Outstanding,
the Issuer shall not:

                      (i) except as expressly permitted by this Indenture, sell,
        transfer,  exchange or  otherwise  dispose of the Trust  Estate,  unless
        directed to do so by the Indenture Trustee;

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

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

                      (iv) waive or impair,  or fail to assert  rights under the
        Grantor Trust Certificate, or impair or cause to be impaired the Grantor
        Trust  Certificate  or  the  Issuer's  interest  in  the  Grantor  Trust
        Certificate,  the Home Loan Purchase Agreement or in any Basic Document,
        if any such action would  materially and adversely  affect the interests
        of the Noteholders.

        Section 3.10.Annual Statement as to Compliance.  The Issuer will deliver
to the Indenture  Trustee,  within 120 days after the end of each fiscal year of
the Issuer  (commencing  with the fiscal year 2003),  an  Officer's  Certificate
stating, as to the Authorized Officer signing such Officer's Certificate, that:

                      (i) a review of the  activities  of the Issuer during such
        year and of its  performance  under this  Indenture  and the Owner Trust
        Agreement has been made under such Authorized Officer's supervision; and

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


                                              13

<PAGE>




        Section  3.11.Recording  of  Assignments.  The Issuer shall  enforce the
obligation  of the Seller  under the Home Loan  Purchase  Agreement to submit or
cause to be submitted for recording all Assignments of Mortgages  within 60 days
of receipt of recording information by the Master Servicer.

        Section 3.12.Representations and Warranties Concerning the Grantor Trust
Certificate. The Indenture Trustee, as pledgee of the Grantor Trust Certificate,
has the  benefit of the  representations  and  warranties  made by the Seller in
Section 3.1(a) and Section 3.1(b) of the Home Loan Purchase Agreement concerning
the Home Loans and the right to enforce the remedies against the Seller provided
in such  Section  3.1(a) or  Section  3.1(b) to the same  extent as though  such
representations and warranties were made directly to the Indenture Trustee.

        Section  3.13.Reserved.

        Section  3.14.Reserved.

        Section  3.15.Investment  Company  Act.  The Issuer  shall not become an
"investment  company" or "controlled by" an investment company as such terms are
defined in the  Investment  Company Act of 1940, as amended (or any successor or
amendatory  statute),  and the rules and  regulations  thereunder  (taking  into
account not only the general  definition  of the term  "investment  company" but
also any available  exceptions to such general definition);  provided,  however,
that the Issuer shall be in  compliance  with this Section 3.15 if it shall have
obtained an order  exempting it from  regulation as an  "investment  company" so
long as it is in compliance with the conditions imposed in such order.

        Section  3.16.Issuer  May  Consolidate,  etc.  (a) The Issuer  shall not
consolidate or merge with or into any other Person, unless:

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

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

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



                                              14

<PAGE>



                      (iv) the Issuer shall have  received an Opinion of Counsel
        (and shall have delivered  copies  thereof to the Indenture  Trustee) to
        the effect that such  transaction will not have any material adverse tax
        consequence to the Issuer, any Noteholder or any Certificateholder;

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

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

        (b) The Issuer  shall not convey or transfer  any of its  properties  or
assets,  including those included in the Trust Estate, to any Person (other than
the initial  transfer of the Owner Trust  Certificate  by the  Depositor  to the
Seller,  by the Seller to RFC Asset Holdings II, Inc., by RFC Asset Holdings II,
Inc.  to the  Class B Issuer  and by the  Class B Issuer  to the Class B Trustee
under the Class B Indenture), unless:

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

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

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

                      (iv) the Issuer shall have  received an Opinion of Counsel
        (and shall have delivered  copies  thereof to the Indenture  Trustee) to
        the effect that such  transaction will not have any material adverse tax
        consequence to the Issuer or any Noteholder;


                                              15

<PAGE>




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

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

        Section  3.17.Successor  or Transferee.  (a) Upon any  consolidation  or
merger of the Issuer in accordance with Section 3.16(a), the Person formed by or
surviving such  consolidation or merger (if other than the Issuer) shall succeed
to, and be  substituted  for,  and may  exercise  every  right and power of, the
Issuer  under this  Indenture  with the same  effect as if such  Person had been
named as the Issuer herein.

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

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

        Section 3.19.No Borrowing.  The Issuer shall not issue,  incur,  assume,
guarantee  or  otherwise  become  liable,   directly  or  indirectly,   for  any
indebtedness except for the Notes.

        Section 3.20.Guarantees,  Loans, Advances and Other Liabilities.  Except
as contemplated by this Indenture or the Basic  Documents,  the Issuer shall not
make any loan or advance or credit to, or guarantee  (directly or  indirectly or
by an instrument having the effect of assuring  another's payment or performance
on any obligation or capability of so doing or otherwise),  endorse or otherwise
become  contingently  liable,  directly or  indirectly,  in connection  with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other Person.

        Section  3.21.Capital  Expenditures.  The  Issuer  shall  not  make  any
expenditure  (by long-term or operating  lease or otherwise)  for capital assets
(either realty or personalty).

        Section  3.22.Owner  Trustee Not Liable for the  Certificate  or Related
Documents. The recitals contained herein shall be taken as the statements of the
Depositor,  and the Owner Trustee assumes no responsibility  for the correctness
thereof.  The Owner  Trustee  makes no  representations  as to the  validity  or
sufficiency  of this  Indenture,  of any Basic  Document  or of the  Certificate
(other  than the  signatures  of the Owner  Trustee on the  Certificate)  or the
Notes, or of any Related


                                              16

<PAGE>



Documents.  The  Owner  Trustee  shall  at no time  have any  responsibility  or
liability with respect to the  sufficiency of the Trust Estate or its ability to
generate the payments to be distributed to the Certificateholder under the Owner
Trust  Agreement  or  the  Noteholders  under  this  Indenture,  including,  the
compliance  by the  Depositor or the Seller with any warranty or  representation
made under any Basic Document or in any related  document or the accuracy of any
such warranty or representation,  or any action of the Certificate Paying Agent,
the  Certificate  Registrar or the  Indenture  Trustee  taken in the name of the
Owner Trustee.

        Section  3.23.Restricted  Payments.  The Issuer  shall not,  directly or
indirectly,  (i) pay any  dividend or make any  distribution  (by  reduction  of
capital or otherwise),  whether in cash,  property,  securities or a combination
thereof,  to the Owner  Trustee  or any owner of a  beneficial  interest  in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer,  (ii) redeem,  purchase,  retire or  otherwise  acquire for
value any such  ownership  or equity  interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose;  provided,  however,  that
the Issuer may make, or cause to be made, (x) distributions to the Owner Trustee
and the  Certificateholder  as  contemplated  by,  and to the  extent  funds are
available for such purpose under the Owner Trust Agreement,  and (y) payments to
the Master Servicer pursuant to the terms of the Servicing Agreement. The Issuer
will not,  directly or indirectly,  make payments to or  distributions  from the
Custodial  Account  except  in  accordance  with  this  Indenture  and the Basic
Documents.

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

        Section 3.25.Further Instruments and Acts. Upon request of the Indenture
Trustee,  the Issuer will execute and deliver such  further  instruments  and do
such  further  acts as may be  reasonably  necessary or proper to carry out more
effectively the purpose of this Indenture.

        Section  3.26.Statements  to  Noteholders.  On each  Payment  Date,  the
Indenture  Trustee  and  the  Certificate  Registrar  shall  forward  by mail or
otherwise make available  electronically  to the Depositor,  the Rating Agencies
and to  each  Noteholder  and  Certificateholder,  respectively,  the  statement
delivered to it, on the Business Day  following the related  Determination  Date
pursuant to Section 4.01 of the Servicing Agreement.

        Section  3.27.Allocation of Liquidation Loss Amounts.  The subordination
provided to the Senior  Notes by the Class M Notes and the B  Component  and the
subordination  provided to each class of Class M Notes by the B Component and by
any class of Class M Notes  subordinate  thereto  will  cover  Liquidation  Loss
Amounts  (other  than Excess Loss  Amounts) on the Home Loans.  On each  Payment
Date,  any  Liquidation  Loss Amounts  which are not Excess Loss Amounts will be
allocated as follows:  first, by a payment of the Liquidation Loss  Distribution
Amount, second by a reduction in the Outstanding Reserve Amount, third, to the B
Component  until the  Component  Principal  Balance  thereof has been reduced to
zero;  fourth,  to the Class M-3 Notes,  until the Note Balance thereof has been
reduced to zero;  fifth, to the Class M-2 Notes,  until the Note Balance thereof
has been  reduced  to zero;  and sixth,  to the Class M-1 Notes,  until the Note
Balance thereof has been reduced to zero.  Liquidation  Loss Amounts (other than
Excess Loss Amounts) will not be allocated to the Senior Notes.


                                              17

<PAGE>




        On each Payment Date, the principal  portion of Excess Loss Amounts will
be  allocated to the Notes (other than the Class A-IO Notes) and the B Component
on a pro rata basis,  based on the Note Balance or Component  Principal  Balance
thereof,  as  applicable,  prior to  application  of principal  payments on that
Payment  Date,  and in an aggregate  amount equal to the  percentage of the loss
equal to the then  aggregate  Note Balance of the Notes and Component  Principal
Balance of the B Component  divided by the then  aggregate  Loan  Balance of the
Home Loans.

        The  interest  portion of Excess Loss  Amounts  will be allocated to the
Notes and the B  Component  as  described  in the  definitions  of Accrued  Note
Interest  and  Accrued  Component  Interest  set  forth  in  Appendix  A to this
Indenture.

        Any  allocation of  Liquidation  Loss Amounts to a Class of Notes or the
Certificate  in respect of the B  Component,  shall be made by reducing the Note
Balance or Component Principal Balance thereof, as applicable,  by the amount so
allocated,  which  allocation  shall be deemed to have  occurred on such Payment
Date. All Liquidation  Loss Amounts and all other losses allocated to a Class of
Notes  or to the  Certificate  in  respect  of  the B  Component  hereunder,  as
applicable, will be allocated among the Notes or the Certificate, as applicable,
of such Class in proportion to the Percentage Interests evidenced thereby.

        Section  3.28.Reserved.

        Section  3.29.Determination  of Class A-1 Note Rate. On the second LIBOR
Business Day immediately preceding (i) the Closing Date in the case of the first
Interest  Accrual  Period  and (ii) the  first day of each  succeeding  Interest
Accrual  Period,  the Indenture  Trustee shall determine LIBOR and the Note Rate
for the Class A-1 Notes for such  Interest  Accrual  Period and shall inform the
Issuer,  the Master  Servicer and the  Depositor at their  respective  facsimile
numbers given to the Indenture Trustee in writing.  All  determinations of LIBOR
by the Indenture  Trustee shall, in the absence of manifest error, be conclusive
for all purposes,  and each holder of a Class A-1 Note, by accepting  this Class
A-1 Note, agrees to be bound by such determination.

        Section  3.30.Liquidation  on Final Scheduled Payment Date. On the Final
Scheduled  Payment Date, if the Notes and B Component are not paid in full on or
prior to the Final Scheduled Payment Date, the Indenture Trustee shall take full
account of the assets and  liabilities of the Owner Trust,  shall  liquidate the
assets,  in a  commercially  reasonable  manner and on  commercially  reasonable
terms, as promptly as is consistent with obtaining the fair value thereof and in
accordance  with  Section  5.15,  and shall apply and  distribute  the  proceeds
therefrom in the order of priority described in Section 3.05(c).

        Section  3.31.No  Recourse.  Upon the  occurrence of an Event of Default
under the Notes,  this  Indenture or the other Basic  Documents,  Holders of the
Notes shall have recourse only to the  Collateral and all proceeds  thereof,  as
and to the extent provided herein,  and no recourse shall be had by such Holders
against the Issuer or its other assets or properties.



                                              18

<PAGE>



        Section  3.32.Additional UCC Representations and Warranties.  The Issuer
hereby represents and warrants that:

                      (i) this Agreement creates a valid and continuing security
        interest (as defined in the applicable UCC) in the Trust Estate in favor
        of the  Indenture  Trustee on behalf of the Holders of the Notes,  which
        security  interest is prior to all other liens,  and is  enforceable  as
        such as against creditors of the Issuer.

                      (ii) the Issuer owns and has good and marketable  title to
        the Trust Estate free and clear of any lien, claim or encumbrance of any
        Person.

                      (iii) the Issuer will cause the filing of all  appropriate
        financing  statements  in the proper  filing  office in the  appropriate
        jurisdictions under applicable law within 10 days of the Closing Date in
        order to perfect the security  interest in the Trust  Estate  granted to
        the Indenture Trustee on behalf of the Holders of the Notes.

                      (iv)  other  than the  security  interest  granted  to the
        Indenture  Trustee on behalf of the Holders of the Notes pursuant to the
        Basic Documents,  the Issuer has not pledged,  assigned, sold, granted a
        security interest in, or otherwise conveyed any of the Trust Estate. The
        Issuer is not aware of any judgment or tax lien filings  against it. The
        Issuer  has  not  authorized  the  filing  of and is  not  aware  of any
        financing  statements  against the Issuer that include a description  of
        collateral  covering the Trust Estate other than any financing statement
        (i) relating to the security  interest  granted to Indenture  Trustee on
        behalf  of the  Holders  of the  Notes  hereunder  or (ii) that has been
        terminated.







                                              19

<PAGE>




                                          Article IV

                      The Notes; Satisfaction and Discharge of Indenture

        Section  4.01.The Notes.  The Notes shall be registered in the name of a
nominee  designated by the Depository.  Beneficial Owners will hold interests in
the Notes as set forth in Section 4.06 herein. The minimum initial Note Balances
with  respect to the Class A Notes  (other  than the Class  A-IO  Notes) and the
Class M-1 Notes shall be $25,000 and integral multiples of $1 in excess thereof,
with  respect to the Class M-2 Notes and Class M-3 Notes shall be  $250,000  and
integral  multiples of $1 in excess thereof,  and with respect to the Class A-IO
Notes the minimum  initial  Notional  Amounts shall be  $1,000,000  and integral
multiples of $1 in excess thereof.

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

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

        The Notes shall,  on original issue, be executed on behalf of the Issuer
by the  Owner  Trustee,  not in its  individual  capacity  but  solely  as Owner
Trustee,  authenticated  by the Note  Registrar  and  delivered by the Indenture
Trustee to or upon the order of the Issuer.

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

        Subject  to the  restrictions  and  limitations  set forth  below,  upon
surrender  for  registration  of  transfer  of any Note at the  Corporate  Trust
Office, the Issuer shall execute and the Note Registrar


                                              20

<PAGE>



shall  authenticate  and deliver,  in the name of the  designated  transferee or
transferees,  one or more new Notes in authorized initial Note Balances or, with
respect to the Class A-IO Notes, Notional Amounts, evidencing the same aggregate
Percentage Interests.

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

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

        All Notes surrendered for registration of transfer and exchange shall be
cancelled  by the Note  Registrar  and  delivered to the  Indenture  Trustee for
subsequent destruction without liability on the part of either.

        The  Issuer  hereby  appoints  the  Indenture   Trustee  as  Certificate
Registrar to keep at its Corporate Trust Office a Certificate  Register pursuant
to  Section  3.09  of the  Owner  Trust  Agreement  in  which,  subject  to such
reasonable  regulations as it may prescribe,  the  Certificate  Registrar  shall
provide for the  registration  of the Certificate and of transfers and exchanges
thereof  pursuant to Section 3.05 of the Owner Trust  Agreement.  The  Indenture
Trustee hereby accepts such appointment.

        Each purchaser of a Note, by its acceptance of the Note, shall be deemed
to have  represented that either (i) it is not a Plan nor is it acquiring a Note
with Plan Assets or (2) the  acquisition  of such Note by the purchaser does not
constitute or give rise to a prohibited  transaction  under Section 406 of ERISA
or  Section  4975  of  the  Code,   for  which  no   statutory,   regulatory  or
administrative exemption is available.

        The Notes may not be  purchased  with the assets of an ERISA plan if the
Depositor,  the Master  Servicer,  the owner of the  Certificate,  the Indenture
Trustee, the Owner Trustee or any of their Affiliates:

                  (i) has investment or  administrative  discretion with respect
to the ERISA plan's assets;



                                              21

<PAGE>



                  (ii)has  authority  or  responsibility  to give,  or regularly
gives,  investment advice regarding the ERISA plan's assets, for a fee and under
an agreement or understanding  that the advice will serve as a primary basis for
investment  decisions regarding the ERISA plan's assets and will be based on the
particular investment needs for the ERISA plan; or

                  (iii) is an employer  maintaining or contributing to the ERISA
plan.

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

        Upon the issuance of any  replacement  Note under this Section 4.03, 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.

        Every   replacement  Note  issued  pursuant  to  this  Section  4.03  in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original  additional  contractual  obligation of the Issuer,  whether or not the
mutilated,  destroyed,  lost or stolen Note shall be at any time  enforceable by
anyone,  and shall be entitled to all the benefits of this Indenture equally and
proportionately  with  any  and all  other  Notes  duly  issued  hereunder.  The
provisions of this Section 4.03 are exclusive and shall  preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes.

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


                                              22

<PAGE>



Issuer,  the  Indenture  Trustee  or any agent of the  Issuer  or the  Indenture
Trustee shall be affected by notice to the contrary.

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

        Section  4.06.Book-Entry  Notes.  Each Class of Notes shall initially be
issued as one or more Notes held by the Book-Entry Custodian or, if appointed to
hold such Notes as provided  below,  the Depository  Trust Company,  the initial
Depository,  and  registered  in the name of its  nominee  Cede & Co.  Except as
provided  below,  registration  of  such  Notes  may not be  transferred  by the
Indenture  Trustee except to another  Depository  that agrees to hold such Notes
for the respective  Beneficial Owners. The Indenture Trustee is hereby initially
appointed  as the  Book-Entry  Custodian  and  hereby  agrees  to act as such in
accordance  herewith and in accordance  with the agreement  that it has with the
Depository  authorizing it to act as such. The Book-Entry Custodian may, and, if
it is no  longer  qualified  to act as such,  the  Book-Entry  Custodian  shall,
appoint, by a written instrument delivered to the Depositor, the Master Servicer
and, if the Indenture  Trustee is not the  Book-Entry  Custodian,  the Indenture
Trustee,  any other  transfer  agent  (including the Depository or any successor
Depository)  to  act  as  Book-Entry  Custodian  under  such  conditions  as the
predecessor  Book-Entry Custodian and the Depository or any successor Depository
may prescribe,  provided that the predecessor  Book-Entry Custodian shall not be
relieved  of any  of  its  duties  or  responsibilities  by  reason  of any  new
appointment,  except  if the  Depository  is  the  successor  to the  Book-Entry
Custodian. If the Indenture Trustee resigns or is removed in accordance with the
terms hereof,  the successor  trustee or, if it so elects,  the Depository shall
immediately  succeed to its predecessor's  duties as Book-Entry  Custodian.  The
Depositor  shall have the right to inspect,  and to obtain  copies of, any Notes
held as Book-Entry Notes by the Book-Entry  Custodian.  No Beneficial Owner will
receive a Definitive Note representing such Beneficial  Owner's interest in such
Note,  except as provided in Section 4.08.  Unless and until  definitive,  fully
registered Notes (the "Definitive  Notes") have been issued to Beneficial Owners
pursuant to Section 4.08:

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

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



                                              23

<PAGE>



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

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

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

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

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

        Section 4.09.Tax Treatment.  The Issuer has entered into this Indenture,
and the Notes will be issued,  with the intention  that, for federal,  state and
local income, single business and franchise tax purposes, the Notes will qualify
as indebtedness of the Issuer. The Issuer, by entering into this Indenture,  and
each Noteholder, by its acceptance of its Note (and each Beneficial Owner by its


                                              24

<PAGE>



acceptance of an interest in the applicable Book-Entry Note), agree to treat the
Notes for federal,  state and local  income,  single  business and franchise tax
purposes as indebtedness of the Issuer.

        Section  4.10.Satisfaction  and Discharge of Indenture.  This  Indenture
shall cease to be of further  effect with  respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.16, 3.18 and 3.19, (v) the rights, obligations and immunities of the Indenture
Trustee  hereunder  (including the rights of the Indenture Trustee under Section
6.07 and the  obligations of the Indenture  Trustee under Section 4.11) and (vi)
the rights of Noteholders as  beneficiaries  hereof with respect to the property
so deposited with the Indenture  Trustee  payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer,  shall execute
proper  instruments  acknowledging  satisfaction and discharge of this Indenture
with respect to the Notes, when

                      (A) either

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

                  (2) the  Notes  not  theretofore  delivered  to the  Indenture
Trustee for cancellation

                      a. have become due and payable,

                      b. will become due and payable within one year, or

                      c. have been declared immediately due and payable pursuant
                  to Section 5.02.

        and the Issuer, in the case of a. or b. above, has irrevocably deposited
        or caused to be irrevocably deposited with the Indenture Trustee cash or
        direct obligations of or obligations  guaranteed by the United States of
        America  (which will mature prior to the date such amounts are payable),
        in trust for such purpose,  in an amount sufficient to pay and discharge
        the entire  indebtedness on such Notes then  outstanding not theretofore
        delivered  to the  Indenture  Trustee for  cancellation  when due on the
        Final Scheduled Payment Date;

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

                      (C) the Issuer has delivered to the  Indenture  Trustee an
                  Officer's  Certificate and an Opinion of Counsel, each meeting
                  the applicable  requirements of Section 10.01 and each stating
                  that all conditions  precedent herein provided for relating to
                  the  satisfaction  and discharge of this  Indenture  have been
                  complied with and, if the Opinion of


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<PAGE>



                  Counsel  relates to a deposit made in connection  with Section
                  4.10(A)(2)b.  above,  such  opinion  shall  further  be to the
                  effect that such deposit  will not have any  material  adverse
                  tax  consequences  to  the  Issuer,  any  Noteholders  or  any
                  Certificateholder.

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

        Section  4.12.Reserved.

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

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

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


                                              26

<PAGE>



                                    Article V

                              Default and Remedies

        Section  5.01.Events  of  Default.  The  Issuer  shall  deliver  to  the
Indenture  Trustee  within five days after  learning of the occurrence any event
which with the  giving of notice and the lapse of time would  become an Event of
Default  under  clause  (iii) of the  definition  of "Event of Default"  written
notice in the form of an Officer's Certificate of its status and what action the
Issuer is taking or proposes to take with respect thereto.

        Section  5.02.Acceleration of Maturity;  Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee or the Holders of Notes  representing not less than a majority
of the  aggregate  Note  Balance of all Notes (for which  purpose the Class A-IO
Notes will be deemed to have a Note Balance equal to their Notional  Amount) may
declare the Notes to be immediately  due and payable,  by a notice in writing to
the Issuer (and to the Indenture Trustee if given by Noteholders),  and upon any
such  declaration  the unpaid  principal  amount of such  Notes,  together  with
accrued and unpaid  interest  thereon  through the date of  acceleration,  shall
become  immediately  due and payable,  together with the Adjusted Issue Price on
the Class A-IO Notes.

        At any time after such  declaration  of  acceleration  of maturity  with
respect to an Event of Default has been made and before a judgment or decree for
payment  of the  money  due  has  been  obtained  by the  Indenture  Trustee  as
hereinafter  in this  Article V provided,  the Holders of Notes  representing  a
majority of the aggregate Note Balance of all Notes (for which purpose the Class
A-IO  Notes  will be  deemed  to have a Note  Balance  equal to  their  Notional
Amount),  by  written  notice to the  Issuer and the  Indenture  Trustee  may in
writing  waive  the  related  Event  of  Default  and  rescind  and  annul  such
declaration and its consequences if:

                      (i) the Issuer has paid or  deposited  with the  Indenture
        Trustee a sum sufficient to pay:

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

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

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

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



                                              27

<PAGE>



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

        (a) Subject to Section 3.31, the Issuer covenants that if default in the
payment of (i) any  interest on any Note when the same  becomes due and payable,
and such default  continues  for a period of five days, or (ii) the principal of
or any  installment  of the  principal of any Note when the same becomes due and
payable,  the Issuer shall, upon demand of the Indenture Trustee, pay to it, for
the  benefit of the Holders of Notes,  the whole  amount then due and payable on
the Notes for principal and interest,  with interest upon the overdue principal,
and in addition  thereto such further amount as shall be sufficient to cover the
costs  and  expenses  of  collection,  including  the  reasonable  compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents and
counsel.

        (b) In case the Issuer  shall fail  forthwith  to pay such  amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust,  subject to the  provisions  of Section  10.17  hereof  may  institute  a
Proceeding for the  collection of the sums so due and unpaid,  and may prosecute
such  Proceeding to judgment or final  decree,  and may enforce the same against
the Issuer or other obligor upon the Notes and collect in the manner provided by
law out of the property of the Issuer or other obligor upon the Notes,  wherever
situated, the monies adjudged or decreed to be payable.

        (c) If an Event of  Default  occurs  and is  continuing,  the  Indenture
Trustee  subject  to the  provisions  of  Section  10.17  hereof  may,  as  more
particularly provided in Section 5.04, in its discretion, proceed to protect and
enforce  its  rights  and the  rights of the  Noteholders,  by such  appropriate
Proceedings  as the Indenture  Trustee shall deem most  effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement  in this  Indenture  or in aid of the  exercise  of any power  granted
herein, or to enforce any other proper remedy or legal or equitable right vested
in the Indenture Trustee by this Indenture or by law.

        (d) In case there shall be pending,  relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust  Estate,  Proceedings  under Title 11 of the United States Code or any
other applicable  federal or state bankruptcy,  insolvency or other similar law,
or in case a receiver,  assignee  or trustee in  bankruptcy  or  reorganization,
liquidator,  sequestrator  or similar  official shall have been appointed for or
taken  possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial  Proceedings  relative to the Issuer
or other  obligor upon the Notes,  or to the creditors or property of the Issuer
or such other  obligor,  the  Indenture  Trustee,  irrespective  of whether  the
principal of any Notes shall then be due and payable as therein  expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any  demand  pursuant  to the  provisions  of this  Section,  shall be
entitled and empowered, by intervention in such Proceedings or otherwise:

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


                                              28

<PAGE>



        Indenture Trustee and each predecessor  Indenture  Trustee,  except as a
        result  of  negligence,  willful  misconduct  or bad  faith)  and of the
        Noteholders allowed in such Proceedings;

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

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

                      (iv) to file such  proofs  of claim  and  other  papers or
        documents  as may be  necessary or advisable in order to have the claims
        of the Indenture Trustee or the Holders of Notes allowed in any judicial
        proceedings relative to the Issuer, its creditors and its property;  and
        any trustee, receiver,  liquidator,  custodian or other similar official
        in any such Proceeding is hereby  authorized by each of such Noteholders
        to make  payments to the Indenture  Trustee,  and, in the event that the
        Indenture  Trustee shall  consent to the making of payments  directly to
        such Noteholders,  to pay to the Indenture Trustee such amounts as shall
        be sufficient to cover reasonable compensation to the Indenture Trustee,
        each  predecessor   Indenture  Trustee  and  their  respective   agents,
        attorneys and counsel, and all other expenses and liabilities  incurred,
        and all advances  made,  by the Indenture  Trustee and each  predecessor
        Indenture Trustee except as a result of negligence,  willful  misconduct
        or bad faith.

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

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

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



                                              29

<PAGE>



        Section 5.04.Remedies; Priorities. (a) If an Event of Default shall have
occurred and be continuing,  the Indenture  Trustee subject to the provisions of
Section  10.17  hereof may do one or more of the  following  (subject to Section
5.05):

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

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

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

                      (iv)  exercise  its rights as Holder of the Grantor  Trust
        Certificate  pursuant  to Section  7.02 of the Grantor  Trust  Agreement
        (provided,  that the  Indenture  Trustee  shall not  exercise its rights
        under  such  Section  7.02  unless  and  until an Event of  Default  has
        occurred and is continuing);

                      (v) refrain  from selling the Trust Estate and continue to
        apply  all  amounts  received  thereon  to  payments  on  the  Notes  in
        accordance with Section 3.05; and

                      (vi)  sell the  Trust  Estate or any  portion  thereof  or
        rights or  interest  therein,  at one or more  public or  private  sales
        called and conducted in any manner permitted by law; provided,  however,
        that the Indenture Trustee may not sell or otherwise liquidate the Trust
        Estate following an Event of Default,  unless (A) the Indenture  Trustee
        obtains the consent of the Holders of 100% of the aggregate Note Balance
        of the Notes (for which  purpose  the Class A-IO Notes will be deemed to
        have a Note Balance equal to their Notional Amount), (B) the proceeds of
        such Sale  distributable  to Holders are sufficient to discharge in full
        all  amounts  then due and  unpaid  upon the  Notes  for  principal  and
        interest or (C) the Indenture Trustee  determines that the Grantor Trust
        Certificate  will not  continue  to  provide  sufficient  funds  for the
        payment of  principal  of and  interest  on the Notes as they would have
        become due if the Notes had not been  declared due and payable,  and the
        Indenture  Trustee  obtains the consent of the Holders of 66 2/3% of the
        aggregate  Note  Balance of the Notes (for which  purpose the Class A-IO
        Notes  will be deemed  to have a Note  Balance  equal to their  Notional
        Amount).  In determining such sufficiency or insufficiency  with respect
        to clause (B) and (C), the Indenture  Trustee may, but need not,  obtain
        and  rely  upon an  opinion  of an  Independent  investment  banking  or
        accounting  firm of national  reputation as to the  feasibility  of such
        proposed  action and as to the  sufficiency of the Trust Estate for such
        purpose.  Notwithstanding the foregoing,  so long as a Servicing Default
        has not occurred,  any Sale of the Trust Estate shall be made subject to
        the  continued  servicing  of the Home Loans by the Master  Servicer  as
        provided in the Servicing Agreement.



                                              30

<PAGE>



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

               FIRST: to the Indenture Trustee for all amounts due under Section
               6.07  herein and the  Grantor  Trustee  for all amounts due under
               Section 6.15 of the Grantor Trust Agreement; and

               SECOND:  to the  Holders  of the  Notes and the B  Component  for
               amounts  due and  unpaid  on the Notes  and the B  Component  for
               interest,  according  to the  order  and  priority  set  forth in
               Section 3.05(b),  from amounts  available in the Trust Estate for
               such Noteholders;

               THIRD:  concurrently,  on a pro rata basis (A) to the  Holders of
               the Class A Notes, other than the Class A-IO Notes, on a pro rata
               basis  for  amounts  due and  unpaid  on such  Class A Notes  for
               principal,  from amounts available in the Trust Estate, until the
               Note  Balance  thereof has been  reduced to zero,  and (B) to the
               Class A- IO Notes, the Adjusted Issue Price;

               FOURTH:  to the holders of the Class M Notes and the B Component,
               for  amounts  due and  unpaid  on the  Class  M  Notes  and the B
               Component  for  principal,  from  amounts  available in the Trust
               Estate,  until the Note Balance and Component  Principal  Balance
               thereof  has been  reduced  to zero,  in the  following  order of
               priority: first, to the Class M-1 Notes, second, to the Class M-2
               Notes,  third,  to the  Class  M-3  Notes  and  fourth,  to the B
               Component.

               FIFTH:  to the  Certificate  Paying  Agent for  amounts due under
               Article VIII of the Owner Trust Agreement; and

               SIXTH: to the payment of the remainder,  if any, to the Issuer or
               any other person legally entitled thereto.

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

        Section  5.05.Optional  Preservation  of the Trust Estate.  If the Notes
have been declared to be due and payable  under Section 5.02  following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled,  the Indenture  Trustee may, but need not,  elect to take and maintain
possession of the Trust Estate.  It is the desire of the parties  hereto and the
Noteholders  that  there be at all times  sufficient  funds for the  payment  of
principal of and interest on the Notes and other  obligations  of the Issuer and
the  Indenture  Trustee  shall take such desire into  account  when  determining
whether  or not  to  take  and  maintain  possession  of the  Trust  Estate.  In
determining  whether to take and maintain  possession of the Trust  Estate,  the
Indenture  Trustee may, but need not,  obtain (at the expense of the Issuer) and
rely upon an opinion of an Independent


                                              31

<PAGE>



investment  banking  or  accounting  firm  of  national  reputation  as  to  the
feasibility  of such  proposed  action  and as to the  sufficiency  of the Trust
Estate for such purpose.

        Section  5.06.Limitation  of Suits. No Holder of any Note shall have any
right to institute any Proceeding,  judicial or otherwise,  with respect to this
Indenture,  or for the  appointment  of a receiver or trustee,  or for any other
remedy hereunder, unless and subject to the provisions of Section 10.17 hereof:

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

                      (ii) the  Holders  of not less  than 25% of the  aggregate
        Note  Balance of the Notes (for which  purpose the Class A-IO Notes will
        be deemed to have a Note Balance  equal to their  Notional  Amount) have
        made  written  request  to  the  Indenture  Trustee  to  institute  such
        Proceeding  in  respect  of such  Event  of  Default  in its own name as
        Indenture Trustee hereunder;

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

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

                      (v) no direction  inconsistent  with such written  request
        has been given to the Indenture Trustee during such 60-day period by the
        Holders of a majority of the  aggregate  Note  Balance of the Notes (for
        which  purpos the Class A-IO Notes will be deemed to have a Note Balance
        equal to their Notional Amount).

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

        In  the  event  the  Indenture  Trustee  shall  receive  conflicting  or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each  representing  less than a majority of the  aggregate  Note  Balance of the
Notes  (for  which  purposes  the Class A-IO Notes will be deemed to have a Note
Balance  equal to their  Notional  Amount),  the  Indenture  Trustee in its sole
discretion  may determine what action,  if any, shall be taken,  notwithstanding
any other provisions of this Indenture.

        Section  5.07.Rights of  Noteholders to Receive  Principal and Interest.
Notwithstanding  any other provisions in this Indenture,  but subject to Section
3.31,  the  Holder of any Note  shall  have the  right,  which is  absolute  and
unconditional,  to receive payment of the principal of and interest,  if any, on
such Note on or after the respective due dates thereof expressed in such Note or
in this Indenture


                                              32

<PAGE>



and to institute suit for the  enforcement  of any such payment,  and such right
shall not be impaired without the consent of such Holder.

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

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

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

        Section  5.11.Control by  Noteholders.  The Holders of a majority of the
aggregate  Note Balance of Notes (for which purpose the Class A-IO Notes will be
deemed to have a Note Balance  equal to their  Notional  Amount)  shall have the
right to direct the time,  method and place of conducting any Proceeding for any
remedy  available  to  the  Indenture  Trustee  with  respect  to the  Notes  or
exercising any trust or power conferred on the Indenture Trustee; provided that:

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

                      (ii)  subject to the express  terms of Section  5.04,  any
        direction to the Indenture Trustee to sell or liquidate the Trust Estate
        shall be by  Holders  of Notes  representing  not less  than 100% of the
        aggregate  Note Balance of Notes (for which purpose the Class A-IO Notes
        will be deemed to have a Note Balance equal to their Notional Amount);

                      (iii) if the  conditions  set forth in  Section  5.05 have
        been  satisfied  and the  Indenture  Trustee  elects to retain the Trust
        Estate  pursuant to such  Section,  then any  direction to the Indenture
        Trustee by Holders of Notes representing less than 100% of the aggregate
        Note  Balance of Notes (for which  purpose  the Class A-IO Notes will be
        deemed to have a


                                              33

<PAGE>



        Note Balance  equal to their  Notional  Amount) to sell or liquidate the
        Trust Estate shall be of no force and effect; and

                      (iv) the  Indenture  Trustee  may take  any  other  action
        deemed proper by the  Indenture  Trustee that is not  inconsistent  with
        such direction.

Notwithstanding the rights of Noteholders set forth in this Section,  subject to
Section 6.01, the Indenture  Trustee need not take any action that it determines
might involve it in liability or might materially adversely affect the rights of
any Noteholders not consenting to such action.

        Section  5.12.Waiver of Past Defaults.  Prior to the  declaration of the
acceleration  of the  maturity  of the Notes as provided  in Section  5.02,  the
Holders of Notes of not less than a majority of the  aggregate  Note  Balance of
the Notes (for which  purpose the Class A-IO Notes will be deemed to have a Note
Balance equal to their Notional  Amount) may waive any past Event of Default and
its  consequences  except an Event of  Default  (a) with  respect  to payment of
principal  of or interest on any of the Notes or (b) in respect of a covenant or
provision  hereof which cannot be modified or amended without the consent of the
Holder of each Note. In the case of any such waiver,  the Issuer,  the Indenture
Trustee and the Holders of the Notes shall be restored to their former positions
and rights  hereunder,  respectively;  but no such  waiver  shall  extend to any
subsequent or other Event of Default or impair any right consequent thereto.

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

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

        Section  5.14.Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension  law  wherever  enacted,  now or at any time  hereafter in
force,  that may affect the covenants or the performance of this Indenture;  and
the Issuer (to the extent that it may  lawfully do so) hereby  expressly  waives
all  benefit  or  advantage  of any such law,  and  covenants  that it shall not
hinder, delay or impede the execution of any power


                                              34

<PAGE>



herein  granted  to the  Indenture  Trustee,  but will  suffer  and  permit  the
execution of every such power as though no such law had been enacted.

        Section  5.15.Sale  of Trust  Estate.  (a) The power to effect any sale,
liquidation  or other  disposition (a "Sale") of any portion of the Trust Estate
pursuant to Section 5.04 is expressly  subject to the provisions of Section 5.05
and this Section 5.15.  The power to effect any such Sale shall not be exhausted
by any one or more Sales as to any portion of the Trust Estate remaining unsold,
but shall continue unimpaired until the entire Trust Estate shall have been sold
or all  amounts  payable on the Notes and under this  Indenture  shall have been
paid.  The  Indenture  Trustee may from time to time postpone any public Sale by
public  announcement  made at the time and  place of such  Sale.  The  Indenture
Trustee  hereby  expressly  waives  its  right  to any  amount  fixed  by law as
compensation for any Sale.

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

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

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

                  (3) the Indenture Trustee determines,  in its sole discretion,
that the  conditions for retention of the Trust Estate set forth in Section 5.05
cannot be satisfied (in making any such determination, the Indenture Trustee may
rely upon an opinion of an  Independent  investment  banking  firm  obtained and
delivered as provided in Section 5.05),  and the Holders  representing  at least
66-2/3% of the aggregate  Note Balance of the Notes (for which purpose the Class
A-IO Notes will be deemed to have a Note Balance equal to their Notional Amount)
consent to such Sale.

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

        (c)  Unless  the  Holders  have  otherwise  consented  or  directed  the
Indenture Trustee,  at any public Sale of all or any portion of the Trust Estate
at  which a  minimum  bid  equal to or  greater  than the  amount  described  in
paragraph (2) of subsection (b) of this Section 5.15 has not been established by
the Indenture Trustee and no Person bids an amount equal to or greater than such
amount,  the Indenture  Trustee shall bid an amount at least $1.00 more than the
highest other bid.

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

                  (1) any Holder or  Holders  of Notes may bid for and  purchase
the property  offered for sale, and upon  compliance  with the terms of sale may
hold,  retain  and  possess  and  dispose  of  such  property,  without  further
accountability,  and may, in paying the  purchase  money  therefor,  deliver any
Notes or claims for  interest  thereon  in lieu of cash up to the  amount  which
shall, upon


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<PAGE>



distribution  of the net  proceeds of such sale,  be payable  thereon,  and such
Notes,  in case the amounts so payable thereon shall be less than the amount due
thereon,  shall be  returned to the Holders  thereof  after being  appropriately
stamped to show such partial payment;

                  (2) the Indenture Trustee may bid for and acquire the property
offered  for Sale in  connection  with any Sale  thereof,  and,  subject  to any
requirements  of, and to the extent  permitted by,  applicable law in connection
therewith,  may  purchase  all or any  portion of the Trust  Estate in a private
sale, and, in lieu of paying cash therefor, may make settlement for the purchase
price by crediting  the gross Sale price against the sum of (A) the amount which
would be  distributable  to the  Holders  of the  Notes  and the  Holder  of the
Certificate as a result of such Sale in accordance  with Section  5.04(b) on the
Payment Date next  succeeding  the date of such Sale and (B) the expenses of the
Sale and of any Proceedings in connection  therewith  which are  reimbursable to
it,  without  being  required to produce the Notes in order to complete any such
Sale or in order for the net Sale price to be credited  against such Notes,  and
any property so acquired by the  Indenture  Trustee shall be held and dealt with
by it in accordance with the provisions of this Indenture;

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

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

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

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



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<PAGE>



                                          Article VI

                                    The Indenture Trustee

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

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

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

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

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

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

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

                      (iii) the  Indenture  Trustee  shall  not be  liable  with
        respect  to any  action  it  takes  or  omits  to take in good  faith in
        accordance  with a direction  received  by it pursuant to Section  5.11,
        which it is entitled to give under any of the Basic Documents.

        (d) The Indenture  Trustee shall not be liable for interest on any money
received by it except as the  Indenture  Trustee  may agree in writing  with the
Issuer.

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

        (f) No provision of this Indenture  shall require the Indenture  Trustee
to expend or risk its own funds or otherwise  incur  financial  liability in the
performance  of any of its duties  hereunder  or in the  exercise  of any of its
rights or powers, if it shall have reasonable grounds to


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<PAGE>



believe that repayment of such funds or adequate  indemnity against such risk or
liability is not reasonably assured to it.

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

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

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

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

        (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;  provided,  however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.

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

        Section  6.03.Individual  Rights of  Indenture  Trustee.  The  Indenture
Trustee in its  individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates  with the same
rights  it would  have if it were not  Indenture  Trustee.  Any Note  Registrar,
co-registrar or co-paying agent may do the same with like rights.  However,  the
Indenture Trustee must comply with Sections 6.11 and 6.12.

        Section 6.04.Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be (i)  responsible  for and makes no  representation  as to the validity or
adequacy of this Indenture or the Notes,  (ii)  accountable for the Issuer's use
of the proceeds  from the Notes or (iii)  responsible  for any  statement of the
Issuer in the Indenture or in any document issued in connection with the sale of
the Notes or in the Notes  other than the  Indenture  Trustee's  certificate  of
authentication.



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<PAGE>



        Section  6.05.Notice  of Event of Default.  The Indenture  Trustee shall
mail to each  Noteholder  notice of the Event of Default within 90 days after it
occurs.  Except in the case of an Event of Default in payment of principal of or
interest on any Note,  the  Indenture  Trustee may withhold the notice if and so
long as a committee of its  Responsible  Officers in good faith  determines that
withholding the notice is in the interests of Noteholders.

        Section  6.06.Reports  by Indenture  Trustee to Holders.  The  Indenture
Trustee shall deliver to each Noteholder such  information as may be required to
enable  such holder to prepare its  federal  and state  income tax  returns.  In
addition,  upon the  Issuer's  written  request,  the  Indenture  Trustee  shall
promptly  furnish  information  reasonably  requested  by  the  Issuer  that  is
reasonably  available to the  Indenture  Trustee to enable the Issuer to perform
its federal and state income tax reporting obligations.

        Section  6.07.Compensation  and  Indemnity.  The Issuer shall pay to the
Indenture Trustee on each Payment Date reasonable compensation for its services.
The  Indenture  Trustee  shall be  compensated  and  indemnified  by the  Master
Servicer in  accordance  with Section 6.06 of the Servicing  Agreement,  and all
amounts owing to the Indenture  Trustee hereunder in excess of such amount shall
be paid solely as provided in Section 3.05 hereof (subject to the priorities set
forth therein). The Indenture Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Issuer shall reimburse
the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made
by it,  including costs of collection,  in addition to the  compensation for its
services.  Such expenses shall include the reasonable compensation and expenses,
disbursements  and  advances  of  the  Indenture   Trustee's  agents,   counsel,
accountants  and  experts.  The Issuer shall  indemnify  the  Indenture  Trustee
against  any and all loss,  liability  or expense  (including  attorneys'  fees)
incurred  by it in  connection  with the  administration  of this  trust and the
performance  of its duties  hereunder.  The  Indenture  Trustee shall notify the
Issuer  promptly  of any claim for which it may seek  indemnity.  Failure by the
Indenture  Trustee to so notify the Issuer  shall not  relieve the Issuer of its
obligations hereunder. The Issuer shall defend any such claim, and the Indenture
Trustee may have separate counsel and the Issuer shall pay the fees and expenses
of such  counsel.  The  Issuer is not  obligated  to  reimburse  any  expense or
indemnify  against any loss,  liability  or expense  incurred  by the  Indenture
Trustee through the Indenture  Trustee's own willful  misconduct,  negligence or
bad faith. The Issuer's payment obligations to the Indenture Trustee pursuant to
this  Section  6.07 shall  survive the  discharge  of this  Indenture.  When the
Indenture  Trustee  incurs  expenses after the occurrence of an Event of Default
specified  in clause (iv) or (v) of the  definition  thereof with respect to the
Issuer, the expenses are intended to constitute expenses of administration under
Title 11 of the  United  States  Code or any other  applicable  federal or state
bankruptcy, insolvency or similar law.

        Section 6.08.Replacement of Indenture Trustee. No resignation or removal
of the Indenture  Trustee and no  appointment of a successor  Indenture  Trustee
shall become  effective  until the  acceptance of  appointment  by the successor
Indenture  Trustee  pursuant to this Section  6.08.  The  Indenture  Trustee may
resign at any time by so notifying the Issuer.  The Holders of a majority of the
aggregate Note Balance of the Notes (for which purpose the Class A-IO Notes will
be deemed to have a Note Balance equal to their Notional  Amount) may remove the
Indenture  Trustee by so  notifying  the  Indenture  Trustee  and may  appoint a
successor Indenture Trustee. The Issuer shall remove the Indenture Trustee if:


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<PAGE>




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

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

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

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

If the  Indenture  Trustee  resigns or is removed or if a vacancy  exists in the
office of the Indenture  Trustee for any reason (the  Indenture  Trustee in such
event being referred to herein as the retiring  Indenture  Trustee),  the Issuer
shall promptly appoint a successor Indenture Trustee. In addition, the Indenture
Trustee  will resign to avoid being  directly or  indirectly  controlled  by the
Issuer.

        A successor  Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee 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.  The successor  Indenture Trustee
shall mail a notice of its  succession to  Noteholders.  The retiring  Indenture
Trustee shall promptly  transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.

        If a successor  Indenture  Trustee  does not take office  within 60 days
after the  retiring  Indenture  Trustee  resigns  or is  removed,  the  retiring
Indenture Trustee, the Issuer or the Holders of a majority of the aggregate Note
Balance of the Notes (for which  purpose  the Class A-IO Notes will be deemed to
have a Note Balance  equal to their  Notional  Amount) may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee.

        If the  Indenture  Trustee  fails  to  comply  with  Section  6.11,  any
Noteholder may petition any court of competent  jurisdiction  for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.

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

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

        In case at the time such  successor or successors by merger,  conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have


                                              40

<PAGE>



been  authenticated  but not  delivered,  any such  successor  to the  Indenture
Trustee may adopt the certificate of authentication of any predecessor  trustee,
and  deliver  such Notes so  authenticated;  and in case at that time any of the
Notes shall not have been authenticated,  any successor to the Indenture Trustee
may authenticate  such Notes either in the name of any predecessor  hereunder or
in the name of the  successor to the  Indenture  Trustee;  and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture  provided that the certificate of the Indenture  Trustee shall
have.

        Section  6.10.Appointment of Co-Indenture  Trustee or Separate Indenture
Trustee.  (a)  Notwithstanding  any other  provisions of this Indenture,  at any
time, for the purpose of meeting any legal  requirement of any  jurisdiction  in
which any part of the Trust  Estate may at the time be  located,  the  Indenture
Trustee  shall have the power and may execute and  deliver  all  instruments  to
appoint one or more Persons to act as a co-trustee or  co-trustees,  or separate
trustee or separate trustees, of all or any part of the Owner Trust, and to vest
in such  Person  or  Persons,  in such  capacity  and  for  the  benefit  of the
Noteholders,  such title to the Trust Estate, or any part thereof,  and, subject
to the other  provisions  of this  Section,  such powers,  duties,  obligations,
rights and trusts as the Indenture Trustee may consider  necessary or desirable.
No co-trustee or separate trustee  hereunder shall be required to meet the terms
of  eligibility  as a  successor  trustee  under  Section  6.11 and no notice to
Noteholders of the  appointment  of any co-trustee or separate  trustee shall be
required under Section 6.08 hereof.

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

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

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

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

        (c) Any notice,  request or other writing given to the Indenture Trustee
shall be deemed to have been  given to each of the then  separate  trustees  and
co-trustees,  as  effectively  as if  given to each of  them.  Every  instrument
appointing any separate  trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate  trustee and  co-trustee,  upon
its  acceptance  of the trusts  conferred,  shall be vested  with the estates or
property specified in its


                                              41

<PAGE>



instrument  of  appointment,  either  jointly  with  the  Indenture  Trustee  or
separately,  as may be provided  therein,  subject to all the provisions of this
Indenture,  specifically including every provision of this Indenture relating to
the conduct of,  affecting  the liability  of, or affording  protection  to, the
Indenture  Trustee.  Every such  instrument  shall be filed  with the  Indenture
Trustee.

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

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

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

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

                      (i)  The  Indenture  Trustee  is duly  organized,  validly
        existing  and in good  standing  under the laws of the State of New York
        with  power and  authority  to own its  properties  and to  conduct  its
        business as such  properties  are  currently  owned and such business is
        presently conducted.

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

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

                      (iv) To the Indenture Trustee's best knowledge,  there are
        no proceedings or investigations pending or threatened before any court,
        regulatory   body,   administrative   agency   or   other   governmental
        instrumentality having jurisdiction over the Indenture Trustee or its


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<PAGE>



        properties:  (A) asserting the  invalidity of this Indenture (B) seeking
        to prevent the consummation of any of the  transactions  contemplated by
        this  Indenture  or (C) seeking any  determination  or ruling that might
        materially and adversely affect the performance by the Indenture Trustee
        of its  obligations  under, or the validity or  enforceability  of, this
        Indenture.

                      (v) The  Indenture  Trustee  does not have  notice  of any
        adverse  claim (as such terms are used in Delaware  UCC  Section  8-302)
        with respect to the Grantor Trust Certificate.

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

        (a) to accept the pledge of the Grantor Trust  Certificate  and hold the
assets of the Trust in trust for the Noteholders;

        (b) to  authenticate  and  deliver the Notes  substantially  in the form
prescribed  by  Exhibit  A-1  and  A-2 in  accordance  with  the  terms  of this
Indenture; and

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

        Section  6.15.Indenture  Trustee  May  Own  Securities.   The  Indenture
Trustee, in its individual or any other capacity may become the owner or pledgee
of  Securities  with the same  rights  it  would  have if it were not  Indenture
Trustee.


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<PAGE>



                                         Article VII

                                Noteholders' Lists and Reports

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

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

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

        (c) The Issuer,  the Indenture Trustee and the Note Registrar shall have
the protection of TIA ss. 312(c).

        Section  7.03.Reports by Issuer.   (a)  The Issuer shall:

                      (i) file with the Indenture Trustee,  within 15 days after
        the Issuer is required to file the same with the  Commission,  copies of
        the annual reports and the information,  documents and other reports (or
        copies of such  portions of any of the foregoing as the  Commission  may
        from time to time by rules and  regulations  prescribe)  that the Issuer
        may be  required to file with the  Commission  pursuant to Section 13 or
        15(d) of the Exchange Act;

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

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



                                              44

<PAGE>



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

        Section  7.04.Reports  by  Indenture  Trustee.  If  required  by TIA ss.
313(a),  within 60 days after each January 1 beginning with January 1, 2004, the
Indenture  Trustee shall mail to each Noteholder as required by TIA ss. 313(c) a
brief  report  dated as of such  date that  complies  with TIA ss.  313(a).  The
Indenture  Trustee also shall comply with TIA ss. 313(b).  A copy of each report
at the time of its  mailing  to  Noteholders  shall  be  filed by the  Indenture
Trustee with the Commission and each stock exchange,  if any, on which the Notes
are listed.  The Issuer shall notify the Indenture Trustee if and when the Notes
are listed on any stock exchange.

        Section 7.05.Exchange Act Reporting.  In connection with the preparation
and filing of periodic  reports by the Master Servicer  pursuant to Section 4.04
of the Servicing  Agreement,  the Indenture  Trustee shall timely provide to the
Master  Servicer  (I) a list  of  Holders  as  shown  on the  Note  Register  or
Certificate  Register as of the end of each  calendar  year,  (II) copies of all
pleadings,  other legal process and any other documents  relating to any claims,
charges or  complaints  involving the Indenture  Trustee,  as indenture  trustee
hereunder, or the Trust Estate that are received by the Indenture Trustee, (III)
notice of all matters that, to the actual knowledge of a Responsible  Officer of
the Indenture Trustee, have been submitted to a vote of the Holders,  other than
those  matters that have been  submitted to a vote of the Holders at the request
of the Depositor or the Master  Servicer,  and (IV) notice of any failure of the
Indenture  Trustee to make any distribution to the Holders as required  pursuant
to this Indenture.  Neither the Master Servicer nor the Indenture  Trustee shall
have any  liability  with respect to the Master  Servicer's  failure to properly
prepare or file such periodic  reports  resulting from or relating to the Master
Servicer's inability or failure to obtain any information not resulting from the
Master Servicer's own negligence or willful  misconduct.  In connection with the
Form 10-K Certification (as defined in the Servicing  Agreement),  the Indenture
Trustee  shall  provide  the  Master  Servicer  with  a  back-up   certification
substantially in the form attached hereto as Exhibit B. A supplemental indenture
may be entered  into in  accordance  with the  provisions  of this  Indenture to
revise this Section 7.05 without the consent of the Holders.


                                              45

<PAGE>



                                         Article VIII

                             Accounts, Disbursements and Releases

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

        Section  8.02.Trust  Accounts.  (a) On or prior to the Closing Date, the
Issuer shall cause the Indenture Trustee to establish and maintain,  in the name
of the Indenture Trustee, for the benefit of the Noteholders and the Certificate
Paying  Agent,  on behalf  of the  Certificateholder,  the  Payment  Account  as
provided in Section 3.01 of this Indenture.

        (b) All  monies  deposited  from  time to  time in the  Payment  Account
pursuant to the  Servicing  Agreement  and the Grantor  Trust  Agreement and all
deposits  therein  pursuant  to  this  Indenture  are  for  the  benefit  of the
Noteholders and the Certificate Paying Agent, on behalf of the Certificateholder
and all  investments  made with such monies  including  all income or other gain
from such  investments are for the benefit of the Master Servicer as provided by
the Servicing Agreement and the Grantor Trust Agreement.

        On each Payment Date, the Indenture Trustee shall distribute all amounts
on deposit in the Payment  Account to Noteholders in respect of the Notes and in
its capacity as Certificate Paying Agent to the  Certificateholder  in the order
of priority set forth in Section  3.05 (except as otherwise  provided in Section
5.04(b)).

        The Master  Servicer  shall direct the  Indenture  Trustee in writing to
invest any funds in the Payment  Account in  Permitted  Investments  maturing no
later than the Business Day preceding each Payment Date and shall not be sold or
disposed of prior to the maturity.

        Section 8.03.Officer's Certificate.  The Indenture Trustee shall receive
at least  seven  days  notice  when  requested  by the Issuer to take any action
pursuant to Section  8.05(a),  accompanied  by copies of any  instruments  to be
executed,  and the Indenture Trustee shall also require,  as a condition to such
action,  an Officer's  Certificate,  in form and substance  satisfactory  to the
Indenture  Trustee,  stating the legal effect of any such action,  outlining the
steps  required  to  complete  the  same,  and  concluding  that all  conditions
precedent to the taking of such action have been complied with.



                                              46

<PAGE>



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

        Section  8.05.Release of Trust Estate. (a) Subject to the payment of its
fees  and  expenses,  the  Indenture  Trustee  may,  and  when  required  by the
provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture,  or convey the Indenture  Trustee's  interest in the
same, in a manner and under  circumstances  that are not  inconsistent  with the
provisions of this  Indenture.  No party relying upon an instrument  executed by
the Indenture  Trustee as provided in Article VIII  hereunder  shall be bound to
ascertain the Indenture  Trustee's  authority,  inquire into the satisfaction of
any conditions precedent, or see to the application of any monies.

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

        (c) The Indenture  Trustee shall release  property from the lien of this
Indenture  pursuant to this Section 8.05 only upon receipt of a request from the
Issuer accompanied by an Officers' Certificate.

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


                                              47

<PAGE>



                                          Article IX

                                   Supplemental Indentures

        Section 9.01.Supplemental Indentures Without Consent of Noteholders. (a)
Without  the  consent of the  Holders of any Notes but with prior  notice to the
Rating  Agencies,  the Issuer and the Indenture  Trustee,  when authorized by an
Issuer  Request,  at any time and from time to time,  may enter into one or more
indentures  supplemental  hereto (which shall  conform to the  provisions of the
Trust Indenture Act as in force at the date of the execution  thereof),  in form
satisfactory to the Indenture Trustee, for any of the following purposes:

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

                      (ii) to evidence the  succession,  in compliance  with the
        applicable  provisions  hereof, of another person to the Issuer, and the
        assumption  by any such  successor of the covenants of the Issuer herein
        and in the Notes contained;

                      (iii)  to add to the  covenants  of the  Issuer,  for  the
        benefit of the Holders of the Notes,  or to surrender any right or power
        herein conferred upon the Issuer;

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

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

                      (vi) to make any other  provisions with respect to matters
        or  questions  arising  under  this  Indenture  or in  any  supplemental
        indenture; provided, that such action shall not materially and adversely
        affect the interests of the Holders of the Notes;

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

                      (viii) to modify,  eliminate or add to the  provisions  of
        this  Indenture  to such  extent as shall be  necessary  to  effect  the
        qualification  of this  Indenture  under  the TIA or under  any  similar
        federal  statute  hereafter  enacted and to add to this  Indenture  such
        other  provisions  as may be  expressly  required by the TIA;  provided,
        however, that no such indenture supplements shall be entered into unless
        the  Indenture  Trustee  shall have  received an Opinion of Counsel that
        entering into such indenture  supplement  will not (A) have any material
        adverse tax  consequences to the Noteholders and (B) adversely affect in
        any


                                              48

<PAGE>



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

        (b) The Issuer and the Indenture  Trustee,  when authorized by an Issuer
Request,  may,  also  without the consent of any of the Holders of the Notes but
with prior notice to the Rating Agencies,  enter into an indenture or indentures
supplemental  hereto for the purpose of adding any provisions to, or changing in
any  manner or  eliminating  any of the  provisions  of,  this  Indenture  or of
modifying  in any  manner  the  rights of the  Holders  of the Notes  under this
Indenture;  provided,  however,  that such action  shall not, as evidenced by an
Opinion of Counsel,  (i) adversely  affect in any material respect the interests
of any Noteholder or (ii) cause the Issuer to be subject to an entity level tax.

        (c) The Issuer and the  Indenture  Trustee  shall,  as  directed  by the
Holder of the  Certificate,  enter into an indenture or indentures  supplemental
hereto for the purpose of providing  for the issuance of one or more  additional
classes of Notes  entitled to payments  derived  solely from all or a portion of
the payments to which the Certificate issued on the Closing Date pursuant to the
Trust Agreement are entitled;  provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, (i) adversely affect in any material respect
the  interests  of any  Noteholder  or (ii) cause the Issuer to be subject to an
entity level tax. Each such class of Notes shall be a non-recourse obligation of
the Issuer and shall be entitled to interest and principal in such amounts,  and
to such  security  for the  repayment  thereof,  as shall be  specified  in such
amendment  or  amendments.  Promptly  after the  execution by the Issuer and the
Indenture Trustee of any amendments  pursuant to this Section or the creation of
a new indenture  and the issuance of the related class or classes of Notes,  the
Issuer shall require the Indenture  Trustee to give notice to the Holders of the
Notes and the Rating  Agencies  setting  forth in general terms the substance of
the  provisions  of such  amendment.  Any  failure of the  Indenture  Trustee to
provide such notice as is required under this paragraph,  or any defect therein,
shall not,  however,  in any way impair or affect the validity of such amendment
or any class of Notes issued pursuant thereto.

        Section  9.02.Supplemental  Indentures With Consent of Noteholders.  The
Issuer and the Indenture  Trustee,  when authorized by an Issuer  Request,  also
may,  with  prior  notice to the  Rating  Agencies  and with the  consent of the
Holders of not less than a majority of the  aggregate  Note Balance of the Notes
(for which  purpose  the Class A-IO Notes will be deemed to have a Note  Balance
equal  to  their  Notional  Amount)  affected  thereby,  by Act of such  Holders
delivered to the Issuer and the  Indenture  Trustee,  enter into an indenture or
indentures  supplemental  hereto for the purpose of adding any provisions to, or
changing in any manner or  eliminating  any of the provisions of, this Indenture
or of  modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Note affected thereby:

                      (i)  change  the date of  payment  of any  installment  of
        principal  of or interest on any Note,  or reduce the  principal  amount
        thereof or the interest  rate  thereon,  change the  provisions  of this
        Indenture relating to the application of collections on, or the proceeds
        of the Sale of, the Trust  Estate to payment of principal of or interest
        on the  Notes,  or change  any place of  payment  where,  or the coin or
        currency in which, any Note or the interest thereon


                                              49

<PAGE>



        is payable, or impair the right to institute suit for the enforcement of
        the  provisions of this  Indenture  requiring the  application  of funds
        available therefor, as provided in Article V, to the payment of any such
        amount due on the Notes on or after the respective due dates thereof;

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

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

                      (iv) reduce the  percentage of the aggregate  Note Balance
        of the Notes  required  to direct  the  Indenture  Trustee to direct the
        Issuer to sell or liquidate the Trust Estate pursuant to Section 5.04;

                      (v) modify any  provision  of this  Section 9.02 except to
        increase  any  percentage  specified  herein or to provide  that certain
        additional provisions of this Indenture or the Basic Documents cannot be
        modified  or  waived  without  the  consent  of the  Holder of each Note
        affected thereby;

                      (vi) modify any of the  provisions  of this  Indenture  in
        such manner as to affect the calculation of the amount of any payment of
        interest or principal due on any Note on any Payment Date (including the
        calculation of any of the individual components of such calculation); or

                      (vii) permit the creation of any lien ranking  prior to or
        on a parity with the lien of this  Indenture with respect to any part of
        the Trust  Estate or,  except as  otherwise  permitted  or  contemplated
        herein, terminate the lien of this Indenture on any property at any time
        subject  hereto  or  deprive  the  Holder  of any  Note of the  security
        provided by the lien of this Indenture; and provided, further, that such
        action  shall not,  as  evidenced  by an Opinion of  Counsel,  cause the
        Issuer to be subject to an entity level tax.

and provided,  further, that no such indenture supplements shall be entered into
unless the  Indenture  Trustee  shall have  received an Opinion of Counsel  that
entering  into  such  indenture  supplement  will not  adversely  affect  in any
material respect the interests of the  Certificateholder  or shall have received
the  express  written  consent  of  the   Certificateholder   to  the  indenture
supplement.

        The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be  conclusive  upon the  Holders of all  Notes,  whether  theretofore  or
thereafter  authenticated and delivered  hereunder.  The Indenture Trustee shall
not be liable for any such determination made in good faith.



                                              50

<PAGE>



        It shall not be  necessary  for any Act of  Noteholders  (as  defined in
Section  10.03) under this Section  9.02 to approve the  particular  form of any
proposed  supplemental  indenture,  but it shall be sufficient if such Act shall
approve the substance thereof.

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

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

        Section 9.04.Effect of Supplemental Indenture. Upon the execution of any
supplemental  indenture pursuant to the provisions hereof,  this Indenture shall
be and shall be deemed to be modified and amended in accordance  therewith  with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations,  duties, liabilities and immunities under this Indenture of
the Indenture Trustee,  the Issuer and the Holders of the Notes shall thereafter
be determined,  exercised and enforced hereunder subject in all respects to such
modifications  and  amendments,  and all the  terms and  conditions  of any such
supplemental  indenture  shall  be and be  deemed  to be part of the  terms  and
conditions of this Indenture for any and all purposes.

        Section  9.05.Conformity  with Trust  Indenture Act. Every  amendment of
this  Indenture  and every  supplemental  indenture  executed  pursuant  to this
Article IX shall conform to the  requirements of the Trust Indenture Act as then
in effect so long as this  Indenture  shall  then be  qualified  under the Trust
Indenture Act.

        Section  9.06.Reference  in  Notes  to  Supplemental  Indentures.  Notes
authenticated  and delivered after the execution of any  supplemental  indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a  notation  in form  approved  by the  Indenture  Trustee as to any matter
provided  for in such  supplemental  indenture.  If the Issuer or the  Indenture
Trustee shall so determine,  new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental  indenture may
be prepared and executed by the Issuer and  authenticated  and  delivered by the
Indenture Trustee in exchange for Outstanding Notes.


                                              51

<PAGE>



                                          Article X

                                        Miscellaneous

        Section 10.01.  Compliance  Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate stating that all conditions  precedent,  if
any,  provided for in this Indenture  relating to the proposed  action have been
complied with and (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions  precedent,  if any, have been complied with, except
that, in the case of any such  application or request as to which the furnishing
of such documents is  specifically  required by any provision of this Indenture,
no additional  certificate  or opinion need be furnished.  Every  certificate or
opinion with respect to compliance with a condition or covenant  provided for in
this Indenture shall include:

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

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

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

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

                  (5) if the Signer of such  Certificate  or Opinion is required
        to be Independent,  the Statement required by the definition of the term
        "Independent".

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

                      (ii)  Whenever  the Issuer is  required  to furnish to the
        Indenture  Trustee an Officer's  Certificate  certifying  or stating the
        opinion of any signer thereof as to the matters  described in clause (i)
        above,  the  Issuer  shall  also  deliver  to the  Indenture  Trustee an
        Independent Certificate as to the same matters, if the fair value to the
        Issuer  of the  securities  to be so  deposited  and of all  other  such
        securities  made the basis of any such  withdrawal  or release since the
        commencement of the then-current fiscal year of the Issuer, as set forth
        in the  certificates  delivered  pursuant  to clause  (i) above and this
        clause (ii), is 10% or more of the  aggregate  Note Balance of the Notes
        (for which


                                              52

<PAGE>



        purpose the Class A-IO Notes will be deemed to have a Note Balance equal
        to their Notional Amount) , but such a certificate need not be furnished
        with respect to any  securities so deposited,  if the fair value thereof
        to the Issuer as set forth in the related Officer's  Certificate is less
        than $25,000 or less than one percent of the  aggregate  Note Balance of
        the Notes.

                      (iii)  Whenever  any  property  or  securities  are  to be
        released from the lien of this Indenture,  the Issuer shall also furnish
        to the Indenture Trustee an Officer's Certificate  certifying or stating
        the opinion of each person signing such certificate as to the fair value
        (within 90 days of such release) of the property or securities  proposed
        to be  released  and  stating  that in the  opinion  of such  person the
        proposed  release will not impair the security  under this  Indenture in
        contravention of the provisions hereof.

                      (iv)  Whenever  the Issuer is  required  to furnish to the
        Indenture  Trustee an Officer's  Certificate  certifying  or stating the
        opinion of any  signer  thereof as to the  matters  described  in clause
        (iii) above,  the Issuer shall also furnish to the Indenture  Trustee an
        Independent  Certificate as to the same matters if the fair value of the
        property or securities and of all other property, other than property as
        contemplated by clause (v) below or securities released from the lien of
        this Indenture since the commencement of the then-current calendar year,
        as set forth in the certificates required by clause (iii) above and this
        clause  (iv),  equals 10% or more of the  aggregate  Note Balance of the
        Notes (for which  purpose  the Class A-IO Notes will be deemed to have a
        Note Balance equal to their Notional Amount),  but such certificate need
        not be furnished in the case of any release of property or securities if
        the fair value thereof as set forth in the related Officer's Certificate
        is less than $25,000 or less than one percent of the then aggregate Note
        Balance of the Notes.

                      (v) Notwithstanding  any provision of this Indenture,  the
        Issuer  may,  without  compliance  with the  requirements  of the  other
        provisions of this Section 10.01, (A) collect, sell or otherwise dispose
        of the  Grantor  Trust  Certificate  as and to the extent  permitted  or
        required by the Basic  Documents  or (B) make cash  payments  out of the
        Payment Account as and to the extent  permitted or required by the Basic
        Documents,  so long as the Issuer shall deliver to the Indenture Trustee
        every six months, commencing December 31, 2003, an Officer's Certificate
        of the Issuer stating that all the dispositions of Collateral  described
        in clauses  (A) or (B) above that  occurred  during  the  preceding  six
        calendar months were in the ordinary course of the Issuer's business and
        that the  proceeds  thereof were  applied in  accordance  with the Basic
        Documents.

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

        Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or  representations
with respect to the matters upon which his certificate or opinion is based are


                                              53

<PAGE>



erroneous.  Any such certificate of an Authorized  Officer or Opinion of Counsel
may be based,  insofar as it relates to factual  matters,  upon a certificate or
opinion of, or  representations  by, an officer or officers of the Seller or the
Issuer,  stating that the information with respect to such factual matters is in
the possession of the Seller or the Issuer, unless such counsel knows, or in the
exercise of  reasonable  care should know,  that the  certificate  or opinion or
representations with respect to such matters are erroneous.

        Where any  Person  is  required  to make,  give or  execute  two or more
applications,  requests, consents,  certificates,  statements, opinions or other
instruments  under this Indenture,  they may, but need not, be consolidated  and
form one instrument.

        Whenever  in this  Indenture,  in  connection  with any  application  or
certificate or report to the Indenture  Trustee,  it is provided that the Issuer
shall  deliver any document as a condition of the granting of such  application,
or as evidence of the Issuer's  compliance with any term hereof,  it is intended
that the truth and accuracy,  at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and  opinions  stated in such  document  shall in such case be  conditions
precedent to the right of the Issuer to have such application  granted or to the
sufficiency of such certificate or report. The foregoing shall not, however,  be
construed  to affect the  Indenture  Trustee's  right to rely upon the truth and
accuracy of any statement or opinion  contained in any such document as provided
in Article VI.

        Section  10.03.   Acts  of   Noteholders.   (a)  Any  request,   demand,
authorization,  direction,  notice,  consent, waiver or other action provided by
this  Indenture  to be  given or taken by  Noteholders  may be  embodied  in and
evidenced by one or more  instruments of  substantially  similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Indenture Trustee,  and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such  instrument or of a writing  appointing  any such agent
shall be  sufficient  for any purpose of this  Indenture and (subject to Section
6.01)  conclusive in favor of the Indenture  Trustee and the Issuer,  if made in
the manner provided in this Section 10.03.

        (b) The  fact  and  date of the  execution  by any  person  of any  such
instrument  or writing  may be proved in any manner that the  Indenture  Trustee
deems sufficient.

        (c) The ownership of Notes shall be proved by the Note Registrar.

        (d) Any request,  demand,  authorization,  direction,  notice,  consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued  upon the  registration  thereof or in exchange  therefor or in lieu
thereof,  in respect of  anything  done,  omitted or  suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon,  whether or not notation of
such action is made upon such Note.



                                              54

<PAGE>



        Section 10.04.  Notices,  etc., to Indenture Trustee,  Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
shall be in  writing  and if such  request,  demand,  authorization,  direction,
notice,  consent,  waiver or Act of  Noteholders  is to be made  upon,  given or
furnished to or filed with:

                        (i) the  Indenture  Trustee by any  Noteholder or by the
        Issuer shall be sufficient for every purpose  hereunder if made,  given,
        furnished  or filed in writing to or with the  Indenture  Trustee at the
        Corporate Trust Office.  The Indenture  Trustee shall promptly  transmit
        any notice received by it from the Noteholders to the Issuer, or

                        (ii)  the  Issuer  by the  Indenture  Trustee  or by any
        Noteholder shall be sufficient for every purpose hereunder if in writing
        and mailed first-class, postage prepaid to the Issuer addressed to: Home
        Loan Trust  2003-HI1,  in care of Wilmington  Trust  Company,  or at any
        other address  previously  furnished in writing to the Indenture Trustee
        by the Issuer. The Issuer shall promptly transmit any notice received by
        it from the Noteholders to the Indenture Trustee.

        Notices  required to be given to the Rating Agencies by the Issuer,  the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered
or mailed by certified  mail,  return receipt  requested,  to (i) in the case of
Moody's,  at  the  following  address:  Moody's  Investors  Service,  Inc.,  ABS
Monitoring  Department,  99 Church Street,  New York, New York 10007 and (ii) in
the case of Standard & Poor's,  at the following  address:  Standard & Poor's, A
Division of the McGraw-Hill  Companies,  Inc., 55 Water Street - 41st Floor, New
York, New York 10041, Attention of Asset Backed Surveillance  Department;  or as
to each of the  foregoing,  at such  other  address  as shall be  designated  by
written notice to the other parties.

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

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

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


                                              55

<PAGE>



giving such notice as shall be  satisfactory  to the Indenture  Trustee shall be
deemed to be a sufficient giving of such notice.

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

        Section 10.06. Alternate Payment and Notice Provisions.  Notwithstanding
any provision of this Indenture or any of the Notes to the contrary,  the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment,  or notice by the Indenture  Trustee to such Holder,  that is different
from the methods  provided for in this  Indenture  for such payments or notices.
The Issuer shall furnish to the Indenture  Trustee a copy of each such agreement
and the  Indenture  Trustee  shall  cause  payments to be made and notices to be
given in accordance with such agreements.

        Section  10.07.  Conflict  with Trust  Indenture  Act. If any  provision
hereof  limits,  qualifies or conflicts  with another  provision  hereof that is
required to be included in this  Indenture by any of the provisions of the Trust
Indenture  Act, such required  provision  shall  control.  The provisions of TIA
ss.ss.  310  through  317  that  impose  duties  on any  Person  (including  the
provisions  automatically  deemed included herein unless  expressly  excluded by
this  Indenture)  are a part  of  and  govern  this  Indenture,  whether  or not
physically contained herein.

        Section  10.08.  Effect of  Headings.  The Article and Section  headings
herein are for convenience only and shall not affect the construction hereof.

        Section 10.09.  Successors and Assigns.  All covenants and agreements in
this  Indenture  and the  Notes by the  Issuer  shall  bind its  successors  and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.

        Section 10.10. Separability.  In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining  provisions shall not in any way be affected
or impaired thereby.

        Section  10.11.  Benefits of Indenture.  Nothing in this Indenture or in
the Notes, express or implied,  shall give to any Person, other than the parties
hereto and their successors  hereunder,  and the Noteholders and any other party
secured  hereunder,  and any other Person with an ownership interest in any part
of the Trust  Estate,  any benefit or any legal or  equitable  right,  remedy or
claim under this Indenture.

        Section 10.12.  Legal Holidays.  In any case where the date on which any
payment  is due shall not be a Business  Day,  then  (notwithstanding  any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next  succeeding  Business  Day with the same  force  and
effect as if made on the date on which  nominally  due,  and no  interest  shall
accrue for the period from and after any such nominal date.



                                              56

<PAGE>



        Section  10.13.  GOVERNING  LAW.  THIS  INDENTURE  SHALL BE CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW  YORK,  WITHOUT  REFERENCE  TO ITS
CONFLICT OF LAW  PROVISIONS,  AND THE  OBLIGATIONS,  RIGHTS AND  REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

        Section  10.14.  Counterparts.  This  Indenture  may be  executed in any
number  of  counterparts,  each of which so  executed  shall be  deemed to be an
original,  but all such counterparts  shall together  constitute but one and the
same instrument.

        Section 10.15.  Recording of Indenture.  If this Indenture is subject to
recording in any appropriate public recording  offices,  such recording is to be
effected by the Issuer and at its expense  accompanied  by an Opinion of Counsel
(which may be counsel to the Indenture  Trustee or any other counsel  reasonably
acceptable  to the  Indenture  Trustee)  to the effect  that such  recording  is
necessary  either for the  protection  of the  Noteholders  or any other  Person
secured  hereunder or for the  enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.

        Section 10.16. Issuer Obligation.  No recourse may be taken, directly or
indirectly,  with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other  writing  delivered in connection  herewith or therewith,  against (i) the
Indenture  Trustee or the Owner  Trustee in its  individual  capacity,  (ii) any
owner of a  beneficial  interest  in the  Issuer  or (iii) any  partner,  owner,
beneficiary,  agent,  officer,  director,  employee  or agent  of the  Indenture
Trustee  or the  Owner  Trustee  in its  individual  capacity,  any  holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture  Trustee or the Owner Trustee in its
individual  capacity,  except as any such Person may have  expressly  agreed (it
being  understood that the Indenture  Trustee and the Owner Trustee have no such
obligations  in their  individual  capacity)  and except that any such  partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid  consideration  for stock,  unpaid capital  contribution  or
failure to pay any installment or call owing to such entity. For all purposes of
this  Indenture,  in the  performance of any duties or obligations of the Issuer
hereunder,  the Owner  Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.

        Section 10.17. No Petition. The Indenture Trustee, by entering into this
Indenture,  and each Noteholder,  by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Depositor or the Issuer, or
join in any institution  against the Depositor or the Issuer of, any bankruptcy,
reorganization,  arrangement,  insolvency or liquidation  proceedings,  or other
proceedings  under any United States federal or state  bankruptcy or similar law
in connection with any obligations  relating to the Notes, this Indenture or any
of the Basic Documents.

        Section 10.18.  Inspection.  The Issuer agrees that, on reasonable prior
notice, it shall permit any representative of the Indenture Trustee,  during the
Issuer's normal  business  hours, to examine all the books of account,  records,
reports and other papers of the Issuer,  to make copies and extracts  therefrom,
to cause such books to be audited by Independent  certified public  accountants,
and to discuss the Issuer's  affairs,  finances  and accounts  with the Issuer's
officers,  employees, and Independent certified public accountants,  all at such
reasonable times and as often as may be


                                              57

<PAGE>



reasonably   requested.   The  Indenture  Trustee  shall  and  shall  cause  its
representatives  to hold in confidence all such information except to the extent
disclosure  may  be  required  by  law  (and  all  reasonable  applications  for
confidential  treatment  are  unavailing)  and  except  to the  extent  that the
Indenture  Trustee may reasonably  determine that such  disclosure is consistent
with its obligations hereunder.



                                              58

<PAGE>



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

                                            HOME LOAN TRUST 2003-HI1,
                                    as Issuer

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


                                  By:
                                  Name:
                                  Title:


                                  JPMORGAN CHASE BANK,
                                  as Indenture Trustee


                                  By:
                                  Name:  Mark McDermott
                                  Title: Vice President


JPMORGAN CHASE BANK
hereby  accepts the  appointment as Paying Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to Section 4.02 hereof.


By:
Name: Mark McDermott
Title:  Vice President






<PAGE>



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

                                   HOME LOAN TRUST 2003-HI1,
                                       as Issuer
                                    By:    Wilmington Trust Company
                                           not in its individual capacity
                                           but solely as Owner Trustee

                                   By: /s/
                                   Name:
                                   Title:

                                   JPMORGAN CHASE BANK,
                                   as Indenture Trustee


                                   By: /s/ Mark McDermott
                                   Name:  Mark McDermott
                                   Title: Vice President


JPMORGAN CHASE BANK
hereby  accepts the  appointment as Paying Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to Section 4.02 hereof.

By: /s/ Mark McDermott
Name:   Mark McDermott
Title:  Vice President




<PAGE>



STATE OF NEW YORK            )
                             ) ss.:
COUNTY OF NEW YORK           )

        On this ___ day of March,  2003,  before  me  personally  appeared  Mark
McDermott,  to me known, who being by me duly sworn, did depose and say, that he
resides  at New  York , NY,  that  he is the  Vice  President  of the  Indenture
Trustee,  one of the  corporations  described  in and which  executed  the above
instrument; and that he signed his name thereto by like order.




                                                                 Notary Public



<PAGE>



STATE OF NEW YORK            )
                             ) ss.:
COUNTY OF NEW YORK           )

        On this ___ day of March, 2003, before me the undersigned, Notary Public
of said State, personally appeared Mark McDermott,  personally known to me to be
a duly  authorized  officer  of  JPMorgan  Chase Bank that  executed  the within
instrument and  personally  known to me to be the person who executed the within
instrument on behalf of JPMorgan Chase Bank therein named,  and  acknowledged to
me such JPMorgan Chase Bank executed the within  instrument  pursuant to its by-
laws.




                                                                 Notary Public



<PAGE>



STATE OF DELAWARE                   )
                                    ) ss.:
COUNTY OF NEW CASTLE                )

        On  this___  day  of  March,   2003,   before  me  personally   appeared
___________________,  to me known,  who being by me duly  sworn,  did depose and
say,  that he resides at  Wilmington,  DE, that he is the  _________________  of
Wilmington Trust Company, as Owner Trustee, one of the corporations described in
and which executed the above instrument;  and that he signed his name thereto by
like order.



                                                                 Notary Public


NOTARIAL SEAL



<PAGE>



                                   EXHIBIT A-1

                                  FORM OF NOTES

                                CLASS A-__ NOTES

               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. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED  REPRESENTATIVE  OF DTC), ANY
TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

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

               THIS NOTE DOES NOT  REPRESENT AN INTEREST IN OR OBLIGATION OF THE
SELLER, THE DEPOSITOR,  THE MASTER SERVICER,  THE INDENTURE  TRUSTEE,  THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE  AFFILIATES,  EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.

               THE HOLDER OF THIS NOTE IS DEEMED TO HAVE REPRESENTED THAT EITHER
(1) IT IS NOT A PLAN NOR IS IT  ACQUIRING  THIS NOTE WITH PLAN ASSETS OR (2) THE
ACQUISITION  OF THIS NOTE BY THE HOLDER  DOES NOT  CONSTITUTE  OR GIVE RISE TO A
PROHIBITED  TRANSACTION  UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE,
FOR WHICH NO STATUTORY, REGULATORY OR ADMINISTRATIVE EXEMPTION IS AVAILABLE.

                                   HOME LOAN TRUST 2003-HI1
                              Home Loan-Backed Note

Registered                                    Principal Amount: $___________

Class A-__
No. __                                             Percentage Interest: _____%

CUSIP No. ___________                                     Note Rate: _____%

               Home Loan Trust  2003-HI1,  a statutory  trust duly organized and
existing  under the laws of the State of  Delaware  (herein  referred  to as the
"Issuer"), for value received, hereby promises


                                              1

<PAGE>



to pay to Cede & Co. or registered  assigns,  the principal sum of $___________,
payable  on each  Payment  Date in an amount  equal to the  Percentage  Interest
specified  above of the  aggregate  amount,  if any,  payable  from the  Payment
Account in respect of principal on the Class A-__ Notes pursuant to Section 3.05
of the  Indenture  dated as of March 28,  2003  (the  "Indenture")  between  the
Issuer, as Issuer, and JPMorgan Chase Bank, as Indenture Trustee (the "Indenture
Trustee");  provided,  however,  that the entire unpaid principal amount of this
Note shall be due and payable on the Payment  Date in April 2028,  to the extent
not  previously  paid on a prior  Payment Date.  Capitalized  terms used but not
defined herein are defined in Appendix A of the Indenture.

               [Interest  on the Class A-__  Notes will be paid  monthly on each
Payment  Date at the Note  Rate.  The Note Rate for the Class A-__ Notes will be
_____% per annum. Interest will be computed on the basis of a 30-day month and a
360-day year. Principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof. On the Step-Up Date, the Note Rate on the Class
A-7 Notes will increase by 0.50% per annum.]

               [Interest  on the Class A-1 Notes  will be paid  monthly  on each
Payment Date at the Note Rate for the related Interest Accrual Period.  The Note
Rate for each Interest  Accrual  Period will be equal to the lesser of (i) LIBOR
plus  0.10% per  annum  and (ii)  8.00%  per  annum.  LIBOR for each  applicable
Interest  Accrual  Period will be  determined  on the second LIBOR  Business Day
immediately  preceding  (i) the Closing  Date in the case of the first  Interest
Accrual Period and (ii) the first day of each succeeding Interest Accrual Period
by the Indenture  Trustee as set forth in the Indenture.  All  determinations of
LIBOR by the  Indenture  Trustee  shall,  in the absence of manifest  error,  be
conclusive  for all  purposes,  and each  holder  of this  Class  A-1  Note,  by
accepting  this  Class  A-1  Note,  agrees  to be bound  by such  determination.
Interest on this Class A-1 Note will accrue for each  Payment Date from the most
recent  Payment  Date on which  interest has been paid (in the case of the first
Payment  Date,  from the  Closing  Date) to but  excluding  such  Payment  Date.
Interest  will be  computed  on the basis of the  actual  number of days in each
Interest Accrual Period and a year assumed to consist of 360 days.  Principal of
and interest on this Class A-1 Note shall be paid in the manner specified in the
Indenture.]

               Principal  of and  interest on this Note are payable in such coin
or currency  of the United  States of America as at the time of payment is legal
tender for payment of public and private debts.  All payments made by the Issuer
with respect to this Note shall be applied  first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.

               Reference  is made to the  further  provisions  of this  Note set
forth on the reverse  hereof,  which shall have the same effect as though  fully
set forth on the face of this Note.

               Unless the certificate of authentication hereon has been executed
by the Indenture Trustee whose name appears below by manual signature, this Note
shall not be  entitled  to any benefit  under the  Indenture  referred to on the
reverse hereof, or be valid or obligatory for any purpose.

               This  Note is one of a duly  authorized  issue  of  Notes  of the
Issuer,  designated as its Home  Loan-Backed  Notes (herein called the "Notes"),
all  issued  under  the  Indenture,   to  which  Indenture  and  all  indentures
supplemental thereto reference is hereby made for a statement of the


                                              2

<PAGE>



respective  rights and  obligations  thereunder  of the  Issuer,  the  Indenture
Trustee and the holders of the Notes.  The Notes are subject to all terms of the
Indenture.

               The Notes are and will be  equally  and  ratably  secured  by the
collateral pledged as security therefor as provided in the Indenture.

               Principal  of and  interest  on this Note will be payable on each
Payment  Date,  commencing  on April 25, 2003,  as  described in the  Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next Business Day.

               The entire unpaid  principal amount of this Note shall be due and
payable in full on the Payment Date in April 2028 pursuant to the Indenture,  to
the extent not  previously  paid on a prior  Payment Date.  Notwithstanding  the
foregoing,  if an Event of Default shall have occurred and be  continuing,  then
the  Indenture  Trustee  or the  holders of Notes  representing  not less than a
majority of the aggregate Note Balance of all Notes (for which purpose the Class
A-IO Notes will be deemed to have a Note Balance equal to their Notional Amount)
may declare the Notes to be immediately  due and payable in the manner  provided
in Section  5.02 of the  Indenture.  Principal  payments  on the Notes  shall be
distributed  sequentially  to the Class A-1 Notes,  Class A-2  Notes,  Class A-3
Notes,  Class A-4 Notes, Class A-5 Notes, Class A-6 Notes and A-7 Notes, in that
order, to the holders of Notes entitled thereto.

               Payments of interest on this Note due and payable on each Payment
Date,  together with the installment of principal,  if any, to the extent not in
full  payment of this Note,  shall be made by check  mailed to the Person  whose
name appears as the Registered  Holder of this Note (or one or more  Predecessor
Notes) on the Note  Register as of the close of  business  on each Record  Date,
except that with respect to Notes  registered  on the Record Date in the name of
the nominee of the Depository Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire  transfer in  immediately  available  funds to the
account  designated by such  nominee.  Such checks shall be mailed to the Person
entitled  thereto  at the  address  of such  Person  as it  appears  on the Note
Register as of the  applicable  Record Date without  requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Payment  Date shall be binding  upon all future  holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. If funds are expected to be available,
as provided in the Indenture,  for payment in full of the then remaining  unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee,  in
the name of and on behalf of the  Issuer,  will  notify  the  Person who was the
Registered  Holder hereof as of the Record Date  preceding  such Payment Date by
notice mailed or  transmitted  by facsimile  prior to such Payment Date, and the
amount  then due and  payable  shall  be  payable  only  upon  presentation  and
surrender of this Note at the address specified in such notice of final payment.

               As provided in the Indenture  and subject to certain  limitations
set forth  therein,  the  transfer  of this Note may be  registered  on the Note
Register  upon  surrender  of this  Note for  registration  of  transfer  at the
Corporate Trust Office, duly endorsed by, or accompanied by a written instrument
of transfer in form  satisfactory to the Indenture Trustee duly executed by, the
holder


                                              3

<PAGE>



hereof or such holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible  guarantor  institution"  meeting the requirements of
the Note Registrar,  which  requirements  include membership or participation in
the  Securities  Transfer  Agent's  Medallion  Program  ("STAMP")  or such other
"signature  guarantee  program" as may be  determined  by the Note  Registrar in
addition  to,  or in  substitution  for,  STAMP,  all  in  accordance  with  the
Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes
in authorized  denominations and in the same aggregate  principal amount will be
issued to the designated  transferee or  transferees.  No service charge will be
charged for any  registration of transfer or exchange of this Note, but the Note
Registrar  shall  require  payment  of a sum  sufficient  to  cover  any  tax or
governmental  charge that may be imposed in connection with any  registration of
transfer or exchange of this Note.

               Each holder or  Beneficial  Owner of a Note,  by  acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial  interest in
a Note,  covenants  and  agrees  that no  recourse  may be  taken,  directly  or
indirectly,  with respect to the  obligations of the Issuer,  the Owner Trustee,
the Seller,  the Master Servicer,  the Depositor or the Indenture Trustee on the
Notes or under the Indenture or any  certificate  or other writing  delivered in
connection therewith,  against (i) the Indenture Trustee or the Owner Trustee in
its individual  capacity,  (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner,  beneficiary,  agent, officer, director or employee
of the Indenture  Trustee or the Owner Trustee in its individual  capacity,  any
holder  of a  beneficial  interest  in the  Issuer,  the  Owner  Trustee  or the
Indenture  Trustee or of any successor or assign of the Indenture Trustee or the
Owner  Trustee in its  individual  capacity,  except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully  liable,  to  the  extent  provided  by  applicable  law  for  any  unpaid
consideration  for  stock,  unpaid  capital  contribution  or failure to pay any
installment or call owing to such entity.

               Each holder or  Beneficial  Owner of a Note,  by  acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note,  covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute  against the
Depositor,  the  Seller,  the  Master  Servicer  or the  Issuer,  or join in any
institution against the Depositor, the Seller, the Master Servicer or the Issuer
of, any  bankruptcy,  reorganization,  arrangement,  insolvency  or  liquidation
proceedings  under any United States federal or state  bankruptcy or similar law
in connection with any obligations  relating to the Notes,  the Indenture or the
Basic Documents.

               The Issuer has entered into the Indenture and this Note is issued
with the intention  that, for federal,  state and local income,  single business
and  franchise  tax  purposes,  the Notes will  qualify as  indebtedness  of the
Issuer.  Each holder of a Note,  by  acceptance  of a Note (and each  Beneficial
Owner of a Note by  acceptance  of a beneficial  interest in a Note),  agrees to
treat the Notes  for  federal,  state and  local  income,  single  business  and
franchise tax purposes as indebtedness of the Issuer.

               Prior to the due presentment for registration of transfer of this
Note,  the  Issuer,  the  Indenture  Trustee  and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of  determination or as of such other date as may be specified in the
Indenture)  as the owner  hereof for all  purposes,  whether or not this Note be
overdue,


                                              4

<PAGE>



and  none of the  Issuer,  the  Indenture  Trustee  or any such  agent  shall be
affected by notice to the contrary.

               The  Indenture  permits,   with  certain  exceptions  as  therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the  Issuer  and the  Indenture  Trustee  and the  rights of the
holders  of the Notes  under the  Indenture  at any time by the  Issuer  and the
Indenture  Trustee  with the  consent  of the  holders of Notes  representing  a
majority of the aggregate Note Balance of all Notes at the time Outstanding (for
which  purpose the Class A-IO Notes will be deemed to have a Note Balance  equal
to their  Notional  Amount) and with prior  notice to the Rating  Agencies.  The
Indenture also contains provisions  permitting the holders of Notes representing
specified  percentages  of the  aggregate  Note  Balance of all Notes (for which
purpose  the Class  A-IO Notes  will be deemed to have a Note  Balance  equal to
their  Notional  Amount),  on behalf of the  holders of all the Notes,  to waive
compliance  by the Issuer with certain  provisions  of the Indenture and certain
past defaults  under the Indenture and their  consequences.  Any such consent or
waiver by the holder of this Note (or any one of more  Predecessor  Notes) shall
be conclusive  and binding upon such holder and upon all future  holders of this
Note and of any Note  issued  upon the  registration  of  transfer  hereof or in
exchange  hereof or in lieu hereof  whether or not  notation of such  consent or
waiver is made upon this Note.  The  Indenture  also  permits the Issuer and the
Indenture  Trustee to amend or waive certain terms and  conditions  set forth in
the Indenture  without the consent of holders of the Notes issued thereunder but
with prior notice to the Rating Agencies.

               The term  "Issuer" as used in this Note includes any successor or
the Issuer under the Indenture.

               The  Issuer  is  permitted  by  the   Indenture,   under  certain
circumstances,  to merge or consolidate,  subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.

               The Notes are issuable only in registered  form in  denominations
as provided in the Indenture, subject to certain limitations therein set forth.

               This Note and the Indenture shall be construed in accordance with
the laws of the State of New York,  without  reference  to its  conflict  of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.

               No  reference  herein to the  Indenture  and no provision of this
Note or of the Indenture  shall alter or impair,  the  obligation of the Issuer,
which is absolute  and  unconditional,  to pay the  principal of and interest on
this  Note at the  times,  place and rate,  and in the coin or  currency  herein
prescribed.

               Anything  herein  to  the  contrary  notwithstanding,  except  as
expressly  provided in the Basic Documents,  none of Wilmington Trust Company in
its individual capacity,  JPMorgan Chase Bank, in its individual  capacity,  any
owner  of a  beneficial  interest  in the  Issuer,  or any of  their  respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Note or performance  of, or
omission to perform, any of the covenants, obligations


                                              5

<PAGE>



or indemnifications  contained in the Indenture.  The holder of this Note by its
acceptance  hereof  agrees  that,  except  as  expressly  provided  in the Basic
Documents,  in the case of an Event of Default under the  Indenture,  the holder
shall have no claim  against any of the foregoing  for any  deficiency,  loss or
claim therefrom; provided, however, that nothing contained herein shall be taken
to prevent  recourse to, and enforcement  against,  the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.




                                              6

<PAGE>



               IN WITNESS  WHEREOF,  the Owner Trustee,  on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.

                             HOME LOAN TRUST 2003-HI1

                             By     WILMINGTON TRUST COMPANY, not in
                                    its individual capacity but solely as Owner
                                    Trustee
Dated: March __, 2003
                             By
                                    Authorized Signatory


                          CERTIFICATE OF AUTHENTICATION

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

                                   JPMORGAN  CHASE BANK,  not in
                                   its  individual  capacity but
                                   solely as Indenture Trustee

Dated: March __, 2003


                                            By
                                                   Authorized Signatory


                                              7

<PAGE>



                                          ASSIGNMENT


Social Security or taxpayer I.D. or other identifying number of assignee:


     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
                              _____________________________________
                                (name and address of assignee)
the within Note and all rights thereunder,  and hereby  irrevocably  constitutes
and  appoints  ,  attorney,  to  transfer  said  Note  on  the  books  kept  for
registration thereof, with full power of substitution in the premises.


Dated: _____________________         ______________________________*/
                                         Signature Guaranteed:


                                     ______________________________/ *



____________

1       NOTICE:  The signature to this  assignment must correspond with the name
        of the registered  owner as it appears on the face of the within Note in
        every  particular,   without  alteration,   enlargement  or  any  change
        whatever.  Such signature  must be guaranteed by an "eligible  guarantor
        institution"  meeting  the  requirements  of the Note  Registrar,  which
        requirements  include membership or participation in STAMP or such other
        "signature guarantee program" as may be determined by the Note Registrar
        in addition to, or in substitution  for,  STAMP,  all in accordance with
        the Securities Exchange Act of 1934, as amended.


                                              8

<PAGE>



                                   EXHIBIT A-2

                                  FORM OF NOTES

                                CLASS A-IO NOTES

               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. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED  REPRESENTATIVE  OF DTC), ANY
TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

               THIS NOTE DOES NOT  REPRESENT AN INTEREST IN OR OBLIGATION OF THE
SELLER, THE DEPOSITOR,  THE MASTER SERVICER,  THE INDENTURE  TRUSTEE,  THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE  AFFILIATES,  EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.

               THE HOLDER OF THIS NOTE IS DEEMED TO HAVE REPRESENTED THAT EITHER
(1) IT IS NOT A PLAN NOR IS IT  ACQUIRING  THIS NOTE WITH PLAN ASSETS OR (2) THE
ACQUISITION  OF THIS NOTE BY THE HOLDER  DOES NOT  CONSTITUTE  OR GIVE RISE TO A
PROHIBITED  TRANSACTION  UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE,
FOR WHICH NO STATUTORY, REGULATORY OR ADMINISTRATIVE EXEMPTION IS AVAILABLE.


                                        9

<PAGE>



                                   HOME LOAN TRUST 2003-HI1
                              Home Loan-Backed Note

Registered                                    Notional Amount: $___________

Class A-IO

No. __                                             Percentage Interest: _____%

CUSIP No. ___________                              Note Rate: _____%

               Home Loan Trust  2003-HI1,  a business  trust duly  organized and
existing  under the laws of the State of  Delaware  (herein  referred  to as the
"Issuer"),  for  value  received,  hereby  promises  to  pay to  Cede  & Co.  or
registered  assigns,  the amount  payable on each Payment Date to the Class A-IO
Notes in an  amount  equal to the  Percentage  Interest  specified  above of the
aggregate  amount,  if any,  payable  from the  Payment  Account  in  respect of
interest on the Class A-IO Notes pursuant to Section 3.05 of the Indenture dated
as of March 28,  2003 (the  "Indenture")  between  the  Issuer,  as Issuer,  and
JPMorgan Chase Bank, as Indenture Trustee (the "Indenture Trustee"). Capitalized
terms used but not defined herein are defined in Appendix A of the Indenture.

               Interest  on the Class A-IO  Notes  will be paid  monthly on each
Payment  Date at the Note  Rate.  The Note Rate for the Class A-IO Notes will be
11.00% per annum for the April 2003 through March 2004 Payment Dates, 10.00% per
annum for the April 2004 through March 2005 Payment  Dates,  7.00% per annum for
the April 2005 through  September  2005  Payment  Dates,  and 0.00%  thereafter.
Interest  will be  computed on the basis of a 30-day  month and a 360-day  year.
Interest  on this Note  shall be paid in the  manner  specified  on the  reverse
hereof.

               Interest  on this Note is payable in such coin or currency of the
United  States of America as at the time of payment is legal  tender for payment
of public and private  debts.  All  payments  made by the Issuer with respect to
this Note shall be applied to interest  due and payable on this Note as provided
above.

               Reference  is made to the  further  provisions  of this  Note set
forth on the reverse  hereof,  which shall have the same effect as though  fully
set forth on the face of this Note.

               Unless the certificate of authentication hereon has been executed
by the Indenture Trustee whose name appears below by manual signature, this Note
shall not be  entitled  to any benefit  under the  Indenture  referred to on the
reverse hereof, or be valid or obligatory for any purpose. This Note is one of a
duly authorized issue of Notes of the Issuer, designated as its

               Home  Loan-Backed  Notes (herein called the "Notes"),  all issued
under the Indenture,  to which Indenture and all indentures supplemental thereto
reference  is  hereby  made  for  a  statement  of  the  respective  rights  and
obligations  thereunder of the Issuer,  the Indenture Trustee and the holders of
the Notes. The Notes are subject to all terms of the Indenture.



                                              10

<PAGE>



               The Notes are and will be  equally  and  ratably  secured  by the
collateral pledged as security therefor as provided in the Indenture.

               Interest  on this Note will be payable on each  Payment  Date for
the first 30 Payment  Dates,  commencing  on April 25, 2003, as described in the
Indenture.  "Payment Date" means the  twenty-fifth day of each month, or, if any
such date is not a Business Day, then the next Business Day.

               If an Event of Default  shall have  occurred  and be  continuing,
then the Indenture Trustee or the holders of Notes  representing not less than a
majority of the aggregate Note Balance of all Notes (for which purpose the Class
A-IO Notes will be deemed to have a Note Balance equal to their Notional Amount)
may declare the Notes to be immediately  due and payable in the manner  provided
in Section 5.02 of the Indenture.

               Payments of interest on this Note due and payable on each Payment
Date,  shall be made by check  mailed to the Person  whose  name  appears as the
Registered  Holder of this Note (or one or more  Predecessor  Notes) on the Note
Register  as of the close of  business  on each  Record  Date,  except that with
respect to Notes registered on the Record Date in the name of the nominee of the
Depository Agency (initially,  such nominee to be Cede & Co.),  payments will be
made by wire transfer in immediately  available funds to the account  designated
by such nominee.  Such checks shall be mailed to the Person entitled  thereto at
the  address  of such  Person  as it  appears  on the  Note  Register  as of the
applicable  Record  Date  without  requiring  that  this Note be  submitted  for
notation of payment.  If funds are expected to be available,  as provided in the
Indenture, for the last payment on this Class A-IO Note occurring on the Payment
Date in September 2005 then the Indenture Trustee,  in the name of and on behalf
of the Issuer, will notify the Person who was the Registered Holder hereof as of
the Record Date  preceding  such Payment Date by notice mailed or transmitted by
facsimile  prior to such Payment Date, and the amount then due and payable shall
be payable  only upon  presentation  and  surrender  of this Note at the address
specified in such notice of final payment.

               As provided in the Indenture  and subject to certain  limitations
set forth  therein,  the  transfer  of this Note may be  registered  on the Note
Register  upon  surrender  of this  Note for  registration  of  transfer  at the
Corporate Trust Office, duly endorsed by, or accompanied by a written instrument
of transfer in form  satisfactory to the Indenture Trustee duly executed by, the
holder hereof or such holder's  attorney duly  authorized in writing,  with such
signature  guaranteed  by  an  "eligible  guarantor   institution"  meeting  the
requirements of the Note Registrar,  which  requirements  include  membership or
participation in the Securities  Transfer Agent's Medallion Program ("STAMP") or
such  other  "signature  guarantee  program"  as may be  determined  by the Note
Registrar in addition to, or in substitution  for, STAMP, all in accordance with
the Securities  Exchange Act of 1934, as amended,  and thereupon one or more new
Notes in authorized denominations and in the same aggregate notional amount will
be issued to the designated transferee or transferees. No service charge will be
charged for any  registration of transfer or exchange of this Note, but the Note
Registrar  shall  require  payment  of a sum  sufficient  to  cover  any  tax or
governmental  charge that may be imposed in connection with any  registration of
transfer or exchange of this Note.

               Each holder or  Beneficial  Owner of a Note,  by  acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial  interest in
a Note,  covenants  and  agrees  that no  recourse  may be  taken,  directly  or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,


                                              11

<PAGE>



the Seller,  the Master Servicer,  the Depositor or the Indenture Trustee on the
Notes or under the Indenture or any  certificate  or other writing  delivered in
connection therewith,  against (i) the Indenture Trustee or the Owner Trustee in
its individual  capacity,  (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner,  beneficiary,  agent, officer, director or employee
of the Indenture  Trustee or the Owner Trustee in its individual  capacity,  any
holder  of a  beneficial  interest  in the  Issuer,  the  Owner  Trustee  or the
Indenture  Trustee or of any successor or assign of the Indenture Trustee or the
Owner  Trustee in its  individual  capacity,  except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully  liable,  to  the  extent  provided  by  applicable  law  for  any  unpaid
consideration  for  stock,  unpaid  capital  contribution  or failure to pay any
installment or call owing to such entity.

               Each holder or  Beneficial  Owner of a Note,  by  acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note,  covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute  against the
Depositor,  the  Seller,  the  Master  Servicer  or the  Issuer,  or join in any
institution against the Depositor, the Seller, the Master Servicer or the Issuer
of, any  bankruptcy,  reorganization,  arrangement,  insolvency  or  liquidation
proceedings  under any United States federal or state  bankruptcy or similar law
in connection with any obligations  relating to the Notes,  the Indenture or the
Basic Documents.

               The Issuer has entered into the Indenture and this Note is issued
with the intention  that, for federal,  state and local income,  single business
and  franchise  tax  purposes,  the Notes will  qualify as  indebtedness  of the
Issuer.  Each holder of a Note,  by  acceptance  of a Note (and each  Beneficial
Owner of a Note by  acceptance  of a beneficial  interest in a Note),  agrees to
treat the Notes  for  federal,  state and  local  income,  single  business  and
franchise tax purposes as indebtedness of the Issuer.

               Prior to the due presentment for registration of transfer of this
Note,  the  Issuer,  the  Indenture  Trustee  and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of  determination or as of such other date as may be specified in the
Indenture)  as the owner  hereof for all  purposes,  whether or not this Note be
overdue,  and none of the Issuer,  the Indenture Trustee or any such agent shall
be affected by notice to the contrary.

               The  Indenture  permits,   with  certain  exceptions  as  therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the  Issuer  and the  Indenture  Trustee  and the  rights of the
holders  of the Notes  under the  Indenture  at any time by the  Issuer  and the
Indenture  Trustee  with the  consent  of the  holders of Notes  representing  a
majority of the aggregate Note Balance of all Notes at the time Outstanding (for
which  purpose the Class A-IO Notes will be deemed to have a Note Balance  equal
to their  Notional  Amount) and with prior  notice to the Rating  Agencies.  The
Indenture also contains provisions  permitting the holders of Notes representing
specified  percentages of the aggregate Note Balance of all Notes,  on behalf of
the holders of all the Notes,  to waive  compliance  by the Issuer with  certain
provisions of the  Indenture  and certain past defaults  under the Indenture and
their  consequences.  Any such  consent or waiver by the holder of this Note (or
any one of more  Predecessor  Notes) shall be  conclusive  and binding upon such
holder and upon all future  holders of this Note and of any Note issued upon the
registration  of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this


                                              12

<PAGE>



Note. The Indenture  also permits the Issuer and the Indenture  Trustee to amend
or waive certain  terms and  conditions  set forth in the Indenture  without the
consent of holders of the Notes issued  thereunder  but with prior notice to the
Rating Agencies.

               The term  "Issuer" as used in this Note includes any successor or
the Issuer under the Indenture.

               The  Issuer  is  permitted  by  the   Indenture,   under  certain
circumstances,  to merge or consolidate,  subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.

               The Notes are issuable only in registered  form in  denominations
as provided in the Indenture, subject to certain limitations therein set forth.

               This Note and the Indenture shall be construed in accordance with
the laws of the State of New York,  without  reference  to its  conflict  of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.

               No  reference  herein to the  Indenture  and no provision of this
Note or of the Indenture  shall alter or impair,  the  obligation of the Issuer,
which is absolute  and  unconditional,  to pay the  interest on this Note at the
times, place and rate, and in the coin or currency herein prescribed.

               Anything  herein  to  the  contrary  notwithstanding,  except  as
expressly  provided in the Basic Documents,  none of Wilmington Trust Company in
its individual capacity,  JPMorgan Chase Bank, in its individual  capacity,  any
owner  of a  beneficial  interest  in the  Issuer,  or any of  their  respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for,  the  payment of interest  on this Note or  performance  of, or omission to
perform, any of the covenants,  obligations or indemnifications contained in the
Indenture.  The holder of this Note by its acceptance hereof agrees that, except
as expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the holder shall have no claim against any of the foregoing
for any deficiency,  loss or claim therefrom;  provided,  however,  that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the  assets  of  the  Issuer  for  any  and  all  liabilities,  obligations  and
undertakings contained in the Indenture or in this Note.



                                              13

<PAGE>



               IN WITNESS  WHEREOF,  the Owner Trustee,  on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.

                                HOME LOAN TRUST 2003-HI1


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

Dated: March __, 2003
                                By
                                       Authorized Signatory


                          CERTIFICATE OF AUTHENTICATION


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

                                                   JPMORGAN  CHASE BANK,  not in
                                                   its  individual  capacity but
                                                   solely as Indenture Trustee


Dated: March __, 2003


                                            By
                                                   Authorized Signatory


                                              14

<PAGE>


                                         ASSIGNMENT


Social Security or taxpayer I.D. or other identifying number of assignee:


     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
                              _____________________________________
                                (name and address of assignee)
the within Note and all rights thereunder,  and hereby  irrevocably  constitutes
and  appoints  ,  attorney,  to  transfer  said  Note  on  the  books  kept  for
registration thereof, with full power of substitution in the premises.


Dated: _____________________         ______________________________*/
                                         Signature Guaranteed:


                                     ______________________________/ *



____________

1       NOTICE:  The signature to this  assignment must correspond with the name
        of the registered  owner as it appears on the face of the within Note in
        every  particular,   without  alteration,   enlargement  or  any  change
        whatever.  Such signature  must be guaranteed by an "eligible  guarantor
        institution"  meeting  the  requirements  of the Note  Registrar,  which
        requirements  include membership or participation in STAMP or such other
        "signature guarantee program" as may be determined by the Note Registrar
        in addition to, or in substitution  for,  STAMP,  all in accordance with
        the Securities Exchange Act of 1934, as amended.



                                              15

<PAGE>



                                   EXHIBIT A-3

                                  FORM OF NOTES

                                CLASS M-__ NOTES

               THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR NOTES
AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).

               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. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED  REPRESENTATIVE  OF DTC), ANY
TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

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

               THIS NOTE DOES NOT  REPRESENT AN INTEREST IN OR OBLIGATION OF THE
SELLER, THE DEPOSITOR,  THE MASTER SERVICER,  THE INDENTURE  TRUSTEE,  THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE  AFFILIATES,  EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.

               THE HOLDER OF THIS NOTE IS DEEMED TO HAVE REPRESENTED THAT EITHER
(1) IT IS NOT A PLAN NOR IS IT  ACQUIRING  THIS NOTE WITH PLAN ASSETS OR (2) THE
ACQUISITION  OF THIS NOTE BY THE HOLDER  DOES NOT  CONSTITUTE  OR GIVE RISE TO A
PROHIBITED  TRANSACTION  UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE,
FOR WHICH NO STATUTORY, REGULATORY OR ADMINISTRATIVE EXEMPTION IS AVAILABLE.






                                              16

<PAGE>







                                   HOME LOAN TRUST 2003-HI1
                              Home Loan-Backed Note

               Home Loan Trust  2003-HI1,  a statutory  trust duly organized and
existing  under the laws of the State of  Delaware  (herein  referred  to as the
"Issuer"),  for  value  received,  hereby  promises  to  pay to  Cede  & Co.  or
registered assigns,  the principal sum of $___________,  payable on each Payment
Date in an  amount  equal  to the  Percentage  Interest  specified  above of the
aggregate  amount,  if any,  payable  from the  Payment  Account  in  respect of
principal  on the Class M-__ Notes  pursuant  to Section  3.05 of the  Indenture
dated as of March 28, 2003 (the "Indenture")  between the Issuer, as Issuer, and
JPMorgan Chase Bank, as Indenture Trustee (the "Indenture  Trustee");  provided,
however,  that the entire unpaid  principal amount of this Note shall be due and
payable on the Payment Date in April 2028, to the extent not previously  paid on
a prior Payment Date.  Capitalized terms used but not defined herein are defined
in Appendix A of the Indenture.

               [Interest  on the Class M-__  Notes will be paid  monthly on each
Payment  Date at the Note  Rate.  The Note Rate for the Class M-__ Notes will be
_____% per annum. Interest will be computed on the basis of a 30-day month and a
360-day year. Principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof. On the Step-Up Date, the Note Rate on the Class
M-___ Note will increase by 0.50% per annum.

               Principal  of and  interest on this Note are payable in such coin
or currency  of the United  States of America as at the time of payment is legal
tender for payment of public and private debts.  All payments made by the Issuer
with respect to this Note shall be applied  first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.

               Reference  is made to the  further  provisions  of this  Note set
forth on the reverse  hereof,  which shall have the same effect as though  fully
set forth on the face of this Note.

               Unless the certificate of authentication hereon has been executed
by the Indenture Trustee whose name appears below by manual signature, this Note
shall not be  entitled  to any benefit  under the  Indenture  referred to on the
reverse hereof, or be valid or obligatory for any purpose.

               This  Note is one of a duly  authorized  issue  of  Notes  of the
Issuer,  designated as its Home  Loan-Backed  Notes (herein called the "Notes"),
all  issued  under  the  Indenture,   to  which  Indenture  and  all  indentures
supplemental  thereto reference is hereby made for a statement of the respective
rights and obligations  thereunder of the Issuer,  the Indenture Trustee and the
holders of the Notes. The Notes are subject to all terms of the Indenture.

               The Notes are and will be  equally  and  ratably  secured  by the
collateral pledged as security therefor as provided in the Indenture.



                                        3

<PAGE>



               Principal  of and  interest  on this Note will be payable on each
Payment  Date,  commencing  on April 25, 2003,  as  described in the  Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next Business Day.

               The entire unpaid  principal amount of this Note shall be due and
payable in full on the Payment Date in April 2028 pursuant to the Indenture,  to
the extent not  previously  paid on a prior  Payment Date.  Notwithstanding  the
foregoing,  if an Event of Default shall have occurred and be  continuing,  then
the  Indenture  Trustee  or the  holders of Notes  representing  not less than a
majority of the aggregate Note Balance of all Notes (for which purpose the Class
A-IO Notes will be deemed to have a Note Balance equal to their Notional Amount)
may declare the Notes to be immediately  due and payable in the manner  provided
in Section  5.02 of the  Indenture.  Principal  payments  on the Notes  shall be
distributed  first to the Senior Notes,  and then  sequentially to the Class M-1
Notes,  Class M-2 Notes and Class M-3 Notes,  in that  order,  to the holders of
Notes entitled thereto.

               Payments of interest on this Note due and payable on each Payment
Date,  together with the installment of principal,  if any, to the extent not in
full  payment of this Note,  shall be made by check  mailed to the Person  whose
name appears as the Registered  Holder of this Note (or one or more  Predecessor
Notes) on the Note  Register as of the close of  business  on each Record  Date,
except that with respect to Notes  registered  on the Record Date in the name of
the nominee of the Depository Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire  transfer in  immediately  available  funds to the
account  designated by such  nominee.  Such checks shall be mailed to the Person
entitled  thereto  at the  address  of such  Person  as it  appears  on the Note
Register as of the  applicable  Record Date without  requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Payment  Date shall be binding  upon all future  holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. If funds are expected to be available,
as provided in the Indenture,  for payment in full of the then remaining  unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee,  in
the name of and on behalf of the  Issuer,  will  notify  the  Person who was the
Registered  Holder hereof as of the Record Date  preceding  such Payment Date by
notice mailed or  transmitted  by facsimile  prior to such Payment Date, and the
amount  then due and  payable  shall  be  payable  only  upon  presentation  and
surrender of this Note at the address specified in such notice of final payment.

               As provided in the Indenture  and subject to certain  limitations
set forth  therein,  the  transfer  of this Note may be  registered  on the Note
Register  upon  surrender  of this  Note for  registration  of  transfer  at the
Corporate Trust Office, duly endorsed by, or accompanied by a written instrument
of transfer in form  satisfactory to the Indenture Trustee duly executed by, the
holder hereof or such holder's  attorney duly  authorized in writing,  with such
signature  guaranteed  by  an  "eligible  guarantor   institution"  meeting  the
requirements of the Note Registrar,  which  requirements  include  membership or
participation in the Securities  Transfer Agent's Medallion Program ("STAMP") or
such  other  "signature  guarantee  program"  as may be  determined  by the Note
Registrar in addition to, or in substitution  for, STAMP, all in accordance with
the Securities  Exchange Act of 1934, as amended,  and thereupon one or more new
Notes in authorized  denominations  and in the same aggregate  principal  amount
will be issued to the designated  transferee or  transferees.  No service charge
will be charged for any  registration  of transfer or exchange of this Note, but
the Note Registrar


                                        4

<PAGE>



shall  require  payment  of a sum  sufficient  to cover any tax or  governmental
charge that may be imposed in connection  with any  registration  of transfer or
exchange of this Note.

               Each holder or  Beneficial  Owner of a Note,  by  acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial  interest in
a Note,  covenants  and  agrees  that no  recourse  may be  taken,  directly  or
indirectly,  with respect to the  obligations of the Issuer,  the Owner Trustee,
the Seller,  the Master Servicer,  the Depositor or the Indenture Trustee on the
Notes or under the Indenture or any  certificate  or other writing  delivered in
connection therewith,  against (i) the Indenture Trustee or the Owner Trustee in
its individual  capacity,  (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner,  beneficiary,  agent, officer, director or employee
of the Indenture  Trustee or the Owner Trustee in its individual  capacity,  any
holder  of a  beneficial  interest  in the  Issuer,  the  Owner  Trustee  or the
Indenture  Trustee or of any successor or assign of the Indenture Trustee or the
Owner  Trustee in its  individual  capacity,  except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully  liable,  to  the  extent  provided  by  applicable  law  for  any  unpaid
consideration  for  stock,  unpaid  capital  contribution  or failure to pay any
installment or call owing to such entity.

               Each holder or  Beneficial  Owner of a Note,  by  acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note,  covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute  against the
Depositor,  the  Seller,  the  Master  Servicer  or the  Issuer,  or join in any
institution against the Depositor, the Seller, the Master Servicer or the Issuer
of, any  bankruptcy,  reorganization,  arrangement,  insolvency  or  liquidation
proceedings  under any United States federal or state  bankruptcy or similar law
in connection with any obligations  relating to the Notes,  the Indenture or the
Basic Documents.

               The Issuer has entered into the Indenture and this Note is issued
with the intention  that, for federal,  state and local income,  single business
and  franchise  tax  purposes,  the Notes will  qualify as  indebtedness  of the
Issuer.  Each holder of a Note,  by  acceptance  of a Note (and each  Beneficial
Owner of a Note by  acceptance  of a beneficial  interest in a Note),  agrees to
treat the Notes  for  federal,  state and  local  income,  single  business  and
franchise tax purposes as indebtedness of the Issuer.

               Prior to the due presentment for registration of transfer of this
Note,  the  Issuer,  the  Indenture  Trustee  and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of  determination or as of such other date as may be specified in the
Indenture)  as the owner  hereof for all  purposes,  whether or not this Note be
overdue,  and none of the Issuer,  the Indenture Trustee or any such agent shall
be affected by notice to the contrary.

               The  Indenture  permits,   with  certain  exceptions  as  therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the  Issuer  and the  Indenture  Trustee  and the  rights of the
holders  of the Notes  under the  Indenture  at any time by the  Issuer  and the
Indenture  Trustee  with the  consent  of the  holders of Notes  representing  a
majority of the aggregate Note Balance of all Notes at the time Outstanding (for
which  purpose the Class A-IO Notes will be deemed to have a Note Balance  equal
to their  Notional  Amount) and with prior  notice to the Rating  Agencies.  The
Indenture also contains provisions  permitting the holders of Notes representing
specified


                                        5

<PAGE>



percentages of the aggregate Note Balance of all Notes, on behalf of the holders
of all the Notes, to waive  compliance by the Issuer with certain  provisions of
the  Indenture  and  certain  past  defaults   under  the  Indenture  and  their
consequences.  Any such consent or waiver by the holder of this Note (or any one
of more Predecessor  Notes) shall be conclusive and binding upon such holder and
upon  all  future  holders  of  this  Note  and  of any  Note  issued  upon  the
registration  of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note.  The Indenture
also  permits  the Issuer and the  Indenture  Trustee to amend or waive  certain
terms and conditions  set forth in the Indenture  without the consent of holders
of the Notes issued thereunder but with prior notice to the Rating Agencies.

               The term  "Issuer" as used in this Note includes any successor or
the Issuer under the Indenture.

               The  Issuer  is  permitted  by  the   Indenture,   under  certain
circumstances,  to merge or consolidate,  subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.

               The Notes are issuable only in registered  form in  denominations
as provided in the Indenture, subject to certain limitations therein set forth.

               This Note and the Indenture shall be construed in accordance with
the laws of the State of New York,  without  reference  to its  conflict  of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.

               No  reference  herein to the  Indenture  and no provision of this
Note or of the Indenture  shall alter or impair,  the  obligation of the Issuer,
which is absolute  and  unconditional,  to pay the  principal of and interest on
this  Note at the  times,  place and rate,  and in the coin or  currency  herein
prescribed.

               Anything  herein  to  the  contrary  notwithstanding,  except  as
expressly  provided in the Basic Documents,  none of Wilmington Trust Company in
its individual capacity,  JPMorgan Chase Bank, in its individual  capacity,  any
owner  of a  beneficial  interest  in the  Issuer,  or any of  their  respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Note or performance  of, or
omission to  perform,  any of the  covenants,  obligations  or  indemnifications
contained in the  Indenture.  The holder of this Note by its  acceptance  hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture,  the holder shall have no claim against
any of the  foregoing for any  deficiency,  loss or claim  therefrom;  provided,
however,  that nothing  contained  herein shall be taken to prevent recourse to,
and enforcement  against,  the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.


               IN WITNESS  WHEREOF,  the Owner Trustee,  on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.

                               HOME LOAN TRUST 2003-HI1




<PAGE>



                               By  WILMINGTON TRUST COMPANY, not in
                                   its individual capacity but solely as Owner
                                   Trustee
Dated: March __, 2003
                               By
                                   Authorized Signatory


                          CERTIFICATE OF AUTHENTICATION

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

                                                   JPMORGAN  CHASE BANK,  not in
                                                   its  individual  capacity but
                                                   solely as Indenture Trustee

Dated: March  __, 2003


                                            By
                                                   Authorized Signatory



<PAGE>

                                         ASSIGNMENT


Social Security or taxpayer I.D. or other identifying number of assignee:


     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
                              _____________________________________
                                (name and address of assignee)
the within Note and all rights thereunder,  and hereby  irrevocably  constitutes
and  appoints  ,  attorney,  to  transfer  said  Note  on  the  books  kept  for
registration thereof, with full power of substitution in the premises.


Dated: _____________________         ______________________________*/
                                         Signature Guaranteed:


                                     ______________________________/ *



____________

1       NOTICE:  The signature to this  assignment must correspond with the name
        of the registered  owner as it appears on the face of the within Note in
        every  particular,   without  alteration,   enlargement  or  any  change
        whatever.  Such signature  must be guaranteed by an "eligible  guarantor
        institution"  meeting  the  requirements  of the Note  Registrar,  which
        requirements  include membership or participation in STAMP or such other
        "signature guarantee program" as may be determined by the Note Registrar
        in addition to, or in substitution  for,  STAMP,  all in accordance with
        the Securities Exchange Act of 1934, as amended.




<PAGE>


                                    EXHIBIT B

                    FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE


        The  undersigned,  a  Responsible  Officer of  JPMorgan  Chase Bank (the
"Indenture Trustee") certifies that:

        1. The Indenture  Trustee has  performed all of the duties  specifically
required to be performed by it pursuant to the provisions of the Indenture dated
as of March 28, 2003 (the  "Indenture") by and between Home Loan Trust 2003-HI1,
as the issuer (the  "Issuer") and the Indenture  Trustee in accordance  with the
standards set forth therein.

        2.  Based on my  knowledge,  the  information  that is  provided  by the
Indenture Trustee pursuant to Section 7.05(I) of the Indenture is accurate as of
the last day of the 20___ calendar year.

        Capitalized  terms used and not defined  herein  shall have the meanings
given such terms in the Indenture.

     IN  WITNESS   THEREOF,   I  have  duly  executed  this  certificate  as  of
____________, 20___


                                       Name:_______________________
                                       Title:________________________





<PAGE>


                                   APPENDIX A

                                   DEFINITIONS

               Accrued Component  Interest:  With respect to the B Component and
any Payment Date, an amount equal to interest  accrued for the related  Interest
Accrual  Period on the  Component  Principal  Balance  thereof at the  Component
Interest  Rate for such Payment Date,  less the interest  portion of Excess Loss
Amounts for such Payment Date, with such interest portion of Excess Loss Amounts
allocated  to the Notes and the B Component  on a pro rata  basis,  based on the
amount of Accrued Note  Interest or Accrued  Component  Interest,  respectively,
payable thereon.

               Accrued Note Interest:  With respect to the Notes and any Payment
Date,  an amount  equal to interest  accrued for the  related  Interest  Accrual
Period on the related Note Balance or Notional Amount thereof as applicable,  in
each case at the related  Note Rate for such  Payment  Date,  less the  interest
portion of Excess Loss Amounts for such Payment Date, with such interest portion
of Excess Loss Amounts  allocated to the Notes and the B Component on a pro rata
basis,  based on the  amount of  Accrued  Note  Interest  or  Accrued  Component
Interest, respectively, payable thereon.

               Adjusted Issue Price: Upon the occurrence of an Event of Default,
or upon the  occurrence of an Optional  Redemption (i) with respect to the first
29 Payment Dates, as defined in Code Section 1272(a)(4) and (ii) with respect to
all Payment Dates thereafter, zero.

               Administrative  Fees:  The Servicing Fees and the fees payable to
the Grantor Trustee, the Owner Trustee and the Indenture Trustee.

               Allocable Loss Interest:  With respect to any Payment Date and as
to any Class of  Subordinate  Notes  and the B  Component,  an  amount  equal to
interest at the related Note Rate or Component  Interest Rate on any Liquidation
Loss Amounts (other than Excess Loss Amounts) previously allocated to such Class
or to the B Component  and not  reimbursed,  from the Payment Date such Class or
the B Component was allocated such loss until the end of the  Collection  Period
preceding the current Payment Date.

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

               Appraised  Value:  For any  Home  Loan the  value of the  related
Mortgaged Property  determined by the appraisal,  sales price for such Mortgaged
Property or alternative  valuation  method used in the  origination of such Home
Loan (which may have been  obtained at an earlier  time);  provided that if such
Home Loan was originated  simultaneously with or not more than 12 months after a
senior lien on the related Mortgaged Property which was originated in a purchase
or cash-out  refinance  transaction,  the appraised value shall be the lesser of
the appraised  value at the  origination  of the senior lien and the sales price
for such Mortgaged Property.


                                       -1-

<PAGE>



               Assignment  of  Mortgage:   With  respect  to  any  Mortgage,  an
assignment,  notice of transfer or equivalent  instrument,  in recordable  form,
sufficient  under the laws of the  jurisdiction  in which the related  Mortgaged
Property  is located  to reflect  the sale of the  Mortgage,  which  assignment,
notice of transfer or  equivalent  instrument  may be in the form of one or more
blanket assignments  covering Mortgages secured by Mortgaged  Properties located
in the same jurisdiction.

               Authorized  Officer:  With respect to the Issuer,  any officer of
the Owner  Trustee  who is  authorized  to act for the Owner  Trustee in matters
relating to the Issuer and who is identified on the list of Authorized  Officers
delivered by the Owner Trustee to the Indenture  Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter).

               B Component: One of two components of the Owner Trust Certificate
issued by the Trust,  which  component has a Component  Principal  Balance and a
Component Interest Rate.

               B Component  Principal  Distribution  Amount: With respect to any
Payment Date: (1) prior to the Stepdown Date or on or after the Stepdown Date if
a Trigger Event is in effect, the remaining  Principal  Distribution  Amount for
that  Payment  Date  after  distribution  of the Senior  Principal  Distribution
Amount,  the Class M-1 Principal  Distribution  Amount,  the Class M-2 Principal
Distribution Amount and the Class M-3 Principal  Distribution  Amount, or (2) on
or after the Stepdown  Date if a Trigger Event is not in effect for that Payment
Date, the lesser of:

                      o the  remaining  Principal  Distribution  Amount for that
               Payment  Date  after   distribution   of  the  Senior   Principal
               Distribution Amount, the Class M-1 Principal Distribution Amount,
               the Class M-2  Principal  Distribution  Amount  and the Class M-3
               Principal Distribution Amount; and

                      o the  excess  of (A) the sum of (1)  the  aggregate  Note
               Balances of the Senior Notes,  the Class M-1 Notes, the Class M-2
               Notes and the Class M-3 Notes  (after  taking  into  account  the
               payment of the sum of the Senior Principal  Distribution  Amount,
               the  Class  M-1  Principal  Distribution  Amount,  the  Class M-2
               Principal   Distribution  Amount  and  the  Class  M-3  Principal
               Distribution  Amount for that Payment Date) and (2) the Component
               Principal  Balance of the B Component  immediately  prior to that
               Payment  Date over (B) the  lesser of (x) the  product of (1) the
               applicable  Subordination  Percentage  and (2) the aggregate Pool
               Balance of the Home Loans after giving affect to distributions to
               be made on that Payment Date and (y) the excess of the  aggregate
               Pool   Balance  of  the  Home  Loans  after   giving   effect  to
               distributions  to be made on that Payment Date,  over the Reserve
               Amount Floor.

               In no event will the B Component Principal Distribution Amount be
greater than the Component Principal Balance of the B Component.

               Bankruptcy Code: The Bankruptcy Code of 1978, as amended.

               Basic  Documents:  The Owner Trust  Agreement,  the Grantor Trust
Agreement,  the  Indenture,  the Home Loan  Purchase  Agreement,  the  Servicing
Agreement,  the  Custodial  Agreement and the other  documents and  certificates
delivered in connection with any of the above.


                                       -2-

<PAGE>



               Beneficial Owner: With respect to any Note, the Person who is the
beneficial  owner of such Note as reflected on the books of the Depository or on
the books of a Person maintaining an account with such Depository (directly as a
Depository  Participant  or  indirectly  through a  Depository  Participant,  in
accordance with the rules of such Depository).

               Book-Entry Custodian: The custodian appointed pursuant to Section
4.06 of the Indenture.

               Book-Entry Notes:  Beneficial  interests in the Notes,  ownership
and  transfers of which shall be made through book entries by the  Depository as
described in Section 4.06 of the Indenture.

               Business  Day:  Any day other than (i) a Saturday  or a Sunday or
(ii) a day on which banking institutions in the States of New York,  California,
Texas, Minnesota, Pennsylvania,  Illinois or Delaware are required or authorized
by law to be closed.

               Calendar Quarter:  A Calendar Quarter shall consist of one of the
following  time periods in any given year:  January 1 through  March 31, April 1
through June 30, July 1 though September 30, and October 1 through December 31.

               Certificate or Owner Trust Certificate: The certificate issued in
the form of Exhibit A to the Owner Trust Agreement and  outstanding  pursuant to
the  terms of the Owner  Trust  Agreement,  evidencing  a  beneficial  ownership
interest  in the  Trust  and  comprised  of the B  Component  and  the  Residual
Component, which are not separately transferable.

               Certificate Distribution Account: The account or accounts created
and maintained by the  Certificate  Paying Agent pursuant to Section  3.10(c) of
the  Owner  Trust  Agreement.   The  Certificate  Paying  Agent  will  make  all
distributions  on the Owner  Trust  Certificate  from  money on  deposit  in the
Certificate  Distribution Account. The Certificate Distribution Account shall be
an Eligible Account.

               Certificate  Distribution  Amount:  The  amount  payable  to  the
Certificate Paying Agent under Section  3.05(b)(v),  (c)(v),  (d)(ii),  (d)(ix),
(d)(x) and  (d)(xi) of the  Indenture  for  payment to the  holders of the Owner
Trust Certificate under the Owner Trust Agreement.

     Certificate  Paying  Agent:  The meaning  specified  in Section 3.10 of the
Owner Trust Agreement.

               Certificate Percentage Interest:  With respect to the Owner Trust
Certificate and the Grantor Trust Certificate and any date of determination, the
percentage  interest  as stated on the face of the Owner  Trust  Certificate  or
Grantor Trust  Certificate,  which  percentage may be recalculated in accordance
with  Section  3.03 of the Owner Trust  Agreement  or 5.01 of the Grantor  Trust
Agreement, as applicable.

               Certificate  Principal  Balance:  As of any  Payment  Date,  with
respect to the Owner Trust  Certificate,  an amount equal to the then applicable
Certificate Percentage Interest of such


                                       -3-

<PAGE>



Owner  Trust   Certificate,   multiplied  by  the  Outstanding   Reserve  Amount
immediately prior to such Payment Date.

               Certificate Register:  The register maintained by the Certificate
Registrar in which the Certificate  Registrar shall provide for the registration
of Owner Trust  Certificates  and of transfers  and exchanges of the Owner Trust
Certificates.

               Certificate Registrar:  Initially,  the Indenture Trustee, in its
capacity as Certificate Registrar,  or any successor to the Indenture Trustee in
such capacity.

               Certificate  of Trust:  The  Certificate  of Trust  filed for the
Trust pursuant to Section 3810(a) of the Statutory Trust Statute,  including all
amendments and restatements.

               Certificateholder:  The  Person  in  whose  name an  Owner  Trust
Certificate  is registered in the  Certificate  Register  except that, any Owner
Trust Certificate registered in the name of the Issuer, the Owner Trustee or the
Indenture  Trustee or any  Affiliate  (other  than the Class B Issuer) of any of
them shall be deemed not to be outstanding and the registered holder will not be
considered a  Certificateholder  or a holder for purposes of giving any request,
demand, authorization,  direction, notice, consent or waiver under the Indenture
or the Owner Trust Agreement provided that, in determining whether the Indenture
Trustee  or the  Owner  Trustee  shall be  protected  in  relying  upon any such
request, demand, authorization, direction, notice, consent or waiver, only Owner
Trust  Certificates  that the Indenture Trustee or the Owner Trustee knows to be
so owned shall be so disregarded.  Owners of the Owner Trust  Certificates  that
have been  pledged in good  faith may be  regarded  as  Holders  if the  pledgee
establishes to the  satisfaction of the Indenture  Trustee or the Owner Trustee,
as the case may be,  the  pledgee's  right so to act with  respect to such Owner
Trust  Certificates  and that the pledgee is not the Issuer,  any other  obligor
upon the Owner  Trust  Certificates  or any  Affiliate  (other  than the Class B
Issuer) of any of the foregoing Persons.

     Class: Collectively, all of the Notes bearing the same designation.

               Class A Notes or Senior Notes:  The Class A-1,  Class A-2,  Class
A-3, Class A-4, Class A-5, Class A-6, Class A-7 Notes and Class A-IO Notes.

               Class B  Indenture:  The Class B Indenture  dated March 28, 2003,
entered into among the B Issuer,  Chase Manhattan Trust Cayman,  Ltd., as Paying
Agent and Note Registrar and the Class B Trustee.

               Class B Issuer: Foreign Obligation Exchange, Inc. 2003-HI1.

               Class B Notes:  The Class B Notes which are to be issued pursuant
to the Class B Indenture,  which will be secured by the Owner Trust  Certificate
and will be entitled to the payments paid on the B Component.

               Class B Trustee:  JPMorgan  Chase Bank,  and its  successors  and
assigns or any successor indenture trustee to be appointed pursuant to the terms
of the Class B Indenture.


                                       -4-

<PAGE>



               Class M Notes: The Class M-1, Class M-2 and Class M-3 Notes.

               Class M-1  Principal  Distribution  Amount:  With  respect to any
Payment Date: (1) prior to the Stepdown Date or on or after the Stepdown Date if
a Trigger Event is in effect, the remaining  Principal  Distribution  Amount for
that  Payment  Date  after  distribution  of the Senior  Principal  Distribution
Amount, or (2) on or after the Stepdown Date if a Trigger Event is not in effect
for that Payment Date, the lesser of:

                      o the  remaining  Principal  Distribution  Amount for that
               Payment  Date  after   distribution   of  the  Senior   Principal
               Distribution Amount; and

                      o the  excess  of (A) the sum of (1)  the  aggregate  Note
               Balances  of the Senior  Notes  (after  taking  into  account the
               payment of the sum of the Senior  Principal  Distribution  Amount
               for that Payment  Date) and (2) the Note Balance of the Class M-1
               Notes  immediately prior to that Payment Date over (B) the lesser
               of (x) the product of (1) the applicable Subordination Percentage
               and (2) the aggregate Pool Balance of the Home Loans after giving
               affect to  distributions  to be made on that Payment Date and (y)
               the excess of the aggregate  Pool Balance of the Home Loans after
               giving effect to  distributions  to be made on that Payment Date,
               over the Reserve Amount Floor.

               In no event will the Class M-1 Principal  Distribution  Amount be
greater than the Note Balance of the Class M-1 Notes.

                Class M-2  Principal  Distribution  Amount:  With respect to any
Payment Date: (1) prior to the Stepdown Date or on or after the Stepdown Date if
a Trigger Event is in effect, the remaining  Principal  Distribution  Amount for
that Payment Date after distribution of the Senior Principal Distribution Amount
and the Class M-1 Principal Distribution Amount, or (2) on or after the Stepdown
Date if a Trigger Event is not in effect for that Payment Date, the lesser of:

                      o the  remaining  Principal  Distribution  Amount for that
               Payment  Date  after   distribution   of  the  Senior   Principal
               Distribution  Amount  and the  Class M-1  Principal  Distribution
               Amount; and

                      o the  excess  of (A) the sum of (1)  the  aggregate  Note
               Balances  of the  Senior  Notes and the  Class  M-1 Notes  (after
               taking  into  account  the  payment  of the  sum  of  the  Senior
               Principal   Distribution   Amount   and   Class   M-1   Principal
               Distribution  Amount  for  that  Payment  Date)  and (2) the Note
               Balance of the Class M-2 Notes  immediately prior to that Payment
               Date over (B) the lesser of (x) the product of (1) the applicable
               Subordination  Percentage  and (2) the aggregate  Pool Balance of
               the Home Loans after giving affect to distributions to be made on
               that  Payment  Date  and (y) the  excess  of the  aggregate  Pool
               Balance of the Home Loans after giving effect to distributions to
               be made on that Payment Date, over the Reserve Amount Floor.


                                       -5-

<PAGE>



               In no event will the Class M-2 Principal  Distribution  Amount be
greater than the Note Balance of the Class M-2 Notes.

               Class M-3  Principal  Distribution  Amount:  With  respect to any
Payment Date: (1) prior to the Stepdown Date or on or after the Stepdown Date if
a Trigger Event is in effect, the remaining  Principal  Distribution  Amount for
that  Payment  Date  after  distribution  of the Senior  Principal  Distribution
Amount, the Class M-1 Principal  Distribution Amount and the Class M-2 Principal
Distribution  Amount, or (2) on or after the Stepdown Date if a Trigger Event is
not in effect for that Payment Date, the lesser of:

                      o the  remaining  Principal  Distribution  Amount for that
               Payment  Date  after   distribution   of  the  Senior   Principal
               Distribution Amount, the Class M-1 Principal  Distribution Amount
               and the Class M-2 Principal Distribution Amount; and

                      o the  excess  of (A) the sum of (1)  the  aggregate  Note
               Balances of the Senior  Notes,  the Class M-1 Notes and the Class
               M-2 Notes  (after  taking into  account the payment of the sum of
               the Senior Principal Distribution Amount, the Class M-1 Principal
               Distribution  Amount  and the  Class M-2  Principal  Distribution
               Amount  for that  Payment  Date) and (2) the Note  Balance of the
               Class M-3 Notes  immediately  prior to that Payment Date over (B)
               the lesser of (x) the product of (1) the applicable Subordination
               Percentage  and (2) the aggregate  Pool Balance of the Home Loans
               after giving affect to  distributions  to be made on that Payment
               Date and (y) the excess of the aggregate Pool Balance of the Home
               Loans after  giving  effect to  distributions  to be made on that
               Payment Date, over the Reserve Amount Floor.

               In no event will the Class M-3 Principal  Distribution  Amount be
greater than the Note Balance of the Class M-3 Notes.

               Closing Date: March 28, 2003.

     Code:  The  Internal  Revenue Code of 1986,  as amended,  and the rules and
regulations promulgated thereunder.

     Collateral: The meaning specified in the Granting Clause of the Indenture.

     Collection Period: As to any Payment Date, the calendar month preceding the
month of that Payment Date.

               Combined Loan-to-Value Ratio: With respect to each Home Loan, the
ratio,  expressed as a percentage,  of (i) the sum of (A) the original principal
balance  of such  Home  Loan,  and (B) any  outstanding  principal  balance,  at
origination of such Home Loan, of all other mortgage loans,  if any,  secured by
senior or  subordinate  liens on the  related  Mortgaged  Property,  to (ii) the
Appraised Value, or, if permitted by the Program Guide, a statistical  valuation
or the Stated Value.

               Commission: The Securities and Exchange Commission.


                                       -6-

<PAGE>



     Component  Interest  Rate:  The interest  rate accruing on the B Component,
which interest rate shall be 8.00% per annum.

               Component Principal Balance: With respect to the B Component, the
Initial  Component  Principal  Balance  thereof as reduced by the sum of (x) all
amounts actually distributed to the Certificate in respect of the B Component on
all  prior  Payment  Dates  on  account  of  principal  and (y)  the  aggregate,
cumulative  amount of Liquidation Loss Amounts  (including  Excess Loss Amounts)
allocated thereto on all prior Payment Dates.

               Corporate  Trust Office:  With respect to the Indenture  Trustee,
Certificate  Registrar,  Certificate Paying Agent, Paying Agent, Grantor Trustee
and Class B Trustee,  the  principal  corporate  trust  office of the  Indenture
Trustee and Note Registrar at which at any particular  time its corporate  trust
business  shall be  administered,  which office at the date of the  execution of
this  instrument is located at 4 New York Plaza,  6th Floor,  New York, New York
10004,  Attention:  Institutional Trust  Services/Structured  Finance Services -
Home Loan Trust  2003-HI1.  With  respect to the Owner  Trustee,  the  principal
corporate  trust office of the Owner Trustee at which at any particular time its
corporate trust business shall be administered,  which office at the date of the
execution of this Trust Agreement is located at Rodney Square North,  1100 North
Market  Street,   Wilmington,   Delaware  19890,   Attention:   Corporate  Trust
Administration.

               Credit  Scores:  The  figure  assigned  to a Home  Loan  that  is
designed to assess the Mortgagor's  credit history which is obtained from credit
reports provided by various credit reporting  organizations and obtained by many
lenders in connection  with Home Loan  applications to help assess a Mortgagor's
creditworthiness.

               Credit  Support  Depletion  Date: The first Payment Date on which
the sum of the  Outstanding  Reserve  Amount,  the aggregate Note Balance of the
Subordinate  Notes and the Component  Principal  Balance of the B Component have
been reduced to zero.

               Custodial Account: The account or accounts created and maintained
by the Master Servicer  pursuant to Section 3.02(b) of the Servicing  Agreement,
in which the Master  Servicer  shall  deposit or cause to be  deposited  certain
amounts in respect of the Home Loans.

               Custodial Agreement: Any Custodial Agreement among the Custodian,
the Grantor Trustee,  the Issuer and the Master Servicer relating to the custody
of the Home Loans and the Related Documents.

     Custodian:  Wells Fargo Bank Minnesota,  N.A., a national association,  and
its successors and assigns.

               Cut-off Date: March 1, 2003.

               Cut-off Date Loan  Balance:  With  respect to any Home Loan,  the
unpaid principal balance thereof as of the close of business on the Business Day
immediately prior to the Cut-off Date.


                                       -7-

<PAGE>



     Default:  Any  occurrence  which is or with  notice or the lapse of time or
both would become an Event of Default.

               Deficient  Valuation:  With respect to any Home Loan, a valuation
by a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding  indebtedness under the Home Loan, or any reduction in
the amount of principal to be paid in connection with any scheduled payment that
constitutes a permanent  forgiveness of principal,  which valuation or reduction
results from a proceeding under the Bankruptcy Code.

     Definitive Notes: The meaning specified in Section 4.06 of the Indenture.

     Deleted  Loan:  A Home Loan  replaced  or to be  replaced  with an Eligible
Substitute Loan.

               Delinquent:  As used herein,  a Home Loan is considered to be "30
to 59 days" or "30 or more days"  delinquent  when a payment due on any due date
remains  unpaid as of the close of  business on the next  following  monthly due
date.  Since  the  determination  as to  whether a Home Loan  falls  into  these
categories  is made as of the close of business on the last business day of each
month,  a Home Loan with a payment due on July 1 that remained  unpaid as of the
close of business on July 31 would still be considered current as of July 31. If
that payment  remained unpaid as of the close of business on August 31, the Home
Loan would then be considered 30-59 days delinquent.  Delinquency information as
of the Cut-off  Date is  determined  and prepared as of the close of business on
the last business day immediately prior to the Cut-off Date.

     Depositor:  Residential  Funding  Mortgage  Securities II, Inc., a Delaware
corporation, or its successor in interest.

               Depository or Depository  Agency: The Depository Trust Company or
a  successor  appointed  by the  Indenture  Trustee  with  the  approval  of the
Depositor.  Any successor to the Depository shall be an organization  registered
as a  "clearing  agency"  pursuant to Section  17A of the  Exchange  Act and the
regulations of the Securities and Exchange Commission thereunder.

               Depository Participant: A Person for whom, from time to time, the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.

               Determination  Date:  With respect to any Payment Date,  the 20th
day of the  month in which  such  Payment  Date  occurs  or if such day is not a
Business Day, the next succeeding Business Day.

               Due Date:  The date on which the  Monthly  Payment on the related
Home Loan is due in accordance with the terms of the related Mortgage Note.

               Eligible  Account:  An account that is any of the following:  (i)
maintained  with a depository  institution  the short-term  debt  obligations of
which have been  rated by each  Rating  Agency in its  highest  rating  category
available,  or (ii) an account or accounts in a depository  institution in which
such accounts are fully insured to the limits established by the FDIC, provided


                                       -8-

<PAGE>



that any deposits not so insured shall, to the extent  acceptable to each Rating
Agency,  as evidenced in writing,  be  maintained  such that (as evidenced by an
Opinion of Counsel  delivered to the Indenture  Trustee and each Rating  Agency)
the Indenture  Trustee have a claim with respect to the funds in such account or
a perfected  first  security  interest  against any  collateral  (which shall be
limited to Permitted Investments) securing such funds that is superior to claims
of any other  depositors or creditors of the depository  institution  with which
such  account  is  maintained,  or (iii) in the case of the  Custodial  Account,
either  (A) a trust  account  or  accounts  maintained  at the  corporate  trust
department of the Indenture Trustee or (B) an account or accounts  maintained at
the corporate trust  department of the Indenture  Trustee,  as long as its short
term debt obligations are rated P-1 by Moody's and A-1+ by Standard & Poor's (or
the  equivalent)  or  better  by each  Rating  Agency  and its  long  term  debt
obligations  are  rated A2 by  Moody's  and AA- by  Standard  &  Poor's  (or the
equivalent)  or  better,  by each  Rating  Agency,  or  (iv) in the  case of the
Custodial  Account,  the  Grantor  Trust  Certificate  Account  and the  Payment
Account, a trust account or accounts  maintained in the corporate trust division
of the  Indenture  Trustee,  or (v)  an  account  or  accounts  of a  depository
institution  acceptable  to each Rating  Agency (as evidenced in writing by each
Rating Agency that use of any such account as the Custodial Account, the Grantor
Trust  Certificate  Account or the  Payment  Account  will not reduce the rating
assigned to any of the  Securities  by such Rating Agency as of the Closing Date
by such Rating Agency).

               Eligible  Substitute  Loan: A Home Loan substituted by the Seller
for a Deleted Loan which must, on the date of such substitution, as confirmed in
an  Officers'  Certificate  delivered  to the  Indenture  Trustee,  (i)  have an
outstanding  principal balance,  after deduction of the principal portion of the
monthly  payment  due  in the  month  of  substitution  (or  in  the  case  of a
substitution  of more  than  one Home  Loan for a  Deleted  Loan,  an  aggregate
outstanding  principal  balance,  after  such  deduction),  not in excess of the
outstanding  principal  balance of the Deleted Loan (the amount of any shortfall
to be  deposited  by the  Seller  in the  Custodial  Account  in  the  month  of
substitution);  (ii) comply with each  representation and warranty (other than a
statistical  representation or warranty) set forth in Section 3.1(b) of the Home
Loan Purchase  Agreement as of the date of substitution;  (iii) have a Loan Rate
no lower  than and not more than 1% in  excess of the Loan Rate of such  Deleted
Loan;  (iv) have a Combined  Loan-to-Value  Ratio at the time of substitution no
higher than that of the Deleted Loan at the time of  substitution;  (v) have, at
the time of  substitution,  a remaining term to stated maturity not greater than
(and not more  than  one year  less  than)  that of the  Deleted  Loan;  (vi) be
ineligible for inclusion in a real estate mortgage  investment conduit ("REMIC")
(a "REMIC  Ineligible  Loan") if the Deleted  Loan was a REMIC  Ineligible  Loan
(because (a) the value of the real property securing the Deleted Loan was not at
least equal to eighty  percent of the  adjusted  issue price of such loan at the
time of origination,  calculated by subtracting the amount of any liens that are
senior  to such  Home  Loan  and a  proportionate  amount  of any  lien of equal
priority from the value of such  property  when the Deleted Loan was  originated
and (b)  substantially  all of the proceeds of the Deleted Loan were not used to
acquire,  improve or protect an interest in the real property securing such loan
and such real property was the only security for such Deleted  Loan);  and (vii)
not be 30 or more days delinquent.

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

     Event of Default:  With respect to the Indenture,  any one of the following
events  (whatever  the reason for such Event of Default  and whether it shall be
voluntary or involuntary or


                                       -9-

<PAGE>



be effected by operation of law or pursuant to any judgment,  decree or order of
any court or any order, rule or regulation of any administrative or governmental
body):

                      (i) a default in the  payment of any  interest on any Note
        when the same becomes due and payable,  and such default shall  continue
        for a period of five days; or

                      (ii) a default in the payment of the  principal  of or any
        installment  of the  principal of any Note when the same becomes due and
        payable, and such default shall continue for a period of five days; or

                      (iii)  there  occurs  a  default  in  the   observance  or
        performance  of any  covenant  or  agreement  of the Issuer  made in the
        Indenture,  or any  representation or warranty of the Issuer made in the
        Indenture or in any  certificate  or other  writing  delivered  pursuant
        hereto or in connection  herewith  proving to have been incorrect in any
        material respect as of the time when the same shall have been made which
        has a material adverse effect on Securityholders, and such default shall
        continue or not be cured, or the circumstance or condition in respect of
        which such  representation or warranty was incorrect shall not have been
        eliminated or otherwise cured, for a period of 30 days after there shall
        have been given,  by registered or certified  mail, to the Issuer by the
        Indenture  Trustee  or to the Issuer  and the  Indenture  Trustee by the
        Holders  of at least 25% of the  outstanding  Note  Balance of the Notes
        (for  which  purpose  the Class A-IO Notes will be deemed to have a Note
        Balance equal to their Notional  Amount),  a written  notice  specifying
        such default or incorrect representation or warranty and requiring it to
        be  remedied  and  stating  that  such  notice  is a notice  of  default
        hereunder; or

                      (iv)  there  occurs  the  filing  of a decree or order for
        relief by a court having  jurisdiction in the premises in respect of the
        Issuer or any  substantial  part of the Trust  Estate in an  involuntary
        case under any  applicable  federal or state  bankruptcy,  insolvency or
        other similar law now or hereafter in effect,  or appointing a receiver,
        liquidator,   assignee,  custodian,  trustee,  sequestrator  or  similar
        official of the Issuer or for any substantial  part of the Trust Estate,
        or ordering the winding-up or liquidation of the Issuer's  affairs,  and
        such decree or order shall remain unstayed and in effect for a period of
        60 consecutive days; or

                      (v)  there  occurs  the  commencement  by the  Issuer of a
        voluntary  case  under  any  applicable  federal  or  state  bankruptcy,
        insolvency  or other  similar  law now or  hereafter  in effect,  or the
        consent  by the  Issuer  to the  entry  of an  order  for  relief  in an
        involuntary case under any such law, or the consent by the Issuer to the
        appointment or taking  possession by a receiver,  liquidator,  assignee,
        custodian,  trustee,  sequestrator or similar  official of the Issuer or
        for any  substantial  part of the  assets  of the Trust  Estate,  or the
        making by the  Issuer  of any  general  assignment  for the  benefit  of
        creditors,  or the failure by the Issuer  generally  to pay its debts as
        such  debts  become  due,  or the  taking of any action by the Issuer in
        furtherance of any of the foregoing.

     Event of Servicer Termination:  With respect to the Servicing Agreement,  a
Servicing Default as defined in Section 7.01 of the Servicing Agreement.


                                      -10-

<PAGE>



               Excess  Loss  Amount:  As of any  Payment  Date,  the  sum of the
following for the related  Collection  Period:  (i) any Special Hazard Losses in
excess of the  Special  Hazard  Amount,  (ii) any Fraud  Losses in excess of the
Fraud Loss Amount,  and (iii) any losses incurred on the Home Loans caused by or
resulting from an Extraordinary Event.

               Excess  Reserve  Amount:  With respect to any Payment  Date,  the
lesser of (i) the  excess,  if any, of the  Outstanding  Reserve  Amount  (after
application of the Principal  Collections and any Liquidation Loss  Distribution
Amounts  for such  Payment  Date)  with  respect to that  Payment  Date over the
Reserve Amount Target and (ii) the Principal Collections for that Payment Date.

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

     Expenses:  The  meaning  specified  in  Section  7.02  of the  Owner  Trust
Agreement.

               Extraordinary Event: Any of the following conditions with respect
to a Mortgaged Property or Home Loan causing or resulting in a loss which causes
the liquidation of such Home Loan:

               (b)  losses  that  are of a type  that  would be  covered  by the
        fidelity bond and the errors and omissions  insurance policy required to
        be maintained  pursuant to Section 3.13 of the  Servicing  Agreement but
        are in excess of the coverage maintained thereunder;

               (c)  nuclear   reaction  or  nuclear   radiation  or  radioactive
        contamination,  all whether controlled or uncontrolled, and whether such
        loss be direct  or  indirect,  proximate  or remote or be in whole or in
        part caused by,  contributed  to or aggravated by a peril covered by the
        definition of the term "Special Hazard Loss";

               (d) hostile or warlike action in time of peace or war,  including
        action in hindering, combating or defending against an actual, impending
        or expected attack:

                      1. by any  government  or sovereign  power,  de jure or de
               facto, or by any authority  maintaining or using military,  naval
               or air forces; or

                      2. by military, naval or air forces; or

                      3. by an agent of any such government, power, authority or
forces;

               (e) any weapon of war  employing  atomic  fission or  radioactive
        force whether in time of peace or war; or

               (f) insurrection, rebellion, revolution, civil war, usurped power
        or action taken by  governmental  authority in  hindering,  combating or
        defending  against  such an  occurrence,  seizure or  destruction  under
        quarantine  or  customs  regulations,   confiscation  by  order  of  any
        government  or  public  authority;  or risks of  contraband  or  illegal
        transportation or trade.


                                      -11-

<PAGE>



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

     FHLMC:  The  Federal  Home  Loan  Mortgage  Corporation,  or any  successor
thereto.

               Final Scheduled Payment Date: The Payment Date in April 2010 with
respect to the Class A-1 Notes, August 2012 with respect to the Class A-2 Notes,
January 2015 with  respect to the Class A-3 Notes,  January 2016 with respect to
the Class A-4 Notes,  January  2017 with  respect to the Class A-5 Notes,  March
2021 with  respect to the Class A-6,  April 2028 with  respect to the Class A-7,
Class M-1,  Class M-2 and Class M-3 Notes and September 2005 with respect to the
Class A-IO Notes.

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

               Foreclosure  Profit:  With respect to a Liquidated Home Loan, the
excess, if any, of (x) Net Liquidation Proceeds over (y) the sum of (a) the Loan
Balance  of the  related  Home  Loan  immediately  prior to the date it became a
Liquidated Home Loan, less any Net Liquidation Proceeds previously received with
respect  to such Home Loan and  applied  as a  recovery  of  principal,  and (b)
accrued  and  unpaid  interest  on the  related  Home  Loan at the net Loan Rate
through the date of receipt of the proceeds.

               Fraud  Loss  Amount:  As of any date of  determination  after the
Cut-off  Date,  the  Fraud  Loss  Amount  shall  equal  (X)  prior to the  first
anniversary  of the Cut-off Date, an amount equal to 5% of the Cut-off Date Loan
Balance  minus the aggregate of any  Liquidation  Loss Amounts on the Home Loans
due to Fraud Losses up to such date of determination;  (Y) from the first to the
second anniversary of the Cut-off Date, an amount equal to (1) the lesser of (a)
the Fraud Loss Amount as of the most recent  anniversary of the Cut-off Date and
(b) 3% of the Pool  Balance of the Home Loans as of the most recent  anniversary
of the Cut-off Date minus (2) the aggregate of any  Liquidation  Loss Amounts on
the Home Loans due to Fraud  Losses  since the most  recent  anniversary  of the
Cut-off  Date up to such date of  determination;  and (Z) from the second to the
fifth  anniversary of the Cut-off Date, an amount equal to (1) the lesser of (a)
the Fraud Loss Amount as of the most recent  anniversary of the Cut-off Date and
(b) 2% of the Pool Balance as of the most recent anniversary of the Cut-off Date
minus (2) the aggregate of any Liquidation Loss Amounts on the Home Loans due to
Fraud  Losses since the most recent  anniversary  of the Cut-off Date up to such
date of  determination.  On and after the fifth  anniversary of the Cut-off Date
the Fraud Loss  Amount  shall be zero.  The initial  Fraud Loss Amount  shall be
equal to $11,250,001.

               Fraud Losses: Losses on Home Loans as to which there was fraud in
the origination of such Home Loan.

               Grant: Pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer,  create, and grant a lien upon and a security interest
in and right of set-off against,  deposit,  set over and confirm pursuant to the
Indenture.  A Grant of the  Collateral  or of any other  agreement or instrument
shall include all rights,  powers and options (but none of the  obligations)  of
the granting party  thereunder,  including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of such  collateral or other  agreement or  instrument  and all other
moneys payable thereunder, to give and receive notices and other


                                      -12-

<PAGE>



communications,  to make waivers or other agreements, to exercise all rights and
options,  to bring  proceedings  in the name of the granting party or otherwise,
and generally to do and receive  anything  that the granting  party is or may be
entitled to do or receive thereunder or with respect thereto.

               Grantor Trust:  Grantor Trust 2003-HI1, a New York trust, created
pursuant to the Grantor Trust Agreement.

               Grantor Trust Agreement: The Grantor Trust Agreement, dated as of
March 28, 2003 among the Grantor Trustee and the Depositor.

               Grantor Trust Certificate: The certificate issued pursuant to the
Grantor  Trust  Agreement  and  designated  as  the  Grantor  Trust  Certificate
evidencing a 100% ownership interest in the Grantor Trust.

               Grantor Trust Certificate Account: The account established by the
Grantor Trustee pursuant to Section 4.01 of the Grantor Trust Agreement.

     Grantor Trust  Certificateholder:  The Person in whose name a Grantor Trust
Certificate is registered in the Grantor Trust Certificate Register.

               Grantor  Trust  Certificate  Principal  Balance:  On any  date of
determination,  an amount equal to (i) the initial Certificate Principal Balance
of the Grantor Trust  Certificate  as specified on the face thereof,  minus (ii)
the sum of (x) the aggregate of all amounts previously  distributed with respect
to the  Grantor  Trust  Certificate  and  applied  to reduce the  Grantor  Trust
Certificate  Principal  Balance thereof  pursuant to Section 4.02 of the Grantor
Trust  Agreement,  and (y) the aggregate of all  reductions in the Grantor Trust
Certificate  Principal  Balance  deemed  to have  occurred  in  connection  with
Liquidation  Loss Amounts which were previously  allocated to such Grantor Trust
Certificate.

               Grantor  Trust  Certificate  Registrar:  Initially,  the  Grantor
Trustee,  in  its  capacity  as  Grantor  Trust  Certificate  Registrar,  or any
successor to the Grantor Trustee in such capacity.

               Grantor Trust Certificate  Register:  The register  maintained by
the Grantor Trust  Certificate  Registrar in which the Grantor Trust Certificate
Registrar shall provide for the  registration  and of transfers and exchanges of
the Grantor Trust Certificate.

               Grantor  Trustee:  JPMorgan  Chase Bank,  and its  successors and
assigns or any successor grantor trustee appointed  pursuant to the terms of the
Grantor Trust Agreement.

               Holder: Any of the Noteholders or Certificateholders.

               Home  Loans:  At any time,  the home loans that have been sold by
the Seller under the Home Loan  Purchase  Agreement,  together  with the Related
Documents, and that remain subject to the terms thereof.


                                      -13-

<PAGE>



               Home Loan Purchase  Agreement:  The Home Loan Purchase Agreement,
between the Seller, as seller, and the Depositor, as purchaser,  with respect to
the Home Loans, dated as of the Cut-off Date.

               Home Loan Schedule:  The initial schedule of Home Loans as of the
Cut-off Date set forth in Exhibit A of the Servicing  Agreement,  which schedule
sets forth as to each Home Loan in each Loan Group, among other things:

               (i)    the Home Loan identifying number ("RFC LOAN #");

               (ii)   the state, city and zip code of the Mortgaged Property;

               (iii)  the maturity of the Mortgage Note ("MATURITY DATE");

               (iv)   the Loan Rate ("CUR RATE");

               (v)    the Principal Balance at origination ("ORG AMT");

               (vi)   the type of property securing the Mortgage Note ("PROPERTY
                      TYPE");

               (vii)  the appraised value ("APPRSL");

               (viii) the initial  scheduled  monthly  payment of principal,  if
                      any, and interest ("ORIGINAL P & I");

               (ix)   the Cut-off Date Loan Balance ("CUT-OFF BAL");

               (x)    the Combined Loan-to-Value Ratio at origination ("CLTV");

               (xi)   the date of the Mortgage Note ("NOTE DATE");

               (xii)  the original term to maturity of the Home Loan  ("ORIGINAL
                      TERM");

               (xiii) under the column  "OCCP CODE," a code  indicating  whether
                      the  Home  Loan  is  secured  by  a   non-owner   occupied
                      residence;

               (xiv)  the Principal Balance of any Home Loan senior thereto ("SR
                      BAL");

               (xv)   the Credit Score ("CR SCORE");

               (xvi)  the debt to income ratio ("DTI");

               (xvii) product code ("PRODUCT CODE");

               (xviii)loan purpose ("PURPOSE");


                                      -14-

<PAGE>



               (xix) the lien position of the related Mortgage ("LIEN");

               (xx) the Subservicer loan number (SERVICER LOAN #); and

               (xxi) the remaining term of the Home Loan (REMAINING TERM).

Such schedule may consist of multiple reports that collectively set forth all of
the information required.

     Indemnified  Party:  The  meaning  specified  in Section  7.02 of the Trust
Agreement.

     Indenture:  The indenture dated as of March 28, 2003 between the Issuer, as
debtor, and the Indenture Trustee, as indenture trustee.

     Indenture  Trustee:  JPMorgan Chase Bank, and its successors and assigns or
any  successor  indenture  trustee  appointed  pursuant  to  the  terms  of  the
Indenture.

               Independent:  When used with respect to any specified Person, the
Person (i) is in fact independent of the Issuer, any other obligor on the Notes,
the Seller,  the Issuer, the Depositor and any Affiliate of any of the foregoing
Persons,  (ii)  does not have any  direct  financial  or any  material  indirect
financial  interest  in the Issuer,  any such other  obligor,  the  Seller,  the
Issuer, the Depositor or any Affiliate of any of the foregoing Persons and (iii)
is not  connected  with the Issuer,  any such other  obligor,  the  Seller,  the
Issuer,  the Depositor or any  Affiliate of any of the  foregoing  Persons as an
officer, employee, promoter,  underwriter,  trustee, partner, director or person
performing similar functions.

               Independent Certificate: A certificate or opinion to be delivered
to the  Indenture  Trustee under the  circumstances  described in, and otherwise
complying  with, the applicable  requirements of Section 10.01 of the Indenture,
made by an  Independent  appraiser or other expert  appointed by an Issuer Order
and approved by the Indenture  Trustee in the exercise of reasonable  care,  and
such opinion or certificate  shall state that the signer has read the definition
of "Independent" in this Indenture and that the signer is Independent within the
meaning thereof.

               Initial Certificate:  The Home Loan-Backed  Certificates,  Series
2003-HI1,  issued on the Closing  Date,  each  evidencing  undivided  beneficial
interests in the Issuer and executed by the Owner Trustee.

               Initial Component Principal Balance: $7,875,000.

               Initial  Note  Balance:  With  respect  to the Class  A-1  Notes,
$53,583,000  with respect to the Class A-2 Notes,  $29,892,000,  with respect to
the  Class  A-3  Notes,  $32,633,000,  with  respect  to the  Class  A-4  Notes,
$9,962,000, with respect to the Class A-5 Notes, $9,910,000, with respect to the
Class A-6 Notes,  $18,829,000,  with respect to the Class A-7 Notes, $15,066,000
with respect to the Class M-1 Notes, $18,000,000,  with respect to the Class M-2
Notes, $15,750,000 and with respect to the Class M-3 Notes, $13,500,000.


                                      -15-

<PAGE>



               Insolvency  Event:  With respect to a specified  Person,  (a) the
filing of a decree or order for  relief by a court  having  jurisdiction  in the
premises in respect of such Person or any substantial part of its property in an
involuntary  case under any applicable  bankruptcy,  insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator,  assignee,
custodian,  trustee, sequestrator or similar official for such Person or for any
substantial  part of its property,  or ordering the winding-up or liquidation of
such  Person's  affairs,  and such decree or order shall remain  unstayed and in
effect for a period of 60  consecutive  days;  or (b) the  commencement  by such
Person of a voluntary case under any applicable bankruptcy,  insolvency or other
similar  law now or  hereafter  in effect,  or the consent by such Person to the
entry of an order for relief in an  involuntary  case under any such law, or the
consent by such Person to the appointment of or taking possession by a receiver,
liquidator,  assignee,  custodian, trustee, sequestrator or similar official for
such Person or for any substantial  part of its property,  or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due or the admission
by such Person in writing (as to which the Indenture  Trustee shall have notice)
of its  inability  to pay its debts  generally,  or the adoption by the Board of
Directors  or managing  member of such Person of a resolution  which  authorizes
action by such Person in furtherance of any of the foregoing.

               Insurance Proceeds:  Proceeds paid by any insurer pursuant to any
insurance  policy  covering a Home Loan which are required to be remitted to the
Master Servicer,  or amounts required to be paid by the Master Servicer pursuant
to the next to last sentence of Section 3.04 of the Servicing Agreement,  net of
any component  thereof (i) covering any expenses incurred by or on behalf of the
Master Servicer in connection with obtaining such proceeds, (ii) that is applied
to the restoration or repair of the related Mortgaged  Property,  (iii) released
to the  Mortgagor in  accordance  with the Master  Servicer's  normal  servicing
procedures  or (iv)  required  to be paid to any holder of a mortgage  senior to
such Home Loan.

               Interest  Accrual  Period:  With respect to the Notes (other than
the Class A-1 Notes) and the B Component and as to any Payment Date, will be the
calendar  month  preceding  the month in which the related  Payment Date occurs.
With  respect to the Class A-1 Notes and any  Payment  Date other than the first
Payment Date, the period  beginning on the preceding  Payment Date and ending on
the day preceding  such Payment Date, and in the case of the first Payment Date,
the period  beginning  on the Closing Date and ending on the day  preceding  the
first Payment Date.

               Interest Collections:  As to any Payment Date, an amount equal to
the sum of (i) the  portion  allocable  to  interest  of all  scheduled  monthly
payments  on the Home Loans  received  during  the  related  Collection  Period,
reduced by the Administrative  Fees for that Collection Period, (ii) the portion
of all Net  Liquidation  Proceeds  allocated to interest  under the terms of the
Mortgage Notes,  reduced by the Administrative  Fees for such Collection Period,
(iii) the interest portion of the Repurchase Price for any Deleted Loans and the
interest portion of the cash purchase price paid in connection with any optional
purchase  of the Home Loans by the Master  Servicer  and (iv) any  proceeds  and
recoveries on a Home Loan received during the related  Collection Period, net of
Administrative  Fees,  after it  becomes a  Liquidated  Home Loan  allocated  to
Interest  Collections  in accordance  with the last paragraph of Section 3.07 of
the Servicing Agreement.


                                      -16-

<PAGE>



     Issuer or Trust: The Home Loan Trust 2003-HI1,  a Delaware statutory trust,
or its successor in interest.

     Issuer Request: 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.

               LIBOR:  For any  Interest  Accrual  Period  other  than the first
Interest  Accrual  Period,  the rate for United States  dollar  deposits for one
month which appears on the Dow Jones Telerate Screen Page 3750 as of 11:00 A.M.,
London, England time, on the second LIBOR Business Day prior to the first day of
such Interest Accrual Period. With respect to the first Interest Accrual Period,
the rate for United  States  dollar  deposits for one month which appears on the
Dow Jones Telerate Screen Page 3750 as of 11:00 A.M., London,  England time, two
LIBOR  Business  Days prior to the Closing Date. If such rate does not appear on
such page (or such other page as may replace  that page on that  service,  or if
such service is no longer  offered,  such other service for displaying  LIBOR or
comparable  rates as may be reasonably  selected by the Indenture  Trustee after
consultation  with the Master  Servicer),  the rate will be the  Reference  Bank
Rate.  If no such  quotations  can be  obtained  and no  Reference  Bank Rate is
available, LIBOR will be LIBOR applicable to the preceding Payment Date.

               LIBOR Business Day: Any day other than (i) a Saturday or a Sunday
or (ii) a day on which banking  institutions in the city of London,  England are
required or authorized by law to be closed.

               Lien:   Any  mortgage,   deed  of  trust,   pledge,   conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other),  preference,  priority right or interest or other security
agreement  or  preferential  arrangement  of  any  kind  or  nature  whatsoever,
including,  without  limitation,  any conditional  sale or other title retention
agreement,  any financing lease having substantially the same economic effect as
any of the  foregoing and the filing of any  financing  statement  under the UCC
(other than any such financing statement filed for informational  purposes only)
or  comparable  law of  any  jurisdiction  to  evidence  any  of the  foregoing;
provided, however, that any assignment pursuant to Section 6.02 of the Servicing
Agreement shall not be deemed to constitute a Lien.

               Liquidated Home Loan: As to any Payment Date, any Home Loan which
the Master Servicer has determined,  based on the servicing procedures specified
in the Servicing  Agreement,  as of the end of the preceding  Collection Period,
that all Liquidation Proceeds which it expects to recover in connection with the
disposition of the related Mortgaged Property have been recovered.  In addition,
the Master Servicer will treat any Home Loan that is 180 days or more delinquent
as having been finally liquidated.

               Liquidation  Expenses:   Out-of-pocket   expenses  (exclusive  of
overhead)  which  are  incurred  by or on  behalf  of  the  Master  Servicer  in
connection  with the  liquidation  of any Home Loan and not recovered  under any
insurance policy,  such expenses including,  without limitation,  legal fees and
expenses,  any  unreimbursed  amount expended  (including,  without  limitation,
amounts  advanced  to correct  defaults on any loan which is senior to such Home
Loan and amounts  advanced  to keep  current or pay off a loan that is senior to
such Home Loan) respecting the related Home Loan and


                                      -17-

<PAGE>



any related and unreimbursed  expenditures for real estate property taxes or for
property  acquisition,  restoration,  preservation or disposition,  or insurance
against casualty loss or damage.

               Liquidation Loss Amount: With respect to any Payment Date and any
Home Loan that  became a  Liquidated  Home Loan  during the  related  Collection
Period,  the unrecovered  portion of the related Loan Balance thereof at the end
of such Collection Period,  after giving effect to the Net Liquidation  Proceeds
applied to reduce the related Loan Balance. In addition, as to any Home Loan for
which the  principal  balance has been  reduced in  connection  with  bankruptcy
proceedings,  the amount of the reduction will be treated as a Liquidation  Loss
Amount.

               Liquidation Loss Distribution  Amount: As to any Payment Date, an
amount equal to the lesser of (i) 100% of the  Liquidation  Loss Amounts,  other
than any Excess  Loss  Amounts,  incurred  on the Home Loans  during the related
Collection  Period  and (ii) the Net  Monthly  Excess  Cash Flow  available  for
payment of the Liquidation  Loss  Distribution  Amount for that Payment Date, as
provided in clause (i) of Section 3.05(d) of the Indenture.

               Liquidation Proceeds:  Proceeds (including Insurance Proceeds) if
any received in connection with the liquidation of any Home Loan or related REO,
whether through  trustee's sale,  foreclosure sale, the exercise of the power of
eminent domain or condemnation or otherwise.

               Loan  Balance:  With  respect  to any  Home  Loan,  other  than a
Liquidated  Home Loan, and as of any day, the related Cut-off Date Loan Balance,
minus all  collections  in respect of principal in  accordance  with the related
Mortgage Note and applied in reduction of the Loan Balance thereof. For purposes
of this  definition,  a  Liquidated  Home  Loan  shall be  deemed to have a Loan
Balance equal to zero.

               Loan Rate or Mortgage Rate: With respect to any Home Loan and any
day, the per annum rate of interest set forth in the related Mortgage Note.

               Lost Note  Affidavit:  With  respect to any Home Loan as to which
the original  Mortgage Note has been  permanently  lost or destroyed and has not
been  replaced,  an  affidavit  from the  Seller  certifying  that the  original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note).

     Master Servicer:  Residential Funding Corporation,  a Delaware corporation,
and its successors and assigns.

               Master  Servicing  Fee:  With  respect  to any Home  Loan and any
Collection  Period,  the product of (i) the Master Servicing Fee Rate divided by
12 and (ii) the Loan  Balance  of such  Home  Loan as of the  first  day of such
Collection Period.

               Master  Servicing Fee Rate: With respect to any Home Loan,  0.08%
per annum.

               Monthly Payment: With respect to any Home Loan (including any REO
Property) and any Due Date, the payment of principal and interest due thereon in
accordance with the amortization  schedule at the time applicable thereto (after
adjustment, if any, for partial prepayments


                                      -18-

<PAGE>



and for  Deficient  Valuations  occurring  prior to such Due Date but before any
adjustment to such amortization schedule by reason of any bankruptcy, other than
a Deficient Valuation, or similar proceeding or any moratorium or similar waiver
or grace period).

     Moody's: Moody's Investors Service, Inc. or its successor in interest.

               Mortgage:  The  mortgage,  deed  of  trust  or  other  instrument
creating  a first or second  lien on an estate in fee  simple  interest  in real
property securing a Home Loan.

               Mortgage  File:  The  file   containing  the  Related   Documents
pertaining to a particular Home Loan and any additional documents required to be
added to the Mortgage File  pursuant to the Home Loan Purchase  Agreement or the
Servicing Agreement.

               Mortgage  Note:  With respect to a Home Loan,  the mortgage  note
pursuant to which the related mortgagor agrees to pay the indebtedness evidenced
thereby and secured by the related Mortgage as modified or amended.

               Mortgaged  Property:  The  underlying  property,  including  real
property and improvements thereon, securing a Home Loan.

               Mortgagor: The obligor or obligors under a Mortgage Note.

               Net  Liquidation  Proceeds:  As to any Liquidated  Home Loan, the
proceeds,   including  Insurance  Proceeds,  received  in  connection  with  the
liquidation of the Home Loan,  whether through trustee's sale,  foreclosure sale
or otherwise,  reduced by related  expenses,  but not including the portion,  if
any, of the proceeds that exceed the  principal  balance of the Home Loan at the
end of the Collection  Period  immediately  preceding the  Collection  Period in
which the Home Loan became a Liquidated Home Loan.

               Net Loan  Rate:  With  respect  to any Home  Loan and any date of
determination,  a per annum rate of interest equal to the then  applicable  Loan
Rate for such Home Loan minus the Servicing Fee Rate.

               Net Monthly  Excess Cash Flow:  For any Payment Date,  the sum of
(i) the excess,  if any, of (a) Interest  Collections for that Payment Date over
(b) the amount  payable to the Notes and the B Component  in respect of interest
as provided in  subsection  (b) of Section  3.05 of the  Indenture  and (ii) the
Excess Reserve Amount for that Payment Date.

               Note  Balance:  With respect to any Payment Date and any Class of
Notes, other than the Class A-IO Notes, the Initial Note Balance thereof reduced
by all payments of principal thereon prior to and as of such Payment Date.

               Note Owner:  The Beneficial Owner of a Note.

     Note Payment Account:  The account  established and maintained  pursuant to
Section 3.01 of the Class B Indenture.


                                      -19-

<PAGE>



               Note  Rate:  With  respect  to the Class A-1  Notes,  will be the
lesser of (a) LIBOR plus 0.10% per annum and (b) 8.00% per annum;  with  respect
to the Class A-2 Notes,  2.38% per annum;  with  respect to the Class A-3 Notes,
2.93% per annum;  with  respect to the Class A-4  Notes,  3.45% per annum;  with
respect to the Class A-5 Notes,  3.89% per annum;  with respect to the Class A-6
Notes,  4.60% per annum;  with respect to the Class A-7 Notes,  5.32% per annum;
with respect to the Class M-1 Notes,  5.27% per annum; with respect to the Class
M-2 Notes,  5.57% per  annum;  with  respect  to the Class M-3 Notes,  6.56% per
annum; provided, that on the Step-Up Date, the Note Rate on the Class A-7, Class
M-1,  Class M-2 and Class M-3 Notes  shall  increase  by 0.50% per  annum.  With
respect to the Class  A-IO  Notes,  11.00% per annum for the April 2003  through
March 2004 Payment Dates, 10.00% per annum for the April 2004 through March 2005
Payment  Dates and 7.00% per annum for the April  2005  through  September  2005
Payment Dates.

               Note Register:  The register  maintained by the Note Registrar in
which the Note  Registrar  shall  provide for the  registration  of Notes and of
transfers and exchanges of Notes.

     Note Registrar: The Indenture Trustee, in its capacity as Note Registrar.

               Noteholder:  The Person in whose name a Note is registered in the
Note Register,  except that,  any Note  registered in the name of the Depositor,
the Issuer or the  Indenture  Trustee or any  Affiliate  of any of them shall be
deemed not to be outstanding and the registered  holder will not be considered a
Noteholder or holder for purposes of giving any request, demand,  authorization,
direction,  notice, consent or waiver under the Indenture or the Trust Agreement
provided that, in determining  whether the Indenture  Trustee shall be protected
in relying upon any such  request,  demand,  authorization,  direction,  notice,
consent or waiver,  only Notes that the  Indenture  Trustee or the Owner Trustee
knows to be so owned  shall be so  disregarded.  Owners of Notes  that have been
pledged in good faith may be regarded as Holders if the pledgee  establishes  to
the  satisfaction  of the  Indenture  Trustee or the Owner Trustee the pledgee's
right so to act with  respect  to such  Notes  and that the  pledgee  is not the
Issuer,  any  other  obligor  upon  the  Notes  or any  Affiliate  of any of the
foregoing Persons.

               Notes: Any one of the Class A-1, Class A-2, Class A-3, Class A-4,
Class A- 5, Class A-6, Class A-7, Class A-IO,  Class M-1, Class M-2 or Class M-3
Notes issued and outstanding at any time pursuant to the Indenture.

               Notional  Amount:  With respect to the first 30 Payment  Dates of
the Class A-IO Notes, 9,000,000; thereafter, zero.

               Officer's  Certificate:  With respect to the Master  Servicer,  a
certificate  signed by the  President,  Managing  Director,  a Director,  a Vice
President or an Assistant Vice  President,  of the Master Servicer and delivered
to the Indenture  Trustee.  With respect to the Issuer, a certificate  signed by
any Authorized Officer of the Issuer, under the circumstances  described in, and
otherwise  complying  with, the applicable  requirements of Section 10.01 of the
Indenture,  and delivered to the Indenture Trustee.  Unless otherwise specified,
any  reference  in the  Indenture  to an  Officer's  Certificate  shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.


                                      -20-

<PAGE>



               Opinion of Counsel: A written opinion of counsel.  Any Opinion of
Counsel for the Master  Servicer  may be  provided  by in-house  counsel for the
Master Servicer if reasonably  acceptable to the Indenture Trustee,  the Class B
Trustee,  the  Grantor  Trustee  and the  Rating  Agencies  or  counsel  for the
Depositor, as the case may be.

               Optional Redemption: The right of the Master Servicer to purchase
the Home Loans on any Payment Date on which the aggregate  Principal  Balance of
the Home Loans as of the end of the related  Collection  Period is less than 10%
of the  Cut-off  Date  Balance,  pursuant  to  Section  8.08  of  the  Servicing
Agreement.

               Original Trust Agreement: The Trust Agreement,  dated as of March
19, 2003, between the Owner Trustee and the Depositor.

               Outstanding:  With  respect  to  the  Notes,  as of the  date  of
determination, all Notes theretofore executed, authenticated and delivered under
this Indenture except:

                      (i) Notes  theretofore  cancelled by the Note Registrar or
        delivered to the Indenture Trustee for cancellation; and

                      (ii) Notes in exchange for or in lieu of which other Notes
        have  been  executed,   authenticated  and  delivered  pursuant  to  the
        Indenture  unless  proof   satisfactory  to  the  Indenture  Trustee  is
        presented that any such Notes are held by a holder in due course.

               Outstanding Reserve Amount: With respect to any Payment Date, the
amount,  if any, by which (i) the Pool Balance after applying  payments received
in the related  Collection Period exceeds (ii) the aggregate Note Balance of the
Notes,  other than the Class A-IO Notes, and the Component  Principal Balance of
the B Component on such Payment Date after application of Principal  Collections
for that date.

               Owner  Trust  Agreement  or  Trust  Agreement:  The  Amended  and
Restated Owner Trust  Agreement,  dated as of March 28, 2003,  between the Owner
Trustee and the Depositor.

               Owner  Trustee:  Wilmington  Trust Company not in its  individual
capacity  but  solely as Owner  Trustee  of the Trust,  and its  successors  and
assigns or any successor  owner trustee  appointed  pursuant to the terms of the
Trust Agreement.

               Paying  Agent:  Any paying  agent or  co-paying  agent  appointed
pursuant  to  Section  3.03  of the  Indenture,  which  initially  shall  be the
Indenture Trustee.

               Payment Account: The account established by the Indenture Trustee
pursuant to Section  8.02 of the  Indenture.  Amounts  deposited  in the Payment
Account will be distributed by the Indenture  Trustee in accordance with Section
3.05 of the Indenture.

               Payment Date: The 25th day of each month, or if such day is not a
Business Day, then the next Business Day.


                                      -21-

<PAGE>



               Percentage  Interest:  With  respect  to any Note and any date of
determination,  the percentage obtained by dividing the Note Balance or Notional
Amount of such Note,  as  applicable,  by the  aggregate of the Note Balances or
Notional Amounts of all Notes of the same Class.

               Permitted Investments:  One or more of the following:

                      (i)  obligations  of or  guaranteed  as to  principal  and
interest by the United
States or any agency or instrumentality thereof when such obligations are backed
by the full faith and credit of the United States;

                      (ii)  repurchase  agreements on  obligations  specified in
        clause (i) maturing not more than one month from the date of acquisition
        thereof,  provided that the unsecured  obligations of the party agreeing
        to  repurchase  such  obligations  are at the time rated by each  Rating
        Agency in its highest short-term rating category available;

                      (iii)  federal  funds,  certificates  of  deposit,  demand
        deposits,  time deposits and bankers' acceptances (which shall each have
        an  original  maturity  of not  more  than 90 days  and,  in the case of
        bankers'  acceptances,  shall in no event have an  original  maturity of
        more  than  365  days or a  remaining  maturity  of more  than 30  days)
        denominated in United States dollars of any U.S. depository  institution
        or trust company incorporated under the laws of the United States or any
        state  thereof  or  of  any  domestic  branch  of a  foreign  depository
        institution or trust company; provided that the debt obligations of such
        depository  institution  or trust company (or, if the only Rating Agency
        is  Standard  &  Poor's,  in  the  case  of  the  principal   depository
        institution  in  a  depository   institution   holding   company,   debt
        obligations of the depository  institution  holding company) at the date
        of  acquisition  thereof  have been rated by each  Rating  Agency in its
        highest short-term rating category available; and provided further that,
        if the only Rating Agency is Standard & Poor's and if the  depository or
        trust company is a principal  subsidiary  of a bank holding  company and
        the debt  obligations of such subsidiary are not separately  rated,  the
        applicable  rating  shall  be that of the  bank  holding  company;  and,
        provided  further  that,  if the  original  maturity of such  short-term
        obligations of a domestic branch of a foreign depository  institution or
        trust  company  shall  exceed  30 days,  the  short-term  rating of such
        institution shall be A-1+ in the case of Standard & Poor's if Standard &
        Poor's is the Rating Agency;

                      (iv) commercial paper (having  original  maturities of not
        more than 365 days) of any  corporation  incorporated  under the laws of
        the United States or any state thereof which on the date of  acquisition
        has been rated by each Rating  Agency in its highest  short-term  rating
        category  available;  provided that such  commercial  paper shall have a
        remaining maturity of not more than 30 days;

                      (v) a money  market  fund or a qualified  investment  fund
        rated by each Rating  Agency in its highest  long-term  rating  category
        available; and

                      (vi) other  obligations or securities  that are acceptable
        to each Rating Agency as an Permitted  Investment hereunder and will not
        reduce the rating assigned to any Securities by such Rating Agency below
        the lower of the then-current rating or the rating


                                      -22-

<PAGE>



        assigned  to such  Securities  as of the  Closing  Date  by such  Rating
        Agency,  provided  that  if the  Master  Servicer  or any  other  Person
        controlled  by the Master  Servicer  is the issuer or the obligor of any
        obligation or security  described in this clause (vi) such obligation or
        security  must  have an  interest  rate or  yield  that is  fixed  or is
        variable based on an objective index that is not affected by the rate or
        amount of losses on the Home Loans;

provided,  however,  that no  instrument  shall be a Permitted  Investment if it
represents,  either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest  payments derived from  obligations  underlying such instrument and the
principal and interest payments with respect to such instrument  provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations  References  herein to the highest  rating  available  on  unsecured
long-term  debt shall  mean AAA in the case of  Standard & Poor's and Aaa in the
case of Moody's,  and  references  herein to the  highest  rating  available  on
unsecured  commercial paper and short-term debt  obligations  shall mean A-1+ in
the case of Standard & Poor's and P-1 in the case of Moody's.

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

               Plan: Any employee  benefit plan subject to Title IV of ERISA and
any plan or other arrangement described in Section 4975(e)(1) of the Code.

               Plan Assets:  The assets of a Plan as determined under Department
of Labor regulation section 2510.3-101 or other applicable law.

               Pool Balance: With respect to any date, the aggregate of the Loan
Balances of all Home Loans as of such date.

               Predecessor  Note:  With respect to any  particular  Note,  every
previous Note  evidencing all or a portion of the same debt as that evidenced by
such  particular  Note;  and,  for the  purpose  of this  definition,  any  Note
authenticated  and  delivered  under  Section 4.03 of the Indenture in lieu of a
mutilated,  lost,  destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.

               Prepayment  Assumption:  A 100% Prepayment Assumption used solely
for  determining  the accrual of original issue  discount,  market  discount and
premium, if any, on the Notes for federal income tax purposes. A 100% Prepayment
Assumption  assumes  a  constant  prepayment  rate of 2% per annum for the first
month,  increasing  each month by an  additional  1.071429%  until the fifteenth
month.  Beginning in the twentieth month and in each month thereafter during the
life  of the  Home  Loans,  a 100%  Prepayment  Assumption  assumes  a  constant
prepayment rate of 17% per annum each month.

     Principal  Collections:  As to any Payment Date, an amount equal to the sum
of:


                                      -23-

<PAGE>



               (i) the principal  portion of all scheduled  Monthly  Payments on
        the Home Loans received during the related Collection Period;

               (ii) the principal  portion of all proceeds of the  repurchase of
        any Home  Loans (or,  in the case of a  substitution,  any  Substitution
        Adjustment  Amounts)  as required by the  Servicing  Agreement  received
        during the related  Collection  Period and the principal  portion of the
        cash purchase price paid in connection with any optional purchase of the
        Home Loans by the Master Servicer; and

               (iii) the principal portion of all other unscheduled  collections
        received  on the Home Loans  during the  related  Collection  Period (or
        deemed to be received during the related Collection Period)  (including,
        without limitation,  full and partial Principal  Prepayments made by the
        respective Mortgagors, Insurance Proceeds and Net Liquidation Proceeds),
        to the extent not previously distributed;

provided,  however,  that Principal  Collections shall be reduced by any amounts
withdrawn from the Custodial Account pursuant to Section 3.03(ii), (v), (vi) and
(vii) of the Servicing Agreement.

     Principal  Distribution  Amount:  As to any  Payment  Date,  the sum of the
following:

                      (i) the Principal Collections for that Payment Date;

                      (ii) any Liquidation  Loss  Distribution  Amounts for that
        Payment Date to the extent  covered by the Net Monthly  Excess Cash Flow
        for that  Payment  Date as provided in clause (i) of Section  3.05(d) of
        the Indenture; and

                      (iii) the amount of any Reserve  Increase  Amount for that
        Payment Date to the extent  covered by the Net Monthly  Excess Cash Flow
        for that Payment  Date as provided in clause (ii) of Section  3.05(d) of
        the Indenture;

                      minus

                      (iv) the  amount of any  Excess  Reserve  Amount  for that
Payment Date.

               Principal  Prepayment:  Any  payment  of  principal  made  by the
Mortgagor on a Home Loan which is received in advance of its  scheduled Due Date
and which is not  accompanied  by an amount of interest  representing  scheduled
interest due on any date or dates in any month or months subsequent to the month
of prepayment.

     Proceeding:  Any  suit  in  equity,  action  at law or  other  judicial  or
administrative proceeding.

     Program Guide:  Together, the Seller's Seller Guide and Servicing Guide, as
in effect from time to time.


                                      -24-

<PAGE>



     Prospectus  Supplement:  The prospectus  supplement,  dated March 20, 2003,
relating to the issuance of the Home Loan-Backed Notes, Series 2003-HI1.

     Purchase  Price:  The meaning  specified in Section 2.2(a) of the Home Loan
Purchase Agreement.

     Purchaser:  Residential  Funding  Mortgage  Securities II, Inc., a Delaware
corporation, and its successors and assigns.

               Qualified  Insurer:  A mortgage  guaranty  insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state  having  jurisdiction  over such insurer in  connection  with the
insurance  policy issued by such insurer,  duly  authorized and licensed in such
states to transact a mortgage guaranty  insurance business in such states and to
write the insurance  provided by the insurance  policy issued by it, approved as
an insurer by the Master Servicer and as a FNMA-approved mortgage insurer.

               Rating  Agency:  Any  nationally  recognized  statistical  rating
organization,  or its successor, that rated the Securities at the request of the
Depositor at the time of the initial issuance of the Securities, which initially
shall be Moody's or Standard & Poor's. If such organization or a successor is no
longer  in  existence,  "Rating  Agency"  shall  be such  nationally  recognized
statistical rating organization,  or other comparable Person,  designated by the
Depositor,  notice of which designation shall be given to the Indenture Trustee.
References  herein to the  highest  short term  unsecured  rating  category of a
Rating  Agency shall mean A-1 or better in the case of Standard & Poor's and P-1
or better in the case of  Moody's  and in the case of any  other  Rating  Agency
shall mean such equivalent  ratings.  References herein to the highest long-term
rating  category of a Rating  Agency  shall mean "AAA" in the case of Standard &
Poor's  and "Aaa" in the case of  Moody's  and in the case of any  other  Rating
Agency, such equivalent rating.

               Record Date:  With respect to the Class A-1 Notes and any Payment
Date,  the Business Day next preceding such Payment Date and with respect to the
Notes  (other  than the Class A-1 Notes) and the  Certificates  and any  Payment
Date,  the last  Business Day of the month  preceding  the month of such Payment
Date.

               Reference Bank Rate: With respect to any Interest Accrual Period,
as follows:  the arithmetic mean (rounded upwards, if necessary,  to the nearest
one  sixteenth  of a percent)  of the  offered  rates for United  States  dollar
deposits  for one month  which are  offered by the  Reference  Banks as of 11:00
A.M., London,  England time, on the second LIBOR Business Day prior to the first
day of such  Interest  Accrual  Period to prime  banks in the  London  interbank
market  for a period of one month in amounts  approximately  equal to the sum of
the outstanding Note Balance of the Class A-1 Notes;  provided that at least two
such Reference  Banks provide such rate. If fewer than two offered rates appear,
the Reference Bank Rate will be the  arithmetic  mean of the rates quoted by one
or more major banks in New York City,  selected by the  Indenture  Trustee after
consultation with the Master Servicer,  as of 11:00 a.m., New York time, on such
date for loans in U.S.  Dollars  to leading  European  Banks for a period of one
month in amounts  approximately equal to the aggregate Note Balance of the Class
A-1 Notes. If no such quotations can be obtained,  the Reference Bank Rate shall
be LIBOR applicable to the preceding Payment Date;  provided  however,  that if,
under the priorities


                                      -25-

<PAGE>



indicated  above,  LIBOR  for a  Payment  Date  would be based on LIBOR  for the
previous  Payment Date for the third  consecutive  Payment  Date,  the Indenture
Trustee shall select an  alternative  comparable  index over which the Indenture
Trustee has no control,  used for determining one-month Eurodollar lending rates
that is calculated  and published or otherwise  made available by an independent
party.

     Reference Banks: Barclays Bank PLC, Credit Suisse and Abbey National PLC.

     Registered  Holder:  The Person in whose name a Note is  registered  in the
Note Register on the applicable Record Date.

               Related Documents:  With respect to each Home Loan, the documents
specified  in  Section  2.1(c)  of the  Home  Loan  Purchase  Agreement  and any
documents  required  to be added to such  documents  pursuant  to the Home  Loan
Purchase Agreement, the Trust Agreement or the Servicing Agreement.

     Release  Agreement:  A Release  Agreement as defined in Section 3.05 of the
Servicing Agreement.

     REO: A Mortgaged  Property that is acquired by the Issuer in foreclosure or
by deed in lieu of foreclosure.

               Repurchase  Event:  With  respect  to any Home  Loan,  one of the
following:  (i) a discovery  that, as of the Closing Date, the related  Mortgage
was not a valid lien on the related  Mortgaged  Property subject only to (A) the
lien of any prior mortgage indicated on the Home Loan Schedule,  (B) the lien of
real property  taxes and  assessments  not yet due and payable,  (C)  covenants,
conditions,  and  restrictions,  rights of way,  easements  and other matters of
public  record  as of the date of  recording  of such  Mortgage  and such  other
permissible  title  exceptions  as are listed in the Program Guide and (D) other
matters to which like  properties  are commonly  subject which do not materially
adversely  affect the value,  use,  enjoyment  or  marketability  of the related
Mortgaged Property, or (ii) with respect to any Home Loan as to which the Seller
delivers a Lost Note  Affidavit,  a subsequent  default on such Home Loan if the
enforcement  thereof or of the related  Mortgage  is  materially  and  adversely
affected by the absence of the original Mortgage Note.

               Repurchase  Price:  With respect to any Home Loan  required to be
repurchased  on any  date  pursuant  to the  Home  Loan  Purchase  Agreement  or
purchased by the Master Servicer pursuant to the Servicing Agreement,  an amount
equal to the sum of (i) 100% of the Loan Balance thereof (without  reduction for
any amounts  charged off) and (ii) unpaid accrued  interest at the Loan Rate (or
with respect to the last day of the month in the month of  repurchase,  the Loan
Rate will be the Loan Rate in effect as to the second to last day in such month)
on the outstanding principal balance thereof from the Due Date to which interest
was last paid by the Mortgagor to the first day of the month following the month
of purchase.

               Request  for  Release:  The form  attached  as  Exhibit  4 to the
Custodial  Agreement  or an  electronic  request  in a  form  acceptable  to the
Custodian.


                                      -26-

<PAGE>



     Reserve  Amount  Floor:  An  amount  equal to 0.50% of the  aggregate  Pool
Balance of the Home Loans as of the Cut-off Date.

               Reserve  Amount  Target:  As to any  Payment  Date  prior  to the
Stepdown  Date,  an amount  equal to 2.00% of the  aggregate  Cut-off  Date Pool
Balance.  On or after the Stepdown Date, the Reserve Amount Target will be equal
to the greater of:

        (a) 4.00% of the aggregate Pool Balance after applying payments received
in the related Collection Period; and

        (b)    the Reserve Amount Floor;

provided,  however, that any scheduled reduction to the Reserve Amount Target on
or after the Stepdown  Date as described  above shall not be made on any Payment
Date when a Trigger Event is in effect.

In addition,  the Reserve  Amount  Target may be reduced with the consent of the
Rating Agencies but without the consent of the noteholders.

               Reserve  Increase  Amount:  As to the first six Payment Dates, an
amount  equal to zero.  With  respect  to any  payment  date after the first six
Payment Dates,  an amount equal to the lesser of (i) the Net Monthly Excess Cash
Flow available for payment of the Reserve Increase Amount for that Payment Date,
as  provided  in clause (ii) of Section  3.05(d) of the  Indenture  and (ii) the
excess, if any of (x) the Reserve Amount Target over (y) the Outstanding Reserve
Amount.

               Residual  Component:  One of two  components  of the Owner  Trust
Certificate  issued by the  Trust,  which  component  has  neither  a  Component
Principal Balance nor a Component Interest Rate.

               Responsible  Officer:  With respect to the Indenture Trustee, the
Class B Trustee and the Grantor Trustee,  any officer of the Indenture  Trustee,
the Class B Trustee and the Grantor Trustee,  with direct responsibility for the
administration  of the  Indenture,  the Class B Indenture  and the Grantor Trust
Agreement,  as applicable,  and also, with respect to a particular  matter,  any
other  officer  to whom  such  matter  is  referred  because  of such  officer's
knowledge of and familiarity with the particular subject.

               Sale:  The meaning specified in Section 5.15 of the Indenture.

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

               Security:  Any of the Certificates or Notes.

               Securityholder or Holder:  Any Noteholder or a Certificateholder.


                                      -27-

<PAGE>



               Security Instrument:  A written instrument creating a valid first
lien  on a  Mortgaged  Property  securing  a  Mortgage  Note,  which  may be any
applicable  form of  mortgage,  deed of trust,  deed to secure  debt or security
deed, including any riders or addenda thereto.

     Seller:  Residential Funding Corporation,  a Delaware corporation,  and its
successors and assigns.

               Senior Note: Any of the Class A-1 Notes,  Class A-2 Notes,  Class
A-3 Notes, Class A-4 Notes, Class A-5 Notes, Class A-6 Notes, Class A-7 Notes or
Class A-IO Notes.

               Senior Principal Distribution Amount: With respect to any Payment
Date,  (1)  prior to the  Stepdown  Date or on or after the  Stepdown  Date if a
Trigger Event is in effect, the Principal  Distribution  Amount for that Payment
Date,  or (2) on or after the Stepdown  Date if a Trigger Event is not in effect
for that Payment Date, the lesser of:

                    o the Principal  Distribution  Amount for that Payment Date;
               and

                      o the excess of (A) the  aggregate  Note  Balances  of the
               Senior Notes  immediately prior to that Payment Date over (B) the
               lesser of (x) the  product  of (1) the  applicable  Subordination
               Percentage  and (2) the aggregate  Pool Balance of the Home Loans
               after giving effect to  distributions  to be made on that Payment
               Date and (y) the excess of the aggregate Pool Balance of the Home
               Loans after  giving  effect to  distributions  to be made on that
               Payment Date, over the Reserve Amount Floor.

               In no event  will the  Senior  Principal  Distribution  Amount be
greater than the aggregate Note Balance of the Class A Notes.

               Servicing  Agreement:  The Servicing  Agreement dated as of March
28,  2003 among the  Grantor  Trustee,  the Issuer and the Master  Servicer,  as
master servicer.

               Servicing  Certificate:  A  certificate  prepared  by a Servicing
Officer on behalf of the Master  Servicer in accordance with Section 4.01 of the
Servicing Agreement.

     Servicing  Default:  The meaning specified in Section 7.01 of the Servicing
Agreement.

     Servicing Fee: With respect to any Home Loan, the sum of the related Master
Servicing Fee and the related Subservicing Fee.

     Servicing Fee Rate:  With respect to any Home Loan,  the sum of the related
Master Servicing Fee Rate and the related Subservicing Fee Rate.

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


                                      -28-

<PAGE>



               Sixty-Plus  Delinquency  Percentage:  For any Payment  Date,  the
fraction,  expressed as a percentage, equal to the aggregate Pool Balance of the
Home Loans that are 60 or more days  delinquent  in  payment  of  principal  and
interest,  including Home Loans in  foreclosure  and Home Loans in REO, over the
aggregate Pool Balance of the Home Loans.

               Special Hazard Amount:  Initially,  $2,250,000. As of any date of
determination  following the Cut-off Date, the Special Hazard Amount shall equal
$2,250,000 less the sum of (A) the aggregate of any Liquidation  Loss Amounts on
the Home Loans due to Special  Hazard Losses and (B) the  Adjustment  Amount (as
defined below) as most recently calculated.  For each anniversary of the Cut-off
Date, the Adjustment  Amount shall be equal to the amount,  if any, by which the
amount  calculated in accordance  with the preceding  sentence  (without  giving
effect to the deduction of the Adjustment Amount for such  anniversary)  exceeds
the  greatest of (i) twice the  outstanding  principal  balance of the Home Loan
which  has  the  largest  outstanding  principal  balance  on the  Payment  Date
immediately preceding such anniversary,  (ii) the product of 1.00% multiplied by
the  outstanding  aggregate  credit limits of all Home Loans on the Payment Date
immediately  preceding  such  anniversary  and (iii) the  aggregate  outstanding
principal  balance (as of the  immediately  preceding  Payment Date) of the Home
Loans in any single five-digit  California zip code area with the largest amount
of Home Loans by aggregate principal balance as of such anniversary.

               Special Hazard Loss: Any Liquidation Loss Amount not in excess of
the cost of the lesser of repair or replacement of a Mortgaged Property suffered
by such Mortgaged Property on account of direct physical loss,  exclusive of (i)
any  loss of a type  covered  by a hazard  policy  or a flood  insurance  policy
required to be  maintained  in respect of such  Mortgaged  Property  pursuant to
Section 3.04 of the Servicing Agreement,  except to the extent of the portion of
such loss not  covered  as a result of any  coinsurance  provision  and (ii) any
losses resulting from an Extraordinary Event.

     Standard  &  Poor's:  Standard  & Poor's,  a  Division  of The  McGraw-Hill
Companies, Inc. or its successor in interest.

     Stated Value: The value of the Mortgaged  Property as stated by the related
Mortgagor in his or her application.

     Statutory  Trust  Statute:  Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code ss.ss.3801 et seq., as the same may be amended from time to time.

               Step-Up Date: The second Payment Date  immediately  following the
Payment  Date on which the Master  Servicer can purchase all or some of the Home
Loans from the Trust pursuant to Section 8.08 of the Servicing Agreement.

               Stepdown  Date:  The later of (i) the Payment  Date in April 2006
and (ii) the  Payment  Date on which the  aggregate  Note  Balance of the Senior
Notes is less than  47.00% of the  aggregate  Pool  Balance,  in each case after
applying payments received in the related Collection Period.

     Subordinate Note: Any of the Class M-1 Notes,  Class M-2 Notes or Class M-3
Notes.


                                      -29-

<PAGE>



               Subordination  Percentage:  As to any  Class of  Notes  and the B
Component, the following percentages: with respect to the Class A Notes, 47.00%,
with  respect  to the Class M-1  Notes,  63.00%,  with  respect to the Class M-2
Notes,  77.00%,  with respect to the Class M-3 Notes, 96.50% and with respect to
the B Component, 96.00%.

               Subservicer: Any Person with whom the Master Servicer has entered
into a Subservicing Agreement as a Subservicer by the Master Servicer.

               Subservicing   Account:   An  Eligible  Account   established  or
maintained by a Subservicer as provided for in Section  3.02(c) of the Servicing
Agreement.

               Subservicing  Agreement:  The written contract between the Master
Servicer and any Subservicer relating to servicing and administration of certain
Home Loans as provided in Section 3.01 of the Servicing Agreement.

               Subservicing Fee: With respect to any Collection  Period, the fee
retained monthly by the Subservicer  (or, in the case of a  nonsubserviced  Home
Loan, by the Master  Servicer) equal to the product of (i) the  Subservicing Fee
Rate  divided  by 12 and (ii)  the  Pool  Balance  as of the  first  day of such
Collection Period.

               Subservicing Fee Rate: With respect to each Home Loan, the amount
payable to the related Subservicer, equal to 0.50% per annum.

               Substitution  Adjustment  Amounts:  With  respect to any Eligible
Substitute  Loan,  the  amount as  defined  in  Section  3.1(b) of the Home Loan
Purchase  Agreement and any Deleted Loan,  the amount,  if any, as determined by
the  Master  Servicer,  by which the  aggregate  principal  balance  of all such
Eligible  Substitute  Loans  as of the  date of  substitution  is less  than the
aggregate  principal balance of all such Deleted Loans (after application of the
principal  portion of the Monthly Payments due in the month of substitution that
are to be distributed to the Payment Account in the month of substitution).

               Termination  Price:  In the event  that all of the Home Loans are
purchased by the Master Servicer,  the Termination Price will be an amount equal
to 100% of the unpaid Loan Balance of each Home Loan so purchased,  plus accrued
and unpaid  interest  thereon at the weighted  average of the Loan Rates through
the day  preceding  the Payment  Date on which such  purchase  occurs,  plus the
Adjusted Issue Price of the Class A-IO Notes.

               Treasury   Regulations:   Regulations,   including   proposed  or
temporary Regulations, promulgated under the Code. References herein to specific
provisions  of  proposed  or  temporary   regulations  shall  include  analogous
provisions  of  final   Treasury   Regulations  or  other   successor   Treasury
Regulations.

               Trigger  Event:  A Trigger Event is in effect with respect to any
Payment Date on or after the Stepdown Date if either:


                                      -30-

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               o      the  three-month  average  of the  Sixty-Plus  Delinquency
                      Percentage,  as determined as of that Payment Date and the
                      immediately  preceding  two Payment  Dates is greater than
                      5.00%; or

               o      if the Payment  Date  occurs on or after the 37th  Payment
                      Date through the 48th Payment Date,  the aggregate  amount
                      of  Liquidation  Loss  Amounts,  other  than  Excess  Loss
                      Amounts,  on the Home Loans since the Cut-off Date exceeds
                      10.00% of the aggregate  Pool Balance of the Home Loans as
                      of the Cut-off Date; or

               o      if the Payment  Date  occurs on or after the 49th  Payment
                      Date through the 60th Payment Date,  the aggregate  amount
                      of  Liquidation  Loss  Amounts,  other  than  Excess  Loss
                      Amounts,  on the Home Loans since the Cut-off Date exceeds
                      12.00% of the aggregate  Pool Balance of the Home Loans as
                      of the Cut-off Date; or

               o      if the Payment  Date  occurs on or after the 61st  Payment
                      Date, the aggregate  amount of  Liquidation  Loss Amounts,
                      other than  Excess Loss  Amounts,  on the Home Loans since
                      the cut-off  date  exceeds  14.00% of the  aggregate  Pool
                      Balance of the Home Loans as of the Cut-off Date;

provided,  however,  that if the six-month average of the aggregate  Liquidation
Loss Amount,  as determined for that Payment Date and the immediately  preceding
five Payment Dates, is less than 50% of the six-month average of the Net Monthly
Excess  Cash Flow,  as  determined  for that  Payment  Date and the  immediately
preceding  five  Payment  Dates,  a Trigger  Event  shall not be deemed to be in
effect.

     Trust  Estate:  The  meaning  specified  in  the  Granting  Clause  of  the
Indenture.

               Trust  Indenture Act or TIA: The Trust  Indenture Act of 1939, as
amended from time to time, as in effect on any relevant date.

               UCC: The Uniform  Commercial  Code, as amended from time to time,
as in effect in any specified jurisdiction.

     Underwriters:  Bear, Stearns & Co. Inc. and Residential  Funding Securities
Corporation.

               Uniform  Single  Attestation  Program for Mortgage  Bankers:  The
Uniform Single  Attestation  Program for Mortgage  Bankers,  as published by the
Mortgage  Bankers  Association  of America and effective  with respect to fiscal
periods ending on or after December 15, 1995.

               United States Person: A citizen or resident of the United States,
a corporation, partnership or other entity created or organized in, or under the
laws of, the United  States or any state  thereof or the  District  of  Columbia
(except,  in the case of a partnership,  to the extent provided in regulations),
or an estate  whose  income is  subject  to United  States  federal  income  tax
regardless of


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its  source,  or a trust  other than a  "foreign  trust"  within the  meaning of
Section 7701(a)(30) of the Code.




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