Document:

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                                 TRUST AGREEMENT

                                     between

                       GREENPOINT MORTGAGE SECURITIES LLC
                                     Sponsor

                                       and

                                 [OWNER TRUSTEE]
                                  Owner Trustee

                           Dated as of ________, 200_

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                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I Definitions..........................................................1

     SECTION 1.1.   Defined Terms..............................................1
     SECTION 1.2.   Other Definitional Provisions..............................2
     SECTION 1.3.   Action by or Consent of Noteholders and
                    Residual Certificateholders................................3

ARTICLE II Organization........................................................3

     SECTION 2.1.   Name.......................................................3
     SECTION 2.2.   Office.....................................................3
     SECTION 2.3.   Purposes and Powers........................................3
     SECTION 2.4.   Appointment of Owner Trustee...............................4
     SECTION 2.5.   Initial Capital Contribution of Trust Estate...............4
     SECTION 2.6.   Declaration of Trust.......................................4
     SECTION 2.7.   Liability..................................................5
     SECTION 2.8.   Title to Trust Property....................................5
     SECTION 2.9.   Situs of Trust.............................................5
     SECTION 2.10.  Representations and Warranties of the Sponsor..............5
     SECTION 2.11.  Federal Income Tax Allocations.............................6
     SECTION 2.12.  Covenants of the Sponsor...................................7
     SECTION 2.13.  Covenants of the Residual Certificateholders...............8

ARTICLE III [Reserved].........................................................9

ARTICLE IV Ownership of Trust Property; Residual Certificates and Transfer of
            Interests..........................................................9

     SECTION 4.1.   Trust Property Ownership...................................9
     SECTION 4.2.   The Residual Certificates..................................9
     SECTION 4.3.   Authentication of Residual Certificates....................9
     SECTION 4.4.   Registration of Transfer and Exchange of Residual
                    Certificates..............................................10
     SECTION 4.5.   Mutilated, Destroyed, Lost or Stolen Residual
                    Certificates..............................................10
     SECTION 4.6.   Persons Deemed Residual Certificateholders................11
     SECTION 4.7.   Access to List of Residual Certificateholders' Names and
                    Addresses.................................................11
     SECTION 4.8.   Maintenance of Office or Agency...........................11
     SECTION 4.9.   ERISA Restrictions........................................11
     SECTION 4.10.  Restrictions on Transfer of Residual Certificates.........12
     SECTION 4.11.  Acceptance of Obligations.................................13
     SECTION 4.12.  Distributions on Residual Certificates....................13

ARTICLE V Voting Rights and Other Actions.....................................13

     SECTION 5.1.   Prior Notice with Respect to Certain Matters..............13

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     SECTION 5.2.   Action by Residual Certificateholders with Respect to
                    Certain Matters...........................................14
     SECTION 5.3.   Action with Respect to Bankruptcy.........................15
     SECTION 5.4.   Restrictions on Residual Certificateholders' Power........15
     SECTION 5.5.   Majority Control..........................................16
     SECTION 5.6.   Rights of the Insurer.....................................16
     SECTION 5.7.   [Reserved]................................................16
     SECTION 5.8.   Insurer's Rights Regarding Actions, Proceedings or
                    Investigations............................................16

ARTICLE VI Certain Duties.....................................................18

     SECTION 6.1.   Accounting and Records to the Noteholders, Residual
                    Certificateholders, the Internal Revenue Service
                    and Others................................................18
     SECTION 6.2.   Signature on Returns; Tax Matters Partner.................18
     SECTION 6.3.   Underwriting Agreement....................................18

ARTICLE VII Authority and Duties of Owner Trustee.............................19

     SECTION 7.1.   General Authority.........................................19
     SECTION 7.2.   General Duties............................................19
     SECTION 7.3.   Action upon Instruction...................................19
     SECTION 7.4.   No Duties Except as Specified in this Agreement or in
                    Instructions..............................................20
     SECTION 7.5.   No Action Except under Specified Documents or
                    Instructions..............................................21
     SECTION 7.6.   Restrictions..............................................21

ARTICLE VIII Concerning the Owner Trustee.....................................21

     SECTION 8.1.   Acceptance of Trust and Duties............................21
     SECTION 8.2.   Furnishing of Documents...................................22
     SECTION 8.3.   Representations and Warranties............................22
     SECTION 8.4.   Reliance; Advice of Counsel...............................23
     SECTION 8.5.   Not Acting in Individual Capacity.........................23
     SECTION 8.6.   Owner Trustee Not Liable for Notes, Residual Certificates
                    or Mortgage Loans.........................................23
     SECTION 8.7.   Owner Trustee May Own Notes and Residual Certificates.....24
     SECTION 8.8.   Payments from Owner Trust Estate..........................24
     SECTION 8.9.   Doing Business in Other Jurisdictions.....................24

ARTICLE IX Compensation of Owner Trustee......................................25

     SECTION 9.1.   Owner Trustee's Fees and Expenses.........................25
     SECTION 9.2.   Indemnification...........................................25
     SECTION 9.3.   Payments to the Owner Trustee.............................25
     SECTION 9.4.   Non-recourse Obligations..................................25

ARTICLE X Termination of Trust Agreement......................................25

     SECTION 10.1.  Termination of Trust Agreement............................25

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ARTICLE XI Successor Owner Trustees and Additional Owner Trustees.............27

     SECTION 11.1.  Eligibility Requirements for Owner Trustee................27
     SECTION 11.2.  Resignation or Removal of Owner Trustee...................27
     SECTION 11.3.  Successor Owner Trustee...................................28
     SECTION 11.4.  Merger or Consolidation of Owner Trustee..................29
     SECTION 11.5.  Appointment of Co-Owner Trustee or Separate Owner Trustee.29

ARTICLE XII Miscellaneous.....................................................30

     SECTION 12.1.  Supplements and Amendments................................30
     SECTION 12.2.  No Legal Title to Owner Trust Estate in Residual
                    Certificateholders........................................31
     SECTION 12.3.  Limitations on Rights of Others...........................31
     SECTION 12.4.  Notices...................................................32
     SECTION 12.5.  Severability..............................................32
     SECTION 12.6.  Separate Counterparts.....................................32
     SECTION 12.7.  Assignments; Insurer......................................32
     SECTION 12.8.  No Petition...............................................33
     SECTION 12.9.  No Recourse...............................................33
     SECTION 12.10. Headings..................................................33
     SECTION 12.11. GOVERNING LAW.............................................33
     SECTION 12.12. Servicer..................................................33

EXHIBITS

Exhibit A    Form of Residual Certificate
Exhibit B    Form of Certificate of Trust

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                  TRUST AGREEMENT dated as of ________,  200_ (the  "AGREEMENT")
between GREENPOINT MORTGAGE SECURITIES LLC, a Delaware limited liability company
(the "SPONSOR"), and [OWNER TRUSTEE], as Owner Trustee.

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION  1.1.   DEFINED  TERMS.   For  the  purposes  of  this
Agreement,  the  following  terms shall have the meanings  set forth below.  All
other  capitalized terms used herein but not defined shall have the meanings set
forth in Annex A to the Indenture dated as of ________,  200_ (the "INDENTURE"),
between  the Issuer and the  Indenture  Trustee,  as the same may be amended and
supplemented from time to time.

                  "AFFILIATE" shall mean with respect to any specified Person, a
Person that directly, or indirectly through one or more intermediaries, controls
or is  controlled  by, or is under common  control  with,  or owns,  directly or
indirectly, 50% or more of, the Person specified.

                  "AGREEMENT"  shall mean this Trust Agreement,  as the same may
be amended and supplemented from time to time.

                  "BENEFIT PLAN" shall have the meaning assigned to such term in
Section 4.9.

                  "CERTIFICATE  OF TRUST" shall mean the Certificate of Trust in
the form of Exhibit C to be filed for the Trust  pursuant to Section  3810(a) of
the Statutory Trust Statute.

                  "CERTIFICATE REGISTER" and "CERTIFICATE  REGISTRAR" shall mean
the register  maintained and the registrar  respectively  appointed  pursuant to
Section 4.4.

                  "DEFINITIVE   RESIDUAL   CERTIFICATES"   shall  mean  Residual
Certificates issued in certificated, fully registered form.

                  "EXPENSES"  shall have the  meaning  assigned  to such term in
Section 9.2.

                  "INDEMNIFIED  PARTIES" shall have the meaning assigned to such
term in Section 9.2.

                  "INSTRUCTING  PARTY"  shall have the meaning  assigned to such
term in Section 7.3.

                  "OWNER TRUST ESTATE" shall mean all right,  title and interest
of the Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing  Agreement,  all funds on deposit from time
to time in the Collection  Account and all other property of the Trust from time
to time,  including any rights of the Issuer  pursuant to the Sale and Servicing
Agreement and any rights of the Sponsor, in its capacity as Purchaser,  pursuant
to the Mortgage Loan Purchase Agreement.

                  "PROPOSER"  shall have the  meaning  ascribed to it in Section
5.2(b) herein.

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                  "RESIDUAL   CERTIFICATE"   shall  mean  a  trust   certificate
evidencing the beneficial ownership interest of a Residual  Certificateholder in
the Trust, substantially in the form of Exhibit B attached hereto.

                  "RESIDUAL  CERTIFICATEHOLDER"  shall  mean the Person in whose
name a Residual Certificate is registered on the Certificate Register.

                  "SECRETARY  OF STATE" shall mean the Secretary of State of the
State of Delaware.

                  "SECURITY  MAJORITY" shall mean a majority by principal amount
of the  Noteholders  so long as the  Notes are  outstanding  and a  majority  by
principal amount of the Residual Certificateholders thereafter.

                  "STATUTORY TRUST STATUTE" shall mean Chapter 38 of Title 12 of
the Delaware Code, 12 DEL. CODE ss. 3801 ET SEQ. as the same may be amended from
time to time.

                  "TREASURY  REGULATIONS"  shall  mean  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.

                  SECTION 1.2. OTHER DEFINITIONAL PROVISIONS.

                  (a) All terms defined in this Agreement shall have the defined
meanings  when  used in any  certificate  or other  document  made or  delivered
pursuant hereto unless otherwise defined therein.

                  (b) As used in this Agreement and in any  certificate or other
document  made or delivered  pursuant  hereto or thereto,  accounting  terms not
defined in this  Agreement or in any such  certificate  or other  document,  and
accounting  terms partly defined in this Agreement or in any such certificate or
other  document to the extent not defined,  shall have the  respective  meanings
given to them under generally accepted accounting principles as in effect on the
date of this Agreement or any such certificate or other document, as applicable.
To the extent that the  definitions of accounting  terms in this Agreement or in
any such  certificate  or other document are  inconsistent  with the meanings of
such terms under  generally  accepted  accounting  principles,  the  definitions
contained in this  Agreement or in any such  certificate or other document shall
control.

                  (c) The words  "hereof,"  "herein,"  "hereunder"  and words of
similar  import when used in this  Agreement  shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and Exhibit
references  contained in this  Agreement are references to Sections and Exhibits
in or to this Agreement  unless  otherwise  specified;  and the term "including"
shall mean "including without limitation."

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                  (d) The definitions contained in this Agreement are applicable
to the singular as well as the plural  forms of such terms and to the  masculine
as well as to the feminine and neuter genders of such terms.

                  SECTION 1.3.  ACTION BY OR CONSENT OF NOTEHOLDERS AND RESIDUAL
CERTIFICATEHOLDERS.

                  (a) Whenever any provision of this Agreement  refers to action
to be taken,  or consented to, by  Noteholders  or Residual  Certificateholders,
such  provision  shall  be  deemed  to  refer  to  the  Noteholder  or  Residual
Certificateholder,  as  the  case  may  be,  of  record  as of the  Record  Date
immediately  preceding the date on which such action is to be taken,  or consent
given, by Noteholders or Residual Certificateholders. Solely for the purposes of
any  action  to  be  taken,   or  consented  to,  by   Noteholders  or  Residual
Certificateholders,  any  Note  or  Certificate  Registered  in the  name of the
Sponsor  or any  Affiliate  thereof  shall  be  deemed  not  to be  outstanding;
PROVIDED,  HOWEVER,  that,  solely for the  purpose of  determining  whether the
Indenture  Trustee is entitled  to rely upon any such  action or  consent,  only
Notes or  Residual  Certificates  which  the  Owner  Trustee,  or the  Indenture
Trustee, respectively, knows to be so owned shall be so disregarded.

                                   ARTICLE II

                                  ORGANIZATION

                  SECTION 2.1. NAME.  There is hereby formed a trust to be known
as "GreenPoint  Home Equity Loan Trust 200_-_",  in which name the Owner Trustee
may conduct  the  business of the Trust,  make and execute  contracts  and other
instruments on behalf of the Trust and sue and be sued.

                  SECTION 2.2.  OFFICE.  The office of the Trust shall be in the
care of the Owner Trustee at the Corporate Trust Office or at such other address
as  the  Owner  Trustee  may  designate  by  written   notice  to  the  Residual
Certificateholders, the Insurer and the Sponsor.

                  SECTION 2.3. PURPOSES AND POWERS.

                  (a) The  purpose of the Trust is, and the Trust shall have the
power and authority, to engage in the following activities:

                  (i) to issue  the  Notes  pursuant  to the  Indenture  and the
         Residual Certificates pursuant to this Agreement, and to sell the Notes
         and Residual Certificates;

                  (ii) to assign, grant, transfer,  pledge,  mortgage and convey
         the  Owner  Trust  Estate  to the  Indenture  Trustee  on behalf of the
         Noteholders and for the benefit of the Insurer and to hold,  manage and
         distribute to the Residual  Certificateholders pursuant to the terms of
         the Sale and Servicing  Agreement any portion of the Owner Trust Estate
         released  from the Lien of, and remitted to the Trust  pursuant to, the
         Indenture;

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                  (iii) with the  proceeds of the sale of the Notes,  to pay the
         organizational, start-up and transactional expenses of the Trust and to
         pay the  balance  to the  Sponsor  pursuant  to the Sale and  Servicing
         Agreement;

                  (iv)  to  enter  into,   execute,   deliver  and  perform  its
         obligations under the Basic Documents to which it is a party;

                  (v) to engage in those  activities,  including  entering  into
         agreements,  that are  necessary,  suitable or convenient to accomplish
         the foregoing or are incidental thereto or connected therewith; and

                  (vi) subject to compliance with the Basic Documents, to engage
         in  such  other  activities  as  may be  required  in  connection  with
         conservation of the Owner Trust Estate and the making of  distributions
         to the Noteholders and the Residual Certificateholders.

The Trust is hereby authorized to engage in the foregoing activities.  The Trust
shall not engage in any activity other than in connection  with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.

                  SECTION 2.4.  APPOINTMENT OF OWNER TRUSTEE. The Sponsor hereby
appoints  the Owner  Trustee as trustee  of the Trust  effective  as of the date
hereof, to have all the rights, powers and duties set forth herein.

                  SECTION 2.5. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The
Sponsor  hereby sells,  assigns,  transfers,  conveys and sets over to the Owner
Trustee,  as of the  date  hereof,  the  sum of $1.  The  Owner  Trustee  hereby
acknowledges  receipt in trust from the Sponsor,  as of the date hereof,  of the
foregoing  contribution,  which shall  constitute the initial Owner Trust Estate
and shall be deposited  in the  Collection  Account.  On or prior to the Closing
Date, the Owner Trustee will also, upon receipt  thereof,  acknowledge on behalf
of the Trust  receipt of the Mortgage  Loans  pursuant to the Sale and Servicing
Agreement.  The Sponsor shall pay  organizational  expenses of the Trust as they
may arise or shall,  upon the request of the Owner Trustee,  promptly  reimburse
the Owner Trustee for any such expenses paid by the Owner Trustee.

                  SECTION 2.6.  DECLARATION  OF TRUST.  The Owner Trustee hereby
declares  that it will hold the Owner Trust  Estate in trust upon and subject to
the  conditions  set  forth  herein  for  the use and  benefit  of the  Residual
Certificateholders,  subject  to the  obligations  of the Trust  under the Basic
Documents. It is the intention of the parties hereto that the Trust constitute a
statutory  trust  under the  Statutory  Trust  Statute  and that this  Agreement
constitute the governing instrument of such statutory trust. It is the intention
of the parties hereto that,  solely for income tax purposes,  the Trust shall be
treated as a branch; PROVIDED,  HOWEVER, that in the event Residual Certificates
are owned by more than one Residual  Certificateholder,  it is the  intention of
the parties hereto that, solely for income and franchise tax purposes, the Trust
shall then be treated as a partnership and that,  unless  otherwise  required by
appropriate tax  authorities,  only after such time the Trust will file or cause
to be  filed  annual  or  other  necessary  returns,  reports  and  other  forms
consistent with the  characterization of the Trust as a partnership for such tax
purposes.  Effective as of the date  hereof,  the Owner  Trustee  shall have all
rights,  powers and duties set

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forth herein and to the extent not inconsistent herewith, in the Statutory Trust
Statute  with  respect to  accomplishing  the  purposes of the Trust.  The Owner
Trustee shall file the Certificate of Trust with the Secretary of State.

                  SECTION  2.7.  LIABILITY.  No Holder  shall have any  personal
liability for any liability or obligation of the Trust.

                  SECTION 2.8. TITLE TO TRUST PROPERTY.

                  (a) Legal title to all the Owner Trust  Estate shall be vested
at all times in the Trust as a separate legal entity except where applicable law
in any  jurisdiction  requires title to any part of the Owner Trust Estate to be
vested in a trustee  or  trustees,  in which  case  title  shall be deemed to be
vested in the Owner Trustee, a co-trustee and/or a separate trustee, as the case
may be.

                  (b) The Holders  shall not have legal title to any part of the
Trust  Property.  The Holders  shall be entitled to receive  distributions  with
respect to their undivided  ownership  interest  therein only in accordance with
the Basic  Documents.  No transfer,  by operation  of law or  otherwise,  of any
right,  title or interest by any  Residual  Certificateholder  of its  ownership
interest in the Owner Trust Estate shall operate to terminate  this Agreement or
the trusts  hereunder  or entitle  any  transferee  to an  accounting  or to the
transfer to it of legal title to any part of the Trust Property.

                  SECTION  2.9.  SITUS OF TRUST.  The Trust will be located  and
administered in the State of Delaware. All bank accounts maintained by the Owner
Trustee on behalf of the Trust  shall be located in the State of Delaware or the
State of New York.  Payments  will be  received by the Trust only in Delaware or
New York and payments  will be made by the Trust only from Delaware or New York.
The  Trust  shall  not have any  employees  in any state  other  than  Delaware;
PROVIDED,  HOWEVER,  that nothing  herein  shall  restrict or prohibit the Owner
Trustee,  the Servicer or any agent of the Trust from having employees within or
without  the State of  Delaware.  The only  office  of the Trust  will be at the
Corporate Trust Office in Delaware.

                  SECTION 2.10.  REPRESENTATIONS  AND WARRANTIES OF THE SPONSOR.
The Sponsor  makes the  following  representations  and  warranties on which the
Owner  Trustee  relies in accepting  the Owner Trust Estate in trust and issuing
the Notes and the  Residual  Certificates  and upon which the Insurer  relies in
issuing the Policy.

                  (a) The Sponsor is duly  organized  and validly  existing as a
Delaware  limited  liability  company  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  and is  proposed  to be  conducted
pursuant to this Agreement and the Basic Documents;

                  (b) It is duly  qualified to do business as a foreign  company
in good standing, and has obtained all necessary licenses and approvals,  in all
jurisdictions  in which the ownership or lease of its  property,  the conduct of
its business and the performance of its obligations under this Agreement and the
Basic Documents requires such qualification;

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                  (c) The  Sponsor  has the power and  authority  to execute and
deliver this Agreement and to carry out its terms; this Agreement, when executed
and  delivered  by the Sponsor,  will  constitute  the legal,  valid and binding
obligations of the Sponsor,  enforceable in accordance with its terms, except as
such  enforceability may be limited by bankruptcy,  insolvency,  reorganization,
moratorium  or other  similar laws  affecting  creditors'  rights  generally and
general equitable  principles;  the Sponsor has full power and authority to sell
and assign the property to be sold and assigned to and deposited  with the Trust
and the Sponsor has duly  authorized such sale and assignment and deposit to the
Trust by all necessary  action;  and the execution,  delivery and performance of
this Agreement has been duly authorized by the Sponsor by all necessary action;

                  (d)  No  consent,   license,   approval  or  authorization  or
registration or declaration with, any Person or with any governmental authority,
bureau or agency is  required  in  connection  with the  execution,  delivery or
performance of this Agreement and the Basic  Documents,  except for such as have
been obtained, effected or made;

                  (e) The consummation of the transactions  contemplated by this
Agreement 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  certificate of formation
or operating agreement of the Sponsor,  or any material indenture,  agreement or
other  instrument  to which the Sponsor is a party or by which it is bound;  nor
result in the  creation  or  imposition  of any Lien upon any of its  properties
pursuant  to the  terms of any such  indenture,  agreement  or other  instrument
(other  than  pursuant to the Basic  Documents);  nor violate any law or, to the
best of the Sponsor's knowledge, any order, rule or regulation applicable to the
Sponsor of any court or of any Federal or state regulatory body,  administrative
agency  or  other  governmental  instrumentality  having  jurisdiction  over the
Sponsor or its properties; and

                  (f) There are no proceedings or investigations  pending or, to
its  knowledge  threatened  against  it  before  any  court,   regulatory  body,
administrative agency or other tribunal or governmental  instrumentality  having
jurisdiction  over the Sponsor or its properties (A) asserting the invalidity of
this  Agreement  or any of the Basic  Documents,  (B)  seeking  to  prevent  the
issuance of the Notes or the Residual Certificates or the consummation of any of
the  transactions  contemplated by this Agreement or any of the Basic Documents,
(C) seeking any  determination  or ruling that might  materially  and  adversely
affect  its   performance  of  its   obligations   under,  or  the  validity  or
enforceability of, this Agreement or any of the Basic Documents,  or (D) seeking
to adversely affect the federal income tax or other federal,  state or local tax
attributes of the Notes or the Residual Certificates.

                  SECTION 2.11. FEDERAL INCOME TAX ALLOCATIONS.  (a) For so long
as the Trust has a single  owner  for  federal  income  tax  purposes,  it will,
pursuant to Treasury Regulations  promulgated under section 7701 of the Code, be
disregarded as an entity  distinct from the Residual  Certificateholder  for all
federal income tax purposes.  Accordingly,  for federal income tax purposes, the
Residual Certificateholder will be treated as (i) owning all assets owned by the
Trust and (ii) having  incurred  all  liabilities  incurred by the Trust and all
transactions  between  the  Trust  and the  Residual  Certificateholder  will be
disregarded.

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                  (b)   Neither   the   Owner    Trustee   nor   any    Residual
Certificateholder  will,  under  any  circumstances,  and at any  time,  make an
election on IRS Form 8832 or otherwise,  to classify the Trust as an association
taxable as a corporation for federal, state or any other applicable tax purpose.

                  (c) In the event that the Trust is  treated  as a  partnership
for  federal  income  tax  purposes,  net  income  of the Trust for any month as
determined for federal income tax purposes (and each item of income, gain, loss,
credit and deduction entering into the computation  thereof) shall be allocated:
(i) to the extent of available net income, among the Residual Certificateholders
and the Holders of any other securities  treated as equity in the partnership as
of the first Record Date following the end of such month, in proportion to their
ownership of principal  amount of Residual  Certificates and any such securities
on such date; (ii) to the Sponsor, to the extent of any remaining net income.

                  If the net  income of the Trust for any month is  insufficient
for the allocations  described in clause (i) above,  subsequent net income shall
first be allocated to make up such shortfall  before being allocated as provided
in clause (ii). Net losses of the Trust, if any, for any month as determined for
federal  income tax purposes (and each item of income,  gain,  loss,  credit and
deduction  entering into the  computation  thereof) shall be allocated among the
Residual  Certificateholders  and the Holders of any other securities treated as
equity in the partnership as of the Record Date in proportion to their ownership
percentage of principal amount of Residual Certificates and any such securities,
respectively,  on such Record Date until the  principal  balance of the Residual
Certificates  and any such  securities  is  reduced  to  zero.  The  Sponsor  is
authorized  to  modify  the  allocations  in  this  paragraph  if  necessary  or
appropriate,  in its sole discretion,  for the allocations to fairly reflect the
economic income, gain or loss to the Residual Certificateholders and the Holders
of any other securities  treated as equity in the  partnership,  or as otherwise
required by the Code.

                  SECTION 2.12. COVENANTS OF THE SPONSOR. The Sponsor agrees and
covenants  for the benefit of each Residual  Certificateholder,  the Insurer and
the Owner Trustee, during the term of this Agreement,  and to the fullest extent
permitted by applicable law, that:

                  (a) it  shall  not  create,  incur  or  suffer  to  exist  any
indebtedness  or engage in any business,  except,  in each case, as permitted by
its certificate of formation, its operating agreement and the Basic Documents;

                  (b) it shall not, for any reason,  institute  proceedings  for
the  Trust  to be  adjudicated  a  bankrupt  or  insolvent,  or  consent  to the
institution of bankruptcy or insolvency proceedings against the Trust, or file a
petition seeking or consenting to  reorganization or relief under any applicable
federal or state law relating to the bankruptcy of the Trust,  or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar  official)  of the Trust or a  substantial  part of the  property of the
Trust or cause or permit  the Trust to make any  assignment  for the  benefit of
creditors,  or admit in  writing  the  inability  of the  Trust to pay its debts
generally as they become due, or declare or effect a  moratorium  on the debt of
the Trust or take any action in furtherance of any such action;

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                  (c) it shall  obtain  from  each  counterparty  to each  Basic
Document  to which it or the Trust is a party and each other  agreement  entered
into on or  after  the date  hereof  to  which  it or the  Trust is a party,  an
agreement by each such  counterparty  that prior to the  occurrence of the event
specified in Section 10.1(e) such counterparty shall not institute  against,  or
join any other Person in instituting  against,  it or the Trust, any bankruptcy,
reorganization,  arrangement,  insolvency or  liquidation  proceedings  or other
similar  proceedings  under  the laws of the  United  States or any state of the
United States; and

                  (d) it shall  not,  for any  reason,  withdraw  or  attempt to
withdraw  from this  Agreement,  dissolve,  institute  proceedings  for it to be
adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy
or insolvency  proceedings  against it, or file a petition seeking or consenting
to reorganization  or relief under any applicable  federal or state law relating
to  bankruptcy,  or  consent  to  the  appointment  of a  receiver,  liquidator,
assignee,  trustee,  sequestrator  (or  other  similar  official)  of  it  or  a
substantial  part of its  property,  or make any  assignment  for the benefit of
creditors,  or admit in writing its inability to pay its debts generally as they
become due, or declare or effect a moratorium  on its debt or take any action in
furtherance of any such action.

                  SECTION  2.13.  COVENANTS OF THE RESIDUAL  CERTIFICATEHOLDERS.
Each Residual Certificateholder agrees:

                  (a) to be bound by the terms and  conditions  of the  Residual
Certificates  and of this  Agreement,  including any  supplements  or amendments
hereto and to perform the  obligations  of a Residual  Certificateholder  as set
forth therein or herein, in all respects as if it were a signatory hereto.  This
undertaking is made for the benefit of the Trust, the Owner Trustee, the Insurer
and all other Residual Certificateholders present and future;

                  (b)  to  hereby   appoint   the   Sponsor  as  such   Residual
Certificateholder's  agent and  attorney-in-fact  to sign any federal income tax
information  return  filed on behalf of the Trust,  if any,  and agree that,  if
requested by the Trust, it will sign such federal income tax information  return
in  its  capacity  as  holder  of  an  interest  in  the  Trust.  Each  Residual
Certificateholder  also  hereby  agrees that in its tax returns it will not take
any position  inconsistent with those taken in any tax returns that may be filed
by the Trust;

                  (c) if  such  Residual  Certificateholder  is  other  than  an
individual or other entity holding its Residual Certificate through a broker who
reports  securities  sales on Form  1099-B,  to notify the Owner  Trustee of any
transfer by it of a Residual  Certificate in a taxable sale or exchange,  within
30 days of the date of the transfer; and

                  (d) until the  completion  of the events  specified in Section
10.1(e),  not to, for any  reason,  institute  proceedings  for the Trust or the
Sponsor to be adjudicated a bankrupt or insolvent, or consent to the institution
of bankruptcy or insolvency  proceedings  against the Trust,  or file a petition
seeking or consenting to reorganization  or relief under any applicable  federal
or state  law  relating  to  bankruptcy,  or  consent  to the  appointment  of a
receiver,   liquidator,   assignee,  trustee,  sequestrator  (or  other  similar
official) of the Sponsor or the Trust or a substantial part of its property,  or
cause or permit the Sponsor or the Trust to make any  assignment for the benefit

                                       8
<PAGE>

of its creditors,  or admit in writing its inability to pay its debts  generally
as they become due,  or declare or effect a  moratorium  on its debt or take any
action in furtherance of any such action.

                  Except as provided in Section 2.13,  and  notwithstanding  any
other provision to the contrary in this Agreement, no Residual Certificateholder
other than the Sponsor in its capacity as the "Sponsor"  shall be deemed to have
adopted, be bound by, or succeed in any way to any representation by, or duty of
indemnification by or any other duty of, the Sponsor,  including those contained
in Sections 2.10, 2.12, 4.6, 9.2 or elsewhere herein.

                                  ARTICLE III

                                   [RESERVED]

                                   ARTICLE IV

  OWNERSHIP OF TRUST PROPERTY; RESIDUAL CERTIFICATES AND TRANSFER OF INTERESTS

                  SECTION 4.1. TRUST PROPERTY  OWNERSHIP.  Upon the formation of
the Trust by the  contribution by the Sponsor pursuant to Section 2.5, the Owner
Trustee,   contemporaneously   therewith,  having  full  power,  authority,  and
authorization  to  do  so,  has  executed,  authenticated,  dated,  issued,  and
delivered,  in the name and on behalf of the Trust,  to the Sponsor,  one (1) or
more Residual Certificates  representing in the aggregate a 100% interest in the
Trust,  and has  registered  such  Residual  Certificate(s)  on the  Certificate
Register in the name of the Sponsor.  The Sponsor shall be the sole  beneficiary
of the Trust. Such Residual Certificate(s) are duly authorized,  validly issued,
and entitled to the benefits of this Agreement. For so long as the Sponsor shall
own such 100% interest in the Trust,  the Sponsor  shall be the sole  beneficial
owner of the  Trust.  The  Sponsor  shall at all times  keep and own a  Residual
Certificate or Residual Certificates  representing no less than 1% interest, and
at no time  will the  Sponsor  sell or  alienate  its  interest  represented  by
Residual  Certificate(s)  in such a way as to reduce  its  aggregate  beneficial
ownership in the Residual Certificates to less than 1%.

                  SECTION 4.2. THE  RESIDUAL  CERTIFICATES.  Except for Residual
Certificates issued to the Sponsor, the Residual Certificates shall be issued in
denominations of $1,000 and integral multiples of $1,000 in excess thereof.  The
Residual  Certificates  shall be  executed  on  behalf of the Trust by manual or
facsimile  signature of an  authorized  officer of the Owner  Trustee.  Residual
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures shall have been affixed,  authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefit of this
Agreement,  notwithstanding  that such  individuals  or any of them  shall  have
ceased to be so  authorized  prior to the  authentication  and  delivery of such
Residual Certificates or did not hold such offices at the date of authentication
and  delivery  of  such  Residual  Certificates.  A  transferee  of  a  Residual
Certificate shall become a Residual  Certificateholder  and shall be entitled to
the  rights  and  subject to the  obligations  of a Residual  Certificateholder,
hereunder,   upon  due  registration  of  such  Residual   Certificate  in  such
transferee's name pursuant to Section 4.4.

                  SECTION   4.3.   AUTHENTICATION   OF  RESIDUAL   CERTIFICATES.
Concurrently  with the initial sale of the Mortgage  Loans to the Trust pursuant
to the Sale and Servicing Agreement,  the

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<PAGE>

Owner Trustee shall cause the Residual  Certificates to be executed on behalf of
the Trust,  authenticated  and  delivered  to or upon the  written  order of the
Sponsor,  signed  by its  chairman  of the  board,  its  president  or any  vice
president,  its treasurer or any assistant  treasurer  without further action by
the Sponsor, in authorized denominations.  No Residual Certificate shall entitle
its  holder  to any  benefit  under  this  Agreement,  or shall be valid for any
purpose, unless there shall appear on such Residual Certificate a certificate of
authentication substantially in the form set forth in Exhibit A (with respect to
a Residual  Certificate),  executed by the Owner Trustee,  by manual  signature;
such  authentication  shall  constitute  conclusive  evidence that such Residual
Certificate  shall have been duly  authenticated  and delivered  hereunder.  All
Residual Certificates shall be dated the date of their authentication.

                  SECTION 4.4. REGISTRATION OF TRANSFER AND EXCHANGE OF RESIDUAL
CERTIFICATES . The Certificate  Registrar shall keep or cause to be kept, at the
office or agency maintained  pursuant to Section 4.8, a Certificate  Register in
which,  subject to such  reasonable  regulations as it may prescribe,  the Owner
Trustee  shall  provide for the  registration  of Residual  Certificates  and of
transfers and exchanges of Residual  Certificates as herein provided.  The Owner
Trustee shall be the initial Certificate Registrar.

                  In furtherance of and not in limitation of the foregoing, each
Residual   Certificateholder,   by  acceptance  of  its  Residual   Certificate,
specifically  acknowledges  that it has no right to or interest in any monies at
any time held in the Trust Estate  prior to the release of such monies  pursuant
to Section 8.7(d)(xiii) of the Indenture, as appropriate, such monies being held
in trust for the benefit of the Noteholders and the Insurer. Notwithstanding the
foregoing,  in the event that it is ever  determined that the monies held in the
Trust Estate constitute a pledge of collateral,  then the provisions of the Sale
and Servicing  Agreement shall be considered to constitute a security  agreement
and  the  Sponsor  and  the  Residual  Certificateholders  hereby  grant  to the
Indenture Trustee and the Insurer a first priority  perfected  security interest
in such amounts. In addition, each Residual Certificateholder,  by acceptance of
its Residual  Certificate  hereby  appoints the Sponsor as its agent to pledge a
first priority  perfected security interest in the Trust Estate, and any amounts
held  therein  from time to time to the  Indenture  Trustee  and the Insurer and
agrees to execute and deliver such instruments of conveyance, assignment, grant,
confirmation,  etc.,  as well as any financing  statements,  in each case as the
Insurer shall  consider  reasonably  necessary in order to perfect the Indenture
Trustee's security interest in the Mortgage Loans.

                  SECTION 4.5.  MUTILATED,  DESTROYED,  LOST OR STOLEN  RESIDUAL
CERTIFICATES.  If (a) any mutilated Residual Certificate shall be surrendered to
the  Certificate  Registrar,  or if  the  Certificate  Registrar  shall  receive
evidence to its satisfaction of the  destruction,  loss or theft of any Residual
Certificate and (b) there shall be delivered to the Certificate  Registrar,  the
Owner  Trustee and the Insurer such  security or indemnity as may be required by
them to save each of them  harmless,  then in the  absence  of notice  that such
Residual  Certificate  shall have been  acquired by a bona fide  purchaser,  the
Owner  Trustee on behalf of the Trust shall  execute and the Owner Trustee shall
authenticate  and  deliver,  in exchange  for or in lieu of any such  mutilated,
destroyed,  lost or stolen  Residual  Certificate,  a new Residual  Certificate,
respectively,  of like class,  tenor and  denomination.  In connection  with the
issuance of any new Residual  Certificate under this Section,  the Owner Trustee
or the  Certificate  Registrar  may require the payment of a sum  sufficient  to
cover any tax or other  governmental  charge  that may be imposed in  connection

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<PAGE>

therewith.  Any duplicate  Residual  Certificate issued pursuant to this Section
shall constitute  conclusive  evidence of an ownership interest in the Trust, as
if  originally  issued,  whether or not the lost,  stolen or destroyed  Residual
Certificate shall be found at any time.

                  SECTION 4.6. PERSONS DEEMED RESIDUAL CERTIFICATEHOLDERS. Every
Person by virtue of becoming a Residual  Certificateholder  in  accordance  with
this Agreement and the rules and regulations of the Certificate  Registrar shall
be deemed to be bound by the terms of this Agreement.  Prior to due presentation
of a Residual  Certificate for registration of transfer,  the Owner Trustee, the
Certificate  Registrar and the Insurer and any agent of the Owner  Trustee,  the
Certificate  Registrar  and the Insurer,  may treat the Person in whose name any
Residual  Certificate  shall be  registered in the  Certificate  Register as the
owner of such Residual  Certificate  for the purpose of receiving  distributions
pursuant to the Sale and Servicing Agreement and the Indenture and for all other
purposes whatsoever, and none of the Owner Trustee, the Certificate Registrar or
the Insurer nor any agent of the Owner Trustee, the Certificate Registrar or the
Insurer shall be bound by any notice to the contrary.

                  SECTION  4.7.  ACCESS TO LIST OF RESIDUAL  CERTIFICATEHOLDERS'
NAMES AND ADDRESSES. The Owner Trustee shall furnish or cause to be furnished to
the  Servicer,  the Sponsor or the Insurer,  within 15 days after receipt by the
Owner Trustee of a request therefor from such Person in writing,  a list, of the
names and  addresses  of the Residual  Certificateholders  as of the most recent
Record Date.  If three or more Holders of Residual  Certificates  or one or more
Holders of  Residual  Certificates  evidencing  not less than 25% by  Percentage
Interest apply in writing to the Owner Trustee, and such application states that
the applicants desire to communicate with other Residual Certificateholders with
respect to their rights under this Agreement or under the Residual  Certificates
and such  application is accompanied  by a copy of the  communication  that such
applicants  propose to  transmit,  then the Owner  Trustee  shall,  within  five
Business  Days after the receipt of such  application,  afford  such  applicants
access   during  normal   business   hours  to  the  current  list  of  Residual
Certificateholders.   Each  Holder,   by   receiving   and  holding  a  Residual
Certificate,  shall be deemed to have agreed not to hold any of the Sponsor, the
Servicer,  the Owner Trustee or the Insurer or any agent thereof  accountable by
reason of the disclosure of its name and address,  regardless of the source from
which such information was derived.

                  SECTION  4.8.  MAINTENANCE  OF  OFFICE  OR  AGENCY.  The Owner
Trustee shall maintain in Wilmington, Delaware an office or offices or agency or
agencies where Residual  Certificates  may be surrendered  for  registration  of
transfer or exchange and where  notices and demands to or upon the Owner Trustee
in respect of the Residual  Certificates  and the Basic Documents may be served.
The Owner  Trustee  initially  designates  its  Corporate  Trust Office for such
purposes. The Owner Trustee shall give prompt written notice to the Sponsor, the
Residual Certificateholders and the Insurer of any change in the location of the
Certificate Register or any such office or agency.

                  SECTION 4.9. ERISA RESTRICTIONS. The Residual Certificates may
not be  acquired  by or for the  account  of (i) an  employee  benefit  plan (as
defined in Section 3(3) of ERISA) that is subject to the  provisions  of Title I
of ERISA, (ii) a plan described in Section  4975(e)(1) of the Code, or (iii) any
entity  whose  underlying  assets  include  plan  assets  by  reason of a plan's
investment in the entity (each, a "BENEFIT PLAN").  By accepting and holding its

                                       11
<PAGE>

beneficial  ownership interest in its Residual  Certificate,  the Holder thereof
shall be deemed to have represented and warranted that it is not a Benefit Plan.

                  SECTION   4.10.   RESTRICTIONS   ON   TRANSFER   OF   RESIDUAL
CERTIFICATES.

                  (a) The Residual Certificates shall be assigned,  transferred,
exchanged, pledged, financed,  hypothecated or otherwise conveyed (collectively,
for  purposes  of this  Section  4.10 and any  other  Section  referring  to the
Residual  Certificates,  "transferred"  or a "transfer") only in accordance with
this Section 4.10.

                  (b) No transfer of a Residual Certificate shall be made unless
such transfer is exempt from the registration requirements of the Securities Act
of 1933, as amended,  and any  applicable  state  securities  laws or is made in
accordance  with said Act and  laws.  Except  for the  initial  issuance  of the
Residual Certificate to the Sponsor, the Indenture Trustee shall require (i) the
transferee  to  execute  an  investment  letter  acceptable  to and in form  and
substance  satisfactory to the Indenture  Trustee and the Insurer  certifying to
the Indenture Trustee and the Insurer the facts surrounding such transfer, which
investment  letter  shall not be an  expense  of the  Indenture  Trustee  or the
Insurer or (ii) if the investment letter is not delivered,  a written Opinion of
Counsel  acceptable to and in form and substance  satisfactory  to the Indenture
Trustee,  the Insurer and the Sponsor that such transfer may be made pursuant to
an exemption,  describing the  applicable  exemption and the basis therefor from
said Act or is being made  pursuant to said Act,  which Opinion of Counsel shall
not be an expense of the  Indenture  Trustee,  the Insurer or the  Sponsor.  The
Holder of a Residual  Certificate  desiring to effect such transfer  shall,  and
does  hereby  agree to,  indemnify  the  Sponsor  and the  Insurer  against  any
liability  that may  result if the  transfer  is not so exempt or is not made in
accordance with such federal and state laws.

                  (c) The Residual  Certificate and any interests  therein shall
not  be  transferred  except  upon  satisfaction  of  the  following  conditions
precedent:  (i) the Person  that  acquires a Residual  Certificate  shall (A) be
organized  and  existing  under the laws of the United  States of America or any
state thereof or the District of Columbia; (B) expressly assume, by an agreement
supplemental  hereto,  executed and delivered to the  Indenture  Trustee and the
Insurer,  the  performance  of every  covenant  and  obligation  of the  Sponsor
hereunder and (C) as part of its acquisition of a Residual Certificate,  acquire
all  rights of the  Sponsor or any  transferee  under  this  Section  4.10(c) to
amounts  payable to the  Residual  Certificateholder  or such  transferee  under
Section  8.7(d)(xiii)  of  the  Indenture;  (ii)  the  Holder  of  the  Residual
Certificates shall deliver to the Indenture Trustee and the Insurer an Officer's
Certificate  stating that such transfer and such  supplemental  agreement comply
with this Section  4.10(c) and that all  conditions  precedent  provided by this
Section  4.10(c) have been complied with and an Opinion of Counsel  stating that
all  conditions  precedent  provided by this Section  4.10(c) have been complied
with,  and the  Indenture  Trustee  may  conclusively  rely  on  such  Officer's
Certificate, shall have no duty to make inquiries with regard to the matters set
forth  therein and shall incur no liability  in so relying;  (iii) the Holder of
the Residual Certificates shall deliver to the Indenture Trustee and the Insurer
a letter from each Rating Agency confirming that its rating of the Notes,  after
giving effect to such transfer,  will not be reduced or withdrawn without regard
to the Policy; (iv) the transferee of the Residual Certificates shall deliver to
the  Indenture  Trustee and the Insurer an Opinion of Counsel to the effect that
(a) such  transfer  will not  adversely  affect the treatment of the Notes after
such transfer as debt for federal and applicable state income tax purposes,  (b)
such  transfer

                                       12
<PAGE>

will not  result in the  Trust  being  subject  to tax at the  entity  level for
federal or applicable  state tax  purposes,  (c) such transfer will not have any
material  adverse impact on the federal or applicable state income taxation of a
Noteholder  or any Residual  Certificateholder  and (d) such  transfer  will not
result in the  arrangement  created by this  Agreement  or any  "portion" of the
Trust, being treated as a taxable mortgage pool as defined in Section 7701(i) of
the Code; (v) all filings and other actions necessary to continue the perfection
of the  interest  of the Trust in the  Mortgage  Loans  and the  other  property
conveyed hereunder shall have been taken or made and (vi) the Insurer shall have
consented to such transfer.  Notwithstanding the foregoing,  the requirement set
forth in subclause  (i)(A) of this Section  4.10(c) shall not apply in the event
the  Indenture  Trustee  shall have  received a letter from each  Rating  Agency
confirming  that its  rating of the  Notes,  after  giving  effect to a proposed
transfer to a Person that does not meet the  requirement  set forth in subclause
(i)(A),  shall  not be  reduced  or  withdrawn  without  regard  to the  Policy.
Notwithstanding the foregoing,  the requirements set forth in this paragraph (c)
shall not apply to the initial  issuance  of the  Residual  Certificates  to the
Sponsor.

                  Except for the initial issuance of the Residual Certificate to
the  Sponsor,  no  transfer of a Residual  Certificate  shall be made unless the
Indenture  Trustee and the Insurer shall have received a  representation  letter
from the transferee of such Residual Certificate,  acceptable to and in form and
substance  satisfactory  to the Indenture  Trustee and the Insurer to the effect
that such  transferee is not a Benefit Plan, nor a Person acting on behalf of or
using the assets of a Benefit Plan, which representation  letter shall not be an
expense of the Indenture Trustee or the Insurer.

                  (d) No transfer or pledge of the Residual  Certificates  shall
result in more than 98 other holders of Residual Certificates.

                  SECTION 4.11.  ACCEPTANCE OF OBLIGATIONS.  The Sponsor, by its
acceptance  of the Residual  Certificates,  agrees to be bound by and to perform
all the duties of the Sponsor set forth in this Agreement.

                  SECTION  4.12.  DISTRIBUTIONS  ON RESIDUAL  CERTIFICATES.  The
Holders of the Residual  Certificates  will be entitled to distributions on each
Payment Date, as provided in the Sale and Servicing Agreement and the Indenture.

                                   ARTICLE V

                         VOTING RIGHTS AND OTHER ACTIONS

                  SECTION 5.1.  PRIOR  NOTICE WITH  RESPECT TO CERTAIN  MATTERS.
With respect to the following  matters,  the Owner Trustee shall not take action
unless at least 30 days  before the  taking of such  action,  the Owner  Trustee
shall have notified the Residual  Certificateholders  and the Insurer in writing
of the proposed action and the Residual Certificateholders and the Insurer shall
not have  notified the Owner Trustee in writing prior to the 30th day after such
notice is given  that  such  Residual  Certificateholders  or the  Insurer  have
withheld consent or provided alternative direction:

                                       13
<PAGE>

                  (a) the  election  by the  Trust to file an  amendment  to the
Certificate  of Trust  (unless such  amendment is required to be filed under the
Statutory  Trust  Statute or unless  such  amendment  would not  materially  and
adversely affect the interests of the Holders);

                  (b) the amendment of the Indenture by a supplemental Indenture
in circumstances where the consent of any Noteholder is required;

                  (c) the amendment of the Indenture by a supplemental Indenture
in  circumstances  where the consent of any  Noteholder is not required and such
amendment   materially   adversely   affects  the   interest  of  the   Residual
Certificateholders;

                  (d) except  pursuant to Section 9.01 of the Sale and Servicing
Agreement,  the  amendment,  change or  modification  of the Sale and  Servicing
Agreement,  except to cure any ambiguity or defect or to amend or supplement any
provision in a manner that would not materially  adversely  affect the interests
of the Residual Certificateholders;

                  (e) the consent to the calling or waiver of any default of any
Basic Document;

                  (f) the consent to the assignment by the Indenture  Trustee or
Servicer of their respective obligations under any Basic Document;

                  (g)  except  as  provided  in  Article  X  hereof,   dissolve,
terminate or liquidate the Trust in whole or in part;

                  (h)  cause  the  Trust  to  incur,   assume  or  guaranty  any
indebtedness other than as in this Agreement or the other Basic Documents;

                  (i) do any act that conflicts with any other Basic Document;

                  (j) do any act which would make it  impossible to carry on the
ordinary business Trust as described in Section 2.3 hereof;

                  (k)  possess  Trust  assets,  or assign the  Trust's  right to
property, for other than a Trust purpose;

                  (l) cause the Trust to lend any funds to any entity; or

                  (m) change the Trust's purpose and powers from those set forth
in this Trust Agreement.

The Owner Trustee shall notify the Residual Certificateholders in writing of any
appointment of a successor Security Registrar,  or Certificate  Registrar within
five Business Days thereof.

                  SECTION  5.2.  ACTION  BY  RESIDUAL   CERTIFICATEHOLDERS  WITH
RESPECT TO CERTAIN MATTERS.

                  (a) Upon the  written  request  from time to time of  Residual
Certificateholder(s)  evidencing  not less than 51% by  Percentage  Interest and
subject  to the  prior

                                       14
<PAGE>

review by the  Insurer,  the Owner  Trustee  shall take  appropriate  actions to
remove  Mortgage  Loans from the Pool  pursuant to Section  2.07 of the Sale and
Servicing  Agreement.  The Owner  Trustee  shall  notify the Insurer of any such
proposed  removal.  The Owner  Trustee  will take such  actions  with respect to
removal of Mortgage  Loans as may from time to time be proposed by the  Residual
Certificateholders pursuant to Sections 5.2(b) and 5.5.

                  (b) Upon the written request of any Residual Certificateholder
(a  "PROPOSER"),  the Owner  Trustee shall  distribute  promptly to all Residual
Certificateholders   any   request   for   action   or   consent   of   Residual
Certificateholders  submitted by such  Proposer,  with a copy to the Insurer and
the Manager.  The Owner Trustee shall provide a reasonable method for collecting
responses to such request and shall  tabulate and report the results  thereof to
the Residual Certificateholders,  the Insurer and the Manager. The Owner Trustee
shall have no responsibility or duty to determine if any such proposed action or
consent is permitted under the terms of this Agreement or applicable law.

                  SECTION 5.3. ACTION WITH RESPECT TO BANKRUPTCY. Until one year
and one day  following  the day on which the Notes  have been paid in full,  the
Owner  Trustee  shall  not have the  power  to,  and  shall  not,  commence  any
proceeding  or other actions  contemplated  by Section  2.12(b)  relating to the
Trust without the prior written  consent of the Insurer.  Until one year and one
day following the day on which the Notes have been paid in full, all amounts due
to the Insurer under the Insurance  Agreement have been paid in full, the Policy
has  terminated  and the  Indenture  Trustee has  surrendered  the Policy to the
Insurer,  the Owner Trustee shall not have the power to, and shall not, commence
any proceeding or other actions  contemplated by Section 2.12(b) relating to the
Trust   without   the   prior   written   consent   of  all   of  the   Residual
Certificateholders  and the Insurer,  and the  delivery to the Owner  Trustee by
each  such  Residual   Certificateholder  and  the  Insurer,  of  a  certificate
certifying  that such Residual  Certificateholder  reasonably  believes that the
Trust is insolvent.  The Owner Trustee in undertaking  such proceedings or other
actions contemplated by Section 2.12(b) relating to the Trust shall consider the
interest of the  Noteholders,  the Insurer in addition to the  interests  of the
Trust and whether the Trust is  insolvent.  The Owner Trustee shall not commence
such  proceedings or other actions  contemplated  by Section  2.12(b) unless the
Owner  Trustee  shall have been  furnished  (at the expense of the Trust) with a
letter from an independent  accounting firm of national  reputation stating that
in the opinion of such firm the Trust is then insolvent.  The provisions of this
Section do not  constitute  an  acknowledgement  or admission by the Trust,  the
Owner Trustee, any Residual  Certificateholder or any creditor of the Trust that
the Trust is eligible to be a debtor under the United States Bankruptcy Code, 11
U.S.C. ss.ss. 101 ET SEQ., as amended.

                  SECTION  5.4.  RESTRICTIONS  ON  RESIDUAL  CERTIFICATEHOLDERS'
POWER.

                  (a) Neither the  Residual  Certificateholders  nor the Insurer
shall direct the Owner Trustee to take or refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the Owner
Trustee under this Agreement or any of the Basic  Documents or would be contrary
to  Section  2.3 or  otherwise  contrary  to law nor shall the Owner  Trustee be
obligated to follow any such direction, if given.

                  (b) No Residual  Certificateholder  (other than the Sponsor as
sole Residual  Certificateholder)  shall have any right by virtue or by availing
itself of any  provisions of this

                                       15
<PAGE>

Agreement to institute any suit,  action, or proceeding in equity or at law upon
or under or with respect to this  Agreement or any Basic  Document,  unless such
party is the  Instructing  Party  pursuant  to Section 7.3 and unless such party
previously shall have given to the Owner Trustee a written notice of default and
of the  continuance  thereof,  as  provided in this  Agreement,  and also unless
Residual Certificateholders  evidencing not less than 25% by Percentage Interest
shall have made written request upon the Owner Trustee to institute such action,
suit or proceeding  in its own name as Owner  Trustee  under this  Agreement and
shall have  offered to the Owner  Trustee  such  reasonable  indemnity as it may
require against the costs,  expenses and  liabilities to be incurred  therein or
thereby,  and the Owner  Trustee,  for 30 days after its receipt of such notice,
request,  and offer of indemnity,  shall have  neglected or refused to institute
any such action,  suit, or proceeding,  and during such 30-day period no request
or waiver  inconsistent  with such  written  request has been given to the Owner
Trustee pursuant to and in compliance with this Section or Section 7.3; it being
understood  and  intended,  and  being  expressly  covenanted  by each  Residual
Certificateholder with every other Residual Certificateholder, the Owner Trustee
or the Insurer, that no Holders of Residual Certificates shall have any right in
any  manner  whatever  by virtue or by  availing  itself  or  themselves  of any
provisions of this Agreement to affect,  disturb, or prejudice the rights of the
Holders  of any  other of the  Residual  Certificates,  or to  obtain or seek to
obtain  priority over or preference to any other such Holder,  or to enforce any
right under this Agreement,  except in the manner provided in this Agreement and
for the equal,  ratable,  and common benefit of all Residual  Certificateholders
and the Insurer.  For the protection  and  enforcement of the provisions of this
Section 5.4, each and every  Residual  Certificateholder,  the Owner Trustee and
the Insurer shall be entitled to such relief as can be given either at law or in
equity.

                  SECTION 5.5. MAJORITY CONTROL.  No Residual  Certificateholder
shall have any right to vote or in any manner  otherwise  control the  operation
and  management  of the Trust  except as expressly  provided in this  Agreement.
Except  as  expressly  provided  herein,  any  action  that  may be taken by the
Residual  Certificateholders under this Agreement may be taken by the Holders of
Residual  Certificates  evidencing not less than a 51% by Percentage Interest of
such class.  Except as  expressly  provided  herein,  any written  notice of the
Residual  Certificateholders  delivered  pursuant  to this  Agreement  shall  be
effective if signed by Residual  Certificateholders  evidencing  not less than a
51%  Percentage  Interest  in such  Class  at the time of the  delivery  of such
notice.

                  SECTION 5.6. RIGHTS OF THE INSURER.  Notwithstanding  anything
to the contrary in the Basic Documents, without the prior written consent of the
Insurer, the Owner Trustee shall not (i) remove the Servicer,  (ii) initiate any
claim,  suit or  proceeding  by the  Trust  or  compromise  any  claim,  suit or
proceeding  brought by or  against  the  Trust,  other than with  respect to the
enforcement  of any  Mortgage  Loan or any  rights  of the Trust  thereunder  or
confess  a  judgement   against  the  Trust,   (iii)  authorize  the  merger  or
consolidation  of the  Trust  with or into any  other  statutory  trust or other
entity or convey or transfer all or  substantially  all of the Trust's assets to
any  other  Person,  (iv)  amend  the  Certificate  of Trust or (v)  amend  this
Agreement in accordance with Section 12.1 of this Agreement.

                  SECTION 5.7. INSURER'S RIGHTS REGARDING  ACTIONS,  PROCEEDINGS
OR  INVESTIGATIONS.  Until all Notes have been paid in full, all amounts owed to
the Insurer have been

                                       16
<PAGE>

paid in full,  the Insurance  Agreement has  terminated  and the Policy has been
returned to the Insurer for cancellation, the following provisions shall apply:

                  (a) Notwithstanding  anything contained herein or in the other
Basic Documents to the contrary, the Insurer shall have the right to participate
in, to direct the  enforcement or defense of, and, at the Insurer's sole option,
to institute or assume the defense of, any action,  proceeding or  investigation
that could adversely affect the Trust,  the Owner Trust Estate,  the Collateral,
the Trust  Property or the rights or  obligations  of the Insurer  hereunder  or
under the Policy or the Basic  Documents,  including  (without  limitation)  any
insolvency or bankruptcy proceeding in respect of the Servicer,  the Seller, the
Sponsor,  the Trust or any affiliate thereof.  Following notice to the Indenture
Trustee,  the  Insurer  shall have  exclusive  right to  determine,  in its sole
discretion,  the actions  necessary to preserve and protect the Trust, the Owner
Trust Estate, the Collateral,  and the Trust Property. All costs and expenses of
the  Insurer  in  connection  with such  action,  proceeding  or  investigation,
including (without limitation) any judgment or settlement entered into affecting
the Insurer or the Insurer's  interests,  shall be included in the Reimbursement
Amount.

                  (b) In connection with any action, proceeding or investigation
that could adversely affect the Trust,  the Owner Trust Estate,  the Collateral,
the Trust  Property or the rights or  obligations  of the Insurer  hereunder  or
under the Policy or the Basic  Documents,  including  (without  limitation)  any
insolvency or bankruptcy proceeding in respect of the Servicer,  the Seller, the
Sponsor,  the Trust or any affiliate thereof, the Owner Trustee hereby agrees to
cooperate  with, and to take such action as directed by, the Insurer,  including
(without  limitation)  entering  into such  agreements  and  settlements  as the
Insurer  shall  direct,  in its sole  discretion,  without  the  consent  of any
Noteholder.

                  (c) The Owner Trustee  hereby agrees to provide to the Insurer
prompt written notice of any action,  proceeding or investigation that names the
Trust or the  Indenture  Trustee as a party or that could  adversely  affect the
Trust, the Owner Trust Estate, the Collateral,  the Trust Property or the rights
or  obligations  of the  Insurer  hereunder  or under  the  Policy  or the Basic
Documents,   including   (without   limitation)  any  insolvency  or  bankruptcy
proceeding in respect of the Servicer, the Seller, the Sponsor, the Trust or any
affiliate thereof.

                  (d) Notwithstanding anything contained herein or in any of the
other Basic Documents to the contrary,  the Owner Trustee shall not, without the
Insurer's prior written consent or unless directed by the Insurer,  undertake or
join any  litigation  or agree to any  settlement  of any action,  proceeding or
investigation  affecting the Trust, the Owner Trust Estate, the Collateral,  the
Trust Property or the rights or  obligations  of the Insurer  hereunder or under
the Policy or the Basic Documents.

                  (e) Each  Residual  Certificateholder,  by  acceptance  of its
Residual  Certificate,  as  appropriate,  and the Owner  Trustee  agree that the
Insurer  shall  have  such  rights as set  forth in this  Section,  which are in
addition to any rights of the Insurer  pursuant to the other  provisions  of the
Basic  Documents,  that the rights set forth in this Section may be exercised by
the  Insurer,  in its sole  discretion,  without  the need  for the  consent  or
approval of any Residual Certificateholder or the Owner Trustee, notwithstanding
any other provision contained herein or in any of the

                                       17
<PAGE>

other Basic  Documents,  and that nothing  contained  in this  Section  shall be
deemed to be an obligation of the Insurer to exercise any of the rights provided
for herein.

                                   ARTICLE VI

                                 CERTAIN DUTIES

                  SECTION  6.1.  ACCOUNTING  AND  RECORDS  TO  THE  NOTEHOLDERS,
RESIDUAL CERTIFICATEHOLDERS, THE INTERNAL REVENUE SERVICE AND OTHERS. Subject to
Sections  8.01(b)(iii)  and  8.01(c) of the Sale and  Servicing  Agreement,  the
Sponsor shall (a) maintain (or cause to be maintained) the books of the Trust on
a calendar year basis on the accrual  method of accounting,  including,  without
limitation, the allocations of net income under Section 2.11 hereof, (b) deliver
(or  cause  to be  delivered)  to  each  Residual  Certificateholder,  as may be
required by the Code and applicable  Treasury  Regulations,  such information as
may be required  (including Schedule K-1, if applicable) to enable each Residual
Certificateholder  to prepare its federal and state income tax returns, (c) file
or cause to be filed,  if  necessary,  such tax  returns  relating  to the Trust
(including a partnership  information  return,  Form 1065, if  applicable),  and
direct  the  Owner  Trustee  or the  Servicer,  as the case may be, to make such
elections  as may  from  time to time  be  required  or  appropriate  under  any
applicable  state or federal  statute or rule or regulation  thereunder so as to
maintain  the  Trust's  characterization  as a branch,  or if  applicable,  as a
partnership,  for  federal  income tax  purposes  and (d) collect or cause to be
collected any  withholding  tax as described in and in  accordance  with Section
8.01(b)(ii)  of the Sale and  Servicing  Agreement  with  respect  to  income or
distributions to Residual  Certificateholders and the appropriate forms relating
thereto.  The Owner Trustee or the Servicer,  as the case may be, shall make all
elections  pursuant to this Section as directed in writing by the  Sponsor.  The
Owner Trustee shall sign all tax information  returns, if any, filed pursuant to
this  Section 6.1 and any other  returns as may be required by law, and in doing
so shall  rely  entirely  upon,  and shall  have no  liability  for  information
provided  by, or  calculations  provided  by, the Sponsor or the  Servicer.  The
Sponsor will direct the Owner  Trustee and the Owner  Trustee  shall elect under
Section 1278 of the Code to include in income currently any market discount that
accrues  with respect to the Mortgage  Loans.  The Sponsor  shall not direct the
Owner  Trustee  to make,  and the Owner  Trustee  shall not make,  the  election
provided under Section 754 of the Code.

                  SECTION 6.2. SIGNATURE ON RETURNS; TAX MATTERS PARTNER.

                  (a)  Notwithstanding  the provisions of Section 6.1 and in the
event that the Trust is characterized as a partnership,  the Owner Trustee shall
sign on behalf of the Trust the tax returns of the Trust,  unless applicable law
requires a Residual Certificateholder to sign such documents, in which case such
documents shall be signed by the Sponsor.

                  (b)  In  the  event  that  the  Trust  is  characterized  as a
partnership,  the  Sponsor  shall  be the "tax  matters  partner"  of the  Trust
pursuant to the Code.

                  SECTION 6.3.  UNDERWRITING  AGREEMENT.  The Servicer is hereby
authorized to execute and deliver the Underwriting Agreement with respect to the
Notes.

                                       18
<PAGE>

                                  ARTICLE VII

                      AUTHORITY AND DUTIES OF OWNER TRUSTEE

                  SECTION  7.1.   GENERAL   AUTHORITY.   The  Owner  Trustee  is
authorized and directed to execute and deliver the Basic  Documents to which the
Trust is named as a party and each certificate or other document  attached as an
exhibit to or contemplated by the Basic Documents to which the Trust is named as
a party and any  amendment  thereto,  in each case,  in such form as the Sponsor
shall  approve  as  evidenced  conclusively  by the  Owner  Trustee's  execution
thereof,  and on behalf  of the  Trust,  to  direct  the  Indenture  Trustee  to
authenticate  and deliver  Class A Notes in the  aggregate  principal  amount of
$____________.  In addition to the  foregoing,  the Owner Trustee is authorized,
but shall not be obligated,  to take all actions  required of the Trust pursuant
to the Basic  Documents.  The Owner Trustee is further  authorized  from time to
time to take such action as the Instructing Party recommends with respect to the
Basic  Documents so long as such activities are consistent with the terms of the
Basic  Documents.  The Owner  Trustee  may rely on the  Manager to carry out any
action that the Owner Trustee is authorized or directed to perform hereunder, to
the extent permitted by the Management Agreement.

                  SECTION 7.2. GENERAL DUTIES. It shall be the duty of the Owner
Trustee to discharge  (or cause to be  discharged)  all of its  responsibilities
pursuant  to the  terms of this  Agreement  and to  administer  the Trust in the
interest of the Holders,  subject to the Basic  Documents and in accordance with
the  provisions of this  Agreement.  Notwithstanding  the  foregoing,  the Owner
Trustee  shall be deemed to have  discharged  its  duties  and  responsibilities
hereunder and under the Basic Documents to the extent the Servicer has agreed in
the Sale and Servicing  Agreement to perform any act or to discharge any duty of
the Trust or the Owner Trustee  hereunder or under any Basic  Document,  and the
Owner  Trustee shall not be liable for the default or failure of the Servicer to
carry out its obligations under the Sale and Servicing  Agreement or the failure
of the Manager to carry out its obligations under the Management Agreement.

                  SECTION 7.3. ACTION UPON INSTRUCTION.

                  (a)  Subject  to  Article  V, the  Insurer  (the  "INSTRUCTING
PARTY")  shall  have the  exclusive  right to direct  the  actions  of the Owner
Trustee in the  management of the Trust,  so long as such  instructions  are not
inconsistent  with the express terms set forth herein or in any Basic  Document.
The  Instructing  Party  shall  not  instruct  the  Owner  Trustee  in a  manner
inconsistent with this Agreement or the Basic Documents. In acting in accordance
with the  direction  of the  Insurer  pursuant  to this  Section or  pursuant to
Article  V, the Owner  Trustee  shall  not be  deemed  to (i) owe any  fiduciary
obligation to the Insurer or (ii) have violated any fiduciary  responsibility to
the Residual Certificateholders.

                  (b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to the terms
hereof or of any Basic Document or is otherwise contrary to law.

                                       19
<PAGE>

                  (c)  Whenever  the Owner  Trustee is unable to decide  between
alternative  courses  of  action  permitted  or  required  by the  terms of this
Agreement or any Basic  Document,  the Owner Trustee shall  promptly give notice
(in  such  form  as  shall  be  appropriate  under  the  circumstances)  to  the
Instructing  Party  requesting  instruction  as to the  course  of  action to be
adopted,  and to the extent the Owner  Trustee acts in good faith in  accordance
with any instruction of the Instructing Party received,  the Owner Trustee shall
not be liable on  account of such  action to any  Person.  If the Owner  Trustee
shall not have received  appropriate  instruction within ten days of such notice
(or within such shorter  period of time as  reasonably  may be specified in such
notice or may be necessary under the  circumstances)  it may, but shall be under
no duty to,  notwithstanding  any other  provision  of this  Agreement,  take or
refrain from taking such action,  not  inconsistent  with this  Agreement or the
Basic  Documents,  as it shall deem to be in the best  interests of the Residual
Certificateholders  and shall have no liability to any Person for such action or
inaction.

                  (d) In the event  that the Owner  Trustee  is unsure as to the
application of any provision of this Agreement or any Basic Document or any such
provision  is  ambiguous  as to its  application,  or is, or  appears  to be, in
conflict  with  any  other  applicable  provision,  or in the  event  that  this
Agreement  permits  any  determination  by the Owner  Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate  under the  circumstances)  to the Instructing
Party requesting  instruction and,  notwithstanding  any other provision of this
Agreement,  to the extent that the Owner Trustee acts or refrains from acting in
good faith in accordance with any such instruction  received,  the Owner Trustee
shall not be liable,  on account of such action or inaction,  to any Person.  If
the Owner Trustee shall not have received appropriate instruction within 10 days
of such  notice (or within  such  shorter  period of time as  reasonably  may be
specified in such notice or may be necessary  under the  circumstances)  it may,
but shall be under no duty to,  take or refrain  from taking  such  action,  not
inconsistent with this Agreement or the Basic Documents,  as it shall deem to be
in the best  interests  of the  Residual  Certificateholders,  and shall have no
liability to any Person for such action or inaction.

                  SECTION 7.4. NO DUTIES  EXCEPT AS SPECIFIED IN THIS  AGREEMENT
OR IN  INSTRUCTIONS.  The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this  Agreement  or in any  document or written  instruction  received by the
Owner  Trustee  pursuant to Section  7.3; and no implied  duties or  obligations
shall be read  into  this  Agreement  or any Basic  Document  against  the Owner
Trustee. The Owner Trustee shall have no responsibility to file any financing or
continuation  statement in any public office at any time or otherwise to perfect
or to maintain the  perfection  of any  security  interest or lien granted to it
hereunder or to prepare or file any Commission filing for the Trust or to record
this Agreement or any Basic Document. The Owner Trustee nevertheless agrees that
it will,  at its own cost  and  expense,  promptly  take  all  action  as may be
necessary  to  discharge  any Liens on any part of the Owner  Trust  Estate that
result from  actions by, or claims  against,  the Owner  Trustee  (solely in its
individual  capacity)  and  that  are  not  related  to  the  ownership  or  the
administration of the Owner Trust Estate.

                                       20
<PAGE>

                  SECTION  7.5. NO ACTION  EXCEPT UNDER  SPECIFIED  DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell, dispose of
or  otherwise  deal  with any  part of the  Owner  Trust  Estate  except  (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement,  (ii) in accordance with the Basic Documents
and (iii) in accordance with any document or instruction  delivered to the Owner
Trustee pursuant to Section 7.3.

                  SECTION 7.6.  RESTRICTIONS.  The Owner  Trustee shall not take
any action (a) that is inconsistent  with the purposes of the Trust set forth in
Section 2.3 or (b) that,  to the actual  knowledge of the Owner  Trustee,  would
result in the Trust's  becoming  taxable as a corporation  or a publicly  traded
partnership  for federal  income tax purposes.  The Residual  Certificateholders
shall not  direct the Owner  Trustee  to take  action  that  would  violate  the
provisions of this Section.

                                  ARTICLE VIII

                          CONCERNING THE OWNER TRUSTEE

                  SECTION 8.1. ACCEPTANCE OF TRUST AND DUTIES. The Owner Trustee
accepts the trust hereby created and agrees to perform its duties hereunder with
respect  to such  trust  but only upon the  terms of this  Agreement.  The Owner
Trustee also agrees to disburse all monies actually  received by it constituting
part of the Owner Trust  Estate upon the terms of the Basic  Documents  and this
Agreement. The Owner Trustee shall not be answerable or accountable hereunder or
under any Basic Document under any circumstances, except (i) for its own willful
misconduct,  bad faith or negligence,  (ii) in the case of the inaccuracy of any
representation or warranty  contained in Section 8.3 expressly made by the Owner
Trustee in its  individual  capacity,  (iii) for  liabilities  arising  from the
failure of the Owner Trustee to perform obligations  expressly  undertaken by it
in the last  sentence of Section 7.4  hereof,  or (iv) for taxes,  fees or other
charges  on,  based on or measured  by, any fees,  commissions  or  compensation
received by the Owner Trustee. In particular,  but not by way of limitation (and
subject to the exceptions set forth in the preceding sentence):

                  (a) the Owner  Trustee  shall  not be liable  for any error of
judgment,  not  constituting  negligence,  made by a Responsible  Officer of the
Owner Trustee;

                  (b) the Owner  Trustee shall not be liable with respect to any
action  taken or  omitted  to be taken by it if such  action or  omission  is in
accordance  with the  instructions of the Instructing  Party,  the Sponsor,  the
Servicer or any Residual Certificateholder pursuant to the terms hereof;

                  (c) the Owner Trustee shall not risk funds or otherwise  incur
any  financial  liability  in the  performance  of any of its  rights  or powers
hereunder or under any Basic Document if the Owner Trustee shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it;

                  (d) the  Owner  Trustee  shall  not be  responsible  for or in
respect  of the  validity  or  sufficiency  of  this  Agreement  or for  the due
execution  hereof  by the  Sponsor  or for  the  form,

                                       21
<PAGE>

character, genuineness, sufficiency, value or validity of any of the Owner Trust
Estate  or for or in  respect  of  the  validity  or  sufficiency  of the  Basic
Documents,  other than the certificates of  authentication  on the Notes and the
Residual  Certificates,  and the Owner Trustee shall in no event assume or incur
any  liability,  duty or obligation to the Sponsor,  the Insurer,  the Indenture
Trustee or any Residual Certificateholder,  other than as expressly provided for
herein and in the Basic Documents;

                  (e) the Owner  Trustee  shall not be liable for the default or
misconduct of the Sponsor,  the Insurer,  the Indenture Trustee, or the Servicer
under any of the Basic  Documents or otherwise  and the Owner Trustee shall have
no obligation or liability to perform the  obligations  under this  Agreement or
the Basic  Documents that are required to be performed by the Sponsor under this
Agreement,  by the Indenture  Trustee under the Indenture or the Servicer  under
the Sale and Servicing Agreement; and

                  (f) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers  vested in it by this  Agreement,  or to  institute,
conduct or defend  any  litigation  under  this  Agreement  or  otherwise  or in
relation to this  Agreement  or any Basic  Document,  at the  request,  order or
direction of the  Instructing  Party or any of the Residual  Certificateholders,
unless such Instructing Party or Residual Certificateholders have offered to the
Owner  Trustee  security  or  indemnity  satisfactory  to it against  the costs,
expenses and  liabilities  that may be incurred by the Owner Trustee  therein or
thereby.  The  right of the Owner  Trustee  to  perform  any  discretionary  act
enumerated in this  Agreement or in any Basic Document shall not be construed as
a duty,  and the Owner Trustee shall not be answerable  for other than its gross
negligence, bad faith or willful misconduct in the performance of any such act.

                  SECTION 8.2. FURNISHING OF DOCUMENTS.  The Owner Trustee shall
furnish to the Residual  Certificateholders  promptly  upon receipt of a written
request  therefor,  duplicates  or copies  of all  reports,  notices,  requests,
demands, certificates,  financial statements and any other instruments furnished
to the Owner Trustee under the Basic Documents.

                  SECTION 8.3. REPRESENTATIONS AND WARRANTIES. The Owner Trustee
hereby represents and warrants,  in its individual capacity,  to the Sponsor and
the Holders that:

                  (a) It is a Delaware banking  corporation,  duly organized and
validly  existing in good standing  under the laws of the State of Delaware.  It
has all requisite corporate power and authority to execute,  deliver and perform
its obligations under this Agreement.

                  (b) It has taken all corporate  action  necessary to authorize
the execution and delivery by it of this  Agreement,  and this Agreement will be
executed and delivered by one of its officers who is duly  authorized to execute
and deliver this Agreement on its behalf.

                  (c)  Neither  the  execution  nor the  delivery  by it of this
Agreement,  nor the consummation by it of the transactions  contemplated  hereby
nor compliance by it with any of the terms or provisions  hereof will contravene
any federal or Delaware state law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or  constitute  any default  under its charter  documents  or by-laws or any

                                       22
<PAGE>

indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound.

                  (d) The Owner  Trustee has duly  executed and  delivered  this
Agreement and each other Basic Document to which it is a party, and each of this
Agreement and each such other Basic Document  constitutes  the legal,  valid and
binding obligation of the Owner Trustee,  enforceable  against the Owner Trustee
in accordance with its terms,  except as (i) such  enforceability may be limited
by  bankruptcy,  insolvency,  reorganization  and  similar  laws  relating to or
affecting  the  enforcement  of  creditors'   rights   generally  and  (ii)  the
availability  of equitable  remedies may be limited by equitable  principles  of
general applicability.

                  SECTION 8.4. RELIANCE; ADVICE OF COUNSEL.

                  (a) The Owner  Trustee  shall incur no  liability to anyone in
acting upon any signature,  instrument,  notice,  resolution,  request, consent,
order, certificate, report, opinion, bond or other document or paper believed by
it to be genuine and believed by it to be signed by the proper party or parties.
The Owner  Trustee may accept a certified  copy of a resolution  of the board of
directors or other governing body of any corporate party as conclusive  evidence
that such  resolution has been duly adopted by such body and that the same is in
full force and effect.  As to any fact or matter the method of the determination
of which is not specifically  prescribed  herein,  the Owner Trustee may for all
purposes  hereof  rely on a  certificate,  signed by the  president  or any vice
president or by the  treasurer,  secretary or other  authorized  officers of the
relevant party, as to such fact or matter, and such certificate shall constitute
full protection to the Owner Trustee for any action taken or omitted to be taken
by it in good faith in reliance thereon.

                  (b) In the exercise or  administration of the trusts hereunder
and in the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys  pursuant to  agreements  entered into with any of them,  and (ii) may
consult with counsel,  accountants and other skilled persons to be selected with
reasonable  care and employed by it. The Owner  Trustee  shall not be liable for
anything  done,  suffered or omitted in good faith by it in accordance  with the
opinion or advice of any such  counsel,  accountants  or other such  persons and
according to such opinion not contrary to this Agreement or any Basic Document.

                  SECTION  8.5.  NOT ACTING IN  INDIVIDUAL  CAPACITY.  Except as
provided in this Article  VII, in accepting  the trusts  hereby  created  [Owner
Trustee]  acts  solely  as Owner  Trustee  hereunder  and not in its  individual
capacity and all Persons having any claim against the Owner Trustee by reason of
the transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.

                  SECTION  8.6.  OWNER  TRUSTEE  NOT LIABLE FOR NOTES,  RESIDUAL
CERTIFICATES OR MORTGAGE LOANS.  The recitals  contained herein and in the Notes
and the Residual  Certificates (other than the signature and countersignature of
the Owner  Trustee on the Notes and the  Residual  Certificates,  respectively),
shall be taken as the statements of the Sponsor 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  Agreement,  of any
Basic Document,  of the Notes (other than the signature and  countersignature of
the Owner Trustee on the Notes) or of

                                       23
<PAGE>

the Residual Certificates, (other than the signature and countersignature of the
Owner Trustee on the Residual  Certificates)  or of any Mortgage Loan or related
documents.  The  Owner  Trustee  shall  at no time  have any  responsibility  or
liability for or with respect to the legality,  validity and  enforceability  of
any Mortgage  Loan,  or the  perfection  and  priority of any security  interest
created by any  Mortgage  Loan or the  maintenance  of any such  perfection  and
priority, or for or with respect to the sufficiency of the Owner Trust Estate or
its  ability  to  generate   the   payments  to  be   distributed   to  Residual
Certificateholders  under this Agreement or the Noteholders under the Indenture,
including,  without  limitation:  the existence,  condition and ownership of any
Mortgage Loan; the existence and  enforceability of any insurance  thereon;  the
existence  and  contents of any  Mortgage  Loan on any  computer or other record
thereof;  the validity of the assignment of any Mortgage Loan to the Trust or of
any  intervening  assignment;   the  completeness  of  any  Mortgage  Loan;  the
performance  or enforcement of any Mortgage Loan; the compliance by the Sponsor,
the Servicer or any other Person 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  Indenture  Trustee  or the
Servicer or any subservicer taken in the name of the Owner Trustee.

                  SECTION  8.7.   OWNER  TRUSTEE  MAY  OWN  NOTES  AND  RESIDUAL
CERTIFICATES.  The Owner  Trustee in its  individual  or any other  capacity may
become the owner or pledgee of Notes or Residual  Certificates and may deal with
the Sponsor, the Indenture Trustee and the Servicer in banking transactions with
the same rights as it would have if it were not Owner Trustee.

                  SECTION 8.8. PAYMENTS FROM OWNER TRUST ESTATE. All payments to
be made by the Owner Trustee under this Agreement or any of the Basic  Documents
to which the Trust or the Owner  Trustee is a party  shall be made only from the
income and  proceeds of the Owner  Trust  Estate and only to the extent that the
Owner Trust shall have  received  income or proceeds from the Owner Trust Estate
to make such payments in accordance with the terms hereof.  [Owner Trustee],  or
any successor thereto, in its individual  capacity,  shall not be liable for any
amounts  payable under this Agreement or any of the Basic Documents to which the
Trust or the Owner Trustee is a party.

                  SECTION   8.9.   DOING   BUSINESS   IN  OTHER   JURISDICTIONS.
Notwithstanding  anything contained to the contrary,  neither [Owner Trustee] or
any  successor  thereto,  nor the Owner  Trustee  shall be  required to take any
action in any jurisdiction  other than in the State of Delaware if the taking of
such action will, even after the appointment of a co-trustee or separate trustee
in accordance  with Section 11.5 hereof,  (i) require the consent or approval or
authorization or order of or the giving of notice to, or the  registration  with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction  other than the State of Delaware;  (ii)
result in any fee, tax or other governmental  charge under the laws of the State
of Delaware becoming payable by [Owner Trustee] (or any successor  thereto);  or
(iii)  subject   [Owner   Trustee]  (or  any  successor   thereto)  to  personal
jurisdiction in any jurisdiction  other than the State of Delaware for causes of
action arising from acts unrelated to the  consummation  of the  transactions by
[Owner Trustee] (or any successor thereto) or the Owner Trustee, as the case may
be, contemplated hereby.

                                       24
<PAGE>

                                   ARTICLE IX

                          COMPENSATION OF OWNER TRUSTEE

                  SECTION 9.1.  OWNER  TRUSTEE'S  FEES AND  EXPENSES.  The Owner
Trustee  shall  receive as  compensation  for its services  hereunder  the Owner
Trustee  Fees,  and the Owner  Trustee shall be entitled to be reimbursed by the
Sponsor for its other reasonable  expenses  hereunder,  including the reasonable
compensation,  expenses  and  disbursements  of  such  agents,  representatives,
experts  and  counsel as the Owner  Trustee  may employ in  connection  with the
exercise and  performance  of its rights and its duties  hereunder and under the
Basic Documents.

                  SECTION 9.2.  INDEMNIFICATION.  The Sponsor shall be liable as
primary  obligor for, and shall  indemnify the Owner Trustee (in its  individual
and trust capacities) and its officers, directors,  successors,  assigns, agents
and servants (collectively, the "INDEMNIFIED PARTIES") from and against, any and
all liabilities, obligations, losses, damages, taxes, claims, actions and suits,
and  any  and  all  reasonable  costs,  expenses  and  disbursements  (including
reasonable  legal  fees  and  expenses)  of  any  kind  and  nature   whatsoever
(collectively,  "EXPENSES") which may (in its trust or individual capacities) at
any time be imposed on,  incurred by, or asserted  against the Owner  Trustee or
any  Indemnified  Party in any way relating to or arising out of this Agreement,
the Basic Documents,  the Owner Trust Estate,  the  administration  of the Owner
Trust Estate or the action or inaction of the Owner  Trustee  hereunder,  except
only that the Sponsor shall not be liable for or required to indemnify the Owner
Trustee from and against  Expenses  arising or resulting from any of the matters
described in the third  sentence of Section 8.1.  The  indemnities  contained in
this Section and the rights under Section 9.1 shall survive the  resignation  or
termination of the Owner Trustee or the  termination of this  Agreement.  In any
event of any claim,  action or  proceeding  for which  indemnity  will be sought
pursuant to this Section,  the Owner Trustee's  choice of legal counsel shall be
subject to the approval of the Sponsor which approval shall not be  unreasonably
withheld.

                  SECTION 9.3.  PAYMENTS TO THE OWNER TRUSTEE.  Any amounts paid
to the Owner  Trustee  pursuant  to this  Article IX shall be deemed not to be a
part of the Owner Trust Estate immediately after such payment.

                  SECTION   9.4.   NON-RECOURSE   OBLIGATIONS.   Notwithstanding
anything in this  Agreement or any Basic  Document,  the Owner Trustee agrees in
its individual  capacity and in its capacity as Owner Trustee for the Trust that
all  obligations  of the Trust to the  Owner  Trustee  individually  or as Owner
Trustee  for the Trust  shall be  recourse  to the Owner  Trust  Estate only and
specifically   shall  not  be   recourse   to  the   assets   of  any   Residual
Certificateholder.

                                   ARTICLE X

                         TERMINATION OF TRUST AGREEMENT

                  SECTION 10.1. TERMINATION OF TRUST AGREEMENT.

                  (a) This Agreement and the Trust shall  terminate and be of no
further force or effect upon the later of (i) the maturity or other  liquidation
of the last Mortgage Loan (including

                                       25
<PAGE>

the redemption by the Sponsor at its option of the Notes as described in Section
7.01(b) of the Sale and Servicing Agreement) and the subsequent  distribution of
amounts in respect of such Mortgage Loans as provided in the Basic  Documents or
(ii) the payment to Residual  Certificateholders  of all amounts  required to be
paid to them  pursuant to this  Agreement  and the payment to the Insurer of all
amounts  payable  or  reimbursable  to it  pursuant  to the Sale  and  Servicing
Agreement,  the Indenture and the Insurance Agreement;  PROVIDED,  HOWEVER, that
the rights to indemnification under Section 9.2 and the rights under Section 9.1
shall survive the  termination of the Trust.  The Servicer shall promptly notify
the Owner  Trustee and the Insurer of any  prospective  termination  pursuant to
this Section 10.1. The bankruptcy, liquidation, dissolution, death or incapacity
of any  Residual  Certificateholder  shall not (x)  operate  to  terminate  this
Agreement or the Trust, nor (y) entitle such Residual  Certificateholder's legal
representatives  or  heirs  to claim an  accounting  or to take  any  action  or
proceeding  in any court for a partition or winding up of all or any part of the
Trust or Owner Trust Estate nor (z) otherwise affect the rights, obligations and
liabilities of the parties hereto.

                  (b) Except as provided in clause (a),  neither the Sponsor nor
any other  Residual  Certificateholder  shall be entitled to revoke or terminate
the Trust.

                  (c) Notice of any  termination  of the Trust,  specifying  the
Payment Date upon which the Residual  Certificateholders  shall  surrender their
Residual  Certificates  to the  Indenture  Trustee  for  payment  of  the  final
distribution and cancellation,  shall be given by the Owner Trustee by letter to
the Residual  Certificateholders  mailed within five Business Days of receipt of
notice of such  termination  from the Servicer given pursuant to Section 7.01(c)
of the Sale and Servicing  Agreement,  stating (i) the Payment Date upon or with
respect to which final payment of the Residual  Certificates  shall be made upon
presentation  and  surrender of the Residual  Certificates  at the office of the
Indenture Trustee therein designated,  (ii) the amount of any such final payment
and (iii) that the Record Date otherwise  applicable to such Payment Date is not
applicable,  payments  being made only upon  presentation  and  surrender of the
Residual  Certificates at the office of the Indenture Trustee therein specified.
The Owner Trustee shall give such notice to the Certificate  Registrar (if other
than the Owner  Trustee)  and the  Indenture  Trustee at the time such notice is
given to the Residual Certificateholders. Upon presentation and surrender of the
Residual Certificates the Indenture Trustee shall cause to be distributed to the
Residual  Certificateholders amounts distributable on such Payment Date pursuant
to Section 8.7(d)(xiii) of the Indenture.

                  In the event that all of the Residual Certificateholders shall
not surrender their Residual  Certificates  for  cancellation  within six months
after  the date  specified  in the  above-mentioned  written  notice,  the Owner
Trustee  shall  give  a  second  written   notice  to  the  remaining   Residual
Certificateholders to surrender their Residual Certificates for cancellation and
receive the final  distribution  with respect thereto.  If within one year after
the second notice all the Residual  Certificates shall not have been surrendered
for cancellation,  the Owner Trustee may take appropriate  steps, or may appoint
an  agent  to  take  appropriate   steps,  to  contact  the  remaining  Residual
Certificateholders concerning surrender of their Residual Certificates,  and the
cost  thereof  shall be paid out of the funds and other assets that shall remain
subject to this Agreement.  Any funds remaining in the Trust after exhaustion of
such remedies shall be distributed,  subject to applicable  escheat laws, by the
Owner  Trustee to the Sponsor  and Holders  shall look solely to the Sponsor for
payment.

                                       26
<PAGE>

                  (d) Any funds  remaining  in the Trust  after  funds for final
distribution  have  been  distributed  or set aside  for  distribution  shall be
distributed by the Owner Trustee to the Sponsor.

                  (e) Upon the winding up of the Trust and its termination,  the
Owner  Trustee shall cause the  Certificate  of Trust to be canceled by filing a
certificate of  cancellation  with the Secretary of State in accordance with the
provisions of Section 3810 of the Statutory Trust Statute.

                                   ARTICLE XI

             SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

                  SECTION 11.1. ELIGIBILITY  REQUIREMENTS FOR OWNER TRUSTEE. The
Owner Trustee shall at all times be a corporation  (i) satisfying the provisions
of Section 3807(a) of the Statutory  Trust Statute;  (ii) authorized to exercise
corporate trust powers;  (iii) having a combined capital and surplus of at least
$50,000,000  and  subject  to  supervision  or  examination  by federal or State
authorities;  (iv) having (or having a parent which has) a rating of at least A3
by Moody's or A-1 by  Standard & Poor's ; and (v)  acceptable  to the Insurer in
its sole discretion.  If such corporation  shall publish reports of condition at
least  annually,  pursuant  to  law  or to the  requirements  of  the  aforesaid
supervising or examining  authority,  then for the purpose of this Section,  the
combined  capital  and  surplus  of such  corporation  shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so  published.  In case at any time the Owner Trustee shall cease to be eligible
in  accordance  with the  provisions  of this  Section,  the Owner Trustee shall
resign immediately in the manner and with the effect specified in Section 11.2.

                  SECTION 11.2.  RESIGNATION  OR REMOVAL OF OWNER  TRUSTEE.  The
Owner  Trustee may at any time resign and be  discharged  from the trusts hereby
created by giving  written  notice  thereof to the Sponsor (or in the event that
the Sponsor is not the sole Residual Certificateholder,  the Holders of Residual
Certificates  evidencing not less than a majority in interest in the Trust), the
Insurer and the Servicer. Upon receiving such notice of resignation, the Sponsor
shall promptly appoint a successor Owner Trustee, meeting the qualifications set
forth  in  Section  11.1  herein,  by  written  instrument,  one  copy of  which
instrument shall be delivered to the resigning Owner Trustee and with additional
copies to the successor Owner Trustee and the Insurer  provided that the Sponsor
shall have received written  confirmation  from each of the Rating Agencies that
the proposed  appointment will not result in an increased  capital charge to the
Insurer by either of the Rating  Agencies.  If no successor  Owner Trustee shall
have been so appointed  and have accepted  appointment  within 30 days after the
giving of such notice of resignation, the resigning Owner Trustee or the Insurer
may  petition  any court of  competent  jurisdiction  for the  appointment  of a
successor Owner Trustee.

                  If at any time the Owner Trustee shall cease to be eligible in
accordance  with the  provisions  of Section 11.1 and shall fail to resign after
written  request  therefor by the Sponsor,  or if at any time the Owner  Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner  Trustee or of its  property  shall be  appointed,  or any
public  officer  shall take  charge or  control  of the Owner  Trustee or of its
property  or  affairs  for  the

                                       27
<PAGE>

purpose  of  rehabilitation,  conservation  or  liquidation,  then the  Residual
Certificateholder  with the consent of the Insurer may remove the Owner Trustee.
If the  Residual  Certificateholder  shall  remove the Owner  Trustee  under the
authority of the  immediately  preceding  sentence,  the Sponsor shall  promptly
appoint a  successor  Owner  Trustee,  meeting the  qualifications  set forth in
Section 11.1 herein,  by written  instrument,  in  duplicate,  one copy of which
instrument shall be delivered to the outgoing Owner Trustee so removed, one copy
to the Insurer and one copy to the successor Owner Trustee and the Sponsor shall
pay all fees owed to the outgoing Owner Trustee,  if not previously  paid by the
Trust.

                  Any   resignation   or  removal  of  the  Owner   Trustee  and
appointment  of a successor  Owner Trustee  pursuant to any of the provisions of
this Section shall not become  effective until  acceptance of appointment by the
successor  Owner  Trustee  pursuant to Section  11.3 and payment of all fees and
expenses owed to the outgoing Owner Trustee. The Sponsor shall provide notice of
such resignation or removal of the Owner Trustee to each of the Rating Agencies.

                  Notwithstanding any other provision of this Agreement,  and in
addition to any other method of removal of the Owner Trustee  contained  herein,
upon a proposal made pursuant to Section  5.2(b) and the  subsequent  consent of
Residual  Certificateholders  representing  no less  than a  66-2/3%  Percentage
Interest of the Residual  Certificates  in the Trust,  the Owner  Trustee may be
removed as Owner Trustee,  subject to the consent of the Insurer,  which consent
is not to be  unreasonably  withheld.  In the event the Owner Trustee is removed
pursuant to this paragraph, the provisions of this Agreement,  including Article
X herein, shall apply as if the Owner Trustee had resigned hereunder.

                  SECTION 11.3.  SUCCESSOR  OWNER TRUSTEE.  Any successor  Owner
Trustee  appointed  pursuant  to Section  11.2 shall  execute,  acknowledge  and
deliver to the  Sponsor,  the  Servicer  and the Insurer and to its  predecessor
Owner Trustee an instrument accepting such appointment under this Agreement, and
thereupon  the  resignation  or removal of the  predecessor  Owner Trustee shall
become effective and such successor Owner Trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations  of its  predecessor  under this  Agreement,  with like effect as if
originally  named as Owner  Trustee.  The  predecessor  Owner Trustee shall upon
payment of its fees and  expenses  deliver to the  successor  Owner  Trustee all
documents and  statements  and monies held by it under this  Agreement;  and the
Sponsor and the  predecessor  Owner  Trustee  shall  execute  and  deliver  such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties and obligations.

                  No  successor  Owner  Trustee  shall  accept   appointment  as
provided in this Section  unless at the time of such  acceptance  such successor
Owner Trustee shall be eligible pursuant to Section 11.1.

                  Upon  acceptance of appointment  by a successor  Owner Trustee
pursuant to this  Section,  the Servicer  shall mail notice of the  successor of
such Owner Trustee to all Residual  Certificateholders,  the Indenture  Trustee,
the Noteholders and the Rating Agencies. If the Servicer shall fail to mail such
notice within 10 days after  acceptance of  appointment  by the

                                       28
<PAGE>

successor Owner Trustee,  the successor Owner Trustee shall cause such notice to
be mailed at the expense of the Servicer.

                  SECTION 11.4.  MERGER OR CONSOLIDATION  OF OWNER TRUSTEE.  Any
corporation  into which the Owner  Trustee  may be merged or  converted  or with
which it may be  consolidated,  or any  corporation  resulting  from any merger,
conversion or  consolidation to which the Owner Trustee shall be a party, or any
corporation  succeeding  to all or  substantially  all  of the  corporate  trust
business  of the Owner  Trustee,  shall be the  successor  of the Owner  Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 11.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto,  anything herein to the contrary  notwithstanding;
PROVIDED,  FURTHER,  that the Owner  Trustee shall mail notice of such merger or
consolidation to the Rating Agencies and the Insurer.

                  SECTION  11.5.  APPOINTMENT  OF  CO-OWNER  TRUSTEE OR SEPARATE
OWNER TRUSTEE.  Notwithstanding  any other provisions of this Agreement,  at any
time, for the purpose of meeting any legal  requirements of any  jurisdiction in
which any part of the Owner Trust  Estate or any  Mortgaged  Property may at the
time be located,  the Servicer and the Owner Trustee  acting  jointly shall have
the power and shall execute and deliver all  instruments  to appoint one or more
Persons  approved by the Owner  Trustee  and the  Insurer to act as  co-trustee,
jointly with the Owner Trustee, or separate trustee or separate trustees, of all
or any part of the  Owner  Trust  Estate,  and to vest in such  Person,  in such
capacity,  such title to the Trust,  or any part  thereof,  and,  subject to the
other provisions of this Section, such powers, duties,  obligations,  rights and
trusts  as the  Servicer  and  the  Owner  Trustee  may  consider  necessary  or
desirable.  If the Servicer shall not have joined in such appointment  within 15
days after the receipt by it of a request so to do, the Owner Trustee subject to
the approval of the Insurer (which approval shall not be unreasonably  withheld)
shall have the power to make such appointment. No co-trustee or separate trustee
under this  Agreement  shall be required to meet the terms of  eligibility  as a
successor  trustee  pursuant to Section 11.1 and no notice of the appointment of
any co-trustee or separate trustee shall be required pursuant to Section 11.3.

                  Each  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 Owner Trustee shall be conferred upon and exercised or
         performed by the Owner 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 Owner 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 Owner 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 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
         Owner Trustee;

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

                                       29
<PAGE>

                  (iii) the Servicer and the Owner Trustee acting jointly may at
         any time accept the  resignation  of or remove any separate  trustee or
         co-trustee.

                  Any  notice,  request  or other  writing  given  to the  Owner
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.  Each separate trustee and co-trustee,  upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified  in its  instrument  of  appointment,  either  jointly  with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this  Agreement,  specifically  including  every  provision of this Agreement
relating to the conduct of, affecting the liability of, or affording  protection
to,  the Owner  Trustee.  Each  such  instrument  shall be filed  with the Owner
Trustee and a copy thereof given to the Servicer and the Insurer.

                  Any separate trustee or co-trustee may at any time appoint the
Owner 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 Owner  Trustee,  to the extent  permitted  by law,  without the
appointment of a new or successor trustee.

                                   ARTICLE XII

                                  MISCELLANEOUS

                  SECTION 12.1. SUPPLEMENTS AND AMENDMENTS.

                  (a) This Agreement may be amended by the Sponsor and the Owner
Trustee,  with the prior  written  consent of the Insurer and with prior written
notice to the Rating Agencies, without the consent of any of the Noteholders or,
in the event that the Sponsor is not the sole  Residual  Certificateholder,  the
Residual  Certificateholders,  (i) to cure any  ambiguity  or  defect or (ii) to
correct,  supplement  or modify  any  provisions  in this  Agreement;  PROVIDED,
HOWEVER, that such action shall not, as evidenced by an Opinion of Counsel which
may be  based  upon a  certificate  of the  Servicer,  adversely  affect  in any
material respect the interests of any Noteholder or Residual Certificateholder.

                  (b) This Agreement may also be amended from time to time, with
the prior written consent of the Insurer,  by the Sponsor and the Owner Trustee,
with  prior  written  notice to the Rating  Agencies,  and,  to the extent  such
amendment  materially  and adversely  affects the interests of the  Noteholders,
with the consent of the  Noteholders  evidencing not less than a majority of the
Outstanding   Amount  of  the  Notes   and,   the   consent   of  the   Residual
Certificateholders  evidencing  not less than a majority  interest  in the Trust
(which consent of any Holder of a Note or Residual Certificate given pursuant to
this  Section or  pursuant to any other  provision  of this  Agreement  shall be
conclusive  and binding on such Holder and on all future Holders of such Note or
Residual  Certificate  and of any Note or Residual  Certificate  issued upon the
transfer  thereof  or in  exchange  thereof  or in lieu  thereof  whether or not
notation of such consent is made upon the Note or Residual  Certificate) for the
purpose of adding any provisions

                                       30
<PAGE>

to or  changing  in any  manner or  eliminating  any of the  provisions  of this
Agreement  or of modifying  in any manner the rights of the  Noteholders  or the
Residual  Certificateholders;  PROVIDED,  HOWEVER,  that, subject to the express
rights of the Insurer under the Basic  Documents,  no such  amendment  shall (a)
increase  or reduce in any  manner the  amount  of, or  accelerate  or delay the
timing of, collections of payments on Mortgage Loans or distributions that shall
be  required  to be made for the  benefit  of the  Noteholders  or the  Residual
Certificateholders  or (b) reduce the aforesaid  percentage  of the  Outstanding
Amount of the Notes  and the  Residual  Certificate,  the  Holders  of which are
required to consent to any such amendment, without the consent of the Holders of
all the outstanding Notes and Holders of all outstanding Residual Certificates.

                  Promptly after the execution of any such amendment or consent,
the Owner Trustee shall furnish  written  notification  of the substance of such
amendment or consent to each Residual Certificateholder,  the Indenture Trustee,
the Insurer and each of the Rating Agencies.

                  It shall not be necessary for the consent of the  Noteholders,
the  Residual  Certificateholders  or the  Indenture  Trustee  pursuant  to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof.  The
manner  of  obtaining   such  consents  (and  any  other  consents  of  Residual
Certificateholders  provided  for  in  this  Agreement  or in  any  other  Basic
Document)  and of  evidencing  the  authorization  of the  execution  thereof by
Residual  Certificateholders shall be subject to such reasonable requirements as
the Owner Trustee may  prescribe.  Promptly after the execution of any amendment
to the  Certificate  of Trust,  the Owner Trustee shall cause the filing of such
amendment with the Secretary of State.

                  Prior to the execution of any  amendment to this  Agreement or
the  Certificate  of Trust,  the Owner  Trustee shall be entitled to receive and
rely upon an Opinion of Counsel  stating that the execution of such amendment is
authorized or permitted by this Agreement and that all  conditions  precedent to
the  execution and delivery of such  amendment  have been  satisfied.  The Owner
Trustee may, but shall not be obligated to, enter into any such amendment  which
affects  the Owner  Trustee's  own  rights,  duties  or  immunities  under  this
Agreement or otherwise.

                  SECTION 12.2. NO LEGAL TITLE TO OWNER TRUST ESTATE IN RESIDUAL
CERTIFICATEHOLDERS.  The Residual  Certificateholders shall not have legal title
to any part of the Owner Trust Estate. The Residual  Certificateholders shall be
entitled to receive  distributions  with  respect to their  undivided  ownership
interest  therein only in accordance with Article IX. No transfer,  by operation
of  law  or  otherwise,  of  any  right,  title  or  interest  of  the  Residual
Certificateholders  to and in their ownership interest in the Owner Trust Estate
shall operate to terminate this Agreement or the trusts hereunder or entitle any
transferee  to an accounting or to the transfer to it of legal title to any part
of the Owner Trust Estate.

                  SECTION  12.3.  LIMITATIONS  ON RIGHTS OF  OTHERS.  Except for
Section 2.7, the  provisions of this Agreement are solely for the benefit of the
Owner Trustee, the Sponsor, the Residual  Certificateholders,  the Servicer and,
to the extent expressly provided herein, the Insurer,  the Indenture Trustee and
the  Noteholders,  and nothing in this  Agreement,  whether  express or implied,
shall be construed  to give to any other  Person any legal or  equitable  right,
remedy  or

                                       31
<PAGE>

claim in the Owner Trust Estate or under or in respect of this  Agreement or any
covenants, conditions or provisions contained herein.

                  SECTION 12.4. NOTICES.

                  (a) Unless otherwise  expressly  specified or permitted by the
terms  hereof,  all notices  shall be in writing and shall be deemed  given upon
receipt  personally  delivered,  delivered by overnight  courier or mailed first
class mail or certified mail, in each case return receipt  requested,  and shall
be deemed  to have  been  duly  given  upon  receipt,  if to the Owner  Trustee,
addressed  to the  Corporate  Trust  Office;  if to the  Sponsor,  addressed  to
GreenPoint  Mortgage  Securities  LLC, 100 Wood Hollow Drive,  Doorstop  #32210,
Novato, California 94945, Attention: S.A. Ibrahim; if to the Insurer,  addressed
to Insurer, [Insurer's Address], Telecopy No.: (____) ____-_____; or, as to each
party,  at such other  address as shall be designated by such party in a written
notice to each other party.

                  (b) Any notice required or permitted to be given to a Residual
Certificateholder  shall be given by first-class mail,  postage prepaid,  at the
address  of such  Holder as shown in the  Certificate  Register.  Any  notice so
mailed  within  the time  prescribed  in this  Agreement  shall be  conclusively
presumed to have been duly given, whether or not the Residual  Certificateholder
receives such notice.

                  SECTION 12.5.  SEVERABILITY.  Any provision of this  Agreement
that is  prohibited  or  unenforceable  in any  jurisdiction  shall,  as to such
jurisdiction,   be   ineffective   to  the   extent  of  such   prohibition   or
unenforceability  without  invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

                  SECTION 12.6.  SEPARATE  COUNTERPARTS.  This  Agreement may be
executed by the parties hereto in separate  counterparts,  each of which when so
executed and delivered  shall be an original,  but all such  counterparts  shall
together constitute but one and the same instrument.

                  SECTION 12.7. ASSIGNMENTS; INSURER.

                  (a)  This  Agreement  shall  inure  to the  benefit  of and be
binding upon the parties  hereto and their  respective  successors and permitted
assigns. This Agreement shall also inure to the benefit of the Insurer.  Without
limiting the generality of the  foregoing,  all covenants and agreements in this
Agreement  which confer  rights upon the Insurer shall be for the benefit of and
run  directly to the  Insurer  and the Insurer  shall be entitled to rely on and
enforce such  covenants,  subject,  however,  to the  limitations on such rights
provided in this Agreement and the Basic Documents. The Insurer may disclaim any
of its  rights  and  powers  under  this  Agreement  (but  not  its  duties  and
obligations  under the Policy)  upon  delivery of a written  notice to the Owner
Trustee.

                  (b) In  accepting  instructions  from the Insurer  pursuant to
Article  V or  Section  7.3 of this  Agreement,  and with  respect  to any other
obligations of the Owner Trustee to the Insurer under this Agreement,  the Owner
Trustee undertakes to perform or observe only its express obligations under this
Agreement,  and no implied obligations with respect to the Insurer

                                       32
<PAGE>

shall be read into this Agreement  against the Owner Trustee.  The Owner Trustee
shall not be deemed to owe any fiduciary duty to the Insurer and it is expressly
understood  and  agreed  by the  Insurer  that the  Owner  Trustee  shall not be
personally  liable or responsible for the payment of any amount owing on or with
respect to the Basic  Documents  or for the  failure of the Trust to perform its
obligations  under  the Basic  Documents  or any other  agreement  with  respect
thereto.

                  SECTION  12.8.  NO  PETITION.  The Owner  Trustee  (not in its
individual  capacity  but  solely  as Owner  Trustee),  by  entering  into  this
Agreement, each Residual Certificateholder, by accepting a Residual Certificate,
and the Indenture  Trustee and each Noteholder by accepting the benefits of this
Agreement,  hereby covenants and agrees that they will not at any time institute
against  the  Sponsor,  or join in any  institution  against the Sponsor 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,  the
Residual Certificates, this Agreement or any of the Basic Documents.

                  SECTION 12.9. NO RECOURSE. Each Residual  Certificateholder by
accepting   a   Residual    Certificate    acknowledges   that   such   Residual
Certificateholder's  Residual Certificates represent beneficial interests in the
Trust only and do not represent interests in or obligations of the Servicer, the
Sponsor,  the Owner Trustee, the Indenture Trustee, the Insurer or any Affiliate
thereof and no recourse may be had against such parties or their assets,  except
as may be expressly set forth or contemplated  in this  Agreement,  the Residual
Certificates or the Basic Documents.

                  SECTION 12.10.  HEADINGS. The headings of the various Articles
and Sections  herein are for  convenience of reference only and shall not define
or limit any of the terms or provisions hereof.

                  SECTION  12.11.   GOVERNING  LAW.  THIS  AGREEMENT   SHALL  BE
CONSTRUED  IN  ACCORDANCE  WITH  THE  LAWS OF THE  STATE  OF  DELAWARE,  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  12.12.   SERVICER.  The  Servicer  is  authorized  to
prepare, or cause to be prepared, execute and deliver on behalf of the Trust all
such documents, reports, filings,  instruments,  certificates and opinions as it
shall be the duty of the Trust or Owner  Trustee  to  prepare,  file or  deliver
pursuant to the Basic Documents.  Upon written request,  the Owner Trustee shall
execute and deliver to the Servicer a limited power of attorney  appointing  the
Servicer  the Trust's  agent and  attorney-in-fact  to  prepare,  or cause to be
prepared, execute and deliver all such documents, reports, filings, instruments,
certificates and opinions.

                                       33
<PAGE>

                  IN WITNESS WHEREOF,  the parties hereto have caused this Trust
Agreement  to be duly  executed  by  their  respective  officers  hereunto  duly
authorized as of the day and year first above written.

                                    [OWNER TRUSTEE],
                                      Owner Trustee

                                    By:
                                       -----------------------------------------
                                       Name:
                                       Title:

                                    GREENPOINT MORTGAGE SECURITIES LLC,
                                     Sponsor

                                    By:
                                       -----------------------------------------
                                       Name:
                                       Title:

Acknowledged and Agreed:

GREENPOINT MORTGAGE FUNDING, INC.,
Servicer

By:
   -----------------------------
   Name:
   Title:

<PAGE>

                                                                       EXHIBIT A

                              RESIDUAL CERTIFICATE

THIS RESIDUAL  CERTIFICATE  REPRESENTS CERTAIN RESIDUAL RIGHTS TO PAYMENT TO THE
EXTENT DESCRIBED HEREIN AND IN THE TRUST AGREEMENT REFERRED TO HEREIN.

THIS  RESIDUAL  CERTIFICATE  MAY NOT BE HELD BY OR  TRANSFERRED  TO A NON-UNITED
STATES PERSON.

THIS  RESIDUAL  CERTIFICATE  HAS NOT BEEN  REGISTERED  OR  QUALIFIED  UNDER  THE
SECURITIES  ACT OF 1933, AS AMENDED,  OR THE SECURITIES  LAWS OF ANY STATE.  ANY
RESALE,  TRANSFER OR OTHER DISPOSITION OF THIS RESIDUAL CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION  MAY BE MADE ONLY IN A TRANSACTION  WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 4.10 OF THE TRUST AGREEMENT REFERRED TO HEREIN.

NO  TRANSFER OF THIS  RESIDUAL  CERTIFICATE  MAY BE MADE  UNLESS THE  TRANSFEREE
PROVIDES  A   REPRESENTATION   LETTER  FROM  THE  TRANSFEREE  OF  SUCH  RESIDUAL
CERTIFICATE,  ACCEPTABLE TO AND IN FORM AND SUBSTANCE  SATISFACTORY TO THE OWNER
TRUSTEE AND THE INSURER,  TO THE EFFECT THAT SUCH  TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT  PLAN (AS  DEFINED  IN  SECTION  3(3) OF ERISA)  THAT IS  SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA,  A PLAN  DESCRIBED IN SECTION  4975(e)(1) OF THE
INTERNAL  REVENUE CODE,  NOR A PERSON ACTING ON BEHALF OF OR USING THE ASSETS OF
ANY SUCH PLAN, WHICH REPRESENTATION  LETTER SHALL NOT BE AN EXPENSE OF THE OWNER
TRUSTEE OR THE INSURER.

NO TRANSFER  OF A RESIDUAL  CERTIFICATE  SHALL BE MADE  UNLESS SUCH  TRANSFER IS
EXEMPT FROM THE  REGISTRATION  REQUIREMENTS  OF THE  SECURITIES  ACT OF 1933, AS
AMENDED,  AND ANY APPLICABLE STATE SECURITIES LAWS OR IS MADE IN ACCORDANCE WITH
SAID ACT AND LAWS.  EXCEPT FOR THE INITIAL ISSUANCE OF THE RESIDUAL  CERTIFICATE
TO THE SPONSOR, THE OWNER TRUSTEE SHALL REQUIRE (i) THE TRANSFEREE TO EXECUTE AN
INVESTMENT  LETTER  ACCEPTABLE TO AND IN FORM AND SUBSTANCE  SATISFACTORY TO THE
OWNER  TRUSTEE AND THE INSURER  CERTIFYING  TO THE OWNER TRUSTEE AND THE INSURER
THE FACTS  SURROUNDING SUCH TRANSFER,  WHICH  INVESTMENT  LETTER SHALL NOT BE AN
EXPENSE OF THE OWNER TRUSTEE, OR THE INSURER OR (ii) IF THE INVESTMENT LETTER IS
NOT  DELIVERED,  A WRITTEN  OPINION  OF  COUNSEL  ACCEPTABLE  TO AND IN FORM AND
SUBSTANCE  SATISFACTORY  TO THE OWNER TRUSTEE,  THE INSURER AND THE SPONSOR THAT
SUCH TRANSFER MAY BE MADE PURSUANT TO AN EXEMPTION,  DESCRIBING  THE  APPLICABLE
EXEMPTION  AND THE BASIS  THEREFOR,  FROM SAID ACT OR IS BEING MADE  PURSUANT TO

<PAGE>

SAID ACT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE OWNER TRUSTEE,
THE INSURER OR THE  SPONSOR.  THE HOLDER OF A RESIDUAL  CERTIFICATE  DESIRING TO
EFFECT SUCH TRANSFER SHALL,  AND DOES HEREBY AGREE TO, INDEMNIFY THE SPONSOR AND
THE INSURER  AGAINST  ANY  LIABILITY  THAT MAY RESULT IF THE  TRANSFER IS NOT SO
EXEMPT OR IS NOT MADE IN ACCORDANCE WITH SUCH FEDERAL AND STATE LAWS.

THE RESIDUAL  CERTIFICATES  AND ANY INTEREST  THEREIN  SHALL NOT BE  TRANSFERRED
EXCEPT UPON SATISFACTION OF THE FOLLOWING CONDITIONS  PRECEDENT:  (I) THE PERSON
THAT ACQUIRES A RESIDUAL  CERTIFICATE  SHALL (A) BE ORGANIZED AND EXISTING UNDER
THE LAWS OF THE  UNITED  STATES  OF  AMERICA  OR ANY  STATE OR THE  DISTRICT  OF
COLUMBIA THEREOF,  (B) EXPRESSLY ASSUME,  BY AN AGREEMENT  SUPPLEMENTAL  HERETO,
EXECUTED AND DELIVERED TO THE OWNER TRUSTEE AND THE INSURER,  THE PERFORMANCE OF
EVERY COVENANT AND  OBLIGATION OF THE SPONSOR UNDER THE TRUST  AGREEMENT AND (C)
AS PART OF ITS ACQUISITION OF A RESIDUAL CERTIFICATE,  ACQUIRE ALL RIGHTS OF THE
RESIDUAL  CERTIFICATEHOLDER UNDER SECTION 4.10 OF THE TRUST AGREEMENT TO AMOUNTS
PAYABLE  TO  THE  RESIDUAL   CERTIFICATE  OR  SUCH   TRANSFEREE   UNDER  SECTION
8.7(D)(XIII)  OF THE  INDENTURE;  (II) THE HOLDER OF THE  RESIDUAL  CERTIFICATES
SHALL  DELIVER TO THE OWNER  TRUSTEE  AND THE INSURER AN  OFFICER'S  CERTIFICATE
STATING THAT SUCH TRANSFER AND SUCH  SUPPLEMENTAL  AGREEMENT COMPLY WITH SECTION
4.10(C) OF THE TRUST  AGREEMENT AND THAT ALL  CONDITIONS  PRECEDENT  PROVIDED BY
SECTION 4.10(C) OF THE TRUST AGREEMENT HAVE BEEN COMPLIED WITH AND AN OPINION OF
COUNSEL STATING THAT ALL CONDITIONS PRECEDENT PROVIDED BY SECTION 4.10(C) OF THE
TRUST AGREEMENT HAVE BEEN COMPLIED WITH, AND THE OWNER TRUSTEE MAY  CONCLUSIVELY
RELY ON SUCH  OFFICER'S  CERTIFICATE,  SHALL HAVE NO DUTY TO MAKE INQUIRIES WITH
REGARD TO THE MATTERS  SET FORTH  THEREIN  AND SHALL  INCUR NO  LIABILITY  IN SO
RELYING;  (III) THE HOLDER OF THE  RESIDUAL  CERTIFICATES  SHALL  DELIVER TO THE
OWNER TRUSTEE AND THE INSURER A LETTER FROM EACH RATING AGENCY  CONFIRMING  THAT
ITS RATING OF THE  NOTES,  AFTER  GIVING  EFFECT TO SUCH  TRANSFER,  WILL NOT BE
REDUCED OR WITHDRAWN  WITHOUT  REGARD TO THE POLICY;  (IV) THE TRANSFEREE OF THE
RESIDUAL  CERTIFICATES  SHALL DELIVER TO THE OWNER  TRUSTEE,  AND THE INSURER AN
OPINION  OF  COUNSEL TO THE EFFECT  THAT (A) SUCH  TRANSFER  WILL NOT  ADVERSELY
AFFECT THE  TREATMENT  OF THE NOTES AFTER SUCH  TRANSFER AS DEBT FOR FEDERAL AND
APPLICABLE  STATE INCOME TAX PURPOSES,  (B) SUCH TRANSFER WILL NOT RESULT IN THE
TRUST BEING SUBJECT TO TAX AT THE ENTITY LEVEL FOR FEDERAL OR  APPLICABLE  STATE
TAX PURPOSES, (C) SUCH TRANSFER WILL NOT HAVE ANY MATERIAL ADVERSE IMPACT ON THE
FEDERAL OR  APPLICABLE  STATE INCOME  TAXATION OF A  NOTEHOLDER  OR ANY RESIDUAL
CERTIFICATEHOLDER  AND (D) SUCH  TRANSFER  WILL NOT  RESULT  IN THE  ARRANGEMENT
CREATED BY THE TRUST AGREEMENT OR ANY "PORTION" OF THE TRUST, BEING TREATED AS A
TAXABLE MORTGAGE POOL AS DEFINED IN SECTION 7701(I) OF THE CODE; (V) ALL FILINGS
AND OTHER  ACTIONS

<PAGE>

NECESSARY  TO  CONTINUE  THE  PERFECTION  OF THE  INTEREST  OF THE  TRUST IN THE
MORTGAGE LOANS AND THE OTHER PROPERTY  CONVEYED UNDER THE TRUST  AGREEMENT SHALL
HAVE  BEEN  TAKEN OR MADE AND (VI) THE  INSURER  SHALL  HAVE  CONSENTED  TO SUCH
TRANSFER.

THIS RESIDUAL  CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE,  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.

<PAGE>

          GREENPOINT HOME EQUITY LOAN TRUST 200_-_ RESIDUAL CERTIFICATE

Percentage Interest:  100%                       Cut-Off Date:  __________, 200_
First Payment Date:  __________, 200_              Issue Date:  __________, 200_

No. 1

                       GreenPoint Mortgage Securities LLC
                           Residual Certificateholder

                  OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION

           This  is  one  of  the  Residual  Certificates  referred  to  in  the
within-mentioned Trust Agreement.

                   [OWNER  TRUSTEE],  not in its individual  capacity but solely
                   as Owner Trustee

                   By:
                      ----------------------------------------------------------
                      Authenticating Agent

<PAGE>

                  The Trust was created  pursuant to a Trust  Agreement dated as
of  ________,  200_ (the  "TRUST  AGREEMENT"),  between  the  Sponsor and [Owner
Trustee],  as owner trustee (the "OWNER  TRUSTEE"),  a summary of certain of the
pertinent  provisions  of which is set forth below.  To the extent not otherwise
defined herein,  the capitalized terms used herein have the meanings assigned to
them in the Trust Agreement.

                  This  Residual  Certificate  is  one of  the  duly  authorized
Residual  Certificates  designated as GreenPoint  Home Equity Loan "Asset Backed
Certificates"  (herein called the "RESIDUAL  CERTIFICATES").  Also issued by the
Trust under the Indenture is one class of Notes designated as Class A Notes (the
"NOTES").  These Residual  Certificates  are issued under and are subject to the
terms,  provisions  and  conditions  of the  Trust  Agreement,  to  which  Trust
Agreement the holder of this Residual  Certificate  by virtue of the  acceptance
hereof  assents  and by which such  holder is bound.  The  property of the Trust
includes a pool of certain  adjustable  rate home equity  revolving  credit line
loans (the "HELOC MORTGAGE  LOANS")  (including any Additional  Balances related
thereto)  and certain  second lien  closed-end  mortgage  loans (the "Closed End
Mortgage Loans").

                  Under the Trust  Agreement,  there will be  distributed on the
__th day of each  month  or, if such __th day is not a  Business  Day,  the next
Business Day (the "PAYMENT DATE"), commencing on __________, 200_, to the Person
in whose name this Residual  Certificate  is registered at the close of business
on the  Business  Day  preceding  such  Payment  Date (the  "RECORD  DATE") such
Residual Certificateholder's Percentage Interest in the amount to be distributed
to Residual Certificateholders on such Payment Date.

                  The  holder  of this  Residual  Certificate  acknowledges  and
agrees  that its rights to  receive  distributions  in respect of this  Residual
Certificate  are  subordinated  to the rights of the Noteholders as described in
the Sale and Servicing  Agreement,  the Indenture  and the Trust  Agreement,  as
applicable.

                  The holder of this Residual Certificate, by acceptance of this
Residual  Certificate,  specifically  acknowledges  that it has no  right  to or
interest in any monies at any time held in the Trust Estate prior to the release
of such monies  pursuant to Sections  8.7(d)(xiii)  and 8.6(c) of the Indenture,
such  monies  being  held in trust for the  benefit of the  Noteholders  and the
Insurer.  Notwithstanding the foregoing, in the event that it is ever determined
that the monies held in the Trust Estate constitute a pledge of collateral, then
the  provisions  of the Sale and  Servicing  Agreement  shall be  considered  to
constitute  a security  agreement  and the holder of this  Residual  Certificate
hereby  grants  to the  Indenture  Trustee  and the  Insurer  a  first  priority
perfected  security  interest  in  such  amounts.  In  addition,  each  Residual
Certificateholder,  by acceptance of its Residual  Certificate,  hereby appoints
the Sponsor as its agent to pledge a first priority  perfected security interest
in the  Reserve  Fund and agrees to execute  and  deliver  such  instruments  of
conveyance,  assignment,  grant,  confirmation,  etc.,  as well as any financing
statements,  in each case as the Insurer shall consider reasonably  necessary in
order  to  perfect  the  Indenture  Trustee's  security  interest  in the  Trust
Property.

                  It is the  intent  of  the  Sponsor,  the  Servicer,  and  the
Residual  Certificateholders  that,  for purposes of Federal  income taxes,  the
Trust will be treated as a branch.  In the event that the Residual  Certificates
are held by more than one Holder, it is the intent of the Sponsor, the

<PAGE>

Servicer,  and the  Residual  Certificateholders  that,  for purposes of Federal
income  taxes,  the Trust  will be  treated as a  partnership  and the  Residual
Certificateholders will be treated as partners in that partnership.  The Sponsor
and  any  other  Residual  Certificateholders,   by  acceptance  of  a  Residual
Certificate,  agree  to  treat,  and to take no  action  inconsistent  with  the
treatment  of, the Residual  Certificates  for such tax purposes as  partnership
interests in the Trust. Each Residual Certificateholder,  by its acceptance of a
Residual Certificate,  covenants and agrees that such Residual Certificateholder
will not at any time institute against the Trust or the Sponsor,  or join in any
institution against the Trust or the Sponsor 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 Residual  Certificates,  the Certificates,  the
Trust Agreement or any of the Basic Documents.

                  Distributions  on this  Residual  Certificate  will be made as
provided in the Sale and Servicing  Agreement and the Indenture by the Indenture
Trustee by wire  transfer or check mailed to the Residual  Certificateholder  of
record in the Certificate Register without the presentation or surrender of this
Residual  Certificate or the making of any notation hereon.  Except as otherwise
provided  in the  Trust  Agreement  and  notwithstanding  the  above,  the final
distribution on this Residual  Certificate  will be made after due notice by the
Owner Trustee of the pendency of such  distribution  and only upon  presentation
and surrender of this Residual  Certificate  at the office or agency  maintained
for the purpose by the Owner Trustee in the Corporate Trust Office.

                  Unless the  certificate  of  authentication  hereon shall have
been  executed  by an  authorized  officer  of  the  Owner  Trustee,  by  manual
signature,  this Residual Certificate shall not entitle the holder hereof to any
benefit  under the Trust  Agreement  or the Sale and  Servicing  Agreement or be
valid for any purpose.

                  The Residual  Certificates  do not represent an obligation of,
or an interest in, the Company,  the Sponsor,  the  Servicer,  the Insurer,  the
Owner  Trustee  or any  Affiliates  of any of them  and no  recourse  may be had
against such parties or their  assets,  except as may be expressly  set forth or
contemplated  herein  or in the  Trust  Agreement,  the  Indenture  or the Basic
Documents.  In addition,  this  Residual  Certificate  is not  guaranteed by any
governmental  agency or  instrumentality  and is  limited in right of payment to
certain collections with respect to the Mortgage Loans, as more specifically set
forth herein, in the Sale and Servicing  Agreement and in the Indenture.  A copy
of each of the Sale and  Servicing  Agreement  and the  Trust  Agreement  may be
examined  during normal  business hours at the principal  office of the Sponsor,
and at such other places,  if any,  designated  by the Sponsor,  by any Residual
Certificateholder upon written request.

                  The Trust Agreement  permits,  with certain exceptions therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the  Sponsor and the rights of the  Residual  Certificateholders
under the Trust  Agreement at any time by the Sponsor and the Owner Trustee with
the prior written  consent of the Insurer and with the consent of the holders of
the Notes and the Residual  Certificates  evidencing not less than a majority of
the outstanding Notes and the Residual Certificates. Any such amendment shall be
conclusive and binding upon the holder of this Residual  Certificate  and on all
future  holders of this  Residual

<PAGE>

Certificate and of any Residual  Certificate  issued upon the transfer hereof or
in exchange  hereof or in lieu hereof whether or not notation of such consent is
made upon this  Residual  Certificate.  The Trust  Agreement  also  permits  the
amendment thereof, in certain limited circumstances,  without the consent of the
holders of any of the  Residual  Certificates  (other than the  Sponsor,  or the
Insurer).

                  As  provided  in the Trust  Agreement  and  subject to certain
limitations  therein set forth,  the transfer of this  Residual  Certificate  is
registrable  in  the  Certificate  Register  upon  surrender  of  this  Residual
Certificate  for  registration  of  transfer  at the  offices or agencies of the
Certificate  Registrar  maintained by the Owner  Trustee in the Corporate  Trust
Office,  accompanied by a written instrument of transfer in form satisfactory to
the Owner  Trustee and the  Certificate  Registrar  duly  executed by the holder
hereof or such holder's  attorney duly authorized in writing,  and thereupon one
or more new Residual  Certificates  in authorized  denominations  evidencing the
same  aggregate  interest  in  the  Trust  will  be  issued  to  the  designated
transferee.   The  initial  Certificate  Registrar  appointed  under  the  Trust
Agreement is [Owner Trustee].

                  Except for Residual  Certificates  issued to the Sponsor,  the
Residual  Certificates  are issuable  only as registered  Residual  Certificates
without coupons in  denominations  of $1,000 or integral  multiples of $1,000 in
excess  thereof.  As  provided  in the Trust  Agreement  and  subject to certain
limitations  therein set forth,  Residual  Certificates are exchangeable for new
Residual Certificates in authorized  denominations evidencing the same aggregate
denomination,  as  requested  by the holder  surrendering  the same.  No service
charge will be made for any such  registration of transfer or exchange,  but the
Owner  Trustee  or  the  Certificate  Registrar  may  require  payment  of a sum
sufficient  to  cover  any tax or  governmental  charge  payable  in  connection
therewith.

                  The Owner Trustee, the Certificate Registrar,  the Insurer and
any agent of the Owner Trustee,  the Certificate  Registrar,  or the Insurer may
treat the person in whose name this  Residual  Certificate  is registered as the
owner hereof for all purposes,  and none of the Owner Trustee,  the  Certificate
Registrar, the Insurer nor any such agent shall be affected by any notice to the
contrary.

                  The  obligations  and  responsibilities  created  by the Trust
Agreement and the Trust  created  thereby  shall  terminate  upon the payment to
Residual  Certificateholders of all amounts required to be paid to them pursuant
to the Trust Agreement,  the Indenture and the Sale and Servicing  Agreement and
the  disposition  of all property held as part of the Trust.  The Sponsor may at
its  option  redeem  the Notes at a price and upon the  satisfaction  of certain
conditions specified in Section 7.01(b) of the Sale and Servicing Agreement, and
if all of the Notes are redeemed,  such  redemption may result in termination of
the Trust which may effect a transfer  of the  Residual  Certificates;  however,
such right of purchase is exercisable,  subject to certain restrictions, only on
any Payment  Date on or after the Payment  Date  immediately  prior to which the
Note Principal Balance is less than or equal to 10% of the related Original Note
Principal Balance,  all amounts due and owing to the Insurer for unpaid premiums
and unreimbursed  draws on the Policy and all other amounts due and owing to the
Insurer  pursuant to the Insurance  Agreement  together with interest thereon as
provided under the Insurance Agreement have been paid.

<PAGE>

                  The recitals contained herein shall be taken as the statements
of the  Sponsor  or the  Servicer,  as the case may be,  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  Residual
Certificate or of any Mortgage Loan or related document.

                  Unless the  certificate  of  authentication  hereon shall have
been  executed  by an  authorized  officer  of the Owner  Trustee,  by manual or
facsimile  signature,  this  Residual  Certificate  shall not entitle the holder
hereof  to any  benefit  under  the Trust  Agreement  or the Sale and  Servicing
Agreement or be valid for any purpose.

<PAGE>

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

                            GREENPOINT HOME EQUITY LOAN TRUST 200_-_

                            By: [OWNER TRUSTEE], not in its individual capacity
                                but solely as Owner Trustee

                            By:
                               -------------------------------------------------
                               Name:
                               Title:

Dated:  __________, 200_

<PAGE>

                                   ASSIGNMENT

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

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE

--------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)

--------------------------------------------------------------------------------
the within Residual Certificate,  and all rights thereunder,  hereby irrevocably
constituting and appointing

----------------- Attorney to transfer  said Residual  Certificate  on the books
of the Certificate Registrar,  with full power of substitution in the premises.

Dated:

                                               --------------------------------*
                                               Signature Guaranteed:

                                               --------------------------------*

-----------------
*     NOTICE:  The signature to this assignment must correspond with the name
      of the  registered  owner  as it  appears  on the  face  of the  within
      Residual   Certificate  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
      Certificate   Registrar,   which  requirements  include  membership  or
      participation in STAMP or such other "signature  guarantee  program" as
      may be  determined by the  Certificate  Registrar in addition to, or in
      substitution for, STAMP, all in accordance with the Securities Exchange
      Act of 1934, as amended.

<PAGE>

                                                                       EXHIBIT B

                             CERTIFICATE OF TRUST OF
                    GREENPOINT HOME EQUITY LOAN TRUST 200_-_

                  This Certificate of Trust of GreenPoint Home Equity Loan Trust
200_-_ (the "TRUST"), dated as of ___________,  200_, is being duly executed and
filed by [Owner Trustee], a Delaware banking corporation,  as trustee, to form a
statutory  trust under the Delaware  Statutory Trust Act (12 DEL. CODE, ss. 3801
ET SEQ.).

                  1. NAME.  The name of the  statutory  trust  formed  hereby is
GreenPoint Home Equity Loan Trust 200_-_.

                  2. DELAWARE TRUST.  The name and business address of the Owner
Trustee  of the  Trust in the  State of  Delaware  is  [Owner  Trustee],  [Owner
Trustee's Address].

                  3. This Certificate of Trust will be effective ________, 200_.

                  IN WITNESS WHEREOF, the undersigned, being the sole trustee of
the Trust,  has executed  this  Certificate  of Trust as of the date first above
written.

                              [OWNER TRUSTEE],
                              not in its individual capacity but solely as Owner
                              Trustee of the Trust.

                              By:
                                 -----------------------------------------------
                                 Name:
                                 Title:Exhibit 10.1

================================================================================

                        MORTGAGE LOAN PURCHASE AGREEMENT

                                     Between

                       GREENPOINT MORTGAGE FUNDING, INC.,

                                    as Seller

                                       and

                       GREENPOINT MORTGAGE SECURITIES LLC,

                                  as Purchaser

                           Dated as of ________, 200_

================================================================================

<PAGE>

                                Table of Contents

                                                                            Page
                                                                            ----

ARTICLE I Definitions .........................................................1

ARTICLE II Procedures for Purchase of Mortgage Loans; Conditions
             Precedent; Settlements............................................1

   Section 2.01.      PURCHASE AND SALE........................................1
   Section 2.02.      DELIVERY OF DOCUMENTS; PURCHASE OF MORTGAGE LOANS........1
   Section 2.03.      [RESERVED]...............................................2
   Section 2.04.      [RESERVED]...............................................2
   Section 2.05.      SURVIVAL OF REPRESENTATIONS..............................2
   Section 2.06.      PROCEEDS OF MORTGAGE LOANS...............................3
   Section 2.07.      DEFECTIVE MORTGAGE LOANS.................................3

ARTICLE III Intent of Parties; Security Interest...............................3

   Section 3.01.      INTENT OF PARTIES; SECURITY INTEREST.....................3

ARTICLE IV Representations and Warranties......................................3

   Section 4.01.      REPRESENTATIONS AND WARRANTIES OF SELLER.................3
   Section 4.02.      REPRESENTATIONS AND WARRANTIES REGARDING MORTGAGE
                        LOANS..................................................5
   Section 4.03.      REPRESENTATIONS AND WARRANTIES OF PURCHASER.............16
   Section 4.04.      REMEDIES FOR BREACH OF REPRESENTATIONS AND
                        WARRANTIES; REPURCHASE OBLIGATION.....................17

ARTICLE V Covenants and Warranties of Seller..................................18

   Section 5.01.      AFFIRMATIVE COVENANTS...................................18
   Section 5.02.      NEGATIVE COVENANTS......................................20

ARTICLE VI Sale of Mortgage Loans from the Purchaser to the Trust.............21

   Section 6.01.      SALE AND SERVICING AGREEMENT............................21

ARTICLE VII Seller's Servicing Obligations....................................22

   Section 7.01.      SELLER'S SERVICING OBLIGATIONS..........................22

ARTICLE VIII Fees and Expenses................................................22

ARTICLE IX Termination; Additional Remedies...................................23

ARTICLE X Payment of Purchase Price...........................................23

   Section 10.01.     PURCHASE PRICE PAYMENTS.................................23
   Section 10.02.     THE PURCHASER NOTE......................................23

ARTICLE XI Confidentiality....................................................24

ARTICLE XII Term .............................................................25

ARTICLE XIII Exclusive Benefit of Parties; Assignment.........................25

ARTICLE XIV Amendment; Waivers................................................25

                                       i
<PAGE>

ARTICLE XV Execution in Counterparts..........................................25

ARTICLE XVI Effect of Invalidity of Provisions................................25

ARTICLE XVII Governing Law....................................................26

ARTICLE XVIII Notices ........................................................26

ARTICLE XIX Entire Agreement..................................................26

ARTICLE XX Indemnities........................................................26

ARTICLE XXI RESPA Obligations.................................................27

ARTICLE XXII Survival ........................................................28

ARTICLE XXIII Right of Set-off................................................28

ARTICLE XXIV Consent to Service...............................................28

ARTICLE XXV Submission to Jurisdiction; Waiver of Trial by Jury...............28

ARTICLE XXVI Construction.....................................................29

ARTICLE XXVII Further Agreements..............................................29

EXHIBIT A    Form of Non-Negotiable GreenPoint Mortgage Securities LLC
             Promissory Note

SCHEDULE I:  Mortgage Loan Schedule

                                       ii
<PAGE>

                  MORTGAGE LOAN  PURCHASE  AGREEMENT  ("AGREEMENT")  dated as of
________, 200_ between GreenPoint Mortgage Funding, Inc., a New York corporation
("SELLER"), and GreenPoint Mortgage Securities LLC, a Delaware limited liability
company ("PURCHASER").

                  WHEREAS,  Seller  desires to sell to  Purchaser  the  Mortgage
Loans (as hereinafter defined),  and Purchaser desires to purchase such Mortgage
Loans in accordance with the terms and conditions set forth in this Agreement.

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

                                    ARTICLE I

                                   Definitions

                  All capitalized terms used in this Agreement and not otherwise
defined  herein,  shall  have the  meanings  assigned  thereto in Annex A to the
Indenture  dated as of  ________,  200_,  between  the Issuer and the  Indenture
Trustee, as the same may be amended and supplemented from time to time.

                                   ARTICLE II

         Procedures  for  Purchase  of  Mortgage  Loans;  Conditions  Precedent;
Settlements

                  Section  2.01.  PURCHASE AND SALE.  (a) On the Closing Date in
consideration  for the  Purchase  Price  the  Seller  hereby  sells,  transfers,
assigns, sets over and otherwise conveys to the Purchaser, without recourse, all
of its right,  title and  interest  in, to and under,  whether  now  existing or
hereafter created,  (i) each Mortgage Loan, including its Principal Balance (and
any Additional  Balances) and all collections in respect thereof  received after
the Cut-Off Date (excluding Interest  Collections due on or prior to the Cut-off
Date);  (ii)  property  that  secured  an  Mortgage  Loan  that is  acquired  by
foreclosure or deed in lieu of foreclosure;  (iii) the Seller's rights under the
related  hazard  insurance  policies;  and (iv) all proceeds with respect to the
foregoing  (collectively,  the  "PURCHASED  ASSETS").  The Purchase Price on the
Closing Date shall be payable in a combination  of cash and credit for a capital
contribution made to the Purchaser by the Seller.

                  (b) To the extent that the fair market value of any Additional
Balance  sold  by  the  Seller  to  the  Purchaser  is  greater  than  the  cash
consideration paid by the Purchaser for such Additional Balance,  the difference
between such fair market value and the amount of such cash  consideration  shall
be deemed to be a combination of a credit for a capital contribution made to the
Purchaser by the Seller and an increase in the principal amount of the Purchaser
Note pursuant to Article X.

                  Section  2.02.  DELIVERY  OF  DOCUMENTS;  PURCHASE OF MORTGAGE
LOANS. Prior to the purchase of the Mortgage Loans:

<PAGE>

                  (a) Seller shall have  delivered to the Purchaser or any agent
appointed by the Purchaser the Mortgage File for each of the Mortgage Loans.

                  (b)  Purchaser  shall have  received a Mortgage  Loan Schedule
pertaining to the related Mortgage Loans.

                  (c) Purchaser shall have received copies of the resolutions of
the  Board of  Directors  of  Seller,  certified  by its  respective  Secretary,
approving this Agreement.

                  (d)  Purchaser   shall  have  received  the   Certificate   of
Incorporation  of Seller certified by the Secretary of State of the State of New
York.

                  (e)  Purchaser  shall  have  received  a  certificate  of  the
Secretary  or  Assistant  Secretary  of  Seller  certifying  (i) the  names  and
signatures of the officers  authorized on its behalf to execute this  Agreement,
and any other  documents  to be  delivered  by it  hereunder  and (ii) a copy of
Seller's By-laws.

                  (f)  Purchaser  shall have  received  an opinion of counsel to
Seller as to the due authorization, execution and delivery by the Seller of this
Agreement  and  as  to  the  validity  and   enforceability   of  the  transfers
contemplated  hereunder and  addressing  such other matters as the Purchaser may
reasonably request.

                  (g)  Seller  shall  have  instructed  the  applicable  debtor,
trustee,   paying  agent,   authenticating  agent,  transfer  agent,  registrar,
predecessor  in  interest,  owner  (if the  Mortgage  Loans are in the form of a
security  agreement),  or servicer,  if any, in respect of the related  Mortgage
Loans to reflect on their books and records the transfer of such Mortgage  Loans
to Purchaser,  as owner or secured party (if the Mortgage  Loans are in the form
of a security agreement).

                  (h) Purchaser  shall have  received the most recent  available
standard  servicing or lien reports in summary form, if any, with respect to all
of the mortgages in Seller's portfolio similar to the Mortgage Loans.

                  (i) The  Purchaser  shall be permitted to perform its standard
loan review of each Mortgage Loan to be purchased.

                  (j) UCC-1  financing  statements  duly  executed  by Seller as
debtor shall have been filed in New York naming the  Purchaser as secured  party
and the Indenture Trustee on behalf of the Trust as assignee.

                  Section 2.03. [RESERVED]

                  Section 2.04. [RESERVED].

                  Section  2.05.  SURVIVAL  OF  REPRESENTATIONS.  The  terms and
conditions  of the purchase of each  Mortgage Loan shall be as set forth in this
Agreement.  Seller will be deemed on the Closing  Date to have made to Purchaser
the  representations  and  warranties  set forth in  Article  IV hereof and such
representations  and warranties of Seller shall be true and correct on

                                       2
<PAGE>

and  as  of  the  Closing   Date.  In  addition,   Seller  shall   reaffirm  the
representations  and  warranties   contained  in  Article  IV  on  the  date  of
disposition  of the  Mortgage  Loans by the  Purchaser  pursuant to the Sale and
Servicing Agreement.

                  Section  2.06.  PROCEEDS OF MORTGAGE  LOANS.  The transfer and
sale  hereby of all of the  Seller's  right,  title and  interest in and to each
Mortgage  Loan  shall  include  all  proceeds,   products  and  profits  derived
therefrom, including, without limitation, all scheduled payments of principal of
and  interest  on such  Mortgage  Loans and other  amounts  due or payable or to
become due or  payable  in respect  thereof  and  proceeds  thereof,  including,
without limitation,  all moneys, goods and other tangible or intangible property
received upon the liquidation or sale thereof.

                  Section 2.07.  DEFECTIVE  MORTGAGE LOANS. If any Mortgage Loan
is re-transferred to the Purchaser  pursuant to Section 2.03 or 2.05 of the Sale
and Servicing Agreement, the Seller shall, at the Purchaser's option, either (a)
repurchase  such  Mortgage Loan at the Loan  Purchase  Price,  or (b) provide an
Eligible Substitute Mortgage Loan if the Seller has any such loans available for
sale at the time,  subject to the terms and conditions of the Sale and Servicing
Agreement.

                                  ARTICLE III

                      Intent of Parties; Security Interest

                  Section 3.01. INTENT OF PARTIES; SECURITY INTEREST.  Purchaser
and Seller  confirm that the  transactions  contemplated  herein are intended as
purchases  and sales  rather than as loan  transactions.  In the event,  for any
reason, and solely in such event, any transaction  hereunder is construed by any
court  or  regulatory  authority  as a loan or  other  purchase  and sale of the
related  Purchased  Assets,  Seller  shall be deemed to have  hereby  pledged to
Purchaser as security for the  performance  by Seller of all of its  obligations
from time to time arising  hereunder  and under any and all  Purchases  effected
pursuant  thereto,  and shall be deemed to have  granted to Purchaser a security
interest  in, the  related  Purchased  Assets and all  distributions  in respect
thereof,  and the proceeds of any and all of the foregoing  whether now owned or
hereafter  acquired,  (collectively,  the  "COLLATERAL").  In furtherance of the
foregoing,  (i) this  Agreement  shall  constitute  a security  agreement,  (ii)
Purchaser  shall have all of the rights of a secured  party with  respect to the
Collateral  pursuant  to  applicable  law and (iii)  Seller  shall  execute  all
documents, including, but not limited to, financing statements under the Uniform
Commercial Code as in effect in any applicable  jurisdictions,  as the Purchaser
may reasonably  require to effectively  perfect and evidence  Purchaser's  first
priority  security  interest in the  Collateral.  Seller also  covenants  not to
pledge, assign or grant any security interest to any other party in any Mortgage
Loan sold to Purchaser.

                                   ARTICLE IV

                         Representations and Warranties

                  Section 4.01.  REPRESENTATIONS  AND WARRANTIES OF SELLER.  The
Seller  represents,  warrants and  covenants to the  Purchaser as of the Closing
Date that:

                                       3
<PAGE>

          (i)  the  Seller  is  duly  organized,  validly  existing  and in good
     standing under the laws of the State of New York and is duly authorized and
     qualified to transact any and all business  contemplated  by this Agreement
     to be conducted by the Seller in any state in which a Mortgaged Property is
     located  to the  extent  necessary  to ensure  the  enforceability  of each
     Mortgage Loan and the servicing of the Mortgage Loan in accordance with the
     terms of this Agreement;

          (ii) the Seller has the full corporate  power and authority to service
     each Mortgage Loan, and to execute,  deliver and perform, and to enter into
     and  consummate  the  transactions  contemplated  by this Agreement and the
     execution,  delivery and  performance  of this  Agreement by the Seller has
     been duly authorized by all necessary  corporate  action on the part of the
     Seller; and this Agreement,  assuming the due authorization,  execution and
     delivery thereof by the Purchaser,  constitutes a legal,  valid and binding
     obligation of the Seller, enforceable against the Seller in accordance with
     its  respective  terms,  except to the extent  that (a) the  enforceability
     thereof  may  be  limited  by  federal  or  state  bankruptcy,  insolvency,
     moratorium,  receivership  and other  similar laws  relating to  creditors'
     rights generally and (b) the remedy of specific  performance and injunctive
     and  other  forms of  equitable  relief  may be  subject  to the  equitable
     defenses and to the  discretion  of the court  before which any  proceeding
     therefor may be brought;

          (iii) the execution and delivery of this Agreement by the Seller,  the
     servicing of the Mortgage Loans by the Seller  hereunder,  the consummation
     by the Seller of the transactions herein contemplated,  and the fulfillment
     by the Seller of or compliance by the Seller with the terms hereof will not
     (A) result in a breach of any term or  provision  of the charter or by-laws
     of the  Seller or (B)  conflict  with,  result in a  breach,  violation  or
     acceleration  of,  or result  in a  default  under,  the terms of any other
     material agreement or instrument to which the Seller is a party or by which
     it may be bound,  or any statute,  order or  regulation  applicable  to the
     Seller of any court, regulatory body, administrative agency or governmental
     body having jurisdiction over the Seller, which breach, violation,  default
     or non-compliance would have a material adverse effect on (a) the business,
     operations,  financial condition,  properties or assets of the Seller taken
     as a whole or (b) the  ability  of the Seller to  perform  its  obligations
     under this  Agreement;  and the  Seller is not a party to,  bound by, or in
     material  breach  or  violation  of any  indenture  or other  agreement  or
     instrument,  or  subject  to or in  violation  of  any  statute,  order  or
     regulation  of  any  court,  regulatory  body,   administrative  agency  or
     governmental  body  having  jurisdiction  over  it,  which  materially  and
     adversely  affects  or,  to the  Seller's  knowledge,  would in the  future
     reasonably be expected to materially and adversely affect,  (x) the ability
     of the Seller to perform its  obligations  under this  Agreement or (y) the
     business,  operations,  financial  condition,  properties  or assets of the
     Seller taken as a whole;

          (iv) the Seller is, and currently  intends to remain, in good standing
     and  qualified to do business in each  jurisdiction  where failure to be so
     qualified  or  licensed  would  have a material  adverse  effect on (a) the
     business,  operations,  financial  condition,  properties  or assets of the
     Seller taken as a whole or (b) the  enforceability  of any Mortgage Loan or
     the servicing of the Mortgage  Loans in  accordance  with the terms of this
     Agreement;

                                       4
<PAGE>

          (v) there is no litigation or administrative proceeding pending or, to
     the  Seller's  best  knowledge,  threatened  against  the Seller that would
     materially and adversely affect the execution,  delivery or  enforceability
     of this  Agreement  or the  ability of the Seller to service  the  Mortgage
     Loans or for the Seller to perform any of its other  obligations  hereunder
     in accordance with the terms hereof;

          (vi) no  consent,  approval,  authorization  or order of any  court or
     governmental  agency or body is required  for the  execution,  delivery and
     performance  by the  Seller of, or  compliance  by the  Seller  with,  this
     Agreement or the consummation of the transactions  contemplated  hereby, or
     if any such  consent,  approval,  authorization  or order not relating to a
     future transaction is required, the Seller has obtained the same;

          (vii) the Seller has caused to be performed  any and all acts required
     to preserve  the rights and  remedies  of the  Purchaser  in any  insurance
     policies of the Seller or a mortgagee applicable to the Mortgage Loans sold
     by the Seller; and

          (viii) the Seller is solvent and will not be rendered insolvent by the
     transactions  described herein and, after giving effect to the transactions
     described  herein,  the Seller will not be left with an unreasonably  small
     amount  of  capital  with  which to engage  in the  ordinary  course of its
     business,  and the  Seller  does not  intend to incur,  nor does the Seller
     believe  that it has  incurred,  debts  beyond  its  ability to pay as they
     mature.  The Seller does not  contemplate  the  commencement of insolvency,
     liquidation or consolidation  proceedings or the appointment of a receiver,
     liquidator,  conservator,  trustee  or similar  official  in respect of the
     Seller or any of its respective assets.

                  Section  4.02.   REPRESENTATIONS   AND  WARRANTIES   REGARDING
MORTGAGE  LOANS.  (a) Seller  represents  and  warrants to  Purchaser  as of the
Closing Date with respect to each Mortgage Loan as follows:

          (i) As of the Closing Date with  respect to the Mortgage  Loans and as
     of the  related  Transfer  Date with  respect  to any  Eligible  Substitute
     Mortgage  Loans and with respect to any HELOC Mortgage Loan, as of the date
     any  Additional  Balance  is  created,  the  information  set  forth in the
     Mortgage Loan  Schedule for such Mortgage  Loans is true and correct in all
     material respects;

          (ii) Each Mortgage Loan is being serviced by the Servicer and is being
     serviced in compliance with applicable law;

          (iii) The  applicable  Cut-Off  Date  Principal  Balance  has not been
     assigned  or  pledged,  and the Seller is the sole owner and holder of such
     Cut-Off Date Principal Balance free and clear of any and all liens, claims,
     encumbrances,   participation  interests,  equities,  pledges,  charges  or
     security interests of any nature,  and has full right and authority,  under
     all  governmental  and  regulatory  bodies  having  jurisdiction  over  the
     ownership of the applicable Mortgage Loans, to sell, assign or transfer the
     same pursuant to this  Agreement and upon its  acquisition  of the Mortgage
     Loans,  as of the  Closing  Date,  the  Sponsor  will be the sole owner and
     holder of such  Mortgage  Loans free and clear of any and all liens claims,
     encumbrances,  participating  interests,  equities,  pledges,  charges,  or
     security interests of any nature;

                                       5
<PAGE>

          (iv) Except with respect to liens  released  immediately  prior to the
     transfer herein contemplated,  each Credit Line Agreement and each Mortgage
     Note and related  Mortgage has not been assigned or pledged and immediately
     prior to the transfer and assignment herein  contemplated,  the Seller held
     good,  marketable  and  indefeasible  title to,  and was the sole owner and
     holder of, each  Mortgage  Loan  subject to no liens,  charges,  mortgages,
     claims, participation interests, equities, pledges or security interests of
     any nature, encumbrances or rights of others (collectively,  a "LIEN"); the
     Seller has full right and authority under all  governmental  and regulatory
     bodies  having  jurisdiction  over the  Seller,  subject to no  interest or
     participation of, or agreement with, any party, to sell and assign the same
     pursuant  to  this  Agreement;  and  immediately  upon  the  transfers  and
     assignments herein  contemplated,  the Seller shall have transferred all of
     its  right,  title  and  interest  in and to  each  Mortgage  Loan  and the
     Purchaser will hold good, marketable and indefeasible title, to, and be the
     sole owner of, each Mortgage Loan subject to no Liens;

          (v) As of the Closing Date with respect to the Mortgage  Loans and the
     applicable  Transfer Date with respect to any Eligible  Substitute Mortgage
     Loans, the related Mortgage is a valid, enforceable and subsisting first or
     second lien,  as set forth on the Mortgage  Loan  Schedule  with respect to
     each related Mortgaged Property,  and as of the applicable Cut-Off Date the
     related Mortgaged  Property is free and clear of all encumbrances and liens
     having  priority  over the first or second  lien,  as  applicable,  of such
     Mortgage except for liens for (i) real estate taxes and special assessments
     not yet delinquent;  (ii) any first mortgage loan secured by such Mortgaged
     Property and  specified on the Mortgage  Loan  Schedule;  (iii)  covenants,
     conditions and restrictions,  rights of way, easements and other matters of
     public record as of the date of recording  that are  acceptable to mortgage
     lending institutions generally or specifically reflected in the appraisals;
     and (iv) other matters to which like properties are commonly  subject which
     do not materially  interfere with the benefits of the security  intended to
     be provided by such Mortgage;

          (vi) As of and after the  Closing  Date with  respect to the  Mortgage
     Loans and as of and after the applicable  Transfer Date with respect to any
     Eligible  Substitute Mortgage Loans, there is no valid right to rescission,
     offset,  defense  (including the defense of usury) or  counterclaim  of any
     obligor under any Loan Agreement or Mortgage;

          (vii) As of the Closing Date with  respect to the  Mortgage  Loans and
     the  applicable  Transfer  Date with  respect  to any  Eligible  Substitute
     Mortgage  Loans,  there is no  delinquent  recording or other tax or fee or
     assessment lien against any related Mortgaged Property;

          (viii) As of the Closing Date with  respect to the Mortgage  Loans and
     the  applicable  Transfer  Date with  respect  to any  Eligible  Substitute
     Mortgage Loans,  there is no proceeding pending or threatened for the total
     or partial condemnation of any Mortgaged Property, nor is such a proceeding
     currently  occurring,  and such property is in good repair and is undamaged
     by waste, fire, earthquake or earth movement, windstorm, flood, other types
     of water damage,  tornado or other casualty,  so as to affect adversely the
     value of the  Mortgaged  Property as security for the Mortgage  Loan or the
     use for which the premises were intended;

                                       6
<PAGE>

          (ix) As of the Closing Date with respect to the Mortgage Loans and the
     applicable  Transfer Date with respect to any Eligible  Substitute Mortgage
     Loans,  there are no  mechanics' or similar liens or claims which have been
     filed for work, labor or material  affecting the related Mortgaged Property
     which  are,  or may be,  liens  prior or  equal to the lien of the  related
     Mortgage and no rights are outstanding which could give rise to such liens,
     except liens which are fully insured against by the title insurance  policy
     or other title protection referred to in clause (xiv);

          (x) No  Minimum  Monthly  Payment  is more  than  59  days  delinquent
     (measured on a contractual basis);

          (xi) As of the Closing Date with respect to the Mortgage Loans and the
     applicable  Transfer Date with respect to any Eligible  Substitute Mortgage
     Loans,  for each Mortgage Loan, the related  Mortgage File contains each of
     the documents and instruments specified to be included therein;

          (xii)  The  related  Loan  Agreement  and  the  related   Mortgage  at
     origination  complied in all material respects with applicable state, local
     and  federal  laws and  regulations,  including,  without  limitation,  all
     applicable  predatory and abusive  lending laws,  usury,  truth-in-lending,
     real estate settlement procedures, consumer credit protection, equal credit
     opportunity,  recording or disclosure laws applicable to the Mortgage Loans
     and consummation of the transactions contemplated hereby, including without
     limitation the receipt of interest,  will not involve the violation of such
     laws;

          (xiii) On the Closing Date with  respect to the Mortgage  Loans and to
     the extent not already included in such filing, on the applicable  Transfer
     Date with respect to any Eligible Substitute Mortgage Loans, the Seller has
     filed UCC-1 financing statements with respect to such Mortgage Loans;

          (xiv) A lender's policy of title  insurance,  expressClose.com  lender
     master  protection  program  (standard  mortgage  guaranty) or a commitment
     (binder) to issue the same or an attorney's certificate or opinion of title
     was effective on the date of the origination of each mortgage loan and each
     such policy or certificate or opinion of title is valid and remains in full
     force and effect;

          (xv) As of the Closing Date with respect to the Mortgage Loans and the
     applicable  Transfer Date with respect to any Eligible  Substitute Mortgage
     Loans, none of the Mortgaged  Properties is a mobile home or a manufactured
     housing unit;

          (xvi) As of the  Cut-Off  Date  for the  Mortgage  Loans no more  than
     approximately _____% of the Mortgage Loans (by Pool Balance) are secured by
     Mortgaged Properties located in one United States postal zip code;

          (xvii) The Combined Loan-to-Value Ratio for each Mortgage Loan was not
     in excess of 100%;

          (xviii) No selection  procedure that  identified the Mortgage Loans as
     being less  desirable  or valuable  than other  comparable  mortgage  loans
     originated or acquired by the

                                       7
<PAGE>

     Seller  was  utilized  in  selecting  the  Mortgage  Loans  for sale to the
     Purchaser;  PROVIDED,  HOWEVER,  that the Mortgage Loans were selected from
     the pool of mortgage  loans  originated  in  connection  with the  Seller's
     mortgage loan origination program;

          (xix)  The  Seller  has not  transferred  the  Mortgage  Loans  to the
     Purchaser with any intent to hinder, delay or defraud any of its creditors;

          (xx) The Minimum  Monthly Payment with respect to any Mortgage Loan is
     not less  than the  interest  accrued  at the  applicable  Loan Rate on the
     average daily Principal  Balance during the interest period relating to the
     date on which such Minimum Monthly Payment is due;

          (xxi) As of the Closing Date with  respect to the  Mortgage  Loans and
     the  applicable  Transfer  Date with  respect  to any  Eligible  Substitute
     Mortgage  Loans,  each Loan Agreement and each Mortgage Loan is genuine and
     is a legal,  valid,  binding  and  enforceable  obligation  of the  related
     Mortgagor,  except as the  enforceability  thereof  may be  limited  by the
     bankruptcy,   insolvency  or  similar  laws  affecting   creditors'  rights
     generally;

          (xxii) As of the Closing Date with  respect to the Mortgage  Loans and
     the  applicable  Transfer  Date with  respect  to any  Eligible  Substitute
     Mortgage Loans,  there has been no default,  breach,  violation or event of
     acceleration  of any senior  mortgage loan related to a Mortgaged  Property
     that has not been cured by a party other than the Servicer;

          (xxiii) The terms of each  Mortgage  Note and each  Mortgage  have not
     been  impaired,  altered or  modified in any  respect,  except by a written
     instrument  which (if such instrument is secured by real property) has been
     recorded, if necessary,  to protect the interest of the Noteholders and the
     Insurer  and  which  has  been  delivered  to the  Indenture  Trustee.  The
     substance  of any such  alteration  or  modification  is  reflected  on the
     related  Mortgage  Loan  Schedule  and has  been  approved  by the  primary
     mortgage guaranty insurer, if any;

          (xxiv) The  definition  of "prime rate" in each Credit Line  Agreement
     relating  to a HELOC  Mortgage  Loan does not  differ  materially  from the
     definition  in the form of Credit Line  Agreement  in Exhibit D to the Sale
     and Servicing Agreement;

          (xxv) The weighted average  remaining term to maturity of the Mortgage
     Loans on a contractual basis as of the Cut-Off Date is approximately  _____
     months.  On each date that the Loan Rates  relating to HELOC Mortgage Loans
     have been adjusted,  interest rate  adjustments on the HELOC Mortgage Loans
     were  made in  compliance  with  the  related  Mortgages  and  Credit  Line
     Agreement  and  applicable  law and all required  notices of interest  rate
     adjustments were sent to each Mortgagor on a timely basis. Over the term of
     each HELOC  Mortgage  Loan,  the Loan Rate may not exceed the related  Loan
     Rate Cap, if any. The Loan Rate Cap for each of the HELOC Mortgage Loans is
     _____%. With respect to the HELOC Mortgage Loans, the margins range between
     ______% and _____% and the weighted average margin is approximately ______%
     as of the Cut-Off Date.  The Loan Rates on the Mortgage Loans range between
     ______% and  ______%,  and the  weighted  average Loan Rate on the Mortgage
     Loans is approximately ______%;

                                       8
<PAGE>

          (xxvi) As of the Closing Date with  respect to the Mortgage  Loans and
     the  applicable  Transfer  Date with  respect  to any  Eligible  Substitute
     Mortgage Loans, each Mortgaged Property consists of a single parcel of real
     property with a one-to-four unit single family  residence  erected thereon,
     or an  individual  condominium  unit,  planned  unit  development  unit  or
     townhouse;

          (xxvii) No more than  approximately  ______% (by Pool  Balance) of the
     Mortgage  Loans  are  secured  by  real  property  improved  by  individual
     condominium  units,  planned  development  units,  manufactured  housing or
     two-to-four  family residences erected thereon,  and approximately  ______%
     (by Pool Balance) of the Mortgage Loans are secured by real property with a
     one-family residence erected thereon;

          (xxviii) Each  Mortgage Note  evidencing a Closed End Mortgage Loan is
     comprised of one original  promissory  note and each such  promissory  note
     constitutes an  "instrument"  for purposes of Section  9-102(A)(47)  of the
     UCC. There is no obligation on the part of the Seller or any other party to
     make  payments in addition to those made by the  Mortgagor  with respect to
     the Closed End Mortgage Loans;

          (xxix) The Credit  Limits on the HELOC  Mortgage  Loans range  between
     $_______  and  $_______  with an average  of  approximately  $_______.  The
     average  Credit Limit  Utilization  Rate  (weighted by Credit Limit) of the
     HELOC Mortgage Loans is approximately _____%. The Principal Balances on the
     Mortgage  Loans range between  approximately  $_______ and $_______ with an
     average of approximately $_______;

          (xxx) Approximately _____% of the Mortgage Loans are second liens, and
     either (A) no consent for each  Mortgage Loan was required by the holder of
     the related  senior lien, if any, prior to the making of such Mortgage Loan
     or (B) such  consent  has been  obtained  and is  contained  in the related
     Mortgage File;

          (xxxi) This  Agreement  constitutes a valid transfer and assignment to
     the Purchaser of all right,  title and interest of the Seller in and to the
     Cut-Off Date  Principal  Balances with respect to the  applicable  Mortgage
     Loans,  all  monies  due or to  become  due with  respect  thereto  and all
     proceeds  of such  Cut-Off  Date  Principal  Balances  with  respect to the
     Mortgage  Loans and such  funds as are from time to time  deposited  in the
     Collection  Account  (excluding  any investment  earnings  thereon) and all
     other property  specified in the definition of "Trust" as being part of the
     corpus  of the  Trust  conveyed  to the  Trust,  and upon  payment  for the
     Additional Balances, will constitute a valid transfer and assignment to the
     Purchaser  of all  right,  title and  interest  of the Seller in and to the
     Additional Balances,  all monies due or to become due with respect thereto,
     and all  proceeds  of such  Additional  Balances  and  all  other  property
     specified in the definition of "Trust" relating to the Additional Balances;

          (xxxiii)  As of the Closing  Date no  Mortgage  Loan is the subject of
     foreclosure  proceedings  and, to the best of the Sponsor's  knowledge,  no
     obligor of any of the Mortgage Loans has filed for  bankruptcy  protection.
     As of the applicable Transfer Date, no Eligible Substitute Mortgage Loan is
     the subject of foreclosure proceedings and, to the best of the

                                       9
<PAGE>

     Sponsor's knowledge,  no obligor of any of the Eligible Substitute Mortgage
     Loans has filed for bankruptcy protection;

          (xxxiii) The proceeds of each Closed End Mortgage Loan have been fully
     disbursed,  and there is no obligation on the part of the mortgagee to make
     future advances  thereunder.  Any and all  requirements as to completion of
     any on-site or off-site  improvements and as to disbursements of any escrow
     funds  therefor  have been  complied  with.  All costs,  fees and  expenses
     incurred in making or closing or recording  such Closed End Mortgage  Loans
     were paid;

          (xxxiv) Each Mortgage  contains  customary and enforceable  provisions
     which render the rights and remedies of the holder thereof adequate for the
     realization  against the related Mortgaged  Property of the benefits of the
     security,  including (A) in the case of a Mortgage  designated as a deed of
     trust, by trustee's sale and (B) otherwise by judicial foreclosure. Subject
     to applicable state law, there is no homestead or other exemption available
     to the Mortgagor which would  materially  interfere with the rights to sell
     the Mortgaged  Property at a trustee's  sale or the right to foreclose upon
     the related Mortgage;

          (xxxv) As of the Closing Date with  respect to the Mortgage  Loans and
     the  applicable  Transfer  Date with  respect  to any  Eligible  Substitute
     Mortgage Loan, except for events  permissible  under Section  4.02(a)(x) of
     this  Agreement,  there  is no  default,  breach,  violation  or  event  of
     acceleration  existing under any Mortgage or the related  Mortgage Note and
     no event which,  with the passage of time or with notice and the expiration
     of any grace or cure period, would constitute a default,  breach, violation
     or event of  acceleration;  and the  Seller  has not  waived  any  default,
     breach, violation or event of acceleration;

          (xxxvi)  To the best  knowledge  of the  Seller,  all  parties  to the
     Mortgage  Note and the Mortgage had legal  capacity to execute the Mortgage
     Note and the Mortgage and each  Mortgage  Note and Mortgage  have been duly
     and properly  executed by such parties;  Each Mortgage and Mortgage Note is
     the legal,  valid and binding  obligation  of the related  Mortgagor and is
     enforceable by the Purchaser or any transferor of the Purchaser against the
     Mortgagor in accordance with its terms, except only as such enforcement may
     be limited by bankruptcy, insolvency,  reorganization,  moratorium or other
     similar laws affecting the enforcement of creditors'  rights  generally and
     by law; there is only one originally  executed Mortgage Note or Credit Line
     Agreement and promissory Note, as applicable, for each Mortgage Loan;

          (xxxvii) As of the Cut-Off  Date no more than  approximately  ____% of
     the Principal  Balance of the Mortgage Loans represent  Mortgage Loans with
     respect to which the related Mortgagor had a Credit Score of ___ or less at
     the time of origination or whose Credit Score was unavailable.

          (xxxviii) As of the Closing  Date with  respect to the Mortgage  Loans
     and the  applicable  Transfer Date with respect to any Eligible  Substitute
     Mortgage Loan, no Mortgagor has been released,  in whole or in part, except
     in connection  with an assumption  agreement which has been approved by the
     applicable title insurer (to the extent required by such title insurer) and
     which is part of the Mortgage File delivered to the Indenture Trustee;

                                       10
<PAGE>

          (xxix) At the time of  origination  of each Mortgage Loan, the related
     prior lien was not more than 30 days  delinquent.  Additionally,  as of the
     Closing Date, no senior mortgage loan on the related Mortgaged Property was
     more than 59 days delinquent;

          (xl) All required inspections,  licenses and certificates with respect
     to the use and occupancy of all occupied  portions of all property securing
     the Mortgages have been made, obtained or issued, as applicable;

          (xli) If the improvements securing a Mortgage Loan were in a federally
     designated  special flood hazard area as of the date of origination,  flood
     insurance to the extent  required in Section 3.04 of the Sale and Servicing
     Agreement covers the related  Mortgaged  Property (either by coverage under
     the federal flood insurance program or by coverage by private insurers);

          (xlii) With respect to each Mortgage Loan, the related prior lien does
     not provide for negative amortization;

          (xliii) With respect to each Mortgage  Loan,  the maturity date of the
     Mortgage  Loan is prior to the maturity  date of the related  prior lien if
     such prior lien provides for a balloon payment;

          (xliv) All amounts received after the Cut-Off Date with respect to the
     Mortgage  Loans to which the Seller is not entitled will be deposited  into
     the Collection Account within one Business Day after the Closing Date;

          (xlv) Each Mortgage Loan is secured by a property  having an appraised
     value as of origination of $_______ or less;

          (xlvi) Except for events  permissible under Section 4.02(a)(x) of this
     Agreement,  there  are no  defaults  in  complying  with  the  terms of the
     Mortgage,  and either (1) any taxes,  governmental  assessments,  insurance
     premiums,  water,  sewer  and  municipal  charges  or  ground  rents  which
     previously  became due and owing have been paid,  or (2) an escrow of funds
     has been  established  in an amount  sufficient  to pay for every such item
     which  remains  unpaid and which has been  assessed  but is not yet due and
     payable.  There are no defaults in  complying  with the terms of any senior
     mortgage  on the  related  Mortgaged  Property  that have not been cured by
     anyone  other than the  Servicer,  except for any payment  defaults of less
     than 30 days.  Except  for  payments  in the  nature  of  escrow  payments,
     including without limitation,  taxes and insurance payments, the Seller has
     not advanced funds, or induced, solicited or knowingly received any advance
     of funds by a party other than the Mortgagor,  directly or indirectly,  for
     the  payment  of any  amount  required  by the  Mortgage  Note,  except for
     interest   accruing  from  the  date  of  the  Mortgage  Note  or  date  of
     disbursement  of the Mortgage  proceeds,  whichever is greater,  to the day
     which  precedes  by one  month  the Due Date of the  first  installment  of
     principal and interest;

          (xlvii) With respect to each Mortgage Loan, the improvements upon each
     Mortgaged  Property  are covered by a valid and existing  hazard  insurance
     policy with a carrier  generally  acceptable  to the Servicer that provides
     for fire and extended coverage  representing coverage not less than (a) the
     Credit Limit of such HELOC  Mortgage Loan or

                                       11
<PAGE>

     (b) the Cut-Off Date Principal  Balance of such Closed End Mortgage Loan or
     (c) the maximum insurable value of the Mortgaged Property;

          (xlviii) No  misrepresentation  of a material fact or fraud in respect
     of the  origination,  modification  or amendment  of any Mortgage  Loan has
     taken place on the part of any person, including,  without limitation,  the
     related  Mortgagor,  any  appraiser,  any builder or developer or any party
     involved in the origination of such Mortgage Loan;

          (xlix) With respect to the Mortgage  Loans,  the terms of the Mortgage
     Note and the Mortgage  have not been  impaired,  altered or modified in any
     material respect, except by a written instrument which has been recorded or
     is in the process of being recorded, if necessary, to protect the interests
     of the Insurer and the Purchaser and which has been or will be delivered to
     the Indenture Trustee on behalf of the Purchaser;  and no Mortgage has been
     satisfied,  cancelled or rescinded,  in whole or in part, and the Mortgaged
     Property  securing the Mortgage has not been  released from the lien of the
     Mortgage,  in whole or in part, nor has any  instrument  been executed that
     would effect any such release, cancellation or rescission;

          (li) As of the Cut-Off  Date,  no  Mortgage  Loan is more than 59 days
     delinquent in payment of principal and interest;

          (li) Except for Mortgage  Loans that are  delinquent for a time period
     less  than  that set  forth in (l)  above,  there  is no  default,  breach,
     violation  or event of  acceleration  existing  under any  Mortgage  or the
     related Mortgage Note and no event which,  with the passage of time or with
     notice and the expiration of any grace or cure period,  would  constitute a
     default,  breach,  violation  or event of  acceleration;  and  neither  the
     Seller,  nor any other  entity  involved  in  originating  or  servicing  a
     Mortgage  Loan,  has  waived any  default,  breach,  violation  or event of
     acceleration;

          (lii) None of the Mortgage Loans is a cooperative share mortgage;

          (liii) Each  appraisal  of a Mortgage  Loan that was used to determine
     the  appraised  value  of the  related  Mortgaged  Property  was  conducted
     generally  in  accordance  with  the  Seller's  mortgage  loan  origination
     program(s) and customary  industry  standards and included an assessment of
     the fair market value of the related mortgaged  property at the time of the
     appraisal.  The  Mortgage  File  contains an  appraisal  of the  applicable
     Mortgaged Property;

          (liv) All individual  insurance  policies contain a standard mortgagee
     clause naming the Servicer,  its successors and assigns, as mortgagee.  All
     premiums  thereon have been paid.  Each  Mortgage  obligates  the Mortgagor
     thereunder  to maintain  all such  insurance  at the  Mortgagor's  cost and
     expense,  and upon the Mortgagor's  failure to do so, authorizes the holder
     of the Mortgage to obtain and maintain  such  insurance at the  Mortgagor's
     cost and expense and to seek reimbursement therefor from the Mortgagor;

          (lv) Any  advances  made after the date of  origination  of a Mortgage
     Loan  but  prior  to the  Cut-Off  Date  have  been  consolidated  with the
     outstanding  principal  amount  secured by the  related  Mortgage,  and the
     secured principal amount, as consolidated, bears a

                                       12
<PAGE>

     single  interest rate and single  repayment  term reflected on the Mortgage
     Loan  Schedule.  The  consolidated  principal  amount  does not  exceed the
     original principal amount of the related Mortgage Loan;

          (lvi)  No  improvement  located  on or  being  part  of any  Mortgaged
     Property is in violation of any applicable  zoning law or  regulation.  All
     inspections,  licenses and certificates  required to be made or issued with
     respect to all  occupied  portions of each  Mortgaged  Property  and,  with
     respect to the use and  occupancy of the same,  including,  but not limited
     to, certificates of occupancy and fire underwriting certificates, have been
     made or  obtained  from the  appropriate  authorities  and  such  Mortgaged
     Property is lawfully occupied under the applicable law and all improvements
     which were included for the purpose of determining  the appraised  value of
     the  Mortgaged  Property  lie wholly  within the  boundaries  and  building
     restriction  lines  of such  property,  and no  improvements  on  adjoining
     property encroach upon the Mortgage Property;

          (lvii) The proceeds of each fixed rate and balloon  Mortgage Loan have
     been  fully  disbursed  and  there  is no  obligation  on the  part  of the
     mortgagee to make future advances  thereunder and any and all  requirements
     as to  completion  of  any  on-site  or  off-site  improvements  and  as to
     disbursement  of any escrow funds  therefor  have been complied  with.  All
     costs,  fees and  expenses  incurred in making,  closing or  recording  the
     Mortgage Loans were paid and the Mortgagor is not entitled to any refund of
     amounts paid or due under the Mortgage Note;

          (lviii) No Mortgage Loan has a shared  appreciation  feature, or other
     contingent interest feature;

          (lix) All parties  which have had any interest in the  Mortgage  Loan,
     whether as originator,  mortgagee, assignee, pledgee or otherwise, are (or,
     during the period in which they held and disposed of such interest,  were):
     (A) organized under the laws of such state, or (B) qualified to do business
     in such state,  or (C) federal  savings and loan  associations  or national
     banks having principal  offices in such state, or (D) not doing business in
     such  state  so as to  require  qualification  or  licensing,  or  (E)  not
     otherwise  required  or  licensed  in such  state.  To the best of Seller's
     knowledge,  all parties  which have had any interest in the  Mortgage  Loan
     were in compliance  with any and all applicable  licensing  requirements of
     the laws of the state wherein the Mortgaged Property is located or were not
     required to be licensed in such state;

          (lx) Each document or instrument in the related  Mortgage File is in a
     form  generally  acceptable  to prudent  mortgage  lenders  that  regularly
     originate or purchase  mortgage loans  comparable to the Mortgage Loans for
     sale to prudent  investors in the secondary  market that invest in mortgage
     loans such as the Mortgage Loans;

          (lxi)  Each  original   Mortgage  was  recorded  and  all   subsequent
     assignments  of the original  Mortgage  (other than the  assignment  to the
     Purchaser) have been recorded in the appropriate jurisdictions wherein such
     recordation  is necessary to perfect the lien thereof as against  creditors
     of the Seller, or is in the process of being recorded;

                                       13
<PAGE>

          (lxii) No Mortgage Loan was originated under a buydown plan;

          (lxiii) No Mortgage  Loan is subject to the  requirements  of the Home
     Ownership and Equity Protection Act of 1994 ("HOEPA") or is in violation of
     any state or municipal law comparable to HOEPA;

          (lxiv) The Servicer for each Mortgage Loan will  accurately  and fully
     report its  borrower  credit files to all three  credit  repositories  in a
     timely manner;

          (lxv) No  proceeds  from  any  Mortgage  Loan  were  used to  purchase
     single-premium credit insurance policies;

          (lxvi) No Mortgage Loan has a prepayment penalty term longer than five
     years after its origination;

          (lxvii) Each Mortgage  Loan  conforms,  and all Mortgage  Loans in the
     aggregate conform,  in all material respects,  to the descriptions  thereof
     set forth in the Prospectus Supplement;

          (lxviii) Each Mortgage Loan was originated on or after ________, 200_;

          (lxix) The Seller  represents  and warrants that the Seller  currently
     operates or actively  participates in an on-going business (A) to originate
     single  family  mortgage  loans  ("LOANS"),  and/or  (B) to  make  periodic
     purchases of Loans from originators or sellers,  and/or (C) to issue and/or
     purchase  securities  or bonds  supported by the Loans,  a portion of which
     Loans are made to borrowers who are:

               (a) low-income  families (families with incomes of 80% or less of
               area median income) living in low-income areas (a census tract or
               block  numbering  area in which the median income does not exceed
               80 percent of the area median income); or

               (b) very  low-income  families  (families  with incomes of 60% or
               less of area median income).

          (lxx) Each Mortgage  contains a provision for the  acceleration of the
     payment of the unpaid principal balance of the related Mortgage Loan in the
     event the related  Mortgaged  Property is sold or  transferred  without the
     prior consent of the mortgagee thereunder;

          (lxxi) Each Mortgage Loan was originated  substantially  in accordance
     with Seller's  underwriting  criteria,  which  conform to the  underwriting
     criteria set forth in the Prospectus Supplement;

          (lxxii)  There  exists no  violation  of any  local,  state or federal
     environmental  law, rule or regulation in respect of any Mortgaged Property
     which  violation has or could have a material  adverse effect on the market
     value of such  Mortgaged  Property.  Seller has no knowledge of any pending
     action or  proceeding  directly  involving any such  Mortgaged  Property in
     which  compliance  with any  environmental  law,  rule or  regulation is in
     issue; and,

                                       14
<PAGE>

     to the best of Seller's  knowledge,  nothing  further remains to be done to
     satisfy  in full all  requirements  of each  such law,  rule or  regulation
     constituting a prerequisite  to the use and enjoyment of any such Mortgaged
     Property;

          (lxxiii) The Seller has caused or will cause to be  performed  any and
     all acts  required to be  performed  to preserve the rights and remedies of
     the Indenture Trustee in any insurance policies  applicable to the Mortgage
     Loans  including,   without  limitation,  any  necessary  notifications  of
     insurers,  assignment of policies or interests therein,  and establishments
     of  co-insured,  joint  loss  payee  and  mortgagee  rights in favor of the
     Indenture Trustee;

          (lxxiv) The related  Mortgage  Note is not and has not been secured by
     any  collateral,  pledged  account or other security except the lien of the
     corresponding Mortgage;

          (lxxv) There is no  obligation  on the part of the Seller or any other
     party to make payments in addition to those made by the Mortgagor;

          (lxxvi) With respect to each Mortgage  constituting a deed of trust, a
     trustee,  duly  qualified  under  existing  law to serve as such,  has been
     properly  designated and currently so serves and is named in such Mortgage,
     and no fees or expenses are or will become  payable by the  Noteholders  or
     the Trust to the trustee under the deed of trust, except in connection with
     a trustee's sale after default by the Mortgagor;

          (lxxvii)  Each  Mortgagor  has executed a statement to the effect that
     such Mortgagor has received all disclosure  materials  including the notice
     of the right of cancellation or rescission  required by applicable law with
     respect to the making of the  Mortgage  Loan and any waiver of any right of
     cancellation  or  rescission  exercised by the  Mortgagor was in accordance
     with applicable law and is binding on the Mortgagor;

          (lxxviii)  The  security  interest  created  pursuant to Section  3.01
     hereof is a valid and continuing  security interest (as defined in the UCC)
     in favor of the Purchaser in the property sold, transferred,  assigned, set
     over and otherwise  conveyed  from the Seller to the Purchaser  pursuant to
     this Agreement,  which security interest is prior to all other Liens and is
     enforceable as such against creditors of and purchasers from the Seller;

          (lxxix) The Seller has not  authorized  the filing of and is not aware
     of any financing  statements  against the Seller that include a description
     of collateral covering the property sold,  transferred,  assigned, set over
     and otherwise  conveyed  from the Seller to the Purchaser  pursuant to this
     Agreement  other than any  financing  statement  relating  to the  security
     interest granted to the Purchaser hereunder that has not been terminated;

          (lxxx) The  Seller is not aware of any  judgment  or tax lien  filings
     against it;

          (xxxi)  None  of  the  Mortgage  Notes  has  any  marks  or  notations
     indicating that they have been pledged,  assigned or otherwise  conveyed to
     any Person other than the Issuer.

          (lxxxii) The pool tape from which the selection of the Mortgage  Loans
     being  acquired on the Closing Date was made  available to the  accountants
     that are providing a

                                       15
<PAGE>

     comfort letter to the Issuer in connection  with the Prospectus  Supplement
     and  with  respect  to the  Mortgage  Loans  as of the  Closing  Date,  the
     information  on the pool tape was  complete and accurate as of its date and
     included a description of the same Mortgage Loans that are described on the
     Schedule  of  Mortgage  Loans and the  payments  due  thereunder  as of the
     Closing Date;

          (lxxxiii) With respect to each Mortgage Loan, the payments required of
     the  related  Mortgagor  will be such that the  Mortgage  Loan  will  fully
     amortize over its amortization term; and

          (lxxxiv) The Sale, transfer, assignment and conveyance of the Mortgage
     Loans by the Seller to the Purchaser pursuant to the Mortgage Loan Purchase
     Agreement  is not  subject  to and  will  not  result  in any  tax,  fee or
     governmental  charge payable by the Seller, the Sponsor,  the Issuer or the
     Indenture  Trustee to any federal,  state or local  governments  ("TRANSFER
     TAXES") other than Transfer  Taxes which have or will have been paid by the
     Sponsor as due; PROVIDED, that in the event that the Trust or the Indenture
     Trustee  receives  actual  notice of any Transfer  Taxes arising out of the
     transfer, assignment or conveyance of the Mortgage Loans, on written demand
     by the Issuer or the  Indenture  Trustee,  or upon the  Seller's  otherwise
     being given  notice  thereof by the Issuer or the  Indenture  Trustee,  the
     Seller  shall  pay,  and  otherwise  indemnify  and  hold the  Issuer,  the
     Indenture Trustee and the Insurer harmless, on an after-tax basis, from and
     against  any  and  all  Transfer  Taxes,  it  being   understood  that  the
     Noteholders,  the Issuer,  the Indenture Trustee and the Insurer shall have
     no obligation to pay any such Transfer Taxes.

With respect to the  representations  and  warranties  set forth in this Section
4.02  that are made to the best of the  Seller's  knowledge  or as to which  the
Seller has no knowledge, if it is discovered by the Purchaser, the Servicer, the
Insurer or a Responsible  Officer of the Indenture Trustee that the substance of
such  representation  and warranty is inaccurate and such inaccuracy  materially
and   adversely   affects  the  value  of  the  related   Mortgage   Loan  then,
notwithstanding  the Seller's lack of knowledge with respect to the substance of
such representation and warranty being inaccurate at the time the representation
or warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty.  Notwithstanding  the foregoing,  a breach of any of
the  representations  and warranties set forth in clauses (lxiii) through (lxvi)
of this Section 4.02 will be deemed to materially and adversely affect the value
of the related Mortgage Loan.

                  Section  4.03.  REPRESENTATIONS  AND  WARRANTIES OF PURCHASER.
Purchaser  hereby makes the following  representations  and warranties,  each of
which  representations  and  warranties (i) is material and being relied upon by
Seller and (ii) is true in all respects as of the date of this Agreement:

          (i)  Purchaser has been duly  organized  and is validly  existing as a
     limited liability company under the laws of the State of Delaware.

          (ii)  Purchaser has the requisite  power and authority and legal right
     to execute and deliver,  engage in the  transactions  contemplated  by, and
     perform and  observe the terms and  conditions  of,  this  Agreement  to be
     performed by it.

                                       16
<PAGE>

          (iii)  This  Agreement  has  been  duly  authorized  and  executed  by
     Purchaser,   is  valid,   binding  and  enforceable  against  Purchaser  in
     accordance with its terms,  and the execution,  delivery and performance by
     Purchaser of this  Agreement  does not conflict  with any material  term or
     provision of any other  agreement to which Purchaser is a party or any term
     or provision of the certificate of formation or the operating  agreement of
     the  Purchaser,  or  any  law,  rule,  equation,   order,  judgment,  writ,
     injunction or decree applicable to Purchaser of any court, regulatory body,
     administrative   agency  or  governmental  body  having  jurisdiction  over
     Purchaser.

          (iv) No consent, approval,  authorization or order of, registration or
     filing with, or notice to any  governmental  authority or court is required
     under  applicable  law in  connection  with the  execution  and delivery by
     Purchaser of this Agreement.

          (v) There is no action, proceeding or investigation pending or, to the
     best knowledge of Purchaser, threatened against Purchaser before any court,
     administrative  agency or other  tribunal (i) asserting  the  invalidity of
     this  Agreement,  (ii)  seeking to prevent the  consummation  of any of the
     transactions  contemplated by this  Agreement,  or (iii) which is likely to
     materially  and  adversely  affect  the  performance  by  Purchaser  of its
     obligations under, or the validity or enforceability of, this Agreement.

          (vi) Each  purchase of Mortgage  Loans  hereunder  shall  constitute a
     representation by Purchaser to Seller that Purchaser understands,  and that
     Purchaser  has such  knowledge  and  experience  in financial  and business
     matters  that it is  capable  of  evaluating  the  merits and risks of, its
     investment in the relevant Mortgage Loans.

                  Section  4.04.  REMEDIES  FOR  BREACH OF  REPRESENTATIONS  AND
WARRANTIES;  REPURCHASE  OBLIGATION.  It  is  understood  and  agreed  that  the
representations and warranties set forth in Sections 4.01 and 4.02 shall survive
each sale of Mortgage  Loans to the  Purchaser and shall inure to the benefit of
the Purchaser and  subsequent  transferees  and  assignees  notwithstanding  any
restrictive  or qualified  endorsement  on any Mortgage  Note or  Assignment  of
Mortgage  or the  examination  or failure to examine  any  Mortgage  File.  With
respect to the  representations  and  warranties  contained in Sections 4.01 and
4.02  which  are made to the best of the  Seller's  knowledge  or to the  actual
knowledge of the Seller, if it is discovered by either the Seller, the Indenture
Trustee  or  the  Issuer,   or  the   Purchaser   that  the  substance  of  such
representation  and warranty is inaccurate  and such  inaccuracy  materially and
adversely  affects the value of the  related  Mortgage  Loan or the  Purchaser's
interest  therein,  then  notwithstanding  the Seller's  lack of knowledge  with
respect to the inaccuracy at the time the  representation  or warranty was made,
the Seller shall  repurchase the related  Mortgage Loan in accordance  with this
Section  4.04 as if the  applicable  representation  or warranty  was  breached,
subject to the terms and  conditions of the Sale and Servicing  Agreement.  Upon
discovery  by either  the  Seller,  the  Indenture  Trustee,  the  Issuer or the
Purchaser of a breach of any of the  foregoing  representations  and  warranties
which  materially  and adversely  affects the value of the Mortgage Loans or the
interest  of the  Purchaser  (or which  materially  and  adversely  affects  the
interests  of the  Purchaser  in the  related  Mortgage  Loan  in the  case of a
representation  and warranty relating to a particular  Mortgage Loan), the party
discovering such breach shall give prompt written notice to the others.

                                       17
<PAGE>

                  Within 60 days of the earlier of either discovery by or notice
to the Seller of any breach of a representation or warranty which materially and
adversely  affects the value of any Mortgage  Loan or the  Purchaser's  interest
therein,  the Seller shall use its best efforts  promptly to cure such breach in
all material  respects and, if such breach cannot be cured or is not cured or is
not  being  diligently  pursued  as  evidenced  by a  notice  acceptable  to the
Purchaser, as evidenced by the Purchaser's agreement thereto, at the end of such
60-day  period,  the  Seller  shall,  at  the  Purchaser's  option,  either  (a)
repurchase  such  Mortgage  Loan at the Loan  Purchase  Price or (b)  provide an
Eligible  Substitute  Mortgage Loan, if the Seller has any such loans  available
for  sale at the  time  subject  to the  terms  and  conditions  of the Sale and
Servicing Agreement.

                  At the time of repurchase or  substitution,  the Purchaser and
the Seller shall arrange for the  assignment of such Mortgage Loan to the Seller
and the delivery by the Purchaser to the Seller of the related Mortgage Files.

                  In addition to such cure and repurchase obligation, the Seller
shall indemnify the Purchaser and hold it harmless against any losses,  damages,
penalties,  fines, forfeitures,  reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion  based on or grounded upon, or resulting  from, a breach of
the representations and warranties contained in this Article IV (notwithstanding
any  limitation  in  such   representation  and  warranty  as  to  the  Seller's
knowledge).  It is understood and agreed that the  obligations of the Seller set
forth in this Section 4.04 to cure or  repurchase a defective  Mortgage Loan and
to indemnify the Purchaser as provided in this Section 4.04  constitute the sole
remedies of the Purchaser  respecting a breach of the foregoing  representations
and warranties.

                  Any cause of action against the Seller  relating to or arising
out of the breach of any representations and warranties made in Sections 4.01 or
4.02 shall accrue as to any Mortgage  Loan upon (i)  discovery of such breach by
the Purchaser,  the Indenture  Trustee or the Insurer,  or notice thereof by the
Seller to the Purchaser,  the Indenture Trustee or the Insurer,  (ii) failure by
the Seller to cure such breach or  repurchase  such  Mortgage  Loan as specified
above, and (iii) demand upon the Seller by the Purchaser,  the Indenture Trustee
or the Insurer, for compliance with the relevant provisions of this Agreement.

                                   ARTICLE V

                       Covenants and Warranties of Seller

                  So long as this  Agreement  remains in effect or Seller  shall
have  any  obligations  hereunder,  Seller  hereby  covenants  and  agrees  with
Purchaser as follows:

                  Section 5.01. AFFIRMATIVE COVENANTS.

                  (a) Until the later to occur of (i) the  discharge and payment
of all of Seller's  obligations  under this  Agreement and (ii) the  Termination
Date of this Agreement, Seller shall, promptly upon preparation, but in no event
later than 60 days  following  the end of each such  party's  first three fiscal
quarters,   deliver  to  Purchaser  its  unaudited   company-prepared  financial
statements  as of the end of each such fiscal  quarter,  prepared in  accordance
with GAAP. Seller

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<PAGE>

shall,  promptly upon preparation,  but in no event later than 90 days following
the end of such party's fourth fiscal quarter,  deliver to Purchaser its audited
and certified financial statements,  prepared in accordance with GAAP, as of the
end of the most  recently  ended  fiscal year,  which audits and  certifications
shall each be prepared by a nationally recognized independent accounting firm or
by a regionally  recognized  independent  accounting firm with the prior written
consent of Purchaser,  which consent shall not be unreasonably  withheld. In all
cases, financial statements shall include,  without limitation, a balance sheet,
a profit and loss  statement  and a  statement  of cash  flows.  Notwithstanding
anything in this  Agreement to the  contrary,  if (x) the audited and  certified
financial  statements  described in the immediately  preceding  sentence are not
delivered within the above-specified 90 days, (y) Seller is diligently using its
best  efforts to deliver  such  financial  statements,  and (z) Seller  provides
Purchaser with a notice specifying the reason for the delay and a date, within a
reasonable  time period (as  determined by  Purchaser),  on which such financial
statements will be delivered, and they are so delivered; then failure to deliver
such financial  statements within the  above-specified  90 days, as the case may
be, shall not be deemed to be an Event of Termination of this Agreement.

                  (b) Upon request of  Purchaser,  Seller  shall,  to the extent
lawful, promptly upon filing, deliver to Purchaser copies of all material public
filings made by Seller with any governmental or quasi-governmental body.

                  (c)  Seller  shall  (i) with  respect  to any  Mortgage  Loans
serviced by Seller or any of its affiliates or otherwise use its best efforts to
cause to be delivered to Purchaser monthly,  the report, if any, prepared by the
relevant  trustee or servicer  setting  forth  payment  activity,  defaults  and
delinquencies  with respect to each Mortgage Loan acquired by Purchaser and (ii)
prepare  and  deliver  reports  each  month,  detailing,  with  respect  to  all
Purchases,  such  information as the Purchaser may from time to time  reasonably
request.

                  (d)  Seller  shall do all  things  necessary  to  remain  duly
incorporated, validly existing and in good standing as a domestic corporation in
its  jurisdiction  of  incorporation  and  maintain all  requisite  authority to
conduct its  business in each  jurisdiction  in which its  business is conducted
except  where  failure  to  maintain  such  authority  would not have a material
adverse  effect on the ability of Seller to conduct  its  business or to perform
its obligations under this Agreement.

                  (e) At all times during this  Agreement,  Seller shall possess
sufficient  net  capital  and liquid  assets (or  ability to access the same) to
satisfy its obligations as they become due in the normal course of business.

                  (f)  Seller  will  notify  Purchaser  in writing of any of the
following promptly upon learning of the occurrence thereof,  describing the same
and, if applicable, any remedial steps being taken with respect thereto;

          (i)  The  occurrence  or  likelihood  of  occurrence  of an  Event  of
     Termination hereunder;

                                       19
<PAGE>

          (ii) The  institution  of any  litigation,  arbitration  proceeding or
     governmental  proceeding  which, in the opinion of counsel to Seller,  will
     have a material adverse effect on Seller or the Mortgage Loans;

          (iii)  The  entry of any  judgment  or  decree  against  Seller if the
     aggregate  amount of all  judgments  and decrees then  outstanding  against
     Seller exceeds  $10,000,000  after deducting (A) the amount with respect to
     which  Seller is insured and with  respect to which the insurer has assumed
     responsibility in writing, and (B) the amount for which Seller is otherwise
     indemnified   if  the  terms  of  such   indemnification   are   reasonably
     satisfactory to Purchaser; or

          (iv) The  occurrence  or likelihood of any event which would allow the
     obligee  under any  material  loan  agreement  to which  Seller is bound to
     declare  an event of  default  or  accelerate  the  obligations  of  Seller
     thereunder.

                  (g) Seller  shall  permit the  Purchaser  or its  accountants,
attorneys  or other  agents  access to all of the books and records  relating to
Mortgage  Loans  purchased and retained by Purchaser for  inspection and copying
during normal business hours at all places where Seller conducts business.

                  (h) Seller shall satisfy the obligation  under any Credit Line
Agreement that provides for the funding of all future Draws thereunder.

                  Section 5.02. NEGATIVE COVENANTS.

                  (a)  Seller  shall  not  assign  or  attempt  to  assign  this
Agreement or any rights hereunder,  without first obtaining the specific written
consent of Purchaser.

                  (b) Seller  shall not amend its Articles of  Incorporation  or
By-laws,  which amendment shall have or is likely to have an adverse effect upon
Purchaser  or its  interests  under this  Agreement,  without the prior  written
consent of Purchaser.

                  (c) During the term of this Agreement, Seller shall not engage
in any  business  other  than as a  consumer  and  mortgage  finance  lender and
servicer, except with the prior written consent of Purchaser.

                  (d) Seller shall not (i) dissolve or terminate  its  existence
or (ii)  transfer  any assets to any  affiliate  except as  otherwise  expressly
permitted or contemplated hereby.

                  (e) Except  with the  written  consent of the  Purchaser,  the
Seller  shall  not  guarantee,  endorse  or  otherwise  in any way  become or be
responsible  for any  obligations  of any other  person,  entity  or  affiliate,
including,  without  limitation,  whether directly or indirectly by agreement to
purchase the  indebtedness of any other person or through the purchase of goods,
supplies or services,  or maintenance of working  capital or other balance sheet
covenants or  conditions,  or by way of stock  purchase,  capital  contribution,
advance or loan for the purposes of paying or discharging  any  indebtedness  or
obligation of such other person or otherwise;  PROVIDED,  HOWEVER,  that nothing
contained herein shall prevent Seller from indemnifying its officers,  directors
and agents pursuant to its By-laws and its Articles of Incorporation.

                                       20
<PAGE>

                  (f) Seller will not commit any act in violation of  applicable
laws, or regulations  promulgated  pursuant  thereto that relate to the Mortgage
Loans or that  materially  and  adversely  affect the  operations  or  financial
conditions of Seller.

                  (g) Seller, by entering into this Agreement,  hereby covenants
and agrees that it will not at any time institute against the Issuer, or join in
any  institution   against  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 or any of the Basic Documents.

                                   ARTICLE VI

             Sale of Mortgage Loans from the Purchaser to the Trust

                  Section 6.01. SALE AND SERVICING  AGREEMENT.  It is the intent
of the Seller and the  Purchaser  that with respect to the Mortgage  Loans,  the
Purchaser shall  concurrently  sell all of its right,  title and interest to the
Mortgage  Loans and all other  property  conveyed to it  hereunder  to the Trust
pursuant to the Sale and Servicing Agreement.

                  With respect to such sale, the Seller agrees:

          (i) to cooperate  fully with the  Purchaser and the Trust with respect
     to  all  reasonable  requests  and  due  diligence   procedures   including
     participating in meetings with Rating Agencies,  the Insurer and such other
     parties as the Purchaser shall designate and participating in meetings with
     the Trust and providing information reasonably requested by the Trust;

          (ii) to  execute  the  Sale  and  Servicing  Agreement  and all  other
     necessary documents to effect the transactions contemplated therein;

          (iii) the Seller shall make the  representations  and  warranties  set
     forth herein  regarding the Seller and the Mortgage Loans as of the date of
     the transfer to the Trust;

          (iv) to deliver to the Purchaser  for  inclusion in any  prospectus or
     other offering material such publicly available  information  regarding the
     Seller,  its  financial   condition  and  the  mortgage  loan  delinquency,
     foreclosure  and loss  experience  of its portfolio as is  customarily  set
     forth in a prospectus  supplement  with  respect to a  comparable  mortgage
     pool, the underwriting of mortgage loans,  the servicer,  the servicing and
     collection  of mortgage  loans,  lending  activities  and loan sales of the
     servicer,  regulatory  matters and  delinquency and loss experience and any
     additional  information  reasonably  requested  by  the  Purchaser,  and to
     deliver to the Purchaser unaudited consolidated financial statements of the
     Seller,  in which case the  Purchaser  shall  bear the cost of having  such
     statements audited by certified public accountants if the Purchaser desires
     such an audit, or as is otherwise reasonably requested by the Purchaser and
     which the Seller is capable of  providing  without  unreasonable  effort or
     expense,  and to indemnify the Purchaser  and its  affiliates  for material
     misstatements or omissions contained in such information;

                                       21
<PAGE>

          (v) to deliver to the  Purchaser  and to any person  designated by the
     Purchaser,  at the Purchaser's  expense,  such statements and audit letters
     issued by reputable, certified public accountants pertaining to information
     provided by the Seller pursuant to clause (iv) above as shall be reasonably
     requested by the Purchaser  (it being  acknowledged  by Purchaser  that the
     delivery of such  statements  and letters is subject to the consent of such
     accountants);

          (vi) to deliver to the Purchaser,  and to any Person designated by the
     Purchaser,  such legal  documents  and in-house  opinions of counsel as are
     customarily delivered by originators or servicers,  as the case may be, and
     reasonably  determined by the Purchaser to be necessary in connection  with
     the transactions contemplated by the Sale and Servicing Agreement, it being
     understood  that the cost of any opinions of outside  special  counsel that
     may be required shall be the responsibility of the Seller;

          (vii) to  cooperate  fully  with  the  Purchaser  and any  prospective
     Purchaser  with respect to the  preparation  of Mortgage Loan documents and
     other  documents  and with  respect to  servicing  requirements  reasonably
     requested by the Rating Agencies and the Insurer; and

          (viii) to negotiate  and execute one or more  custodial  and servicing
     agreements   among  the   Purchaser,   the   Seller   and  a  third   party
     custodian/trustee   which  is   generally   considered   to  be  a  prudent
     custodian/trustee  in  the  secondary  mortgage  market  designated  by the
     Purchaser in its sole discretion  after  consultation  with the Seller,  in
     either case for the purpose of securitizing the Mortgage Loans.

                                  ARTICLE VII

                         Seller's Servicing Obligations

                  Section 7.01. SELLER'S SERVICING  OBLIGATIONS.  The Seller, as
an  independent  contract  servicer,  shall service and  administer the Mortgage
Loans in accordance with the terms and provisions set forth in Articles III, IV,
V, VII and VIII of the Sale and Servicing  Agreement  which  sections are hereby
incorporated in this Agreement in their entirety (with, however, the changes and
adjustments as provided in this Agreement) as if the same were contained in this
Article VII.

                  To the extent any provision of any definition set forth in the
Sale and Servicing Agreement shall conflict with any provision set forth in this
Agreement, the provision or definition in this Agreement shall govern.

                                  ARTICLE VIII

                                Fees and Expenses

                  The  Purchaser  shall pay any salaries and other  compensation
due its  employees  and  the  legal  fees  and  expenses  of its  attorneys  and
accountants.  All other  costs and  expenses  incurred  in  connection  with the
transfer and delivery of the Mortgage  Loans  pursuant to this  Agreement or the
Sale and Servicing  Agreement,  including,  without limitation,  recording fees,
fees for title policy  endorsements  and  continuations,  and fees for recording
intervening

                                       22
<PAGE>

assignments of Mortgage, shall be paid by the Seller. To the extent not paid out
of the Trust pursuant to Section  8.7(d)(i) of the  Indenture,  the Seller shall
pay the on-going  fees of any  custodian or trustee under the Sale and Servicing
Agreement,  the Trust  Agreement or the Indenture.  The Seller shall pay (i) the
acceptance  and  file  review  fees  of any  custodian  or  trustee  under  this
Agreement,  the  Indenture,  the  Trust  Agreement  or the  Sale  and  Servicing
Agreement  and (ii) the costs of legal  counsel and legal  opinions,  accounting
comfort letters and fees, printing of disclosure documents,  rating agency fees,
Insurer  up-front  fees,  SEC filing  fees and the costs of any and all  related
document  preparations  associated  with the Sale and Servicing  Agreement,  the
Trust Agreement,  the Indenture or this Agreement. The Seller also agrees to pay
the fees and other  amounts for which the Seller or Servicer is obligated  under
the Insurance Agreement.

                                   ARTICLE IX

                        Termination; Additional Remedies

                  Upon the  occurrence of a Rapid  Amortization  Event due to an
act or omission of the Seller (an "EVENT OF TERMINATION"), the Purchaser and its
assignees  shall have,  in addition to all other rights and remedies  under this
Agreement or otherwise,  all other rights and remedies provided under the UCC of
each applicable  jurisdiction  and other  applicable laws, which rights shall be
cumulative.  Without  limiting  the  foregoing,  the  occurrence  of an Event of
Termination  shall not deny to the  Purchaser  or its  assignees  any  remedy in
addition to termination of its obligations to make purchases  hereunder to which
the Purchaser or its assignee may be otherwise appropriately  entitled,  whether
by statute or applicable law, at law or in equity.

                                   ARTICLE X

                            Payment of Purchase Price

                  Section 10.01.  PURCHASE PRICE  PAYMENTS.  On the Closing Date
and on the next  Business Day following  each other day on which any  Additional
Balances  relating to Mortgage Loans are funded by the Seller,  on the terms and
subject to the  conditions of this  Agreement,  the  Purchaser  shall pay to the
Seller the applicable  Purchase Price by (i) making or causing to be made a cash
payment  to  the  Seller  or its  designee  in  such  amount  determined  by the
Purchaser,  (ii) crediting the Seller with an additional capital contribution to
the Purchaser,  (iii) automatically  increasing the principal amount outstanding
under the Purchaser Note by the amount of the excess of the Purchase Price to be
paid to the Seller for such purchased assets over the amount of any cash payment
made on such day to the  Seller  and/or  any  capital  contribution  made by the
Seller to the Purchaser,  subject to a cap on such note at any time equal to $30
million or (iv) any combination of the foregoing.

                  Section 10.02. THE PURCHASER NOTE.

                  (a) On the Closing Date,  the  Purchaser  shall deliver to the
Seller a promissory note, substantially in the form of EXHIBIT A, payable to the
order of the Seller (such promissory note, as the same has been or hereafter may
be amended,  supplemented,  endorsed or  otherwise  modified  from time to time,
together with any promissory note issued from time to time in

                                       23
<PAGE>

substitution  therefor or renewal  thereof in  accordance  with this  Agreement,
being herein  called the  "PURCHASER  NOTE"),  which  Purchaser  Note shall,  in
accordance with its terms,  be  subordinated to all interests of the Trust,  all
claims to the cash flows from Trust assets and all obligations of the Purchaser,
of any nature, now or hereafter arising under or in connection with the Sale and
Servicing  Agreement.  The Purchaser  Note shall  evidence all amounts  incurred
thereunder subsequent to the Closing Date as provided in this Agreement. Subject
to the foregoing,  the Purchaser Note shall be payable in full on the date which
is one year and one day after the  Termination  Date.  The Purchaser  Note shall
bear interest at the "prime rate" as  determined  by the Indenture  Trustee from
time to time in effect.  The Purchaser may prepay all or part of the outstanding
balance of the  Purchaser  Note and interest  accrued  thereon from time to time
without any premium or penalty,  unless an Event of Default has  occurred and is
continuing or would result from such prepayment or payment.

                  (b) The Servicer shall hold the Purchaser Note for the benefit
of the Seller, and shall make all appropriate recordkeeping entries with respect
to the Purchaser Note or otherwise to reflect the payments on and adjustments of
the Purchaser Note. The Servicer's books and records shall constitute rebuttable
presumptive  evidence of the  principal  amount of and  accrued  interest on the
Purchaser  Note at any  time.  The  Seller  hereby  irrevocably  authorizes  the
Servicer to mark the Purchaser Note "CANCELLED" and to return the Purchaser Note
to the Purchaser upon the full and final payment  thereof after the  Termination
Date.

                  (c) The Seller hereby agrees not to transfer, assign, exchange
or  otherwise  convey or  pledge,  hypothecate  or  otherwise  grant a  security
interest in the  Purchaser  Note or any interest  represented  thereby,  and any
attempt to transfer,  assign, exchange,  convey, pledge,  hypothecate or grant a
security  interest in the  Purchaser  Note or any interest  represented  thereby
shall be void and of no effect.

                                   ARTICLE XI

                                 Confidentiality

                  Purchaser and Seller each  acknowledges  that the  information
heretofore  provided to them  pursuant to the  operation of this  Agreement,  is
highly confidential, proprietary information of Seller or Purchaser, as the case
may be.  Purchaser and Seller each agrees that it will hold such  information in
strict  confidence  and will not  disclose any part of such  information  to any
person or  entity,  other  than to its  accountants  and  lawyers  to the extent
necessary for the  performance  of their duties and as required by law and other
than to such  other  persons  to the  extent  necessary,  as  determined  by the
Purchaser  in its sole  discretion,  to complete the  transactions  contemplated
hereunder  and in the Sale and  Servicing  Agreement  including the offering and
issuance of the Notes;  PROVIDED,  HOWEVER, that copies of this Agreement may be
included as part of any filing made pursuant to the  Securities  Act of 1933 and
the Securities Exchange Act of 1934 and any regulations  promulgated thereunder.
In  furtherance  of the  foregoing,  Purchaser and Seller each covenants that it
will adhere to its established procedures for the maintenance of confidentiality
with respect to such information.  Purchaser and Seller each further agrees that
it will not distribute such information  within its own  organization  except to
persons with a need to know such information in connection with the transactions
contemplated by this Agreement.

                                       24
<PAGE>

                                  ARTICLE XII

                                      Term

                  This Agreement shall terminate on the Termination Date.

                                  ARTICLE XIII

                    Exclusive Benefit of Parties; Assignment

                  This  Agreement  is for the  exclusive  benefit of the parties
hereto and their  respective  successors  and assigns and shall not be deemed to
give any legal or equitable  right to any other person  except the Sponsor,  the
Trust,  the  Noteholders  and the Insurer.  Notwithstanding  the foregoing,  the
Seller covenants and agrees that the representations and warranties contained in
this Agreement and the rights of the Purchaser hereunder are intended to benefit
the Trust,  the Noteholders and the Insurer.  This Agreement may not be assigned
by any party hereto without the prior written  consent of the other party hereto
except to the Trust.

                                  ARTICLE XIV

                               Amendment; Waivers

                  This  Agreement  may be  amended  from  time to  time  only by
written  agreement of Seller and Purchaser with the prior written consent of the
Insurer,  which consent shall not be  unreasonably  withheld.  Any  forbearance,
failure, or delay by a party in exercising any right, power, or remedy hereunder
shall not be deemed to be a waiver thereof,  and any single or partial  exercise
by a party of any  right,  power or  remedy  hereunder  shall not  preclude  the
further  exercise  thereof.  Every  right,  power and  remedy  of a party  shall
continue in full force and effect until specifically waived by it in writing. No
right, power or remedy shall be exclusive,  and each such right, power or remedy
shall be cumulative and in addition to any other right, power or remedy, whether
conferred  hereby or  hereafter  available  at law or in equity or by statute or
otherwise.

                                   ARTICLE XV

                            Execution in Counterparts

                  This Agreement may be executed in any number of  counterparts,
each of which shall be deemed an original, and all of which shall constitute one
and the same instrument.

                                  ARTICLE XVI

                       Effect of Invalidity of Provisions

                  In case any one or more of the  provisions  contained  in this
Agreement should be or become invalid,  illegal or unenforceable in any respect,
the validity,  legality and enforceability of the remaining provisions contained
herein shall in no way be affected, prejudiced or disturbed thereby.

                                       25
<PAGE>

                                  ARTICLE XVII

                                  Governing Law

                  This   Agreement   shall  be  governed  by  and  construed  in
accordance  with the laws of the State of New York,  without regard to its rules
regarding  conflict of laws (other  than  sections  5-1401 and 5-1402 of the New
York General Obligations Law).

                                 ARTICLE XVIII

                                     Notices

                  Any   notices,   consents,   directions,   demands  and  other
communications  given under this Agreement (unless  otherwise  specified herein)
shall be in writing and shall be deemed to have been duly given when  personally
delivered at or telecopied to the respective  addresses or facsimile numbers, as
the  case  may be,  set  forth on the  signature  page  hereof  for  Seller  and
Purchaser,  or to such other  address or facsimile  number as either party shall
give notice to the other  party  pursuant  to this  Section.  In the case of the
Insurer, notices shall be provided to [Insurer],  [Insurer's Address] (Telephone
No. (___) ____-_____) (Telecopier No. (___) ____-____). Notices, consents, etc.,
may also be effected by first class mail,  postage prepaid sent to the foregoing
addresses and will be effective upon receipt by the intended recipient.

                                  ARTICLE XIX

                                Entire Agreement

                  This Agreement,  including the Exhibits and Schedules  hereto,
contains the entire  agreement of the parties hereto with respect to the subject
matter hereof, and supersedes all prior and  contemporaneous  agreements between
them,  whether  oral or written,  of any nature  whatsoever  with respect to the
subject matter hereof.

                                   ARTICLE XX

                                   Indemnities

                  Without  limiting any other  rights which  Purchaser or Seller
may have  hereunder  or under  applicable  law,  and in  addition  to any  other
indemnity provided  hereunder,  Seller hereby agrees to indemnify  Purchaser and
its respective officers,  directors, agents and employees (each, an "INDEMNIFIED
PARTY") from and against any and all Losses  incurred by any of them relating to
or resulting from:

                  (1) any  representation  or  warranty  made by Seller  (or any
         officers,  employees or agents of Seller) under or in  connection  with
         this Agreement, any periodic report required to be furnished thereunder
         or any other  information  or  document  delivered  by Seller  pursuant
         hereto,  which  shall  have been  false or  incorrect  in any  material
         respect when made or deemed made;

                                       26
<PAGE>

                  (2) the  failure by Seller to (a) comply  with any  applicable
         law, rule or regulation  with respect to any Purchase or (b) perform or
         observe any material obligation or covenant hereunder; or

                  (3) the failure by Seller (if so  requested by  Purchaser)  to
         execute and  properly  file,  or any delay in  executing  and  properly
         filing,  financing statements or other similar instruments or documents
         under the Uniform  Commercial  Code of any applicable  jurisdiction  or
         other applicable laws with respect to the Mortgage Loans.

                  Promptly  after  receipt by an  Indemnified  Party  under this
Article XX of notice of the commencement of any action,  such Indemnified  Party
will, if a claim in respect thereof is to be made against the indemnifying party
under  this  Article  XX,  notify  the  indemnifying  party  in  writing  of the
commencement  thereof; but the omission so to notify the indemnifying party will
not  relieve it from any  liability  that it may have to any  Indemnified  Party
otherwise than under this Article XX. In case any such action is brought against
any Indemnified Party and it notifies the indemnifying party of the commencement
thereof,  the indemnifying party will be entitled to participate therein, and to
the extent  that it may elect by written  notice  delivered  to the  Indemnified
Party promptly after receiving the aforesaid notice from such Indemnified Party,
to assume the defense  thereof,  with counsel  satisfactory to such  Indemnified
Party; PROVIDED, HOWEVER, that if the defendants in any such action include both
the Indemnified  Party and the indemnifying  party and the Indemnified  Party or
parties  shall  have  reasonably  concluded  that  there  may be legal  defenses
available to it or them and/or other Indemnified Parties that are different from
or additional to those  available to the  indemnifying  party,  the  Indemnified
Party or parties shall have the right to elect  separate  counsel to assert such
legal  defenses  and to otherwise  participate  in the defense of such action on
behalf of such  Indemnified  Party or parties.  Upon  receipt of notice from the
indemnifying  party to such  Indemnified  Party of its election so to assume the
defense of such action and  approval by the  Indemnified  Party of counsel,  the
indemnifying  party  will  not  be  liable  for  any  legal  or  other  expenses
subsequently  incurred by such Indemnified  Party in connection with the defense
thereof,  unless (i) the Indemnified  Party shall have employed separate counsel
in  connection  with the  assertion  of legal  defenses in  accordance  with the
proviso to the next preceding sentence (it being understood,  however,  that the
indemnifying  party  shall  not be  liable  for the  expenses  of more  than one
separate  counsel,  approved by you in the case of Article XX,  representing the
Indemnified Parties under this Article XX, who are parties to such action), (ii)
the  indemnifying  party shall not have  employed  counsel  satisfactory  to the
Indemnified  Party to represent the  Indemnified  Party within a reasonable time
after notice of commencement of the action or (iii) the  indemnifying  party has
authorized the employment of counsel for the Indemnified Party at the expense of
the  indemnifying  party; and except that, if clause (i) or (iii) is applicable,
such  liability  shall  only be in respect of the  counsel  referred  to in such
clause (i) or (iii).

                                  ARTICLE XXI

                                RESPA Obligations

                  Seller   agrees  to  discharge  on   Purchaser's   behalf  all
obligations,  including,  without limitation, all disclosure obligations,  which
Purchaser may have under the Real Estate  Settlement  Procedures Act of 1974, as
amended,  in connection with Purchaser's  purchases of Mortgage Loans hereunder.
Purchaser  agrees to  provide  Seller  with such  information  as is  reasonably

                                       27
<PAGE>

necessary for Seller to discharge such obligations and hereby appoints Seller as
its  agent in its name  for the  purposes  of,  and  only for the  purposes  of,
performing such obligations. Seller hereby agrees to indemnify Purchaser and its
respective officers, directors, agents and employees from any losses suffered by
any such party in connection with Seller's obligations under this Article XXI.

                  Notwithstanding  anything to the  contrary  contained  in this
Agreement or any document  delivered  herewith,  all persons may disclose to any
and all  persons,  without  limitation  of any  kind,  the  federal  income  tax
treatment  of the Notes,  any fact  relevant  to  understanding  the federal tax
treatment of the Notes,  and all  materials of any kind  (including  opinions or
other tax analyses) relating to such federal tax treatment.

                                  ARTICLE XXII

                                    Survival

                  All  indemnities  and  undertakings  of Seller  and  Purchaser
hereunder shall survive the termination of this Agreement.

                                 ARTICLE XXIII

                                Right of Set-off

                  Upon  the  occurrence  of  any  event  or  circumstance  which
requires Seller to make a payment hereunder, Purchaser is hereby authorized then
or at any time or times  thereafter,  without  notice to Seller (any such notice
being  expressly  waived by Seller),  to set-off and apply any and all  deposits
(general or special, time or demand, provisional or final), at any time held and
other  indebtedness  at any time owing by  Purchaser to or for the credit or the
account  of Seller  against  any and all of the  obligations  of  Seller  now or
hereafter  existing  hereunder,  irrespective  of whether or not Purchaser shall
have made any demand hereunder. Purchaser agrees promptly to notify Seller after
any such set-off and application made by Purchaser; PROVIDED that the failure to
give such notice shall not affect the validity of such set-off and  application.
The rights of Purchaser under this Article XXIII are in addition to other rights
and remedies which Purchaser may have.

                                  ARTICLE XXIV

                               Consent to Service

                  Each party  irrevocably  consents to the service of process by
registered  or  certified  mail,  postage  prepaid,  to it at its address  given
pursuant to Article XVIII hereof.

                                  ARTICLE XXV

               Submission to Jurisdiction; Waiver of Trial by Jury

                  With respect to any claim arising out of this  Agreement  each
party  irrevocably  submits to the exclusive  jurisdiction  of the courts of the
State of New York and the United States

                                       28
<PAGE>

District  Court located in the Borough of Manhattan,  City of New York, and each
party  irrevocably  waives  any  objection  which it may have at any time to the
laying of venue of any suit,  action or  proceeding  arising  out of or relating
hereto  brought in any such  court,  irrevocably  waives any claim that any such
suit,  action or  proceeding  brought in any such court has been  brought in any
inconvenient  forum and  further  irrevocably  waives the right to object,  with
respect to such claim,  suit,  action or  proceeding  brought in any such court,
that such  court  does not have  jurisdiction  over such  party;  PROVIDED  that
service of process is made as set forth in Article XXIV hereof,  or by any other
lawful means. To the extent  permitted by applicable  law,  Purchaser and Seller
each irrevocably  waive all right of trial by jury in any action,  proceeding or
counterclaim  arising out of or in connection  with this Agreement or any matter
arising hereunder.

                                  ARTICLE XXVI

                                  Construction

                  The headings in this  Agreement are for  convenience  only and
are  not  intended  to  influence  its  construction.  References  to  Articles,
Sections, Schedules and Exhibits in this Agreement are to the Articles, Sections
of and Schedules and Exhibits to this Agreement.  The Schedules and Exhibits are
hereby  incorporated into and form a part of this Agreement.  In this Agreement,
the singular includes the plural,  the plural the singular,  the words "and" and
"or" are used in the  conjunctive or disjunctive as the sense and  circumstances
may require and the word  "including"  means  "including,  but not limited  to."
Unless  otherwise  stated in this  Agreement,  in the computation of a period of
time from a specified  date to a later  specified  date,  the word "from"  means
"from  and  including"  and the  words  "to"  and  "until"  each  means  "to but
excluding."

                                 ARTICLE XXVII

                               Further Agreements

                  The Seller and the Purchaser each agree to execute and deliver
to the other such reasonable and appropriate  additional documents,  instruments
or agreements as may be necessary or  appropriate  to effectuate the purposes of
this Agreement.

                                       29
<PAGE>

                  IN WITNESS  WHEREOF,  the Purchaser and the Seller have caused
their names to be signed  hereto by their  respective  officers  thereunto  duly
authorized, all as of the date first written above.

                                       GREENPOINT MORTGAGE SECURITIES LLC,
                                         as Purchaser

                                       100 Wood Hollow Drive
                                       Doorstop # 32210
                                       Novato, California  94945

                                       By:
                                           -------------------------------
                                           Name:
                                           Title:

                                       GREENPOINT MORTGAGE FUNDING, INC.,
                                          as Seller

                                       100 Wood Hollow Drive
                                       Novato, California  94945

                                       By:
                                           -------------------------------
                                           Name:
                                           Title:

                       [Mortgage Loan Purchase Agreement]

<PAGE>

                                                                       EXHIBIT A

                             FORM OF NON-NEGOTIABLE
                       GREENPOINT MORTGAGE SECURITIES LLC
                                 PROMISSORY NOTE

                                                                   _______, 200_

EXCEPT TO THE EXTENT PROVIDED IN THE PURCHASE  AGREEMENT REFERRED TO BELOW, THIS
PROMISSORY  NOTE AND ANY INTEREST  REPRESENTED  HEREBY SHALL NOT BE TRANSFERRED,
ASSIGNED, EXCHANGED, CONVEYED, PLEDGED, HYPOTHECATED OR OTHERWISE THE SUBJECT OF
THE GRANT OF A SECURITY INTEREST AND ANY ATTEMPT TO TRANSFER,  ASSIGN, EXCHANGE,
CONVEY, PLEDGE, HYPOTHECATE OR GRANT A SECURITY INTEREST IN THIS PROMISSORY NOTE
OR ANY INTEREST REPRESENTED HEREBY SHALL BE VOID AND OF NO EFFECT.

         For VALUE RECEIVED,  the undersigned,  GREENPOINT  MORTGAGE  SECURITIES
LLC, a Delaware limited liability company (the "PURCHASER"),  promises to pay to
GREENPOINT MORTGAGE FUNDING, INC., a California  corporation (the "SELLER"),  on
the terms and subject to the  conditions  set forth  herein and in the  Purchase
Agreement  referred to below,  the aggregate unpaid Purchase Price of all assets
purchased  and  to be  purchased  by the  Purchaser  pursuant  to  the  Purchase
Agreement;  PROVIDED that such amount shall in no event exceed $30,000,000. Such
amount as shown in the  records of the  Seller  will be  rebuttable  presumptive
evidence of the principal amount owing under this Note.

         1.  PURCHASE  AND  SALE  AGREEMENT.  This  Note is the  Purchaser  Note
described  in,  and is subject to the terms and  conditions  set forth in,  that
certain Mortgage Loan Purchase Agreement dated as of ________, 200_ (as the same
may be amended, supplemented,  restated or otherwise modified in accordance with
its terms,  the  "PURCHASE  AGREEMENT"),  between the Seller and the  Purchaser.
Reference  is hereby made to the Purchase  Agreement  for a statement of certain
other rights and obligations of the Purchaser and the Seller.

         2.  DEFINITIONS.  Capitalized  terms used (but not defined) herein have
the meanings ascribed thereto in the Purchase  Agreement.  In addition,  as used
herein, the following terms have the following meanings:

             "BANKRUPTCY PROCEEDINGS" has the meaning set forth in clause (a) of
paragraph 7 hereof.

             "FINAL  MATURITY  DATE"  means the date that falls one year and one
day after the Termination Date.

             "JUNIOR  LIABILITIES" means all obligations of the Purchaser to the
Seller under this Note and under all similar  notes  issued by the  Purchaser to
the  Seller  in   connection   with  any   previous  or  future   securitization
transactions.

<PAGE>

             "SENIOR  LIABILITIES" means all obligations of the Purchaser to the
Trust and any other  obligations of the Purchaser arising under or in connection
with the Sale and Servicing Agreement,  howsoever created, arising or evidenced,
whether direct or indirect,  absolute or contingent, now or thereafter existing,
or due or to become due on or before the Final Maturity Date.

             "SUBORDINATION PROVISIONS" means, collectively, clauses (a) through
(j) of paragraph 7 hereof.

         3. INTEREST.  Subject to the Subordination  Provisions and paragraph 10
hereof, the Purchaser promises to pay interest on the aggregate unpaid principal
amount of this Note  outstanding  on each day,  at a variable  rate equal to the
rate publicly announced by the Indenture Trustee from time to time as its "prime
lending rate."

         4. INTEREST  PAYMENT DATES.  Subject to the  Subordination  Provisions,
paragraph 10 hereof and Section 10.02 of the Purchase  Agreement,  the Purchaser
shall pay accrued  interest on this Note on each  Payment  Date and on the Final
Maturity Date.  The Purchaser  also shall pay accrued  interest on the principal
amount of each prepayment hereof on the date of each such prepayment.

         5. BASIS OF COMPUTATION.  Interest accrued  hereunder shall be computed
for the actual number of days elapsed on the basis of a 360-day year.

         6. PRINCIPAL PAYMENT DATES.  Subject to the  Subordination  Provisions,
any unpaid  principal of this Note shall be paid on the Final Maturity Date (or,
if such date is not a Business Day, the next succeeding  Business Day).  Subject
to the  Subordination  Provisions,  paragraph 10 hereof and Section 10.02 of the
Purchase  Agreement,  the principal  amount of and accrued interest on this Note
may be prepaid on any Business Day without premium or penalty.

         7. SUBORDINATION  PROVISIONS.  The Purchaser  covenants and agrees, and
the Seller, by its acceptance of this Note,  likewise covenants and agrees, that
the payment of all Junior Liabilities is hereby expressly  subordinated in right
of payment to the  payment  and  performance  of the Senior  Liabilities  to the
extent and in the manner set forth in the following clauses of this paragraph 7:

             (a) (i) In the event of any dissolution,  winding up,  liquidation,
readjustment,  reorganization  or other similar event relating to the Purchaser,
whether  voluntary  or  involuntary,   partial  or  complete,   and  whether  in
bankruptcy,  insolvency,  receivership or other similar proceedings,  or upon an
assignment for the benefit of creditors,  or any other marshalling of the assets
and liabilities of the Purchaser or any sale of all or substantially  all of the
assets of the  Purchaser  except  pursuant to the Sale and  Servicing  Agreement
(such proceedings being herein  collectively  called "BANKRUPTCY  PROCEEDINGS"),
and  (ii) on and  after  the  occurrence  of an  Event of  Default,  the  Senior
Liabilities  shall  first be paid and  performed  in full and in cash before the
Seller shall be entitled to receive and to retain any payment or distribution in
respect of the Junior Liabilities.  In order to implement the foregoing: (x) all
payments  and  distributions  of any kind or  character in respect of the Junior
Liabilities  to which the Seller would be entitled shall be made directly to the
Indenture Trustee (for the benefit of the Noteholders, and the Insurer); and

                                      A-2
<PAGE>

(y) the Seller hereby  irrevocably  agrees that the Indenture Trustee (on behalf
of the  Noteholders),  in the name of the Seller or otherwise,  may demand,  sue
for,   collect,   receive  and  receipt  for  any  and  all  such   payments  or
distributions,  and  file,  prove  and vote or  consent  in any such  Bankruptcy
Proceedings  with  respect to any and all claims of the Seller  relating  to the
Junior  Liabilities,  in each case until the Senior  Liabilities shall have been
paid and performed in full and in cash.

             (b)  Following  the  occurrence  of any of the events  described in
CLAUSE  (a)(i) OR (ii),  in the event that the Seller  receives  any  payment or
other distribution of any kind or character from the Purchaser or from any other
source whatsoever,  in respect of the Junior Liabilities,  such payment or other
distribution  shall be received in trust for the Indenture  Trustee and shall be
turned  over by the  Seller to the  Indenture  Trustee  (for the  benefit of the
Noteholders, and the Insurer) forthwith. All payments and distributions received
by the Indenture  Trustee in respect of this Note, to the extent  received in or
converted into cash, may be applied by the Indenture Trustee (for the benefit of
the  Noteholders and the Insurer) first to the payment of any and all reasonable
expenses  (including  reasonable  attorneys'  fees and legal  expenses)  paid or
incurred by the Indenture  Trustee,  the Noteholders or the Insurer in enforcing
these Subordination Provisions, or in endeavoring to collect or realize upon the
Junior Liabilities,  and any balance thereof shall, solely as between the Seller
and the Noteholders and the Insurer,  be applied by the Indenture Trustee toward
the payment of the Senior  Liabilities  in a manner  determined by the Indenture
Trustee to be in accordance with the Indenture; but as between the Purchaser and
its creditors,  no such payments or distributions of any kind or character shall
be deemed to be payments or distributions in respect of the Senior Liabilities.

             (c)  Upon  the  final  payment  in full  and in cash of all  Senior
Liabilities,  the Seller  shall be  subrogated  to the  rights of the  Indenture
Trustee  to  receive  payments  or  distributions  from the  Purchaser  that are
applicable to the Senior  Liabilities  until the Junior  Liabilities are paid in
full.

             (d) These  Subordination  Provisions  are  intended  solely for the
purpose of defining the relative rights of the Seller,  on the one hand, and the
Indenture Trustee (on behalf of Noteholders and the Insurer), on the other hand.
Nothing  contained in these  Subordination  Provisions or elsewhere in this Note
(subject to paragraph 10 hereof) is intended to or shall impair,  as between the
Purchaser,  its creditors  (other than the  Noteholders and the Insurer) and the
Seller, the Purchaser's obligation,  which is unconditional and absolute, to pay
the  Junior  Liabilities  as and when the same shall  become due and  payable in
accordance  with the terms  hereof  (subject to  paragraph 10 hereof) and of the
Purchase  Agreement or to affect the relative rights of the Seller and creditors
of the Purchaser (other than the Noteholders and the Insurer).

             (e) The Seller shall not,  until the Senior  Liabilities  have been
finally paid and  performed  in full and in cash,  (i) cancel,  waive,  forgive,
transfer or assign,  or commence  legal  proceedings  to enforce or collect,  or
subordinate to any obligation of the Purchaser,  howsoever  created,  arising or
evidenced,  whether  direct  or  indirect,  absolute  or  contingent,  or now or
thereafter   existing,   or  due  or  to  become  due  (other  than  the  Senior
Liabilities),  the Junior  Liabilities  or any rights in respect  hereof or (ii)
convert the Junior Liabilities into an equity interest in the Purchaser, unless,
in the case of each of  CLAUSES  (i) AND  (ii)  above,  the  Seller  shall  have
received the prior written  consent of the Indenture  Trustee and the Insurer in
each case.

                                      A-3
<PAGE>

             (f) The Seller  shall  not,  except  without  the  advance  written
consent of the  Indenture  Trustee  and the Insurer  commence,  or join with any
other  Person in  commencing,  any  Bankruptcy  Proceedings  with respect to the
Purchaser  until at least one year and one day have passed since the Termination
Date.

             (g) If, at any time,  any of the payment (in whole or in part) made
with  respect to any Senior  Liabilities  is  rescinded  or must be  restored or
returned by the  Indenture  Trustee or  Noteholders  or the Insurer  (whether in
connection with any Bankruptcy  Proceedings or otherwise),  these  Subordination
Provisions  shall continue to be effective or shall be  reinstated,  as the case
may be, as though such payment had not been made.

             (h)  The  Indenture  Trustee  (on  behalf  of  Noteholders  and the
Insurer) may, from time to time,  with the consent of the Insurer without notice
to the Seller,  and without waiving any of its rights under these  Subordination
Provisions,  take any or all of the  following  actions:  retain  or  obtain  an
interest in any property to secure any of the Senior Liabilities; (ii) retain or
obtain the primary or  secondary  obligations  of any other  obligor or obligors
with respect to any of the Senior Liabilities;  (iii) extend or renew for one or
more periods (whether or not longer than the original period), alter or exchange
any of the Senior  Liabilities,  or release or compromise  any obligation of any
nature with respect to any of the Senior  Liabilities;  (iv) amend,  supplement,
amend and restate,  or otherwise modify the Sale and Servicing  Agreement or any
related document; and (v) release its security interest in or surrender, release
or permit  any  substitution  or  exchange  for all or any part of any rights or
property securing any of the Senior  Liabilities,  or extend or renew for one or
more  periods  (whether  or not longer  than the  original  period) or  release,
compromise,  alter or exchange any obligations of any nature of any obligor with
respect to any such rights or property.

             (i) The Seller  hereby  waives:  (i) notice of  acceptance of these
Subordination  Provisions by any of the Noteholders and the Insurer, (ii) notice
of the existence,  creation, non-payment or non-performance of all or any of the
Senior  Liabilities;  and (iii) all  diligence  in  enforcement,  collection  or
protection of, or realization upon, the Senior  Liabilities,  or any thereof, or
any security therefor.

             (j) These  Subordination  Provisions  constitute a continuing offer
from the  Purchaser to all Persons who become the holders of, or who continue to
hold, Senior Liabilities;  and these  Subordination  Provisions are made for the
benefit of the  Noteholders  and the  Insurer,  and the  Indenture  Trustee  may
proceed to enforce such provisions on behalf of each of such Persons.

         8. GENERAL. No failure or delay on the part of the Seller in exercising
any power or right hereunder  shall operate as a waiver  thereof,  nor shall any
single or  partial  exercise  of any such power or right  preclude  any other or
further  exercise  thereof  or the  exercise  of any other  power or  right.  No
amendment,  modification or waiver of, or consent with respect to, any provision
of this Note  shall in any event be  effective  unless  (a) the same shall be in
writing and signed and delivered by the  Purchaser  and the Seller,  and (b) all
consents required for such actions under the Purchase Agreement and the Sale and
Servicing  Agreement  shall have been received by the appropriate  Persons.  The
rights  and  remedies  granted  hereunder  to  the  Indenture  Trustee  and  the
Noteholders  are subject to exercise as provided in the Purchase  Agreement  and
the Sale and Servicing Agreement.

                                      A-4
<PAGE>

         9. LIMITATION ON INTEREST. Notwithstanding anything in this Note to the
contrary,  the Purchaser shall never be required to pay unearned interest on any
amount outstanding hereunder, and shall never be required to pay interest on the
principal  amount  outstanding  hereunder  at a rate in  excess  of the  maximum
interest rate that may be contracted for, charged or received without  violation
of applicable federal or state law.

         10.  ACKNOWLEDGMENT.  The Seller acknowledges and agrees that it has no
rights to  payment  under  this  Note,  and will not make any claim for  payment
hereunder,  unless funds are available for payment by the Purchaser in excess of
amounts due and payable by it at the time under the  Indenture  and the Sale and
Servicing  Agreement  and under all similar notes issued by the Purchaser to the
Seller in connection with any previous or future securitizations.

         11. NO NEGOTIATION. This Note is not negotiable.

         12.  GOVERNING  LAW.  THIS NOTE SHALL BE DEEMED TO BE A  CONTRACT  MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT  REGARD
TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW).

         13. CAPTIONS.  Paragraph captions used in this Note are provided solely
for  convenience  of  reference  only  and  shall  not  affect  the  meaning  or
interpretation of any provision of this Note.

                                             GREENPOINT MORTGAGE SECURITIES LLC

                                             By:
                                                 ------------------------------

                                             Name:
                                                   ----------------------------

                                             Title:
                                                    ---------------------------

                                      A-5
<PAGE>

                                                                      SCHEDULE I

                             MORTGAGE LOAN SCHEDULE

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