Document:

Exhibit 4.1

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                    GREENPOINT HOME EQUITY LOAN TRUST 200_-_

                    Class A Variable Rate Asset Backed Notes

                                    INDENTURE

                            Dated as of _______, 200_

                               [INDENTURE TRUSTEE]
                                Indenture Trustee

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                                TABLE OF CONTENTS
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ARTICLE I Definitions and Incorporation by Reference...........................2

      SECTION 1.1.    Definitions..............................................2
      SECTION 1.2.    Incorporation by Reference of the Trust Indenture Act....2
      SECTION 1.3.    Rules of Construction....................................3
      SECTION 1.4.    Action by or Consent of Noteholders and
                        Residual Certificateholders............................3
      SECTION 1.5.    Conflict with TIA........................................3

ARTICLE II The Notes  4

      SECTION 2.1.    Form   4
      SECTION 2.2.    Execution, Authentication and Delivery...................4
      SECTION 2.3.    Registration; Registration of Transfer and Exchange......4
      SECTION 2.4.    Mutilated, Destroyed, Lost or Stolen Notes...............6
      SECTION 2.5.    Persons Deemed Owners....................................7
      SECTION 2.6.    Payment of Principal and Interest; Defaulted Interest....7
      SECTION 2.7.    Cancellation.............................................8
      SECTION 2.8.    Release of Collateral....................................8
      SECTION 2.9.    Book-Entry Notes.........................................8
      SECTION 2.10.   Notices to Clearing Agency...............................9
      SECTION 2.11.   Definitive Notes.........................................9

ARTICLE III Covenants; Representations and Warranties of the Issuer...........10

      SECTION 3.1.    Payment of Principal and Interest.......................10
      SECTION 3.2.    Maintenance of Office or Agency.........................10
      SECTION 3.3.    Money for Payments to be Held in Trust..................10
      SECTION 3.4.    Existence...............................................11
      SECTION 3.5.    Protection of Trust Property............................11
      SECTION 3.6.    Opinions as to Trust Property...........................12
      SECTION 3.7.    Performance of Obligations; Servicing of
                        Mortgage Loans........................................13
      SECTION 3.8.    Negative Covenants......................................14
      SECTION 3.9.    Annual Statement as to Compliance.......................14
      SECTION 3.10.   Issuer May Not Consolidate or Transfer Assets...........15
      SECTION 3.11.   No Other Business.......................................15
      SECTION 3.12.   No Borrowing............................................15
      SECTION 3.13.   Servicer's Obligations..................................15
      SECTION 3.14.   Guarantees, Loans, Advances and Other Liabilities.......15
      SECTION 3.15.   Capital Expenditures....................................15
      SECTION 3.16.   Compliance with Laws....................................15
      SECTION 3.17.   Restricted Payments.....................................16
      SECTION 3.18.   Notice of Rapid Amortization Events and
                        Events of Servicing Termination.......................16
      SECTION 3.19.   Further Instruments and Acts............................16

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      SECTION 3.20.   Amendments of Sale and Servicing Agreement
                        and Trust Agreement...................................16
      SECTION 3.21.   Income Tax Characterization.............................16
      SECTION 3.22.   Representations and Warranties of the Issuer
                        Regarding the Lien of the Indenture Trustee...........16

ARTICLE IV Satisfaction and Discharge.........................................17

      SECTION 4.1.    Satisfaction and Discharge of Indenture.................17
      SECTION 4.2.    Application of Trust Money..............................18
      SECTION 4.3.    Repayment of Monies Held by Note Paying Agent...........18

ARTICLE V Remedies............................................................18

      SECTION 5.1.    Remedies 18
      SECTION 5.2.    Limitation of Suits.....................................19
      SECTION 5.3.    Unconditional Rights of Noteholders To Receive
                        Principal and Interest................................19
      SECTION 5.4.    Restoration of Rights and Remedies......................20
      SECTION 5.5.    Rights and Remedies Cumulative..........................20
      SECTION 5.6.    Delay or Omission Not a Waiver..........................20
      SECTION 5.7.    Control by Insurer and Noteholders......................20
      SECTION 5.8.    Undertaking for Costs...................................20
      SECTION 5.9.    Waiver of Stay or Extension Laws........................21
      SECTION 5.10.   Action on Notes.........................................21
      SECTION 5.11.   Performance and Enforcement of Certain Obligations......21
      SECTION 5.12.   Subrogation.............................................22
      SECTION 5.13.   Preference Claims.......................................22
      SECTION 5.14.   Noteholder Rights.......................................23
      SECTION 5.15.   Insurer's Rights Regarding Actions, Proceedings
                        or Investigations.....................................23

ARTICLE VI The Indenture Trustee..............................................24

      SECTION 6.1.    Duties of Indenture Trustee.............................24
      SECTION 6.2.    Rights of Indenture Trustee.............................26
      SECTION 6.3.    Individual Rights of Indenture Trustee..................27
      SECTION 6.4.    Indenture Trustee's Disclaimer..........................27
      SECTION 6.5.    Notice of Rapid Amortization Events
                        and Events of Servicing Termination...................27
      SECTION 6.6.    Reports by Indenture Trustee to Holders.................27
      SECTION 6.7.    Compensation and Indemnity..............................28
      SECTION 6.8.    Replacement of Indenture Trustee........................28
      SECTION 6.9.    Successor Indenture Trustee by Merger...................30
      SECTION 6.10.   Appointment of Co-Indenture Trustee
                        or Separate Indenture Trustee.........................30
      SECTION 6.11.   Eligibility; Disqualification...........................32
      SECTION 6.12.   Preferential Collection of Claims Against Issuer........32
      SECTION 6.13.   Appointment and Powers..................................32

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      SECTION 6.14.   Performance of Duties...................................32
      SECTION 6.15.   Limitation on Liability.................................32
      SECTION 6.16.   Reliance Upon Documents.................................33
      SECTION 6.17.   Representations and Warranties
                        of the Indenture Trustee..............................33
      SECTION 6.18.   Waiver of Setoffs.......................................33
      SECTION 6.19.   Control by the Controlling Party........................33
      SECTION 6.20.   Indenture Trustee May Enforce Claims
                        Without Possession of Notes...........................34
      SECTION 6.21.   Suits for Enforcement...................................34
      SECTION 6.22.   Mortgagor Claims........................................34

ARTICLE VII Noteholders' Lists and Reports....................................35

      SECTION 7.1.    Issuer To Furnish To Indenture Trustee Names
                        and Addresses of Noteholders..........................35
      SECTION 7.2.    Preservation of Information; Communications
                        to Noteholders........................................35
      SECTION 7.3.    Reports by Issuer.......................................35
      SECTION 7.4.    Reports by Indenture Trustee............................36

ARTICLE VIII Payments and Statements to Noteholders and Residual
             Noteholders; Accounts, Disbursements and Releases................36

      SECTION 8.1.    Collection of Money.....................................36
      SECTION 8.2.    Release of Trust Property...............................37
      SECTION 8.3.    Establishment of Accounts...............................37
      SECTION 8.4.    The Policy..............................................37
      SECTION 8.5.    Payments under the GreenPoint Bank Demand Note:.........38
      SECTION 8.6.    [Reserved]..............................................39
      SECTION 8.7.    Priority of Distributions...............................39
      SECTION 8.8.    Statements to Noteholders...............................41
      SECTION 8.9.    Indenture Trustee Annual Certification..................43
      SECTION 8.10.   Rights of Noteholders and Residual Certificateholders...43
      SECTION 8.11.   Opinion of Counsel......................................43

ARTICLE IX Supplemental Indentures............................................44

      SECTION 9.1.    Supplemental Indentures Without Consent of Noteholders..44
      SECTION 9.2.    Supplemental Indentures with Consent of Noteholders.....45
      SECTION 9.3.    Execution of Supplemental Indentures....................46
      SECTION 9.4.    Effect of Supplemental Indenture........................47
      SECTION 9.5.    Reference in Notes to Conformity With Trust
                      Indenture Act...........................................47
      SECTION 9.6.    Reference in Notes to Supplemental Indentures...........47

ARTICLE X Redemption of Notes.................................................47

      SECTION 10.1.   Redemption..............................................47
      SECTION 10.2.   Surrender of Notes......................................48
      SECTION 10.3.   Form of Redemption Notice...............................49
      SECTION 10.4.   Notes Payable on Redemption Date........................49

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ARTICLE XI Miscellaneous......................................................49

      SECTION 11.1.   Compliance Certificates and Opinions, etc...............49
      SECTION 11.2.   Form of Documents Delivered to Indenture Trustee........50
      SECTION 11.3.   Acts of Noteholders.....................................51
      SECTION 11.4.   Notices, etc., to Indenture Trustee, Issuer, Insurer
                        and Rating Agencies...................................51
      SECTION 11.5.   Notices to Noteholders; Waiver..........................52
      SECTION 11.6.   Alternate Payment and Notice Provisions.................53
      SECTION 11.7.   Conflict with Trust Indenture Act.......................53
      SECTION 11.8.   Effect of Headings and Table of Contents................53
      SECTION 11.9.   Successors and Assigns..................................53
      SECTION 11.10.  Separability............................................53
      SECTION 11.11.  Benefits of Indenture...................................53
      SECTION 11.12.  Legal Holidays..........................................54
      SECTION 11.13.  GOVERNING LAW...........................................54
      SECTION 11.14.  Counterparts............................................54
      SECTION 11.15.  Recording of Indenture..................................54
      SECTION 11.16.  Trust Obligation........................................54
      SECTION 11.17.  No Petition.............................................55
      SECTION 11.18.  Inspection..............................................55
      SECTION 11.19.  Limitation of Liability.................................55

ARTICLE XII Rapid Amortization Events.........................................55

      SECTION 12.1.   Rapid Amortization Events...............................55

ANNEX A          -    Defined Terms

EXHIBIT A        -    Form of Class A Note

EXHIBIT B        -    Form of Opinion of Counsel

EXHIBIT C        -    Form of Certification to be Provided by the Manager
                      to the Indenture Trustee

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              INDENTURE,  dated as of _______,  200_ (the "INDENTURE"),  between
GREENPOINT  HOME  EQUITY  LOAN TRUST  200_-_,  a Delaware  statutory  trust (the
"ISSUER"), and [INDENTURE TRUSTEE], as trustee (the "INDENTURE TRUSTEE").

              Each party  agrees as follows  for the  benefit of the other party
and for the equal and  ratable  benefit of the Holders of the  Issuer's  Class A
Variable Rate Asset Backed Notes (the "NOTES")

              As security for the payment and  performance  by the Issuer of its
obligations  under this Indenture and the Notes, the Issuer has agreed to assign
the  Collateral  (as defined  below) to the  Indenture  Trustee on behalf of the
Noteholders and the Insurer.

              [Insurer]  (the  "INSURER")  has issued and  delivered a financial
guaranty  insurance policy for the Notes, dated the Closing Date (the "POLICY"),
pursuant to which the Insurer  guarantees  the  Insured  Amounts and  Preference
Amount (as defined in the Policy).

              As an  inducement  to the Insurer to issue and deliver the Policy,
the Issuer and the  Insurer  have  executed  and  delivered  the  Insurance  and
Indemnity  Agreement,  dated as of _______,  200_ (as amended from time to time,
the "INSURANCE AGREEMENT"),  among the Insurer, the Issuer,  GreenPoint Mortgage
Funding, Inc., GreenPoint Mortgage Securities LLC and the Indenture Trustee.

              As an  additional  inducement  to the Insurer to issue the Policy,
and as security for the  performance by the Issuer of the Insurer Issuer Secured
Obligations  and as security for the  performance by the Issuer of the Indenture
Trustee  Issuer Secured  Obligations,  the Issuer has agreed to grant and assign
the Collateral  (as defined  below) to the Indenture  Trustee for the benefit of
the Issuer Secured Parties, as their respective interests may appear.

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                                 GRANTING CLAUSE

The Issuer hereby Grants to the Indenture  Trustee at the Closing Date,  for the
benefit of the Issuer  Secured  Parties  all of the  Issuer's  right,  title and
interest  in and to: (i) a pool (the  "POOL") of  certain  adjustable  rate home
equity  revolving  credit line loans ("HELOC  MORTGAGE  LOANS")  (including  any
Additional  Balances  related thereto) and second lien closed-end loans ("CLOSED
END MORTGAGE LOANS") (the "MORTGAGE LOANS") in each case as set forth in Exhibit
A to the Sale and Servicing  Agreement;  (ii) the  collections in respect of the
Mortgage  Loans after the Cut-Off Date;  (iii)  property that secured a Mortgage
Loan that has been acquired by foreclosure or deed in lieu of foreclosure;  (iv)
rights of the Sponsor  under hazard  insurance  policies  covering the Mortgaged
Properties;  (v) amounts on deposit from time to time in the Collection Account;
(vi) all rights under the Purchase  Agreement  assigned to the Issuer (including
all  representations  and  warranties of the Seller  contained  therein) and all
rights of the Issuer under the Sale and  Servicing  Agreement;  (vii) the Policy
(solely  for the  benefit of the  Noteholders);  (viii) the  Demand  Note;  (ix)
amounts on deposit from time to time in the Demand Note Reserve Account; and (x)
any and all proceeds of the  foregoing  (the items set forth in (i) through (ix)
above, the "COLLATERAL").

              The foregoing Grant is made in trust to the Indenture Trustee, for
the benefit FIRST, of the Holders of the Notes,  and SECOND,  for the benefit of
the Insurer.  The Indenture Trustee hereby acknowledges such Grant,  accepts the
trusts under this Indenture in accordance  with the provisions of this Indenture
and agrees to perform its duties  required in this  Indenture to the best of its
ability  to the  end  that  the  interests  of  such  parties,  recognizing  the
priorities  of their  respective  interests may be  adequately  and  effectively
protected.

              The Indenture  Trustee  hereby agrees that it will hold the Policy
in trust and that it will hold any  proceeds  of any claim  made upon the Policy
solely for the use and the benefit of the  Noteholders  in  accordance  with the
terms hereof and the terms of the Policy.

              Neither  the  Indenture  Trustee  nor the Issuer  assumes or shall
assume any  obligation  under any Credit Line  Agreement  that  provides for the
funding of future Draws to the Mortgagor  thereunder,  and neither the Indenture
Trustee nor the Issuer  shall be  obligated or permitted to fund any such future
Draws.

                                   ARTICLE I

                   DEFINITIONS AND INCORPORATION BY REFERENCE

              SECTION 1.1.  DEFINITIONS.  Except as otherwise  specified herein,
the following  terms have the  respective  meanings set forth in Annex A to this
Indenture.

              SECTION 1.2.  INCORPORATION  BY  REFERENCE OF THE TRUST  INDENTURE
ACT.  Whenever this Indenture  refers to a provision of the Trust  Indenture Act
("TIA"),  the provision is  incorporated by reference in and made a part of this
Indenture.  The  following TIA terms used in this  Indenture  have the following
meanings:

              "Commission" means the Securities and Exchange Commission.

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              "indenture securities" means the Notes.

              "indenture security holder" means a Holder of a Note.

              "indenture to be qualified" means this Indenture.

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

              "obligor" on the indenture securities means the Issuer.

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

              SECTION 1.3. RULES OF CONSTRUCTION.  Unless the context  otherwise
requires:

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

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

                     (iii)  "or" is not exclusive;

                     (iv)   "including" means including without limitation; and

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

              SECTION  1.4.  ACTION BY OR CONSENT OF  NOTEHOLDERS  AND  RESIDUAL
CERTIFICATEHOLDERS. Whenever any provision of this Indenture 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 Residual Certificate  registered in the name of
GreenPoint  Mortgage Funding,  Inc. or any Affiliate thereof shall be deemed not
to  be  outstanding;   PROVIDED,  HOWEVER,  that,  solely  for  the  purpose  of
determining  whether the  Indenture  Trustee or the Owner 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.

              SECTION 1.5.  CONFLICT WITH TIA. If any provision  hereof  limits,
qualifies  or conflicts  with a provision of the TIA that is required  under the
TIA to be part of and govern this Indenture,  the latter provision shall control
and all provisions required by the TIA are hereby incorporated by reference.  If
any  provision of this  Indenture  modifies or excludes any provision of the TIA
that may be so modified or excluded,  the latter  provisions  shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.

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                                   ARTICLE II

                                    THE NOTES

              SECTION 2.1. FORM. The Class A Notes,  together with the Indenture
Trustee's certificate of authentication,  shall be in substantially the form set
forth  in  Exhibit  A  hereto,  with  such  appropriate  insertions,  omissions,
substitutions  and  other  variations  as are  required  or  permitted  by  this
Indenture  and may have such letters,  numbers or other marks of  identification
and such legends or endorsements placed thereon as may,  consistently  herewith,
be  determined  by the  officers  executing  such Notes,  as  evidenced by their
execution of the Notes. Any portion of the text of any Notes may be set forth on
the reverse thereof,  with an appropriate  reference  thereto on the face of the
Note.

              Each Note shall be dated the date of its authentication. The terms
of the Notes set forth in Exhibit A are part of the terms of this Indenture.

              SECTION 2.2.  EXECUTION,  AUTHENTICATION  AND DELIVERY.  The Notes
shall be executed on behalf of the Issuer by any of its Authorized Officers. The
signature  of any such  Authorized  Officer  on the  Notes  may be  original  or
facsimile.

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

              The Indenture Trustee shall authenticate and deliver Class A Notes
for original  issue in the aggregate  principal  amount of  $_____________.  The
Class A Notes outstanding at any time may not exceed such amounts.

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

              No Note shall be entitled to any benefit  under this  Indenture or
be valid or obligatory  for any purpose,  unless there appears  attached to such
Note a  certificate  of  authentication  substantially  in the form provided for
herein executed by the Indenture  Trustee by the manual  signature of one of its
authorized  signatories,  and such  certificate  attached  to any Notes shall be
conclusive  evidence,  and the only  evidence,  that such  Notes  have been duly
authenticated and delivered hereunder.  Subject to Section 2.11, the Notes shall
be Book Entry Notes.

              SECTION 2.3. REGISTRATION;  REGISTRATION OF TRANSFER AND EXCHANGE.
The Issuer  shall cause to be kept a register  (the "NOTE  REGISTER")  in which,
subject to such  reasonable  regulations as it may  prescribe,  the Issuer shall
provide for the  registration  of Notes and the  registration  of  transfers  of
Notes.  The  Indenture  Trustee  shall be "Note  Registrar"  for the  purpose of
registering  Notes  and  transfers  of  Notes  as  herein  provided.   Upon  any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects  not to make such an  appointment,  assume  the  duties of Note
Registrar.

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              If a Person other than the  Indenture  Trustee is appointed by the
Issuer as Note  Registrar,  the Issuer will give the  Indenture  Trustee and the
Insurer prompt  written notice of the  appointment of such Note Registrar and of
the location,  and any change in the  location,  of the Note  Register,  and the
Indenture  Trustee  and the  Insurer  shall have the right to  inspect  the Note
Register at all  reasonable  times and to obtain copies  thereof.  The Indenture
Trustee  shall have the right to rely upon a  certificate  executed on behalf of
the  Note  Registrar  by an  Authorized  Officer  thereof  as to the  names  and
addresses  of the Holders of the Notes and the  principal  amounts and number of
such Notes.

              Upon  surrender  for  registration  or transfer of any Note at the
office or agency of the Issuer to be  maintained as provided in Section 3.2, and
if the  requirements  of Section  8-401(1) of the UCC are met,  the Issuer shall
execute or cause the Indenture Trustee to authenticate one or more new Notes, in
any authorized  denominations,  of the same class and a like aggregate principal
amount. A Noteholder may also obtain from the Indenture Trustee,  in the name of
the  designated  transferee  or  transferees  one  or  more  new  Notes,  in any
authorized  denominations,  of the same  class  and a like  aggregate  principal
amount.  Such requirements shall not be deemed to create a duty in the Indenture
Trustee to monitor the compliance by the Issuer with Section 8-401 of the UCC.

              At the  option of the  Holder,  Notes may be  exchanged  for other
Notes in any  authorized  denominations,  of the same class and a like aggregate
principal amount,  upon surrender of the Notes to be exchanged at such office or
agency.  Whenever  any  Notes  are  so  surrendered  for  exchange,  and  if the
requirements  of Section  8-401(1) of the UCC are met, the Issuer shall  execute
and upon its request the Indenture  Trustee shall  authenticate  the Notes which
the  Noteholder  making the exchange is entitled to receive.  Such  requirements
shall not be deemed to create a duty in the  Indenture  Trustee to  monitor  the
compliance by the Issuer with Section 8-401 of the UCC.

              All Notes issued upon any  registration of transfer or exchange of
Notes shall be the valid  obligations  of the Issuer,  evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.

              Every Note presented or surrendered  for  registration of transfer
or  exchange  shall be (i) duly  endorsed  by,  or be  accompanied  by a written
instrument  of transfer in the form  attached to Exhibit A, duly executed by the
Holder thereof or such Holder's  attorney duly authorized in writing,  with such
signature  guaranteed  by  an  "eligible  guarantor   institution"  meeting  the
requirements  of the Note Registrar all in accordance with the Exchange Act, and
(ii) accompanied by such other documents as the Note Registrar may require.

              No service  charge shall be made to a Holder for any  registration
of transfer or exchange of Notes,  but the Note Registrar may require payment of
a sum  sufficient  to cover  any tax or other  governmental  charge  that may be
imposed in connection  with any  registration  of transfer or exchange of Notes,
other than exchanges pursuant to Section 2.4 or 9.6 not involving any transfer.

              The Note Registrar shall not register the transfer of a Definitive
Note unless the Indenture Trustee has received a representation  letter (in form
and substance satisfactory to the

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Indenture Trustee) from the prospective transferee to the effect that either (a)
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 or a plan (as
defined in Section  4975(e)(1)  of the Code) that is subject to Section  4975 of
the Code (each,  a "BENEFIT  PLAN") and is not acting on behalf of or  investing
the assets of a Benefit Plan or (b) the  acquisition  and  continued  holding of
such  Note by the  transferee  will be  covered  by a U.S.  Department  of Labor
prohibited  transaction  class  exemption.  Each Note Owner,  by acceptance of a
beneficial  interest  in a  Book-Entry  Note,  will be deemed to make one of the
foregoing representations.

              SECTION 2.4.  MUTILATED,  DESTROYED,  LOST OR STOLEN NOTES. If (i)
any mutilated Note is surrendered to the Note  Registrar,  or the Note Registrar
receives  evidence to its satisfaction of the destruction,  loss or theft of any
Note, and (ii) there is delivered to the Indenture  Trustee and the Insurer such
security or indemnity as may be required by it to hold the Issuer, the Indenture
Trustee and the Insurer harmless,  then, in the absence of notice to the Issuer,
the Note Registrar or the Indenture  Trustee that such Note has been acquired by
a bona fide  purchaser,  and provided that the  requirements of Section 8-405 of
the UCC are met,  the Issuer  shall  execute and upon its request the  Indenture
Trustee shall  authenticate and deliver,  in exchange for or in lieu of any such
mutilated,  destroyed, lost or stolen Note, a replacement Note (such requirement
shall not be deemed to create a duty in the  Indenture  Trustee to  monitor  the
compliance by the Issuer with Section  8-405);  PROVIDED,  HOWEVER,  that if any
such destroyed, lost or stolen Note, but not a mutilated Note, shall have become
or within  seven days shall be due and  payable,  or shall have been  called for
redemption,  the Issuer may, instead of issuing a replacement  Note,  direct the
Indenture Trustee, in writing,  to pay such destroyed,  lost or stolen Note when
so due or payable or upon the Redemption  Date without  surrender  thereof.  If,
after the delivery of such replacement  Note or payment of a destroyed,  lost or
stolen  Note  pursuant  to the proviso to the  preceding  sentence,  a bona fide
purchaser of the original Note in lieu of which such replacement Note was issued
presents for payment such original Note, the Issuer,  the Indenture  Trustee and
the Insurer shall be entitled to recover such replacement Note (or such payment)
from the Person to whom it was delivered or any Person  taking such  replacement
Note  from  such  Person  to whom such  replacement  Note was  delivered  or any
assignee of such Person, except a bona fide purchaser,  and shall be entitled to
recover upon the security or  indemnity  provided  therefor to the extent of any
loss,  damage,  cost or expense incurred by the Issuer, the Indenture Trustee or
the Insurer in connection therewith.

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

              Every   replacement  Note  issued  pursuant  to  this  Section  in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original  additional  contractual  obligation of the Issuer,  whether or not the
mutilated,  destroyed,  lost or stolen Note shall be at any time  enforceable by
anyone,  and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

                                       6
<PAGE>

              The  provisions of this Section are  exclusive and shall  preclude
(to the  extent  lawful)  all other  rights  and  remedies  with  respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.

              SECTION 2.5.  PERSONS DEEMED OWNERS.  Prior to due presentment for
registration of transfer of any Note, the Issuer,  the Indenture Trustee and the
Insurer and any agent of the Issuer,  the Indenture  Trustee and the Insurer may
treat the Person in whose name any Note is registered (as of the Record Date) as
the owner of such Note for the purpose of receiving payments of principal of and
interest, if any, on such Note and for all other purposes whatsoever, whether or
not such Note be overdue,  and none of the Issuer,  the Insurer,  the  Indenture
Trustee nor any agent of the Issuer,  the Insurer or the Indenture Trustee shall
be affected by notice to the contrary.

              SECTION  2.6.   PAYMENT  OF  PRINCIPAL  AND  INTEREST;   DEFAULTED
INTEREST.

              (a)    The Notes shall  accrue  interest as provided  herein,  and
such amount  shall be payable on each  Payment  Date as  specified  herein.  Any
installment  of  interest  or  principal,  if any,  payable on any Note which is
punctually  paid or duly  provided for by the Issuer on the  applicable  Payment
Date  shall  be paid to the  Person  in  whose  name  such  Note (or one or more
Predecessor   Notes)  is   registered  on  the  Record  Date,  by  check  mailed
first-class, postage prepaid, to such Person's address as it appears on the Note
Register on such Record Date,  except that,  unless  Definitive  Notes have been
issued pursuant to Section 2.11, with respect to Notes  registered on the Record
Date in the name of the nominee of the Clearing Agency (initially,  such nominee
to be  Cede & Co.),  payment  will be  made  by  wire  transfer  in  immediately
available  funds to the account  designated  by such  nominee and except for the
final  installment  of principal  payable with respect to such Note on a Payment
Date or on the Final Scheduled Payment Date (and except for the Redemption Price
for any Note  called for  redemption  pursuant  to Section  10.1) which shall be
payable as provided  below.  The funds  represented by any such checks  returned
undelivered shall be held in accordance with Section 3.3.

              (b)    Upon written notice from the Issuer,  the Indenture Trustee
shall  notify  the  Person in whose  name a Note is  registered  at the close of
business  on the Record  Date  preceding  the  Payment  Date on which the Issuer
expects  that the final  installment  of  principal of and interest on such Note
will be paid.  Such notice shall be mailed or transmitted by facsimile  prior to
such final  Payment Date and shall specify that such final  installment  will be
payable only upon  presentation and surrender of such Note and shall specify the
place  where such Note may be  presented  and  surrendered  for  payment of such
installment.  Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.2.

              (c)    If the  Issuer  defaults  in a payment of  interest  on the
Notes, the Issuer shall pay defaulted  interest (plus interest on such defaulted
interest to the extent lawful) at the applicable Note Rate to the extent lawful.
The Issuer may pay such defaulted interest to the Persons who are Noteholders on
a subsequent  special  Record Date,  which date shall be at least five  Business
Days prior to the Payment  Date.  The Issuer  shall fix or cause to be fixed any
such special Record Date and Payment Date, and, at least 15 days before any such
special Record Date, the Issuer shall mail to each  Noteholder,  the Insurer and
the Indenture  Trustee a notice that states the special Record Date, the Payment
Date and the amount of defaulted interest to be paid.

                                       7
<PAGE>

              (d)    Promptly  following  the date on which all principal of and
interest on the Notes has been paid in full and the Notes have been  surrendered
to the Indenture Trustee,  the Indenture Trustee shall, upon written notice from
the Servicer of the amounts, if any, that the Insurer has paid in respect of the
Notes  under  the  Policy or  otherwise  which  has not been  reimbursed  to the
Insurer,  deliver  such  surrendered  Notes to the  Insurer  to the  extent  not
previously canceled or destroyed.

              SECTION 2.7.  CANCELLATION.  Subject to Section 2.6(d),  all Notes
surrendered for payment, registration of transfer, exchange or redemption shall,
if surrendered to any Person other than the Indenture  Trustee,  be delivered to
the Indenture Trustee and shall be promptly  canceled by the Indenture  Trustee.
Subject to Section  2.6(d),  the Issuer may at any time deliver to the Indenture
Trustee  for  cancellation  any Notes  previously  authenticated  and  delivered
hereunder which the Issuer may have acquired in any manner  whatsoever,  and all
Notes so delivered shall be promptly canceled by the Indenture Trustee. No Notes
shall be  authenticated  in lieu of or in  exchange  for any Notes  canceled  as
provided in this  Section,  except as  expressly  permitted  by this  Indenture.
Subject to Section 2.6(d),  all canceled Notes may be held or disposed of by the
Indenture  Trustee in accordance with its standard  retention or disposal policy
as in effect at the time unless the Issuer  shall direct by an Issuer Order that
they be returned to it;  provided that such Issuer Order is timely and the Notes
have not been previously disposed of by the Indenture Trustee.

              SECTION 2.8. RELEASE OF COLLATERAL.  The Indenture  Trustee shall,
on or after the  Termination  Date,  release any remaining  portion of the Trust
Property from the lien created by this  Indenture and deposit in the  Collection
Account any funds then on deposit in any other  Account.  The Indenture  Trustee
shall release property from the lien created by this Indenture  pursuant to this
Section  2.8 only upon  receipt  of an Issuer  Request by it  accompanied  by an
Officer's  Certificate  and an Opinion of Counsel (which shall also be addressed
to the  Insurer)  and (if  required  by the  TIA)  Independent  Certificates  in
accordance  with  TIA  ss.ss.   314(c)  and  314(d)(1)  meeting  the  applicable
requirements of Section 11.1.

              SECTION 2.9.  BOOK-ENTRY NOTES. The Notes, upon original issuance,
will be issued in the form of  typewritten  Notes  representing  the  Book-Entry
Notes,  to be delivered to The Depository  Trust Company or its  custodian,  the
initial  Clearing  Agency,  by, or on behalf of, the  Issuer.  Such Notes  shall
initially  be  registered  on the Note  Register in the name of Cede & Co.,  the
nominee  of the  initial  Clearing  Agency,  and no Note  Owner  will  receive a
Definitive Note  representing such Note Owner's interest in such Note, except as
provided in Section 2.11.  Unless and until  definitive,  fully registered Notes
(the  "DEFINITIVE  NOTES")  have been issued to Note Owners  pursuant to Section
2.11:

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

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

                                       8
<PAGE>

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

                     (iv)   the rights of Note Owners  shall be  exercised  only
       through the Clearing Agency and shall be limited to those  established by
       law and  agreements  between  such Note  Owners and the  Clearing  Agency
       and/or the  Clearing  Agency  Participants.  Unless and until  Definitive
       Notes are issued  pursuant to Section 2.11, the initial  Clearing  Agency
       will make book-entry transfers among the Clearing Agency Participants and
       receive and  transmit  payments of principal of and interest on the Notes
       to such Clearing Agency Participants;

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

                     (vi)   Note Owners may receive  copies of any reports  sent
       to Noteholders pursuant to this Indenture, upon written request, together
       with  a   certification   that  they  are  Note  Owners  and  payment  of
       reproduction  and postage  expenses  associated with the  distribution of
       such reports, from the Indenture Trustee at the Corporate Trust Office.

              SECTION  2.10.  NOTICES TO CLEARING  AGENCY.  Whenever a notice or
other communication to the Noteholders is required under this Indenture,  unless
and until  Definitive  Notes shall have been  issued to Note Owners  pursuant to
Section  2.11,   the   Indenture   Trustee  shall  give  all  such  notices  and
communications  specified  herein  to be given to  Holders  of the  Notes to the
Clearing Agency, and shall have no obligation to the Note Owners.

              SECTION 2.11.  DEFINITIVE  NOTES. If (i) the Servicer  advises the
Indenture  Trustee in writing that the Clearing  Agency is no longer  willing or
able to properly discharge its  responsibilities  with respect to the Notes, and
the Servicer is unable to locate a qualified successor, (ii) the Servicer at its
option advises the Indenture  Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence of a
Rapid  Amortization  Event,  Note  Owners  representing   beneficial   interests
aggregating  at least a majority of the  Outstanding  Amount of the Notes advise
the  Indenture   Trustee  through  the  Clearing  Agency  in  writing  that  the
continuation  of a book entry system through the Clearing Agency is no longer in
the best interests of the Note Owners, then the Clearing Agency shall notify all
Note Owners and the Indenture Trustee of the occurrence of any such event and of
the  availability of Definitive  Notes to Note Owners  requesting the same. Upon
surrender to the Indenture Trustee of the typewritten Note or Notes representing
the  Book-Entry  Notes  by the  Clearing  Agency,  accompanied  by  registration
instructions,   the  Issuer  shall  execute  and  the  Indenture  Trustee  shall
authenticate  the Definitive  Notes in accordance  with the  instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture Trustee
shall  be  liable  for  any  delay  in  delivery  of such  instructions  and may
conclusively rely on, and shall be

                                       9
<PAGE>

protected  in relying on, such  instructions.  Upon the  issuance of  Definitive
Notes, the Indenture Trustee shall recognize the Holders of the Definitive Notes
as Noteholders.

                                  ARTICLE III

             COVENANTS; REPRESENTATIONS AND WARRANTIES OF THE ISSUER

              SECTION 3.1.  PAYMENT OF PRINCIPAL AND  INTEREST.  The Issuer will
duly and punctually pay the principal of and interest on the Notes in accordance
with the  terms  of the  Notes  and  this  Indenture.  The  Notes  shall be debt
obligations  of the Trust and shall be  limited  in right of  payment to amounts
available  from the Trust as provided in this  Indenture and the Trust shall not
otherwise  be liable for payments on the Notes.  No person  shall be  personally
liable for any amounts payable under the Notes.  Amounts properly withheld under
the Code by any  Person  from a payment to any  Noteholder  of  interest  and/or
principal  shall  be  considered  as  having  been  paid by the  Issuer  to such
Noteholder for all purposes of this Indenture.

              SECTION  3.2.  MAINTENANCE  OF OFFICE OR AGENCY.  The Issuer  will
maintain  in New  York,  New  York,  an  office  or  agency  where  Notes may be
surrendered  for  registration,  transfer or  exchange  of the Notes,  and where
notices  and  demands  to or upon the  Issuer in  respect  of the Notes and this
Indenture  may be served.  The Issuer  hereby  initially  appoints the Indenture
Trustee to serve as its agent for the foregoing  purposes.  The Issuer will give
prompt  written  notice to the  Indenture  Trustee of the  location,  and of any
change in the location,  of any such office or agency. If at any time the Issuer
shall fail to  maintain  any such  office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such surrenders, notices and demands
may be made or served at the  Corporate  Trust  Office,  and the  Issuer  hereby
appoints  the  Indenture  Trustee as its agent to receive  all such  surrenders,
notices and demands.

              SECTION 3.3.  MONEY FOR  PAYMENTS TO BE HELD IN TRUST.  The Issuer
will cause each Note Paying  Agent other than the  Indenture  Trustee to execute
and deliver to the Indenture Trustee and the Insurer an instrument in which such
Note Paying Agent shall agree with the  Indenture  Trustee (and if the Indenture
Trustee  acts as Note  Paying  Agent,  it  hereby  so  agrees),  subject  to the
provisions of this Section, that such Note Paying Agent will:

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

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

                     (iii)  at any  time  during  the  continuance  of any  such
       default,  upon the  written  request of the  Indenture  Trustee  with the
       consent  of  the  Insurer,  if the  Insurer  is  the  Controlling  Party,
       forthwith pay to the Indenture  Trustee all sums so held in trust by such
       Note Paying Agent;

                                       10
<PAGE>

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

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

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

              Subject to  applicable  laws with respect to the escheat of funds,
any money held by the  Indenture  Trustee or any Note Paying  Agent in trust for
the payment of any amount due with respect to any Note and  remaining  unclaimed
for two years after such amount has become due and payable  shall be  discharged
from  such  trust  and be paid to the  Issuer,  with the  prior  consent  of the
Insurer,  on Issuer Request,  and shall be deposited by the Indenture Trustee in
the  Collection  Account;  and the Holder of such Note shall  thereafter,  as an
unsecured  general  creditor,  look only to the Issuer for payment  thereof (but
only to the extent of the amounts so paid to the Issuer),  and all  liability of
the  Indenture  Trustee,  the Insurer or such Note Paying  Agent with respect to
such trust money shall thereupon cease; PROVIDED, HOWEVER, that if such money or
any  portion  thereof had been  previously  deposited  by the  Insurer  with the
Indenture  Trustee for the payment of principal or interest on the Notes, to the
extent any amounts are owing to the Insurer, such amounts shall be paid promptly
to the Insurer upon receipt of a written request by the Insurer to such effect.

              SECTION  3.4.  EXISTENCE.  The Issuer will keep in full effect its
existence,  rights and  franchises  as a  statutory  trust under the laws of the
State of Delaware  (unless it becomes,  or any successor  Issuer hereunder is or
becomes,  organized under the laws of any other state or of the United States of
America, in which case the Issuer will keep in full effect its existence, rights
and franchises  under the laws of such other  jurisdiction)  and will obtain and
preserve its  qualification  to do business in each  jurisdiction  in which such
qualification   is  or  shall  be   necessary   to  protect  the   validity  and
enforceability of this Indenture,  the Trust Property, the Notes, and each other
instrument or agreement included in the Trust Property.

              SECTION 3.5. PROTECTION OF TRUST PROPERTY.  The Issuer intends the
security  interest  granted  pursuant to this  Indenture  in favor of the Issuer
Secured  Parties to be prior to all other liens in respect of the Trust Property
and the Issuer shall take all actions necessary to obtain and maintain, in favor
of the Indenture Trustee, for the benefit of the Issuer Secured Parties, a first
lien on and a first priority, perfected security interest in the Trust Property.
The  Issuer  will from time to time  prepare  (or shall  cause to be  prepared),
execute and deliver all such

                                       11
<PAGE>

supplements   and  amendments   hereto  and  all  such   financing   statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:

                     (i)    Grant  more  effectively  all or any  portion of the
       Trust Property;

                     (ii)   maintain or preserve the lien and security  interest
       (and the  priority  thereof)  in favor of the  Indenture  Trustee for the
       benefit of the Issuer Secured  Parties created by this Indenture or carry
       out more effectively the purposes hereof;

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

                     (iv)   enforce  any of  the  Collateral,  including  making
       draws on the Demand Note;

                     (v)    preserve and defend title to the Trust  Property and
       the rights of the Indenture  Trustee in such Trust  Property  against the
       claims of all persons and parties; and

                     (vi)   pay all taxes or assessments levied or assessed upon
       the Trust Property when due.

The   Issuer   hereby   designates   the   Indenture   Trustee   its  agent  and
attorney-in-fact to execute any financing statement,  continuation  statement or
other  instrument  required  pursuant  to  this  Section;  PROVIDED  that,  such
designation  shall not be deemed to create a duty in the  Indenture  Trustee  to
monitor  the  compliance  of the Issuer  with  respect to its duties  under this
Section 3.5 or the adequacy of any financing statement,  continuation  statement
or other instrument prepared by the Issuer.

              SECTION 3.6. OPINIONS AS TO TRUST PROPERTY.

              (a)    On the  Closing  Date,  the  Issuer  shall  furnish  to the
Indenture Trustee and the Insurer an Opinion of Counsel in the form of Exhibit B
hereto,  stating that,  in the opinion of such  counsel,  such actions have been
taken with respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents,  and with respect to the
execution and filing of any financing statements and continuation statements, as
are necessary to perfect and make effective the first priority lien and security
interest  in favor of the  Indenture  Trustee,  for the  benefit  of the  Issuer
Secured  Parties,  created  by this  Indenture,  subject to the  exceptions  and
qualifications set forth in such Opinion of Counsel.

              (b)    Within 90 days after the beginning of each  calendar  year,
beginning in 200_,  the Issuer shall  furnish to the  Indenture  Trustee and the
Insurer,  an Opinion of Counsel  either  stating  that,  in the  opinion of such
counsel,  such actions have been taken with  respect to the  recording,  filing,
re-recording and refiling of this Indenture,  any indentures supplemental hereto
and any other  requisite  documents and with respect to the execution and filing
of any  financing  statements  and  continuation  statements as are necessary to
maintain the lien and security  interest  created by this Indenture and reciting
the details of such action or stating  that in the opinion of such  counsel,  no
such action is necessary to maintain such lien and security

                                       12
<PAGE>

interest.  Such Opinion of Counsel  shall also describe the  recording,  filing,
re-recording and refiling of this Indenture,  any indentures supplemental hereto
and any other requisite  documents and the execution and filing of any financing
statements  and  continuation  statements  that  will,  in the  opinion  of such
counsel,  be  required  to  maintain  the lien  and  security  interest  of this
Indenture.

              SECTION 3.7.  PERFORMANCE  OF  OBLIGATIONS;  SERVICING OF MORTGAGE
LOANS.

              (a)    The  Issuer  will not take any action and will use its best
efforts  not to permit any action to be taken by others  that would  release any
Person from any of such Person's  material  covenants or  obligations  under any
instrument or agreement  included in the Trust  Property or that would result in
the  amendment,  hypothecation,  subordination,  termination or discharge of, or
impair the  validity or  effectiveness  of, any such  instrument  or  agreement,
except as ordered by any  bankruptcy or other court or as expressly  provided in
this Indenture, the Basic Documents or such other instrument or agreement.

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

              (c)    The Issuer will  punctually  perform and observe all of its
obligations and agreements contained in this Indenture,  the Basic Documents and
in the instruments and agreements included in the Trust Property, including, but
not limited to,  preparing (or causing to be prepared) and filing (or causing to
be filed) all UCC financing  statements and continuation  statements required to
be filed by the terms of this Indenture and the Sale and Servicing  Agreement in
accordance  with and within the time  periods  provided  for herein and therein.
Except as  otherwise  expressly  provided  therein,  the Issuer shall not waive,
amend,  modify,  supplement  or terminate  any Basic  Document or any  provision
thereof without the consent of the Indenture Trustee and the Insurer.

              (d)    If a  Responsible  Officer of the Owner  Trustee shall have
actual  knowledge of the occurrence of an Event of Servicing  Termination  under
the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture
Trustee,  the Insurer and the Rating Agencies thereof in accordance with Section
11.4, and shall specify in such notice the action,  if any, the Issuer is taking
at the  direction of the  Controlling  Party in respect of such  default.  If an
Event of Servicing  Termination  shall arise from the failure of the Servicer to
perform any of its duties or obligations under the Sale and Servicing  Agreement
with respect to the Mortgage Loans,  the Issuer shall take all reasonable  steps
available to it to remedy such failure.

              (e)    The Issuer agrees that it will not waive timely performance
or  observance by the Servicer or the Sponsor of their  respective  duties under
the Basic  Documents  (x) without the prior consent of the Insurer or (y) if the
effect thereof would adversely affect the Holders of the Notes.

                                       13
<PAGE>

              SECTION  3.8.  NEGATIVE  COVENANTS.  So  long  as  any  Notes  are
Outstanding, the Issuer shall not:

                     (i)    except as expressly  permitted by this  Indenture or
       the Basic Documents, sell, transfer, exchange or otherwise dispose of any
       of the  properties or assets of the Issuer,  including  those included in
       the Trust  Property (but  excluding  any Mortgage  Loans removed from the
       Pool  pursuant  to  Section  2.07 of the Sale and  Servicing  Agreement),
       without the consent of the Insurer (which consent may not be unreasonably
       withheld)  PROVIDED,  that if an  Insurer  Default  has  occurred  and is
       continuing the Noteholders representing 66-2/3% of the Outstanding Amount
       may  direct  the  Indenture  Trustee  to sell  or  dispose  of the  Trust
       Property.

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

                     (iii)  (A) permit the  validity  or  effectiveness  of this
       Indenture  to be impaired,  or permit the lien in favor of the  Indenture
       Trustee   created  by  this   Indenture  to  be  amended,   hypothecated,
       subordinated,  terminated  or  discharged,  or  permit  any  Person to be
       released  from any  covenants  or  obligations  with respect to the Notes
       under this Indenture  except as may be expressly  permitted  hereby,  (B)
       permit any lien, charge,  excise, claim,  security interest,  mortgage or
       other  encumbrance  (other than the lien of this Indenture) to be created
       on or extend to or otherwise  arise upon or burden the Trust  Property or
       any part thereof or any interest  therein or the proceeds  thereof (other
       than tax liens,  mechanics' liens and other liens that arise by operation
       of law, in each case on a  Mortgaged  Property  and  arising  solely as a
       result of an action or omission of the related  obligor),  (C) permit the
       lien of this  Indenture not to constitute a valid first  priority  (other
       than with  respect to any such tax,  mechanics'  or other lien)  security
       interest  in the Trust  Property  or (D) amend,  modify or fail to comply
       with the  provisions  of the Basic  Documents  without the prior  written
       consent of the Insurer, which consent may not be unreasonably withheld.

              SECTION 3.9.  ANNUAL  STATEMENT AS TO COMPLIANCE.  The Issuer will
deliver to the Indenture  Trustee and the Insurer,  within 90 days after the end
of each  fiscal  year of the  Issuer  (commencing  with the  fiscal  year  ended
_______,  200_) and otherwise in compliance with the requirements of TIA Section
314(a)(4),  an  Officer's  Certificate  stating,  as to the  Authorized  Officer
signing such Officer's Certificate, that

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

                     (ii)   to the best of such Authorized  Officer's knowledge,
       based on such review,  the Issuer has complied  with all  conditions  and
       covenants  under this  Indenture  throughout  such year, or, if there has
       been a default in the compliance of any such

                                       14
<PAGE>

       condition  or  covenant,  specifying  each  such  default  known  to such
       Authorized Officer and the nature and status thereof.

              SECTION 3.10. ISSUER MAY NOT CONSOLIDATE OR TRANSFER ASSETS.

              (a)    The  Issuer may not  consolidate  or merge with or into any
other Person.

              (b)    Except  as  otherwise  provided  in the Sale and  Servicing
Agreement,  the Issuer shall not convey or transfer all or substantially  all of
its properties or assets, including those included in the Trust Property, to any
Person.

              SECTION  3.11. NO OTHER  BUSINESS.  The Issuer shall not engage in
any business other than  purchasing,  owning,  selling and managing the Mortgage
Loans and other  assets in the manner  contemplated  by this  Indenture  and the
Basic Documents and activities incidental thereto.

              SECTION  3.12. NO  BORROWING.  The Issuer shall not issue,  incur,
assume,  guarantee or otherwise become liable,  directly or indirectly,  for any
Indebtedness  or any  certificates  of  beneficial  interest  except for (i) the
Residual Certificates, (ii) the Notes, (iii) obligations owing from time to time
to the Insurer  under the Insurance  Agreement  and (iv) any other  indebtedness
permitted by or arising under the Basic Documents,  except that the Issuer shall
not incur any indebtedness  that would cause it, or any portion  thereof,  to be
treated  as a  "taxable  mortgage  pool"  under  Section  7701 of the Code.  The
proceeds of the Notes and the Residual Certificates shall be used exclusively to
fund the Issuer's  purchase of the Mortgage Loans and the other assets specified
in the Sale and  Servicing  Agreement  and to pay the  Issuer's  organizational,
transactional and start-up expenses.

              SECTION 3.13. SERVICER'S  OBLIGATIONS.  The Issuer shall cause the
Servicer to comply with Sections  3.09,  3.10 and 4.01 of the Sale and Servicing
Agreement and Section 8.6 herein.

              SECTION 3.14.  GUARANTEES,  LOANS, ADVANCES AND OTHER LIABILITIES.
Except as  contemplated  by the Sale and Servicing  Agreement or this Indenture,
the  Issuer  shall  not make any loan or  advance  or credit  to,  or  guarantee
(directly  or  indirectly  or by an  instrument  having the  effect of  assuring
another's  payment or performance on any obligation or capability of so doing or
otherwise),  endorse  or  otherwise  become  contingently  liable,  directly  or
indirectly, in connection with the obligations,  stocks or dividends of, or own,
purchase,  repurchase  or acquire  (or agree  contingently  to do so) any stock,
obligations,  assets or  securities  of, or any other  interest  in, or make any
capital contribution to, any other Person.

              SECTION 3.15. CAPITAL EXPENDITURES.  The Issuer shall not make any
expenditure  (by long-term or operating  lease or otherwise)  for capital assets
(either realty or personalty).

              SECTION 3.16.  COMPLIANCE  WITH LAWS. The Issuer shall comply with
the  requirements of all applicable laws, the  non-compliance  with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its  obligations  under the Notes,  this  Indenture or any
Basic Document.

                                       15
<PAGE>

              SECTION 3.17. RESTRICTED PAYMENTS.  The Issuer shall not, directly
or indirectly,  (i) pay any dividend or make any  distribution  (by reduction of
capital or otherwise),  whether in cash,  property,  securities or a combination
thereof,  to the Owner  Trustee  or any owner of a  beneficial  interest  in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the  Issuer  or to the  Servicer,  (ii)  redeem,  purchase,  retire  or
otherwise acquire for value any such ownership or equity interest or security or
(iii)  set  aside or  otherwise  segregate  any  amounts  for any such  purpose;
PROVIDED,  HOWEVER, that the Issuer may make, or cause to be made, distributions
to the Servicer,  the Owner Trustee,  the Insurer, the Indenture Trustee and the
Noteholders  as  permitted  by, and to the extent funds are  available  for such
purpose  under,  the Sale and  Servicing  Agreement,  this  Indenture,  or Trust
Agreement.  The Issuer will not,  directly or  indirectly,  make  payments to or
distributions  from the  Collection  Account  except  in  accordance  with  this
Indenture and the Basic Documents.

              SECTION 3.18.  NOTICE OF RAPID  AMORTIZATION  EVENTS AND EVENTS OF
SERVICING  TERMINATION.  Upon a Responsible  Officer of the Owner Trustee having
actual knowledge thereof,  the Issuer agrees to give the Indenture Trustee,  the
Insurer and the Rating Agencies prompt written notice of each Rapid Amortization
Event hereunder or Event of Servicing  Termination  under the Sale and Servicing
Agreement.

              SECTION 3.19.  FURTHER  INSTRUMENTS  AND ACTS. Upon request of the
Indenture  Trustee or the  Insurer,  the Issuer will  execute  and deliver  such
further  instruments and do such further acts as may be reasonably  necessary or
proper to carry out more effectively the purpose of this Indenture.

              SECTION 3.20. AMENDMENTS OF SALE AND SERVICING AGREEMENT AND TRUST
AGREEMENT.  The Issuer  shall not agree to any  amendment to Section 9.01 of the
Sale and Servicing Agreement or Section 12.1 of the Trust Agreement to eliminate
the  requirements  thereunder  that the  Indenture  Trustee,  the Insurer or the
Holders of the Notes consent to amendments thereto as provided therein.

              SECTION 3.21. INCOME TAX CHARACTERIZATION. For purposes of federal
income,  state and local income and franchise  and any other income  taxes,  the
Issuer and the  Noteholders  will treat the Notes as indebtedness of the Sponsor
and hereby instruct the Indenture  Trustee to treat the Notes as indebtedness of
the Sponsor for federal and state tax reporting purposes.

              SECTION  3.22.   REPRESENTATIONS  AND  WARRANTIES  OF  THE  ISSUER
REGARDING THE LIEN OF THE INDENTURE TRUSTEE. With respect to the Collateral, the
Issuer represents and warrants that, as of the Closing Date:

                     (i)    This  Indenture   creates  a  valid  and  continuing
       security  interest (as such term is defined in the UCC) in the Collateral
       in favor of the Indenture  Trustee,  which security  interest is prior to
       all other liens,  and is  enforceable  as such  against  creditors of and
       purchasers from the Issuer;

                     (ii)   The Mortgage Notes constitute  "instruments"  within
       the meaning of the UCC;

                                       16
<PAGE>

                     (iii)  The  Issuer  owns or will  own and has or will  have
       good  title to the  Collateral  free  and  clear  of any  lien,  claim or
       encumbrance of any Person;

                     (iv)   The Issuer has or will have  received  all  consents
       and approvals  required by the terms of the Mortgage  Loans to the pledge
       of the Mortgage Loans hereunder to the Indenture Trustee;

                     (v)    All original  executed  copies of each Mortgage Loan
       have been or will be delivered to the Custodian or the Indenture Trustee;

                     (vi)   The  Issuer  has or will  have  received  a  written
       acknowledgement  from the  Custodian  or the  Indenture  Trustee that the
       Custodian  or Indenture  Trustee is holding the Mortgage  Loans solely on
       behalf  and for the  benefit  of the  Indenture  Trustee on behalf of the
       Noteholders;

                     (vii)  Other  than the  security  interest  granted  to the
       Indenture Trustee pursuant to this Indenture, the Issuer has not pledged,
       assigned, sold, granted a security interest in, or otherwise conveyed any
       of the Collateral. The Issuer has not authorized the filing of and is not
       aware of any  financing  statement  against  the Issuer  that  includes a
       description  of any of the  Collateral  other than a financing  statement
       relating  to the  security  interest  granted  to the  Indenture  Trustee
       hereunder  or that has been  terminated.  The  Issuer is not aware of any
       judgment or tax lien filings against the Issuer; and

                     (viii) None of the  Mortgage  Notes  has or will  have  any
       marks or  notations  indicating  that it has been  pledged,  assigned  or
       otherwise conveyed to any Person other than the Indenture Trustee.

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

              SECTION 4.1. SATISFACTION AND DISCHARGE OF INDENTURE. Upon payment
in full to the  Insurer of amounts  due to the  Insurer  and on the Notes,  this
Indenture  shall cease to be of further  effect with respect to the Notes except
as to (i) the rights of registration of transfer and exchange, (ii) substitution
of mutilated,  destroyed,  lost or stolen Notes, (iii) the rights of Noteholders
to receive  payments of principal  thereof and interest  thereon,  (iv) Sections
3.3, 3.4, 3.5, 3.8, 3.10, 3.12, 3.13, 3.20 and 3.21, (v) the rights, obligations
and immunities of the Indenture Trustee  hereunder  (including the rights of the
Indenture Trustee under Section 6.7 and the obligations of the Indenture Trustee
under  Section  4.2) and (vi) the  rights  of  Noteholders  and the  Insurer  as
beneficiaries  hereof  with  respect  to the  property  so  deposited  with  the
Indenture Trustee payable to all or any of them, and the Indenture  Trustee,  on
demand of and at the expense of the Issuer,  shall  execute  proper  instruments
acknowledging  satisfaction  and discharge of this Indenture with respect to the
Notes, when

              either

              (1)    all Notes  theretofore  authenticated  and delivered (other
than (i)  Notes  that  have been  destroyed,  lost or stolen  and that have been
replaced  or paid as provided  in Section  4.5 of the Trust  Agreement  and (ii)
Notes for which payment money has theretofore been deposited

                                       17
<PAGE>

in trust or segregated and held in trust by the Issuer and thereafter  repaid to
the Issuer or discharged  from such trust, as provided in Section 3.3) have been
delivered  to  the  Indenture  Trustee  for  cancellation  and  the  Policy  has
terminated  and been  returned to the Insurer for  cancellation  and all amounts
owing to the Insurer have been paid in full; or

              (2)    all  Notes  not  theretofore  delivered  to  the  Indenture
Trustee for cancellation have become due and payable, and

              (A)    the  Issuer  has  irrevocably  deposited  or  caused  to be
irrevocably  deposited with the Indenture Trustee cash or direct  obligations of
or  obligations  guaranteed by the United  States of America  (which will mature
prior to the date such amounts are payable),  in trust for such  purpose,  in an
amount sufficient to pay and discharge the entire  indebtedness on the Notes, in
each case to the extent not theretofore  delivered to the Indenture  Trustee for
cancellation when due on the Final Scheduled Payment Date or Redemption Date (if
Notes shall have been called for redemption  pursuant to Section  10.1),  as the
case may be;

              (B)    the Issuer has paid or caused to be paid all Insurer Issuer
Secured Obligations and all Indenture Trustee Issuer Secured Obligations; and

              (C)    the Issuer has delivered to the  Indenture  Trustee and the
Insurer an Officer's Certificate,  an Opinion of Counsel and, if required by the
TIA, the Indenture  Trustee or the Insurer,  an Independent  Certificate  from a
firm of certified public accountants,  each meeting the applicable  requirements
of  Section  11.1(a)  and each  stating  that all  conditions  precedent  herein
provided  relating to the satisfaction and discharge of this Indenture have been
complied with.

              SECTION 4.2. APPLICATION OF TRUST MONEY. All monies deposited with
the Indenture  Trustee pursuant to Section 4.1 hereof shall be held in trust and
applied  by it,  in  accordance  with  the  provisions  of the  Notes  and  this
Indenture,  to the payment, either directly or through any Note Paying Agent, as
the Indenture Trustee may determine,  to the Holders of the particular Notes for
the payment or  redemption  of which such monies  have been  deposited  with the
Indenture  Trustee,  of all sums due and to become due thereon for principal and
interest  and to the  Insurer for the payment of any amounts due to it under the
Basic Documents.

              SECTION  4.3.  REPAYMENT OF MONIES HELD BY NOTE PAYING  AGENT.  In
connection with the satisfaction and discharge of this Indenture with respect to
the  Notes,  all  monies  then  held by any Note  Paying  Agent  other  than the
Indenture  Trustee under the  provisions of this  Indenture with respect to such
Notes shall,  upon demand of the Issuer,  be paid to the Indenture Trustee to be
held and applied  according to Section 3.3 and thereupon  such Note Paying Agent
shall be released from all further liability with respect to such monies.

                                   ARTICLE V

                                    REMEDIES

              SECTION 5.1. REMEDIES.  If a Rapid Amortization Event as described
in Article XII shall have occurred and be continuing,  the Noteholders  shall be
entitled  on each  Payment  Date to an  amount  equal to the  Maximum  Principal
Payment payable during such Rapid

                                       18
<PAGE>

Amortization  Period.  The rights contained in this Article V are in addition to
any rights which the Noteholders possess pursuant to Article XII.

              SECTION 5.2. LIMITATION OF SUITS. No Holder of any Note shall have
any right to institute any  proceeding,  judicial or otherwise,  with respect to
this  Indenture,  or for the  appointment  of a receiver or trustee,  or for any
other remedy hereunder, unless:

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

                     (ii)   the Holders of not less than 50% of the  Outstanding
       Amount of the related  Notes have made written  request to the  Indenture
       Trustee to institute such proceeding with respect to the Notes in respect
       of such Rapid  Amortization  Event in its own name as  Indenture  Trustee
       hereunder;

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

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

                     (v)    no direction  inconsistent with such written request
       has been given to the Indenture  Trustee during such 60-day period by the
       Holders of a majority of the Outstanding Amount of the Notes; and

                     (vi)   an  Insurer  Default  shall  have  occurred  and  be
       continuing;

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

              In the event the Indenture  Trustee shall receive  conflicting  or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing  less than a majority of the Outstanding  Amount of the Notes,
the Indenture  Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.

              SECTION  5.3.  UNCONDITIONAL  RIGHTS  OF  NOTEHOLDERS  TO  RECEIVE
PRINCIPAL AND INTEREST.  Notwithstanding any other provisions in this Indenture,
the  Holder  of  any  Note  shall  have  the  right,   which  is  absolute   and
unconditional,  to receive payment of the principal of and interest,  if any, on
such Note on or after the respective due dates thereof expressed in such Note or
in this  Indenture  (or, in the case of  redemption,  on or after the Redemption
Date) and to institute suit for the  enforcement  of any such payment,  and such
right shall not be impaired without the consent of such Holder.

                                       19
<PAGE>

              SECTION 5.4. RESTORATION OF RIGHTS AND REMEDIES.  If the Indenture
Trustee or any  Noteholder has instituted any proceeding to enforce any right or
remedy  under  this  Indenture  and such  proceeding  has been  discontinued  or
abandoned for any reason,  then and in every such case the Issuer,  the Insurer,
the Indenture Trustee and the Noteholders shall, subject to any determination in
such  proceeding,  be  restored  severally  and  respectively  to  their  former
positions  hereunder,  and  thereafter  all rights and remedies of the Indenture
Trustee,  the  Insurer  and the  Noteholders  shall  continue  as though no such
proceeding had been instituted.

              SECTION 5.5.  RIGHTS AND REMEDIES  CUMULATIVE.  No right or remedy
herein  conferred  upon or reserved to the  Controlling  Party or to the related
Noteholders is intended to be exclusive of any other right or remedy,  and every
right and remedy shall,  to the extent  permitted by law, be  cumulative  and in
addition to every other right and remedy  given  hereunder  or now or  hereafter
existing at law or in equity or  otherwise.  The  assertion or employment of any
right or remedy  hereunder,  or  otherwise,  shall not  prevent  the  concurrent
assertion or employment of any other appropriate right or remedy.

              SECTION 5.6. DELAY OR OMISSION NOT A WAIVER.  No delay or omission
of the Indenture Trustee,  the Insurer or any Holder of any Note to exercise any
right or remedy accruing upon any Rapid Amortization Event shall impair any such
right or remedy or constitute a waiver of any such Rapid  Amortization  Event or
an  acquiescence  therein.  Every right and remedy given by this Article V or by
law to the Indenture Trustee, the Insurer or to the Noteholders may be exercised
from time to time,  and as often as may be deemed  expedient,  by the  Indenture
Trustee, the Insurer or by the Noteholders, as the case may be.

              SECTION 5.7. CONTROL BY INSURER AND NOTEHOLDERS.  The Insurer (or,
if an  Insurer  Default  shall have  occurred  and is  continuing,  Holders of a
majority of the Outstanding Amount of the related Notes) shall have the right to
direct the time,  method and place of conducting  any  proceeding for any remedy
available to the Indenture  Trustee pursuant to Section 12.1 hereof with respect
to the  Notes  or  exercising  any  trust or power  conferred  on the  Indenture
Trustee; provided that:

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

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

PROVIDED,  HOWEVER, that, subject to Section 6.1, the Indenture Trustee need not
take any  action  that it  determines  might  involve it in  liability  or might
materially adversely affect the rights of any Noteholders not consenting to such
action.

              SECTION 5.8.  UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Note by such Holder's  acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture,  or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture  Trustee,  the  filing  by any  party  litigant  in  such  suit  of an
undertaking  to pay the  costs of such  suit,  and that  such  court  may in its
discretion  assess

                                       20
<PAGE>

reasonable costs, including reasonable attorneys' fees and expenses, against any
party  litigant in such suit,  having due regard to the merits and good faith of
the claims or defenses made by such party  litigant;  but the provisions of this
Section shall not apply to (a) any suit instituted by the Indenture Trustee, (b)
any suit instituted by the Insurer, any Noteholder, or group of Noteholders with
the prior  written  consent of the  Insurer  (so long as no Insurer  Default has
occurred),  in  each  case  holding  in  the  aggregate  more  than  10%  of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder for
the  enforcement  of the payment of  principal  of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).

              SECTION  5.9.  WAIVER  OF  STAY  OR  EXTENSION  LAWS.  The  Issuer
covenants  (to the extent  that it may  lawfully  do so) that it will not at any
time  insist  upon,  or plead  or in any  manner  whatsoever,  claim or take the
benefit or advantage of, any stay or extension law wherever  enacted,  now or at
any time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder,  delay or impede the  execution of any power herein  granted to
the  Indenture  Trustee,  but will suffer and permit the execution of every such
power as though no such law had been enacted.

              SECTION 5.10.  ACTION ON NOTES.  The Indenture  Trustee's right to
seek and  recover  judgment  on the Notes or under this  Indenture  shall not be
affected by the seeking,  obtaining or  application of any other relief under or
with  respect to this  Indenture.  Neither  the lien of this  Indenture  nor any
rights or  remedies of the  Indenture  Trustee,  the Insurer or the  Noteholders
shall be impaired by the  recovery of any judgment by the  Indenture  Trustee or
the  Insurer  against  the  Issuer or by the levy of any  execution  under  such
judgment upon any portion of the Trust Property or upon any of the assets of the
Issuer.

              SECTION 5.11.  PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.

              (a)    Promptly following a request from the Indenture Trustee (at
the direction of the Insurer) to do so and at the Servicer's expense, the Issuer
agrees to take all such lawful  action as the  Indenture  Trustee may request to
compel or secure the performance and observance by the Sponsor and the Servicer,
as applicable, of each of their obligations to the Issuer under or in connection
with the Sale and Servicing Agreement in accordance with the terms thereof,  and
to  exercise  any and all  rights,  remedies,  powers  and  privileges  lawfully
available  to the  Issuer  under or in  connection  with the Sale and  Servicing
Agreement  to the extent and in the manner  directed by the  Indenture  Trustee,
including the  transmission  of notices of default on the part of the Sponsor or
the Servicer  thereunder and the institution of legal or administrative  actions
or proceedings to compel or secure performance by the Sponsor or the Servicer of
each of their obligations under the Sale and Servicing Agreement.

              (b)    If  a  Rapid   Amortization   Event  has  occurred  and  is
continuing, the Indenture Trustee, with the consent of the Insurer, may, and, at
the written direction of the Insurer (or, if (i) an Insurer Default has occurred
and is continuing or (ii) a Rapid  Amortization Event described in clause (g) of
Section  12.1 has  occurred  and is  continuing,  the  Holders of 66-2/3% of the
Outstanding Amount of the Notes) shall, exercise all rights,  remedies,  powers,
privileges and claims of the Issuer against the Sponsor or the Servicer under or
in connection

                                       21
<PAGE>

with the Sale and Servicing Agreement,  including the right or power to take any
action to compel or secure  performance  or  observance  by the  Sponsor  or the
Servicer of each of their  obligations to the Issuer  thereunder and to give any
consent,  request, notice,  direction,  approval,  extension or waiver under the
Sale and  Servicing  Agreement,  and any right of the Issuer to take such action
shall be suspended.

              SECTION 5.12. SUBROGATION.  The Indenture Trustee shall receive as
attorney-in-fact  of each Noteholder any Insured  Amounts or Preference  Amounts
from the  Insurer  pursuant  to the  Policy.  Any and all  Insured  Amounts  and
Preference Amounts disbursed by the Indenture Trustee from claims made under the
Policy shall not be  considered  payment by the Issuer,  and shall not discharge
the  obligations of the Issuer with respect  thereto.  The Insurer shall, to the
extent it makes any payment with respect to the Notes,  become subrogated to the
rights of the recipient of such payments to the extent of such payments. Subject
to and conditioned upon any payment with respect to the Notes by or on behalf of
the Insurer, the Indenture Trustee shall assign to the Insurer all rights to the
payment of interest or  principal  with  respect to the Notes which are then due
for payment to the extent of all payments made by the Insurer.

              SECTION 5.13. PREFERENCE CLAIMS.

              (a)    In the event  that the  Indenture  Trustee  has  received a
certified copy of an order of the appropriate court that any Insured Amount on a
Note  has  been  avoided  in  whole  or in part as a  preference  payment  under
applicable  bankruptcy  law, the Indenture  Trustee shall so notify the Insurer,
shall comply with the  provisions of the Policy to obtain payment by the Insurer
of such  avoided  payment,  and  shall,  at the time it  provides  notice to the
Insurer,  notify  Holders  of the  Notes by mail  that,  in the  event  that any
Noteholder's  payment is so  recoverable,  such  Noteholder  will be entitled to
payment pursuant to the terms of the Policy. The Indenture Trustee shall furnish
to the Insurer at its written  request,  the  requested  records it holds in its
possession  evidencing  the payments of  principal of and interest on Notes,  if
any, which have been made by the Indenture  Trustee and  subsequently  recovered
from Noteholders and the dates on which such payments were made. Pursuant to the
terms of the Policy, the Insurer will make such payment on behalf of the related
Noteholder  to the  receiver,  conservator,  debtor-in-possession  or trustee in
bankruptcy  named in the final  order of the court  exercising  jurisdiction  on
behalf of the  Noteholders  and not to the  Indenture  Trustee,  any  Noteholder
directly (unless such Noteholder has returned  principal or interest paid on the
Notes to such receiver or trustee in bankruptcy, in which case the Insurer shall
make such payment to the  Indenture  Trustee for payment to such  Noteholder  in
accordance with the terms of the Policy).

              (b)    The Indenture  Trustee shall promptly notify the Insurer of
any proceeding or the institution of any action (of which the Indenture  Trustee
has actual  knowledge)  seeking the avoidance as a  preferential  transfer under
applicable bankruptcy, insolvency,  receivership,  rehabilitation or similar law
(a "PREFERENCE  CLAIM") of any distribution made with respect to the Notes. Each
Holder, by its purchase of Notes, and the Indenture Trustee hereby agree that so
long as an  Insurer  Default  shall not have  occurred  and be  continuing,  the
Insurer may at any time during the continuation of any proceeding  relating to a
Preference  Claim  direct  all  matters  relating  to  such  Preference   Claim,
including,  without  limitation,  (i) the  direction  of any appeal of any order
relating to any Preference Claim and (ii) the posting of any surety,  supersedes
or

                                       22
<PAGE>

performance  bond  pending any such appeal at the  expense of the  Insurer,  but
subject to  reimbursement as provided in the Insurance  Agreement.  In addition,
and without  limitation  of the  foregoing,  as set forth in Section  5.12,  the
Insurer shall be subrogated to, and each  Noteholder  and the Indenture  Trustee
hereby delegate and assign,  to the fullest extent  permitted by law, the rights
of the Indenture  Trustee and each  Noteholder in the conduct of any  proceeding
with respect to a Preference Claim, including, without limitation, all rights of
any party to an  adversary  proceeding  action  with  respect to any court order
issued in connection  with any such  Preference  Claim.  All actions taken under
this Section 5.13(b) by the Indenture  Trustee shall be taken in accordance with
the terms of the Policy.

              SECTION 5.14. NOTEHOLDER RIGHTS. Each Noteholder by the acceptance
of its Note  agrees  that,  so long as no Insurer  Default has  occurred  and is
continuing, the Insurer shall be treated by the Issuer, the Seller, the Sponsor,
the Servicer, the Owner Trustee and the Indenture Trustee as if the Insurer were
the Holder of the Note for the purpose of the giving of any consent,  the making
of any direction or the exercise of any voting or other control rights otherwise
given to the Noteholder hereunder without any further consent of the Noteholder.
So long as no Insurer  Default has occurred and is continuing,  the  Noteholders
may only exercise such rights with the consent of the Insurer.

              SECTION 5.15.  INSURER'S RIGHTS REGARDING ACTIONS,  PROCEEDINGS OR
INVESTIGATIONS.  Until all Notes have been paid in full, all amounts owed to the
Insurer have been 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 Issuer,  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 Issuer 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 Issuer,  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 Issuer,  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 Issuer or
any affiliate  thereof,  the Indenture  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.

                                       23
<PAGE>

              (c)    The  Indenture  Trustee  hereby  agrees to  provide  to the
Insurer prompt written notice of any action,  proceeding or  investigation  that
names the Issuer or the  Indenture  Trustee  as a party or that could  adversely
affect  the  Issuer,  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 Indenture 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 Issuer,  the Collateral,  the Trust Property or the
rights or obligations of the Insurer  hereunder or under the Policy or the Basic
Documents.

              (e)    Each  Noteholder,  by  acceptance  of  its  Note,  and  the
Indenture  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  Noteholder  or the  Indenture  Trustee,
notwithstanding  any  other  provision  contained  herein or in any of the 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

                              THE INDENTURE TRUSTEE

              SECTION 6.1. DUTIES OF INDENTURE TRUSTEE.

              (a)    If  a  Rapid   Amortization   Event  has  occurred  and  is
continuing, the Indenture Trustee shall exercise the rights and powers vested in
it by this Indenture and the Basic Documents and use the same degree of care and
skill in its  exercise  as a  prudent  person  would  exercise  or use under the
circumstances  in the conduct of such person's own affairs;  PROVIDED,  HOWEVER,
that if the  Indenture  Trustee  is  acting as  Servicer,  it shall use the same
degree  of care and  skill as is  required  of the  Servicer  under the Sale and
Servicing Agreement.

              (b)    Except during the continuance of a Rapid Amortization Event

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

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

                                       24
<PAGE>

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

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

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

                     (iii)  the  Indenture  Trustee  shall  not be  liable  with
       respect  to any  action  it  takes  or  omits  to take in good  faith  in
       accordance with a direction received by it pursuant to Section 5.12; and

                     (iv)   the  Indenture  Trustee  shall not be  charged  with
       knowledge of any failure by the  Servicer to comply with the  obligations
       of the  Servicer  referred to in clause (ii) of Section  6.01 of the Sale
       and Servicing  Agreement  unless a  Responsible  Officer of the Indenture
       Trustee at the Corporate  Trust Office obtains  actual  knowledge of such
       failure or occurrence or the Indenture Trustee receives written notice of
       such failure or occurrence from the Servicer,  the Insurer or the Holders
       of Notes evidencing more than 50% of the Outstanding Amount.

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

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

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

              (g)    The Indenture  Trustee  shall,  upon three  Business  Days'
prior written notice to the Indenture Trustee,  permit any representative of the
Insurer,  during the Indenture  Trustee's  normal business hours, to examine all
books of account,  records,  reports and other papers of the  Indenture  Trustee
relating to the Notes,  to make copies and extracts (at the expense of the party
requesting  such copies or  extracts)  therefrom  and to discuss  the  Indenture
Trustee's  affairs  and  actions,  as such  affairs  and  actions  relate to the
Indenture  Trustee's  duties  with  respect  to the  Notes,  with the  Indenture
Trustee's  officers and  employees  responsible  for carrying out the  Indenture
Trustee's duties with respect to the Notes.

              (h)    The  Indenture  Trustee  shall,  and hereby  agrees that it
will,  perform all of the  obligations  and duties required of it under the Sale
and Servicing Agreement.

                                       25
<PAGE>

              (i)    The  Indenture  Trustee  shall,  and hereby  agrees that it
will,  hold the Policy in trust,  and will hold any proceeds of any claim on the
Policy in trust solely for the use and benefit of the Noteholders.

              (j)    In no  event  shall  [Indenture  Trustee],  in  any  of its
capacities hereunder,  be deemed to have assumed any duties of the Owner Trustee
under the Delaware Business Trust Statute, common law, or the Trust Agreement.

              SECTION 6.2. RIGHTS OF INDENTURE TRUSTEE.

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

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

              (c)    The  Indenture  Trustee  may  execute  any of the trusts or
powers  hereunder  or perform  any duties  hereunder  either  directly  or by or
through agents or attorneys or a custodian or nominee and the Indenture  Trustee
shall not be liable for the negligence of such agents, attorneys,  custodians or
nominees appointed (i) with due care and (ii) with the consent of the Insurer.

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

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

              (f)    The  Indenture  Trustee  shall be under  no  obligation  to
institute,  conduct or defend any litigation under this Indenture or in relation
to this Indenture,  at the request,  order or direction of any of the Holders of
Notes or the  Controlling  Party,  pursuant to the provisions of this Indenture,
unless such Holders of Notes or the Controlling  Party shall have offered to the
Indenture  Trustee security or indemnity  reasonably  satisfactory to it against
the costs,  expenses and  liabilities  that may be incurred  therein or thereby;
PROVIDED,  HOWEVER,  that the Indenture  Trustee shall, upon the occurrence of a
Rapid  Amortization  Event or Event of Servicing  Termination  as defined in the
Sale and Servicing  Agreement (that has not been cured or waived),  exercise the
rights  and  powers  vested in it by this  Indenture  or the Sale and  Servicing
Agreement with reasonable care and skill.

                                       26
<PAGE>

              (g)    The  Indenture  Trustee  shall  not be  bound  to make  any
investigation  into the facts or matters stated in any resolution,  certificate,
statement,   instrument,  opinion,  report,  notice,  request,  consent,  order,
approval, bond or other paper or document,  unless requested in writing to do so
by the  Insurer or by the Holders of Notes  evidencing  not less than 25% of the
Outstanding  Amount  thereof;  PROVIDED,  HOWEVER,  that if the payment within a
reasonable time to the Indenture  Trustee of the costs,  expenses or liabilities
likely  to be  incurred  by it in the  making of such  investigation  is, in the
opinion of the  Indenture  Trustee,  not  reasonably  assured  to the  Indenture
Trustee by the  security  afforded to it by the terms of this  Indenture  or the
Sale and  Servicing  Agreement,  the  Indenture  Trustee may  require  indemnity
reasonably  satisfactory  to it against  such cost,  expense or  liability  as a
condition to so  proceeding;  the reasonable  expense of every such  examination
shall be paid by the Person  making such  request,  or, if paid by the Indenture
Trustee shall be reimbursed by the Person making such request upon demand.

              (h)    The Indenture Trustee shall not be accountable,  shall have
no liability and makes no representation  as to any acts or omissions  hereunder
of the Servicer until such time as the Indenture  Trustee may be required to act
as Servicer.

              SECTION 6.3. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture
Trustee in its  individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates  with the same
rights it would have if it were not  Indenture  Trustee.  Any Note Paying Agent,
Note  Registrar,  co-registrar  or  co-paying  agent  may do the same  with like
rights. However, the Indenture Trustee must comply with Sections 6.11 and 6.12.

              SECTION 6.4. INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee
shall not be responsible for and makes no  representation  as to the validity or
adequacy of this  Indenture,  the Trust  Property or the Notes,  it shall not be
accountable  for the Issuer's use of the proceeds  from the Notes,  and it shall
not be  responsible  for any  statement of the Issuer in the Indenture or in any
document  issued in connection  with the sale of the Notes or in the Notes other
than the Indenture Trustee's certificate of authentication.

              SECTION  6.5.  NOTICE OF RAPID  AMORTIZATION  EVENTS AND EVENTS OF
SERVICING  TERMINATION.  If a Rapid Amortization Period or an Event of Servicing
Termination  occurs and is  continuing  and if it is either known by, or written
notice of the existence thereof has been delivered to, a Responsible  Officer of
the  Indenture  Trustee,  the  Indenture  Trustee shall (i) promptly mail to the
Insurer  notice of such event,  and (ii) within 90 days after such  knowledge or
notice occurs,  mail to each Noteholder notice of such event. Except in the case
of a default in payment of principal of or interest on any Note,  the  Indenture
Trustee may withhold the notice to the  Noteholders if and so long as one of its
Responsible  Officers in good faith determines that withholding the notice is in
the interests of  Noteholders;  provided  that the  Indenture  Trustee shall not
withhold any such notice to the Insurer.

              SECTION 6.6. REPORTS BY INDENTURE TRUSTEE TO HOLDERS. Upon written
request,  the Note Paying  Agent or the  Servicer  shall on behalf of the Issuer
deliver to each  Noteholder  such  information as may be reasonably  required to
enable such Holder to prepare its federal and state income tax returns  required
by law.

                                       27
<PAGE>

              SECTION 6.7. COMPENSATION AND INDEMNITY.

              (a)    Pursuant to Section 8.7 and subject to Section 6.10 herein,
the Issuer shall,  or shall cause the Servicer to, pay to the Indenture  Trustee
from time to time  compensation as agreed to in writing between the Servicer and
the Indenture  Trustee for its services.  The Indenture  Trustee's  compensation
shall not be  limited  by any law on  compensation  of a trustee  of an  express
trust.  The Issuer shall or shall cause the Servicer to reimburse  the Indenture
Trustee  for  all  reasonable  out-of-pocket  expenses  incurred  or made by it,
including costs of collection, in addition to the compensation for its services.
Such  expenses   shall  include  the  reasonable   compensation   and  expenses,
disbursements  and  advances  of  the  Indenture   Trustee's  agents,   counsel,
accountants  and  experts.  The  Issuer  shall or shall  cause the  Servicer  to
indemnify  the  Indenture  Trustee  and  its  respective  officers,   directors,
employees and agents against any and all loss,  liability or expense  (including
attorneys'  fees and expenses)  incurred by each of them in connection  with the
acceptance or the administration of this trust and the performance of its duties
hereunder or under any other Basic Document.  The Indenture Trustee shall notify
the  Issuer  and the  Servicer  promptly  of any  claim  for  which  it may seek
indemnity.  Failure  by the  Indenture  Trustee  to so notify the Issuer and the
Servicer  shall not  relieve  the  Issuer of its  obligations  hereunder  or the
Servicer  of its  obligations  under  Article  VIII of the  Sale  and  Servicing
Agreement. The Issuer shall or shall cause the Servicer to defend the claim, the
Indenture  Trustee may have separate counsel and the Issuer shall or shall cause
the  Servicer to pay the fees and expenses of such  counsel.  Neither the Issuer
nor the  Servicer  need  reimburse  any expense or  indemnify  against any loss,
liability or expense  incurred by the  Indenture  Trustee  through the Indenture
Trustee's own willful misconduct, negligence or bad faith.

              (b)    The Issuer's payment  obligations to the Indenture  Trustee
pursuant  to this  Section  shall  survive  the  discharge  of  this  Indenture.
Notwithstanding  anything  else  set  forth  in  this  Indenture  or  the  Basic
Documents,  the Indenture Trustee agrees that the obligations of the Issuer (but
not the  Servicer)  to the  Indenture  Trustee  hereunder  and  under  the Basic
Documents  shall be recourse to the Trust Property only and  specifically  shall
not be recourse to the assets of the Issuer or any Noteholder.  In addition, the
Indenture Trustee agrees that its recourse to the Issuer, the Trust Property and
the Sponsor shall be limited to the right to receive the distributions  referred
to in Section 8.7 herein.

              SECTION 6.8.  REPLACEMENT  OF  INDENTURE  TRUSTEE.  The  Indenture
Trustee  may resign at any time by so  notifying  the Issuer and the  Insurer by
written  notice.  Upon  receiving such notice of  resignation,  the Issuer shall
promptly  appoint a  successor  Indenture  Trustee  (approved  in writing by the
Insurer,  so long as such  approval  is not  unreasonably  withheld)  by written
instrument,  in duplicate, one copy of such instrument shall be delivered to the
resigning  Indenture  Trustee (who shall  deliver a copy to the Servicer and the
Insurer) and one copy to the successor  Indenture  Trustee;  PROVIDED,  HOWEVER,
that any such successor  Indenture Trustee shall be subject to the prior written
approval  of the  Servicer.  The Issuer  may,  and at the request of the Insurer
shall, remove the Indenture Trustee, if:

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

                     (ii)   a  court  having  jurisdiction  in the  premises  in
       respect of the  Indenture  Trustee in an  involuntary  case or proceeding
       under federal or state banking or

                                       28
<PAGE>

       bankruptcy laws, as now or hereafter constituted, or any other applicable
       federal or state bankruptcy,  insolvency or other similar law, shall have
       entered  a decree or order  granting  relief or  appointing  a  receiver,
       liquidator,  assignee, custodian, trustee, conservator,  sequestrator (or
       similar  official) for the Indenture  Trustee or for any substantial part
       of the  Indenture  Trustee's  property,  or ordering  the  winding-up  or
       liquidation of the Indenture Trustee's affairs;

                     (iii)  an  involuntary  case under the  federal  bankruptcy
       laws, as now or hereafter in effect, or another present or future federal
       or state bankruptcy,  insolvency or similar law is commenced with respect
       to the Indenture Trustee and such case is not dismissed within 60 days;

                     (iv)   the  Indenture  Trustee  commences a voluntary  case
       under  any  federal  or  state  banking  or  bankruptcy  laws,  as now or
       hereafter   constituted,   or  any  other  applicable  federal  or  state
       bankruptcy,   insolvency  or  other  similar  law,  or  consents  to  the
       appointment of or taking possession by a receiver, liquidator,  assignee,
       custodian, trustee, conservator, sequestrator (or other similar official)
       for the Indenture  Trustee or for any  substantial  part of the Indenture
       Trustee's property,  or makes any assignment for the benefit of creditors
       or fails generally to pay its debts as such debts become due or takes any
       corporate action in furtherance of any of the foregoing;

                     (v)    the Indenture Trustee otherwise becomes incapable of
       acting; or

                     (vi)   the  Indenture  Trustee   materially   breaches  any
       covenant or obligation under the Basic Documents.

              Additionally, the Issuer shall remove the Indenture Trustee at the
request of the Insurer.

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

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

              If a successor  Indenture  Trustee does not take office  within 30
days after the retiring  Indenture  Trustee resigns or is removed,  the retiring
Indenture  Trustee,  the Issuer,  the  Insurer,  or the Holders of a majority in
Outstanding  Amount of the Notes may, at the expense of the  Servicer,  petition
any court of competent jurisdiction for the appointment of a successor Indenture
Trustee acceptable to the Insurer.

                                       29
<PAGE>

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

              Any   resignation   or  removal  of  the  Indenture   Trustee  and
appointment of a successor  Indenture  Trustee pursuant to any of the provisions
of this Section shall not become  effective  until  acceptance of appointment by
the successor  Indenture Trustee pursuant to Section 6.8 and payment of all fees
and expenses owed to the outgoing Indenture Trustee.

              Notwithstanding  the replacement of the Indenture Trustee pursuant
to this Section,  the Issuer's and the Servicer's  indemnity  obligations  under
Section 6.7 shall continue for the benefit of the retiring Indenture Trustee and
the Servicer shall pay any amounts owing to the Indenture Trustee.

              SECTION  6.9.  SUCCESSOR  INDENTURE  TRUSTEE  BY  MERGER.  If  the
Indenture Trustee  consolidates  with, merges or converts into, or transfers all
or  substantially  all of its  corporate  trust  business or assets to,  another
corporation  or banking  association,  the  resulting,  surviving or  transferee
corporation  without any further act shall be the successor  Indenture  Trustee,
provided that such entity meets the  requirements  of Section 6.11 hereunder and
is otherwise  acceptable to the Insurer  (unless an Insurer Default has occurred
and is continuing). The Indenture Trustee shall provide Insurer and the Servicer
with at least 30 days notice of any such transaction.

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

              SECTION  6.10.  APPOINTMENT  OF  CO-INDENTURE  TRUSTEE OR SEPARATE
INDENTURE TRUSTEE.

              (a)    Notwithstanding any other provisions of this Indenture,  at
any time, for the purpose of meeting any legal  requirement of any  jurisdiction
in  which  any  part of the  Trust  may at the time be  located,  the  Indenture
Trustee,  with the consent of the Insurer,  shall have the power and may execute
and  deliver  all  instruments  to  appoint  one  or  more  Persons  to act as a
co-trustee or co-trustees,  or separate trustee or separate trustees,  of all or
any part of the Trust,  and to vest in such Person or Persons,  in such capacity
and for the  benefit of the  Noteholders,  such title to the Trust,  or any part
hereof,  and,  subject to the other  provisions  of this  Section,  such powers,
duties,  obligations,  rights and trusts as the  Indenture  Trustee may consider
necessary or desirable.

                                       30
<PAGE>

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

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

                     (ii)   no trustee  hereunder shall be personally  liable by
       reason of any act or omission of any other trustee  hereunder,  including
       acts or omissions of predecessor or successor trustees; and

                     (iii)  the  Indenture   Trustee  and  the  Servicer  acting
       jointly may at any time accept the  resignation of or remove any separate
       trustee or co-trustee except that following the occurrence of an Event of
       Servicing Termination,  the Indenture Trustee acting alone may accept the
       resignation of or remove any separate trustee or co-trustee.

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

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

              (e)    The  Servicer  shall  be  responsible  for the  fees of any
co-trustee or separate trustee appointed hereunder.

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              SECTION 6.11. ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee
shall at all times satisfy the  requirements  of TIA ss.  310(a).  The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent  published  annual report of  condition.  The Indenture
Trustee  shall provide  copies of such reports to the Insurer upon request.  The
Indenture  Trustee  shall  comply with TIA ss.  310(b),  including  the optional
provision  permitted  by the second  sentence  of TIA ss.  310(b)(9);  PROVIDED,
HOWEVER,  that there shall be excluded from the  operation of TIA ss.  310(b)(1)
any  indenture  or  indentures  under which other  securities  of the Issuer are
outstanding  if the  requirements  for  such  exclusion  set  forth  in TIA  ss.
310(b)(1) are met.

              SECTION 6.12.  PREFERENTIAL  COLLECTION OF CLAIMS AGAINST  ISSUER.
The Indenture  Trustee shall comply with TIA ss. 311(a),  excluding any creditor
relationship  listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.

              SECTION  6.13.  APPOINTMENT  AND POWERS.  Subject to the terms and
conditions hereof, each of the Issuer Secured Parties hereby appoints [Indenture
Trustee] as the Indenture Trustee with respect to the Collateral, and [Indenture
Trustee] hereby accepts such appointment and agrees to act as Indenture  Trustee
with respect to the Trust Property for the Issuer Secured  Parties,  to maintain
custody and  possession  of such Trust  Property  (except as otherwise  provided
hereunder)  and to  perform  the  other  duties  of  the  Indenture  Trustee  in
accordance with the provisions of this Indenture and the other Basic  Documents.
Each Issuer Secured Party hereby  authorizes the Indenture  Trustee to take such
action  on its  behalf,  and to  exercise  such  rights,  remedies,  powers  and
privileges   hereunder,   as  the  Controlling  Party  may  direct  and  as  are
specifically  authorized to be exercised by the  Indenture  Trustee by the terms
hereof, together with such actions, rights,  remedies,  powers and privileges as
are reasonably  incidental thereto.  The Indenture Trustee shall act upon and in
compliance  with the  written  instructions  delivered  to it  pursuant  to this
Indenture promptly following receipt of such written instructions; PROVIDED that
the  Indenture  Trustee shall not act in accordance  with any  instructions  (i)
which  are not  authorized  by,  or in  violation  of the  provisions  of,  this
Indenture or (ii) for which the  Indenture  Trustee has not received  reasonable
indemnity. Receipt of such instructions shall not be a condition to the exercise
by the  Indenture  Trustee of its express  duties  hereunder,  except where this
Indenture provides that the Indenture Trustee is permitted to act only following
and in accordance with such instructions.

              SECTION 6.14.  PERFORMANCE OF DUTIES.  The Indenture Trustee shall
have no duties or  responsibilities  except  those  expressly  set forth in this
Indenture  and the other Basic  Documents  to which the  Indenture  Trustee is a
party or as directed by the Controlling Party in accordance with this Indenture.
The Indenture  Trustee shall not be required to take any  discretionary  actions
hereunder except at the written  direction and with the  indemnification  of the
Controlling  Party. The Indenture Trustee shall, and hereby agrees that it will,
perform  all of the duties  and  obligations  required  of it under the Sale and
Servicing Agreement.

              SECTION  6.15.  LIMITATION  ON  LIABILITY.  Neither the  Indenture
Trustee nor any of its directors, officers, employees and agents shall be liable
for any  action  taken or  omitted  to be taken by it or them  hereunder,  or in
connection  herewith,  except that the Indenture Trustee shall be liable for its
negligence,  bad faith or willful  misconduct;  nor shall the Indenture  Trustee

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be  responsible  for  the  validity,   effectiveness,   value,   sufficiency  or
enforceability against the Issuer of this Indenture or any of the Trust Property
(or any part thereof).

              SECTION  6.16.   RELIANCE  UPON  DOCUMENTS.   In  the  absence  of
negligence,  bad faith or willful  misconduct on its part, the Indenture Trustee
shall be entitled to conclusively rely on any communication,  instrument,  paper
or other  document  reasonably  believed  by it to be genuine and correct and to
have been  signed or sent by the  proper  Person or  Persons  and shall  have no
liability in acting, or omitting to act, where such action or omission to act is
in  reasonable  reliance  upon any  statement  or opinion  contained in any such
document or instrument.

              SECTION  6.17.  REPRESENTATIONS  AND  WARRANTIES  OF THE INDENTURE
TRUSTEE. The Indenture Trustee represents and warrants to the Issuer and to each
Issuer Secured Party as follows:

              (a)    DUE  ORGANIZATION.  The  Indenture  Trustee is a __________
banking corporation, duly organized, validly existing and in good standing under
the laws of the State of __________  and is duly  authorized  and licensed under
applicable law to conduct its business as presently conducted.

              (b)    CORPORATE  POWER.  The Indenture  Trustee has all requisite
right,  power and authority to execute and deliver this Indenture and to perform
all of its duties as the Indenture Trustee hereunder.

              (c)    DUE  AUTHORIZATION.  The  execution  and  delivery  by  the
Indenture Trustee of this Indenture and the other Basic Documents to which it is
a party,  and the performance by the Indenture  Trustee of its duties  hereunder
and  thereunder,   have  been  duly   authorized  by  all  necessary   corporate
proceedings,  are required for the valid execution and delivery by the Indenture
Trustee, or the performance by the Indenture Trustee, of this Indenture and such
other Basic Documents.

              (d)    VALID AND BINDING INDENTURE. The Indenture Trustee has duly
executed and delivered  this Indenture and each other Basic Document to which it
is a party,  and each of this  Indenture  and each  such  other  Basic  Document
constitutes the legal,  valid and binding  obligation of the Indenture  Trustee,
enforceable  against the Indenture 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  6.18.  WAIVER OF SETOFFS.  The Indenture  Trustee  hereby
expressly  waives any and all rights of setoff  that the  Indenture  Trustee may
otherwise at any time have under  applicable law with respect to any Account and
agrees  that  amounts  in the  Accounts  shall at all times be held and  applied
solely in accordance with the provisions hereof.

              SECTION  6.19.  CONTROL BY THE  CONTROLLING  PARTY.  The Indenture
Trustee shall comply with notices and  instructions  given by the Issuer only if
accompanied by the written

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consent of the  Controlling  Party.  The  Indenture  Trustee  shall act upon and
comply with notices and instructions given by the Controlling Party alone.

              SECTION  6.20.   INDENTURE  TRUSTEE  MAY  ENFORCE  CLAIMS  WITHOUT
POSSESSION OF NOTES. All rights of action and claims under this Indenture or the
Notes may be  prosecuted  and  enforced  by the  Indenture  Trustee  without the
possession  of any of the  Notes or the  production  thereof  in any  proceeding
relating thereto, and such proceeding  instituted by the Indenture Trustee shall
be brought in its own name or in its capacity as Indenture Trustee. Any recovery
of  judgment   shall,   after  provision  for  the  payment  of  the  reasonable
compensation,  expenses, disbursement and advances of the Indenture Trustee, its
agents and counsel,  be for the ratable benefit of the Noteholders in respect of
which such judgment has been recovered.

              SECTION 6.21. SUITS FOR ENFORCEMENT. In case an Event of Servicing
Termination  or other  default by the  Servicer or the Sponsor  hereunder  shall
occur and be  continuing,  the  Controlling  Party may  proceed to  protect  and
enforce its rights and the rights of the  Noteholders  under this Indenture by a
suit,  action or proceeding  in equity or at law or  otherwise,  whether for the
specific performance of any covenant or agreement contained in this Indenture or
in aid of the  execution  of any  power  granted  in this  Indenture  or for the
enforcement  of any other legal,  equitable or other  remedy,  as the  Indenture
Trustee,  being  advised by counsel,  shall deem most  effectual  to protect and
enforce any of the rights of the Indenture Trustee and the Noteholders.

              SECTION 6.22.  MORTGAGOR  CLAIMS.  In  connection  with any offset
defenses,  or affirmative claim for recovery,  asserted in legal actions brought
by Mortgagors under one or more Mortgage Loans based upon provisions  therein or
upon other rights or remedies arising from any requirements of law applicable to
the Mortgage Loans:

              (a)    The Indenture  Trustee is the holder of the Mortgage  Loans
only as trustee on behalf of the holders of the Notes and the  Insurer,  and not
as a principal or in any individual or personal capacity.

              (b)    The Indenture  Trustee shall not be personally  liable for,
or obligated to pay Mortgagors,  any affirmative  claims  asserted  thereby,  or
responsible  to  holders  of the Notes for any offset  defense  amounts  applied
against Mortgage Loan payments, pursuant to such legal actions.

              (c)    The  Indenture  Trustee  will  pay,  solely  from the Trust
Estate,  affirmative  claims for recovery by  Mortgagors  only pursuant to final
judicial  orders or judgments,  or  judicially-approved  settlement  agreements,
resulting from such legal actions.

              (d)    The Indenture  Trustee will comply with judicial orders and
judgments   which  require  its  actions  or  cooperation  in  connection   with
Mortgagors' legal actions to recover  affirmative  claims against holders of the
Notes.

              (e)    The Indenture  Trustee will  cooperate  with and assist the
Servicer, the Insurer, the Issuer, the Sponsor, or holders of the Notes in their
defense of legal  actions by Mortgagors  to recover  affirmative  claims if such
cooperation  and  assistance  is not contrary to the  interests of the Indenture
Trustee  as a party  to such  legal  actions  and if the  Indenture  Trustee  is

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satisfactorily  indemnified  for all  liability,  costs and expenses  (including
attorneys' fees and expenses) arising therefrom.

              (f)    The Issuer and  Servicer  hereby agree to  indemnify,  hold
harmless  and  defend  the  Indenture  Trustee  from  and  against  any  and all
liability,  loss, costs and expenses (including attorneys' fees and expenses) of
the  Indenture  Trustee  resulting  from any  affirmative  claims  for  recovery
asserted or collected by Mortgagors under the Mortgage Loans.

                                  ARTICLE VII

                         NOTEHOLDERS' LISTS AND REPORTS

              SECTION  7.1.  ISSUER TO FURNISH TO  INDENTURE  TRUSTEE  NAMES AND
ADDRESSES  OF  NOTEHOLDERS.  The Issuer will furnish or cause to be furnished to
the Indenture  Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months  after the last Record  Date, a list,  in such
form as the Indenture Trustee may reasonably require, of the names and addresses
of the Holders as of such Record Date,  (b) at such other times as the Indenture
Trustee may request in  writing,  within 30 days after  receipt by the Issuer of
any such request,  a list of similar form and content as of a date not more than
10 days prior to the time such list is  furnished;  PROVIDED,  HOWEVER,  that so
long as the  Indenture  Trustee  is the Note  Registrar,  no such list  shall be
required to be furnished.  The Indenture Trustee or, if the Indenture Trustee is
not the Note Registrar, the Issuer shall furnish to the Insurer or the Issuer in
writing upon their written request and at such other times as the Insurer or the
Issuer may request a copy of the list.

              SECTION  7.2.  PRESERVATION  OF  INFORMATION;   COMMUNICATIONS  TO
NOTEHOLDERS.

              (a)    The Indenture Trustee shall preserve,  in as current a form
as is reasonably  practicable,  the names and addresses of the Holders contained
in the most  recent  list  furnished  to the  Indenture  Trustee as  provided in
Section 7.1 and the names and  addresses  of Holders  received by the  Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list  furnished to it as provided in such Section 7.1 upon receipt of a new list
so furnished.

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

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

              SECTION 7.3. REPORTS BY ISSUER.

              (a)    The Issuer shall:

                     (i)    file with the Indenture  Trustee (with a copy to the
       Insurer),  within 15 days after the Issuer is  required  to file the same
       with the  Commission,  copies of the  annual  reports  and  copies of the
       information,  documents  and other reports (or copies of such portions of
       any of the  foregoing  as the  Commission  may from time to time by rules

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<PAGE>

       and regulations  prescribe) which the Issuer may be required to file with
       the Commission pursuant to Section 13 or 15(d) of the Exchange Act;

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

                     (iii)  supply to the  Indenture  Trustee (and the Indenture
       Trustee shall  transmit by mail to all  Noteholders  described in TIA ss.
       313(c)) (with a copy to the Insurer) such  summaries of any  information,
       documents  and  reports  required  to be filed by the Issuer  pursuant to
       clauses (i) and (ii) of this  Section  7.3(a) as may be required by rules
       and regulations prescribed from time to time by the Commission.

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

              SECTION 7.4. REPORTS BY INDENTURE TRUSTEE.  If required by TIA ss.
313(a),  within 60 days after each _______,  beginning  with _______,  200_, the
Indenture  Trustee shall mail to each Noteholder (with a copy to the Insurer) as
required by TIA ss.  313(c) a brief report  dated as of such date that  complies
with TIA ss.  313(a).  The  Indenture  Trustee  also shall  comply  with TIA ss.
313(b).

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

                                  ARTICLE VIII

        PAYMENTS AND STATEMENTS TO NOTEHOLDERS AND RESIDUAL NOTEHOLDERS;
                      ACCOUNTS, DISBURSEMENTS AND RELEASES

              SECTION 8.1.  COLLECTION OF MONEY.  Except as otherwise  expressly
provided  herein,  the Indenture  Trustee may demand payment or delivery of, and
shall receive and collect,  directly and without  intervention  or assistance of
any fiscal agent or other intermediary,  all money and other property payable to
or receivable by the Indenture  Trustee  pursuant to this Indenture and the Sale
and  Servicing  Agreement.  The  Indenture  Trustee  shall  apply all such money
received  by it as  provided  in this  Indenture  and  the  Sale  and  Servicing
Agreement.  Except as otherwise  expressly  provided in this Indenture or in the
Sale and Servicing Agreement, if any default occurs in the making of any payment
or  performance  under any  agreement  or  instrument  that is part of the Trust
Property, the Indenture Trustee may, with the consent of the Insurer (so long as
no Insurer Default has occurred and is continuing), or shall at the direction of
the Insurer (so long as no Insurer Default has occurred and is continuing), take
such  action as may be  appropriate  to enforce  such  payment  or  performance,
including the institution and prosecution of appropriate proceedings.

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              SECTION 8.2. RELEASE OF TRUST PROPERTY.

              (a)    Subject  to  Section  8.10 and the  payment of its fees and
expenses  pursuant to Section 6.7, the Indenture  Trustee may, and when required
by the Issuer and the provisions of this Indenture shall, execute instruments to
release  property  from  the  lien of this  Indenture,  in a  manner  and  under
circumstances that are not inconsistent with the provisions of this Indenture or
the Sale and Servicing  Agreement.  In the event that the fair value of property
to be released  from the lien of this  Indenture on any date,  together with the
fair value of property  previously  released  during the  then-current  calendar
year,  equals or exceeds 10% of the Note Principal  Balance,  in addition to all
other  actions  required to be taken  pursuant to this  Indenture,  the Sale and
Servicing Agreement or otherwise in connection with such release, an Independent
Certificate  in  accordance  with TIA ss.ss.  314(c) and  314(d)(1)  meeting the
applicable requirements of Section 11.1 shall also be delivered to the Indenture
Trustee.  No party relying upon an instrument  executed by the Indenture Trustee
as provided  in this  Article  VIII shall be bound to  ascertain  the  Indenture
Trustee's  authority,  inquire into the satisfaction of any conditions precedent
or see to the application of any monies.

              (b)    The Indenture  Trustee shall,  at such time as there are no
Notes  outstanding  and all sums due the Indenture  Trustee  pursuant to Section
6.7, and to the Insurer  pursuant to the Insurance  Agreement have been paid and
the Policy has been cancelled and returned to the Insurer, release any remaining
portion  of the Trust  Property  that  secured  the Notes  from the lien of this
Indenture  and release to the Issuer or any other  Person  entitled  thereto any
funds then on deposit in the  Accounts.  The  Indenture  Trustee  shall  release
property from the lien of this  Indenture  pursuant to this Section  8.2(b) only
upon  receipt by the  Indenture  Trustee  and the  Insurer of an Issuer  Request
accompanied by an Officer's Certificate,  an Opinion of Counsel and (if required
by the TIA)  Independent  Certificates in accordance with TIA ss.ss.  314(c) and
314(d)(1) meeting the applicable requirements of Section 11.1.

              SECTION 8.3. ESTABLISHMENT OF ACCOUNTS. The Sponsor shall cause to
be established, and the Indenture Trustee shall maintain, at the Corporate Trust
Office of the  Indenture  Trustee,  a  Collection  Account and a Policy  Payment
Account (which account maybe a sub-account of the Collection Account) to be held
by the  Indenture  Trustee  in the  name of the  Trust  for the  benefit  of the
Noteholders and the Insurer,  as their interests may appear.  Each account shall
be an Eligible Account. In addition,  the Sponsor shall be permitted to withdraw
amounts  from the  Collection  Account from time to time as described in Section
3.03 of the Sale and Servicing Agreement.

              SECTION 8.4. THE POLICY.

              (a)    By the close of business on the Business Day preceding each
Determination  Date the  Indenture  Trustee shall  determine  from the Servicing
Certificate  with  respect  to  the  immediately  following  Payment  Date,  the
Deficiency Amount, if any.

              (b)    If the Indenture Trustee  determines  pursuant to paragraph
(a) above that a Deficiency  Amount would exist,  the  Indenture  Trustee  shall
complete a Notice in the form of Exhibit A to the Policy and submit  such notice
to the Insurer no later than 12:00 noon New York

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<PAGE>

City time on the related  Determination  Date  preceding  such Payment Date as a
claim for the payment of an Insured  Amount in an amount equal to the Deficiency
Amount.

              (c)    The Indenture  Trustee shall establish an Eligible  Account
(which may be a sub-account  of the  Collection  Account) for the benefit of the
Noteholders and the Insurer  referred to herein as the "Policy Payment  Account"
over which the Indenture  Trustee shall have exclusive control and sole right of
withdrawal.  The  Indenture  Trustee  shall deposit upon receipt any amount paid
under the Policy into the Policy Payment Account and distribute such amount only
for  purposes of payment to the  Noteholders  of the Insured  Amount for which a
claim was made and such amount may not be applied to satisfy any costs, expenses
or liabilities of the Sponsor, the Servicer, the Indenture Trustee or the Trust.
Amounts paid under the Policy,  to the extent needed to pay the Insured  Amount,
shall be disbursed by the  Indenture  Trustee to the  Noteholders  in accordance
with Section  8.7(b).  It shall not be necessary for such payments to be made by
check or wire  transfers  separate from checks or wire transfers used to pay the
Insured  Amount with other funds  available to make such payment.  However,  the
amount of any  payment of  principal  or  interest  on the Notes to be paid from
funds  transferred from the Policy Payment Account shall be noted as provided in
subsection  (d) of this Section 8.4 in the Note  Register  and in the  Indenture
Trustee's  Statement to  Noteholders.  Funds held in the Policy Payment  Account
shall not be invested.  Any funds remaining in the Policy Payment Account on the
first  Business  Day  following a Payment  Date shall be returned to the Insurer
pursuant to the written  instructions of the Insurer by the end of such Business
Day.

              (d)    The  Indenture  Trustee  shall keep a complete and accurate
record of the amount of interest and principal  paid in respect of any Note from
moneys  received  under the Policy.  The Insurer shall have the right to inspect
such records at  reasonable  times  during  normal  business  hours upon one (1)
Business Day's prior written notice to the Indenture Trustee.

              (e)    The Indenture  Trustee shall, upon retirement of the Notes,
furnish to the Insurer a notice of such retirement,  and, upon retirement of the
Notes,  and, upon  retirement of the Notes and the expiration of the term of the
Policy surrender the Policy to the Insurer for cancellation.

              SECTION 8.5. PAYMENTS UNDER THE GREENPOINT BANK DEMAND NOTE:

              On the ______th  Payment Date, the Indenture  Trustee shall demand
payment  from  GreenPoint  Bank  under the Demand  Note of the Demand  Note Draw
Amount payable  thereunder and deposit such amount into the Collection  Account.
The Indenture  Trustee shall use its best efforts to give GreenPoint Bank notice
of any draw to be made under the Demand Note at least one  Business Day prior to
the related  Payment  Date.  The Demand Note Draw Amount (the  "DEMAND NOTE DRAW
AMOUNT")  shall be equal to the  Overcollateralization  Deficit on such  Payment
Date.

              The  Indenture  Trustee shall also make a demand for payment under
the Demand  Note upon its  receipt  of written  notice  from the  Servicer  that
GreenPoint  Bank's  long-term senior unsecured debt rating or its equivalent has
been  downgraded  to below _____ by [First  Rating  Agency] or to below _____ by
[Second  Rating Agency] while the Demand Note is still  outstanding.  The amount
demanded by the Indenture Trustee in that instance shall equal the

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<PAGE>

lesser  of (i) the  Maximum  Available  Amount  (as  defined  below) or (ii) the
Overcollateralization  Deficiency Amount, in each case calculated on the date of
the  downgrade.  In  fulfillment  of such a  demand  by the  Indenture  Trustee,
GreenPoint  Bank will deposit a Demand Note Reserve Account Deposit Amount in an
amount  equal to the amount  demanded by the  Indenture  Trustee  into a reserve
account (the "DEMAND NOTE  RESERVE  ACCOUNT").  The Demand Note Reserve  Account
shall be held by the Indenture  Trustee in the name of the Trust for the benefit
of the Noteholders and the Insurer,  as their interests may appear, and shall be
an Eligible  Account.  Amounts on deposit in the Demand Note Reserve Account may
be  invested  as  approved  by the  Insurer,  if  the  Issuer  delivers  written
instruction  as to such  investments to the Indenture  Trustee,  and earnings on
such Eligible  Investments will be paid to GreenPoint Bank on each Payment Date.
During any period  that  amounts  are on  deposit  in the  Demand  Note  Reserve
Account,  the Indenture Trustee shall make draws upon the amounts therein in the
same manner as under the Demand Note and in lieu of making draws upon the Demand
Note directly. Any such draw will be made first, from any cash amount on deposit
in the Demand  Reserve  Account and second,  if the amount of cash on deposit is
insufficient to fully fund the draw, the Indenture  Trustee will liquidate up to
the entire  amount of other  collateral  on deposit in the Demand  Note  Reserve
Account,  as instructed by GreenPoint Bank, in an amount  sufficient to generate
cash to fund the  remainder  of the draw.  All  amounts on deposit in the Demand
Note Reserve  Account will be released to GreenPoint  Bank on the earlier of the
Payment  Date  immediately  following  the date on which  its  long-term  senior
unsecured  debt rating or its  equivalent  is no longer below ____,  as rated by
[First Rating Agency],  or ____, as rated by [Second Rating  Agency],  or, after
permitted withdrawals, upon maturity of the Demand Note.

              In addition,  GreenPoint  Bank agrees under the Demand Note to pay
any Capitalized  Interest  Shortfall for each Payment Date occurring  during the
Demand  Note  Term.  For  purposes  of the  Demand  Note,  Capitalized  Interest
Shortfall  shall  mean the  positive  difference,  if any,  of (i) the  Interest
Payment Amount for such Payment Date minus (ii) the total  Interest  Collections
received on the  Mortgage  Loans  during the  immediately  preceding  Collection
Period.

              As of the Closing Date and each Payment Date thereafter during the
Demand Note Term, the maximum available amount outstanding under the Demand Note
shall  equal ___% of the  aggregate  Note  Balance as of the  Cut-Off  Date (the
"MAXIMUM AVAILABLE AMOUNT").

              The term of the Demand Note (the "DEMAND NOTE TERM") shall be from
_______,  200_ until its  maturity on the  earliest of (i) the date on which the
aggregate principal balances of the Notes are paid down to zero or (ii) the date
on which the  Specified  Overcollateralization  Amount has been reached or (iii)
the __________th Payment Date.

              SECTION 8.6. [RESERVED]

              SECTION 8.7. PRIORITY OF DISTRIBUTIONS.

              (a)    The  Indenture  Trustee  shall  deposit  to the  Collection
Account,  without  duplication,  upon receipt,  (i) any payments  related to the
Class A Notes made  pursuant  to the  Policy,  (ii) any  amounts  received  from
GreenPoint  Bank under the Demand Note or released  from the Demand Note Reserve
Account;  (iii) the proceeds of any  liquidation  of the assets of the Trust and
(iv) Interest  Collections and Principal  Collections  remitted by the Servicer,
together

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<PAGE>

with any Substitution  Amounts,  and any Loan Purchase Price amounts received by
the Indenture Trustee.

              (b)    With  respect to the  Collection  Account,  on each Payment
Date, the Indenture Trustee shall make the following allocations,  disbursements
and  transfers in the  following  order of priority,  and each such  allocation,
transfer and  disbursement  shall be treated as having  occurred  only after all
preceding allocations, transfers and disbursements have occurred:

                     (i)    to the Indenture Trustee, the Trustee Fee then due;

                     (ii)   from amounts on deposit therein,  the Premium Amount
       with respect to the Class A Notes to the Insurer for such Payment Date

                     (iii)  from amounts then on deposit therein, to the Class A
       Noteholders, the Interest Payment Amount for such Payment;

                     (iv)   on each Payment Date during the Managed Amortization
       Period, from amounts then on deposit therein, to the Sponsor, the portion
       of Additional Balance Contributed Amount for such Payment Date related to
       HELOC Mortgage Loans;

                     (v)    from amounts then on deposit therein, to the Class A
       Noteholders as a distribution of principal,  the Principal Payment Amount
       for such Payment Date;

                     (vi)   from amounts then on deposit therein, to the Class A
       Noteholders,  as a distribution of principal,  the  Overcollateralization
       Deficit for such Payment Date;

                     (vii)  from  amounts  then  on  deposit  therein,   to  the
       Insurer, the Reimbursement Amount, if any, then due to it;

                     (viii) from  amounts  then on deposit  therein,  the Excess
       Cashflow with respect to the Class A Notes shall be applied to the extent
       necessary to fund the full amount of the Accelerated Principal Payment;

                     (ix)   from amounts then on deposit,  PARI PASSU (a) to the
       Servicer, reimbursement for amounts reimbursable to the Servicer pursuant
       to Section 3.03 and Section 5.03 of the Sale and  Servicing  Agreement to
       the extent not previously reimbursed and (b) to the Indenture Trustee, up
       to a maximum of $5,000 on any Payment  Date to pay certain  amounts  that
       may be required to be paid to the  Indenture  Trustee with respect to its
       or the Custodian's  preparation and recording of assignments of mortgages
       (which  amounts  were not  previously  paid  pursuant  to  clause  (i) or
       reimbursed pursuant to the Sale and Servicing Agreement);

                     (x)    from  amounts then on deposit  therein,  the current
       Deferred  Interest  with  respect  to the  Class A Notes  and any  unpaid
       Deferred  Interest from prior Payment Dates with interest  thereon at the
       Formula Note Rate;

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<PAGE>

                     (xi)   to the Indenture Trustee,  all remaining amounts due
       and owing to the Indenture  Trustee  pursuant to the Basic  Documents and
       not otherwise paid pursuant to clause (i) or (ix);

                     (xii)  to the Manager of the Trust, the Management Fee then
       due and any amount due and owing to the Manager  pursuant to Section 5(b)
       of the Management Agreement; and

                     (xiii) to  the  Residual  Certificateholders,  any  amounts
       remaining on deposit in the Collection Account.

              SECTION 8.8.  STATEMENTS TO  NOTEHOLDERS.  The  Indenture  Trustee
(based upon information  received from the Servicer) will make available via its
internet website on each Payment Date concurrently with each distribution to the
Noteholders,  to the  Servicer,  the  Noteholders  and the  Insurer a  statement
setting forth among other items with respect to the Notes:

                     (i)    the amount being distributed to the Notes;

                     (ii)   the amount of interest included in such distribution
       and the Note Rate;

                     (iii)  the  amount,  if any,  of overdue  accrued  interest
       included in such distribution (and the amount of interest thereon);

                     (iv)   the amount, if any, of the remaining overdue accrued
       interest after giving effect to such distribution;

                     (v)    the amount,  if any, of  principal  included in such
       distribution;

                     (vi)   the Servicing Fee for such Payment Date;

                     (vii)  the related principal  balance,  after giving effect
       to such distribution;

                     (viii) the  related  initial  Pool  Balance and the related
       Pool Balance as of the end of the preceding Collection Period;

                     (ix)   the  number  and  aggregate   Principal  Balance  of
       Mortgage Loans that were (A)  delinquent  (exclusive of Mortgage Loans in
       bankruptcy or foreclosure or properties  acquired by the Trust by deed in
       lieu of foreclosure)  (1) 30 to 59 days, (2) 60 to 89 days, (3) 90 to 119
       days,  (4) 120 to 149 days,  (5) 150 to 179 days, (6) 180 to 269 days and
       (7) 270 or more  days,  (B) in  foreclosure,  (C) in  bankruptcy  and (D)
       properties acquired by the Trust by deed in lieu of foreclosure;

                     (x)    (A)  cumulative  losses as a percentage  of original
       Pool  Balance,  (B)  cumulative  losses as a  percentage  of current Pool
       Balance and (C) the twelve-month  rolling average of cumulative losses as
       a percentage of original Pool Balance;

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<PAGE>

                     (xi)    the  three-month  rolling average of Mortgage Loans
       that are 60 days or more delinquent;

                     (xii)   the book value of any real estate which is acquired
       by the Trust through foreclosure or grant of deed in lieu of foreclosure;

                     (xiii)  the amount of any draws on the Policy;;

                     (xiv)   whether the related  Payment  Date will fall during
       the Managed Amortization Period or the Rapid Amortization Period;

                     (xv)    whether a Rapid  Amortization  Event  has  occurred
       during the related Collection Period;

                     (xvi)   the amount,  if any,  of any Relief Act  Shortfalls
       incurred during the related Collection Period;

                     (xvii)  the  outstanding  principal  balance  of the  three
       Mortgage Loans in with the largest outstanding principal balance;

                     (xviii) whether  an Event of  Servicing  Termination  or an
       Insurer Default has occurred;

                     (xix)   the amount, if any, of Additional  Balances created
       during the related Collection Period;

                     (xx)    whether the Managed  Amortization  Period has ended
       and the Rapid Amortization Period has begun;

                     (xxi)   the Specified Overcollateralization Amount;

                     (xxii)  the  Overcollateralization   Amount,  after  giving
       effect to payments on such Payment Date;

                     (xxiii) the amount of any  servicing  advances  made by the
       Servicer during the related Collection Period; and

                     (xxiv)  the amount, if any, of interest shortfalls relating
       to prepayments during the related Collection Period.

              In the case of  information  furnished  pursuant to clauses  (ii),
(iii), (iv) and (v) above, the amounts shall be expressed as a dollar amount per
Class A Note with a $1,000 denomination.

              The  Indenture  Trustee  will make the  reports  referred to above
(and, at its option,  any additional files containing the same information in an
alternative  format)  available  each month to  Noteholders,  the  Insurer,  the
Sponsor and the Servicer via the Indenture Trustee's internet website,  which is
presently located at www.mbsreporting.com. Any such persons that

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<PAGE>

are  unable  to use  this  website  are  entitled  to have a paper  copy of such
information  sent to them via  facsimile  by faxing a request  to the  Indenture
Trustee  at  (212)  815-3986.  If the  Insurer  requests  a  paper  copy of such
information,  a paper copy shall be sent to the Insurer  each month  without the
need for any additional  request.  The Indenture Trustee shall have the right to
change  the  manner  in  which  the  reports  referred  to in this  section  are
distributed  in order to make such  distribution  more  convenient  and/or  more
accessible to the Noteholders,  the Insurer,  the Sponsor and the Servicer.  The
Indenture  Trustee will provide  timely and  adequate  notification  to all such
parties regarding any such change to the method of distribution of the reports.

              Each  report  provided to the  Insurer  (either via the  Indenture
Trustee's  website  or  a  paper  copy)  pursuant  to  this  Section  8.8  shall
additionally  report:  (a) the total amount of funds received as Insured Amounts
or  Preference  Amounts for such Payment Date,  separately  stating the portions
used to pay principal and interest  components of the Deficiency Amount; (b) the
cumulative  amount of Insured Amounts or Preference  Amounts paid by the Insurer
through  such  Payment  Date;  and (c)  other  information  as the  Insurer  may
reasonably request from time to time.

              Within 60 days after the end of each calendar  year,  the Servicer
shall prepare or cause to be prepared and shall forward to the Indenture Trustee
the  information  set forth in clauses  (i) and (ii) above  aggregated  for such
calendar  year.  Such  obligation  of the Servicer  shall be deemed to have been
satisfied  to the extent  that  substantially  comparable  information  shall be
provided by the Servicer or a Note Paying Agent pursuant to any  requirements of
the Code.

              SECTION 8.9. INDENTURE TRUSTEE ANNUAL CERTIFICATION.  On or before
January 31 of each year, the Manager,  on behalf of the Trust, shall provide the
Indenture  Trustee  with a written  notice  listing all Payment  Date reports to
Noteholders  with respect to Payment Dates  occurring in the prior calendar year
that were included in a Form 8-K filing pursuant to Section 3.14 of the Sale and
Servicing  Agreement;  provided that if no Form 10-K is required to be filed for
such prior  calendar  year, no written  notice shall be required.  No later than
March 15 of each year in which such written notice is provided by the Manager to
the Indenture Trustee,  the Indenture Trustee shall sign a certification (in the
form attached hereto as Exhibit C) for the benefit of the Person(s)  signing the
Form  10-K   Certification,   regarding   certain   aspects  of  the  Form  10-K
Certification.

              SECTION    8.10.    RIGHTS    OF    NOTEHOLDERS    AND    RESIDUAL
CERTIFICATEHOLDERS.  The Notes shall  represent  obligations of the Trust,  each
representing  interests  in or  secured  by the Trust  Property,  including  the
Collection  Account  and the right to receive  Interest  Collections,  Principal
Collections, if any, and other amounts at the times and in the amounts specified
in this  Indenture and the Residual  Certificates  shall  represent a beneficial
interest in the Trust (other than the Policy).

              SECTION 8.11.  OPINION OF COUNSEL.  The Indenture  Trustee and the
Insurer shall  receive at least seven days' notice when  requested by the Issuer
to take any action  pursuant  to Section  8.2(a),  accompanied  by copies of any
instruments  involved,  and  the  Indenture  Trustee  shall  also  require  as a
condition  to such action,  an Opinion of Counsel  (addressed  to the  Indenture
Trustee  and to the  Insurer),  stating  the legal  effect  of any such  action,
outlining  the steps  required to complete  the same,  and  concluding  that all
conditions  precedent to the taking of

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<PAGE>

such action have been  complied  with and such  action will not  materially  and
adversely  impair the security for the Notes or the rights of the Noteholders or
the Insurer in  contravention  of the  provisions of this  Indenture;  PROVIDED,
HOWEVER,  that such  Opinion  of  Counsel  shall not be  required  to express an
opinion as to the fair value of the Trust Property.  Counsel  rendering any such
opinion  may  rely,  without  independent  investigation,  on the  accuracy  and
validity of any  certificate  or other  instrument  delivered  to the  Indenture
Trustee in connection with any such action.

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

              SECTION   9.1.   SUPPLEMENTAL   INDENTURES   WITHOUT   CONSENT  OF
NOTEHOLDERS.

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

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

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

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

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

                     (v)    to cure any ambiguity,  to correct or supplement any
       provision  herein  or  in  any   supplemental   indenture  which  may  be
       inconsistent  with any  other  provision  herein  or in any  supplemental
       indenture  or to make any other  provisions  with  respect  to matters or
       questions arising under this Indenture or in any supplemental  indenture;
       PROVIDED that such action shall not adversely affect the interests of the
       Holders of the Notes; or

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

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<PAGE>

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

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

              (b)    The parties  hereto,  when  authorized  by an Issuer Order,
may,  also  without  the consent of any of the Holders of the Notes but with the
prior  written  consent  of the  Insurer  and with  prior  notice to the  Rating
Agencies by the Issuer,  as evidenced to the  Indenture  Trustee,  enter into an
indenture  or  indentures  supplemental  hereto  for the  purpose  of adding any
provisions  to, or changing in any manner or  eliminating  any of the provisions
of, this  Indenture  or of  modifying in any manner the rights of the Holders of
the Notes under this Indenture;  PROVIDED,  HOWEVER, that such action shall not,
as evidenced by an Opinion of Counsel,  adversely affect in any material respect
the interests of any Noteholder.

              SECTION 9.2. SUPPLEMENTAL  INDENTURES WITH CONSENT OF NOTEHOLDERS.
The parties  hereto,  when  authorized by an Issuer Order,  also may, with prior
notice to the Rating  Agencies,  with the  consent of the  Insurer  and with the
consent of the Holders of not less than a majority of the Outstanding  Amount of
the Notes, by Act of such Holders delivered to the parties hereto, enter into an
indenture  or  indentures  supplemental  hereto  for the  purpose  of adding any
provisions  to, or changing in any manner or  eliminating  any of the provisions
of, this  Indenture  or of  modifying in any manner the rights of the Holders of
the Notes under this Indenture;  PROVIDED, HOWEVER, that, subject to the express
rights of the Insurer under the Basic Documents,  no such supplemental indenture
shall,  without the  consent of the Holder of each  Outstanding  Notes  affected
thereby:

                     (i)    change  the date of payment  of any  installment  of
       principal  of or interest  on any Note,  or reduce the  principal  amount
       thereof,  the interest rate thereon or the Redemption  Price with respect
       thereto,   change  the  provision  of  this  Indenture  relating  to  the
       application of collections  on, or the proceeds of the sale of, the Trust
       Property to payment of principal  of or interest on the Notes,  or change
       any place of payment where, or the coin or currency in which, any Note or
       the interest thereon is payable;

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

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

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<PAGE>

                     (iv)   modify or alter the provisions of the proviso to the
       definition of the term "Outstanding";

                     (v)    reduce the percentage of the  Outstanding  Amount of
       the Notes  required to direct the Indenture  Trustee to direct the Issuer
       to sell or liquidate the Trust Property pursuant to Section 5.4;

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

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

                     (viii) permit the creation of any lien ranking  prior to or
       on a parity with the lien of this  Indenture  with respect to any part of
       the Trust  Property  or,  except as otherwise  permitted or  contemplated
       herein  or in any of the  Basic  Documents,  terminate  the  lien of this
       Indenture  on any  property  at any time  subject  hereto or deprive  the
       Holder  of any  Note  of  the  security  provided  by the  lien  of  this
       Indenture.

              The Indenture  Trustee may conclusively  rely as to whether or not
any Notes would be adversely affected by any supplemental indenture upon receipt
of an Opinion of Counsel  addressed and  delivered to the Indenture  Trustee and
the Insurer to that effect and any such  determination  shall be conclusive upon
the Holders of all Notes,  whether  theretofore or thereafter  authenticated and
delivered  hereunder.  The Indenture  Trustee shall not be liable for relying on
such Opinion of Counsel in good faith.

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

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

              SECTION 9.3. EXECUTION OF SUPPLEMENTAL  INDENTURES.  In executing,
or permitting  the  additional  trusts  created by, any  supplemental  indenture
permitted by this Article IX or the modifications  thereby of the trusts created
by this  Indenture,  the Indenture  Trustee and the Insurer shall be entitled to
receive,  and  subject to  Sections  6.1 and 6.2,  shall be fully  protected  in
relying  upon, an Opinion of Counsel  (and,  if  requested,  an Officer's  Note)
stating that the  execution of such  supplemental  indenture  is  authorized  or
permitted  by this  Indenture.  The  Indenture  Trustee  may,  but  shall not be
obligated to, enter into any such supplemental

                                       46
<PAGE>

indenture that affects the Indenture Trustee's own rights,  duties,  liabilities
or immunities under this Indenture or otherwise.

              SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURE.  Upon the execution
of any supplemental  indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance  therewith  with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations,  duties, liabilities and immunities under this Indenture of
the Indenture Trustee,  the Issuer and the Holders of the Notes shall thereafter
be determined,  exercised and enforced hereunder subject in all respects to such
modifications  and  amendments,  and all the  terms and  conditions  of any such
supplemental  indenture  shall  be and be  deemed  to be part of the  terms  and
conditions of this Indenture for any and all purposes.

              SECTION 9.5. REFERENCE IN NOTES TO CONFORMITY WITH TRUST INDENTURE
ACT. Every amendment of this Indenture and every supplemental indenture executed
pursuant to this Article IX shall conform to the requirements of the TIA as then
in effect so long as this Indenture shall then be qualified under the TIA.

              SECTION 9.6. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.  Notes
authenticated  and delivered after the execution of any  supplemental  indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a  notation  in form  approved  by the  Indenture  Trustee as to any matter
provided  for in such  supplemental  indenture.  If the Issuer or the  Indenture
Trustee shall so determine,  new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental  indenture may
be prepared and executed by the Issuer and  authenticated  and  delivered by the
Indenture Trustee in exchange for Outstanding Notes.

                                   ARTICLE X

                               REDEMPTION OF NOTES

              SECTION 10.1.  REDEMPTION.  The Notes are subject to redemption in
whole,  but not in part,  at the  direction  of the Sponsor  pursuant to Section
7.01(b) of the Sale and  Servicing  Agreement,  on any Payment Date on which the
Sponsor  exercises  its option to transfer the Trust  Property  pursuant to said
Section  7.01(b),  for a  purchase  price  equal to the  Redemption  Price.  The
Servicer or the Issuer shall furnish the Insurer  notice of such  redemption not
later than 35 days prior to the Redemption Date. If the Notes are to be redeemed
pursuant to this Section 10.1,  the Servicer or the Issuer shall furnish  notice
of such  election to the  Indenture  Trustee not later than 35 days prior to the
Redemption Date and the Issuer shall deposit or undertake to deposit on or prior
to the Redemption Date with the Indenture Trustee in the Collection  Account the
Redemption Price of such Notes whereupon all such Notes shall be due and payable
on the Redemption  Date upon the  furnishing of a notice  complying with Section
10.2 (unless the Issuer shall default in the deposit of the Redemption Price).

                                       47
<PAGE>

              SECTION 10.2. SURRENDER OF NOTES.

              (a)    Notice of any  termination,  specifying  the  Payment  Date
(which shall be a date that would  otherwise  be a Payment  Date) upon which the
Noteholders  may surrender  their Notes to the Indenture  Trustee for payment of
the  final  distribution  and  cancellation,  shall  be  given  promptly  by the
Indenture Trustee (upon receipt of written  directions from the Sponsor,  if the
Sponsor is  exercising  its right to transfer of the Mortgage  Loans,  given not
later  than the  first  day of the  month  preceding  the  month  of such  final
distribution)  to the Insurer and to the Servicer  and by letter to  Noteholders
mailed  not  earlier  than the 15th day and not  later  than the 25th day of the
month next  preceding the month of such final  distribution  specifying  (i) the
Payment  Date upon  which  final  distribution  of the  Notes  will be made upon
presentation  and  surrender  of Notes at the office or agency of the  Indenture
Trustee therein  designated,  (ii) the amount of any such final distribution and
(iii) that the Record Date  otherwise  applicable  to such  Payment  Date is not
applicable, distributions being made only upon presentation and surrender of the
Notes at the office or agency of the Indenture Trustee therein specified. In the
event written  directions are delivered by the Sponsor to the Indenture  Trustee
as  described  in the  preceding  sentence,  the  Sponsor  shall  deposit in the
Collection  Account on or before the Payment Date for such final distribution in
immediately  available funds an amount which, when added to the funds on deposit
in the Collection Account that are payable to the Noteholders,  will be equal to
the  retransfer  amount  for the  Mortgage  Loans  computed  as above  provided,
together  with 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.

              (b)    Upon presentation and surrender of the Notes, the Indenture
Trustee  shall  cause to be  distributed  to the Holders of Notes on the Payment
Date for such final distribution,  in proportion to the Percentage  Interests of
their  respective  Notes and to the  extent  that funds are  available  for such
purpose,  the amount  required  to be  distributed  to  Noteholders  pursuant to
Section 10.1 of this Indenture for such Payment Date. The  distribution  on such
final Payment Date pursuant to a retransfer pursuant to Section 7.01(a)(B)(i) of
the Sale and Servicing Agreement shall be in lieu of the distribution  otherwise
required to be made on such Payment  Date in respect of the Notes.  On the final
Payment  Date prior to having  made the  distributions  called  for  above,  the
Indenture  Trustee shall,  based upon the information set forth in the Servicing
Certificate  for such Payment  Date,  withdraw from the  Collection  Account and
remit to the Insurer the lesser of (x) the amount  available for distribution on
such final Payment Date, net of any portion thereof necessary to pay the amounts
described in clauses (i) and (ii) above and (y) the unpaid 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.

              (c)    In  the  event  that  all  of  the  Noteholders  shall  not
surrender their Notes for final payment and cancellation on or before such final
Payment Date,  the  Indenture  Trustee shall on such date cause all funds in the
Collection  Account not  distributed in final  distribution to Noteholders to be
withdrawn therefrom and credited to the remaining Noteholders by depositing such
funds in a separate  escrow account for the benefit of such  Noteholders and the
Sponsor (if the Sponsor has exercised its right to transfer the Mortgage  Loans)
or the  Indenture  Trustee (in any other  case) and shall give a second  written
notice to the remaining Noteholders to surrender

                                       48
<PAGE>

their Notes for  cancellation  and receive the final  distribution  with respect
thereto. If within one year after the second notice all the Notes shall not have
been surrendered for  cancellation,  the Indenture  Trustee may take appropriate
steps,  or may  appoint  an agent to take  appropriate  steps,  to  contact  the
remaining Noteholders  concerning surrender of their Notes, and the cost thereof
shall be paid out of the funds on deposit in such escrow account.

              SECTION  10.3.  FORM OF  REDEMPTION  NOTICE.  Notice of redemption
supplied to the  Indenture  Trustee by the Sponsor  under  Section 10.1 shall be
given by the  Indenture  Trustee by facsimile or by  first-class  mail,  postage
prepaid,  transmitted or mailed prior to the applicable  Redemption Date to each
Holder of Notes of record,  as of the close of business on the date which is not
less than 5 days  prior to the  applicable  Redemption  Date,  at such  Holder's
address appearing in the Note Register.

              All notices of redemption shall state:

                     (i)    the Redemption Date;

                     (ii)   the Redemption Price;

                     (iii)  that the Record Date  otherwise  applicable  to such
       Redemption  Date is not  applicable  and that payments shall be made only
       upon  presentation  and  surrender  of such Notes at the place where such
       Notes are to be surrendered  for payment of the  Redemption  Price (which
       shall be the office or agency of the Issuer to be  maintained as provided
       in Section 3.2); and

                     (iv)   that  interest on the Notes shall cease to accrue on
       the Redemption Date.

              Notice of  redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer.  Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.

              SECTION 10.4.  NOTES PAYABLE ON REDEMPTION  DATE.  The Notes to be
redeemed shall,  following  notice of redemption as required by Section 10.2, on
the Redemption  Date become due and payable at the Redemption  Price and (unless
the Issuer  shall  default in the payment of the  Redemption  Price) no interest
shall  accrue on the  Redemption  Price for any  period  after the date to which
accrued interest is calculated for purposes of calculating the Redemption Price.

                                   ARTICLE XI

                                  MISCELLANEOUS

              SECTION 11.1. COMPLIANCE  CERTIFICATES AND OPINIONS, ETC. Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee  and to the  Insurer  if the  application  or  request  is  made  to the
Indenture Trustee (i) an Officer's Certificate stating that

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<PAGE>

all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent,  if any, have been
complied  with  and  (iii)  (if  required  by the TIA or any  provision  of this
Agreement)  an  Independent   Certificate   from  a  firm  of  certified  public
accountants meeting the applicable requirements of this Section, except that, in
the case of any such  application  or request as to which the furnishing of such
documents  is  specifically  required by any  provision  of this  Indenture,  no
additional certificate or opinion need be furnished.

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

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

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

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

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

              SECTION 11.2. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In
any case where several matters are required to be certified by, or covered by an
opinion of, any specified  Person,  it is not necessary that all such matters be
certified  by, or covered by the opinion of, only one such Person,  or that they
be so certified or covered by only one document, but one such Person may certify
or give an  opinion  with  respect  to some  matters  and one or more other such
Persons as to other matters,  and any such Person may certify or give an opinion
as to such matters in one or several documents.

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

                                       50
<PAGE>

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

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

              SECTION 11.3. ACTS OF NOTEHOLDERS.

              (a)    Any  request,  demand,  authorization,  direction,  notice,
consent,  waiver or other action provided by this Indenture to be given or taken
by  Noteholders  may be embodied in and evidenced by one or more  instruments of
substantially  similar tenor signed by such  Noteholders  in person or by agents
duly appointed in writing;  and except as herein  otherwise  expressly  provided
such action shall become  effective  when such  instrument  or  instruments  are
delivered to the Indenture Trustee,  and, where it is hereby expressly required,
to the Issuer.  Such instrument or instruments  (and the action embodied therein
and  evidenced  thereby)  are herein  sometimes  referred to as the "Act" of the
Noteholders  signing such instrument or  instruments.  Proof of execution of any
such  instrument or of a writing  appointing  any such agent shall be sufficient
for any purpose of this  Indenture  and (subject to Section 6.1)  conclusive  in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section.

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

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

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

              SECTION 11.4. NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER, INSURER
AND RATING AGENCIES.  Any request,  demand,  authorization,  direction,  notice,
consent,  waiver or Act of Noteholders or other documents  provided or permitted
by this Indenture to be made upon, given or furnished to or filed with:

              (a)    The  Indenture  Trustee by any  Noteholder or by the Issuer
shall be  sufficient  for  every  purpose  hereunder  if  personally  delivered,
delivered by overnight courier or mailed first-class and shall be deemed to have
been duly given upon receipt to the Indenture

                                       51
<PAGE>

Trustee at its  Corporate  Trust  Office and any notice  delivered  by facsimile
shall be  addressed  to the  Corporate  Trust  Office,  telecopy  number  (____)
____-____, or

              (b)    The Issuer by the  Indenture  Trustee or by any  Noteholder
shall be  sufficient  for  every  purpose  hereunder  if  personally  delivered,
delivered by facsimile  or  overnight  courier or mailed first class,  and shall
deemed to have  been  duly  given  upon  receipt  to the  Issuer  addressed  to:
GreenPoint  Home Equity Loan Trust 200_-_,  in care of [Owner  Trustee],  [Owner
Trustee's Address],  or at any other address previously  furnished in writing to
the Indenture  Trustee by Issuer.  The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Indenture Trustee.

              (c)    The Insurer by the Issuer or the Indenture Trustee shall be
sufficient  for any purpose  hereunder  if in writing and mailed by  first-class
mail personally delivered or telecopied to the recipient as follows:

              To the Insurer:          [Insurer]
                                       [Insurer's Address]

                                       Telecopy:  (____) ____-_____

              Notices required to be given to the Rating Agencies by the Issuer,
the  Indenture  Trustee or the Owner  Trustee  shall be in  writing,  personally
delivered, delivered by overnight courier or first class or via facsimile to (i)
in the case of [First Rating Agency],  at the following  address:  [First Rating
Agency's  Address],  Fax No:  (___)  ____-_____  and (ii) in the case of [Second
Rating Agency], at the following address:  [Second Rating Agency's Address], Fax
No: (___) ____-_____;  or as to each of the foregoing,  at such other address as
shall be designated by written notice to the other parties.

              SECTION 11.5. NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture
provides  for  notice  to  Noteholders  of  any  event,  such  notice  shall  be
sufficiently  given (unless  otherwise herein expressly  provided) if in writing
and mailed,  first-class,  postage prepaid to each  Noteholder  affected by such
event (and in all cases, the Insurer shall receive notice), at his address as it
appears on the Note  Register,  not later than the latest date,  and not earlier
than the earliest date,  prescribed  for the giving of such notice.  In any case
where notice to Noteholders  is given by mail,  neither the failure to mail such
notice nor any defect in any notice so mailed to any particular Noteholder shall
affect the sufficiency of such notice with respect to other Noteholders, and any
notice  that is mailed in the  manner  herein  provided  shall  conclusively  be
presumed to have been duly given.

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

              In case, by reason of the  suspension of regular mail service as a
result of a strike,  work stoppage or similar activity,  it shall be impractical
to mail notice of any event to

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<PAGE>

Noteholders  when such notice is required to be given  pursuant to any provision
of  this  Indenture,  then  any  manner  of  giving  such  notice  as  shall  be
satisfactory to the Indenture  Trustee shall be deemed to be a sufficient giving
of such notice.

              Where this Indenture  provides for notice to the Rating  Agencies,
failure to give such  notice  shall not affect any other  rights or  obligations
created hereunder.

              SECTION   11.6.   ALTERNATE   PAYMENT   AND   NOTICE   PROVISIONS.
Notwithstanding  any  provision  of this  Indenture  or any of the  Notes to the
contrary,  the  Issuer may enter  into any  agreement  with any Holder of a Note
providing  for a method of payment,  or notice by the  Indenture  Trustee or any
Note Paying Agent to such Holder,  that is different  from the methods  provided
for in this  Indenture for such payments or notices,  provided that such methods
are  reasonable  and consented to by the Indenture  Trustee (which consent shall
not be unreasonably withheld).  The Issuer will furnish to the Indenture Trustee
a copy of each such  agreement and the Indenture  Trustee will cause payments to
be made and notices to be given in accordance with such agreements.

              SECTION 11.7.  CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof  limits,  qualifies or conflicts  with another  provision  hereof that is
required to be included in this  indenture by any of the  provisions of the TIA,
such required provision shall control.

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

              SECTION  11.8.  EFFECT  OF  HEADINGS  AND TABLE OF  CONTENTS.  The
Article  and  Section  headings  herein  and  the  Table  of  Contents  are  for
convenience only and shall not affect the construction hereof.

       Notwithstanding  anything to the contrary  contained in this Indenture 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.

              SECTION 11.9. SUCCESSORS AND ASSIGNS. All covenants and agreements
in this  Indenture  and the Notes by the Issuer  shall bind its  successors  and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors.

              SECTION  11.10.  SEPARABILITY.  In  case  any  provision  in  this
Indenture  or in the Notes  shall be  invalid,  illegal  or  unenforceable,  the
validity,  legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

              SECTION  11.11.  BENEFITS  OF  INDENTURE.   The  Insurer  and  its
successors and assigns shall be third-party  beneficiaries  to the provisions of
this Indenture,  and shall be entitled to rely upon and directly to enforce such
provisions of this Indenture. Nothing in this Indenture or in the Notes, express
or implied, shall give to any Person, other than the parties hereto and

                                       53
<PAGE>

their successors  hereunder,  the Insurer,  and the  Noteholders,  and any other
party secured hereunder,  and any other person with an ownership interest in any
part of the Trust Property,  any benefit or any legal or equitable right, remedy
or claim under this  Indenture.  The Insurer may  disclaim any of its rights and
powers under this  Indenture (in which case the  Indenture  Trustee may exercise
such rights or powers  hereunder),  but not its duties and obligations under the
Policy upon delivery of a written notice to the Indenture Trustee.

              SECTION 11.12. LEGAL HOLIDAYS. In any case where the date on which
any payment is due shall not be a Business Day, then  (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next  succeeding  Business  Day with the same  force  and
effect as if made on the date on which  nominally  due,  and no  interest  shall
accrue for the period from and after any such nominal date.

              SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW  YORK,  WITHOUT  REFERENCE  TO ITS
CONFLICT OF LAW  PROVISIONS  (OTHER THAN  SECTIONS  5-1401 AND 5-1402 OF THE NEW
YORK GENERAL  OBLIGATIONS LAW), AND THE OBLIGATIONS,  RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS .

              SECTION 11.14. COUNTERPARTS. This Indenture may be executed in any
number  of  counterparts,  each of which so  executed  shall be  deemed to be an
original,  but all such counterparts  shall together  constitute but one and the
same instrument.

              SECTION  11.15.  RECORDING  OF  INDENTURE.  If this  Indenture  is
subject to recording in any appropriate public recording offices, such recording
is to be effected by the Issuer and at its expense  accompanied by an Opinion of
Counsel  (which  may be  counsel  to the Trust or any other  counsel  reasonably
acceptable  to the  Indenture  Trustee and the  Insurer) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
person secured  hereunder or for the  enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.

              SECTION  11.16.  TRUST  OBLIGATION.  No  recourse  may  be  taken,
directly or  indirectly,  with  respect to the  obligations  of the Issuer,  the
Sponsor,  the Servicer,  the Owner Trustee or the Indenture Trustee on the Notes
or under this  Indenture or any Note or other  writing  delivered in  connection
herewith or  therewith,  against (i) the Sponsor,  the  Servicer,  the Indenture
Trustee or the Owner  Trustee in its  individual  capacity,  (ii) any owner of a
beneficial  interest  in the Issuer or (iii) any  partner,  owner,  beneficiary,
agent, officer,  director,  employee or agent of the Sponsor, the Servicer,  the
Indenture Trustee or the Owner Trustee in its individual capacity, any holder of
a  beneficial  interest in the Issuer,  the  Sponsor,  the  Servicer,  the Owner
Trustee or the  Indenture  Trustee or of any successor or assign of the Sponsor,
the  Servicer,  the  Indenture  Trustee or the Owner  Trustee in its  individual
capacity,  except  as any  such  Person  may have  expressly  agreed  (it  being
understood  that  the  Indenture  Trustee  and the  Owner  Trustee  have no such
obligations  in their  individual  capacity)  and except  that any such owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid  consideration for stock,  unpaid capital  contribution or failure to
pay any  installment  or call owing to such  entity.  For all  purposes  of this
Indenture, in the performance of any duties or

                                       54
<PAGE>

obligations of the Issuer hereunder,  the Owner Trustee shall be subject to, and
entitled to the  benefits of, the terms and  provisions  of Articles VI, VII and
VIII of the Trust Agreement.

              SECTION 11.17.  NO PETITION.  The Indenture  Trustee,  by entering
into this Indenture,  and each Noteholder,  by accepting a Note, hereby covenant
and agree that they will not at any time institute  against the Sponsor,  or the
Issuer,  or join in any institution  against the Sponsor,  or the Issuer of, any
bankruptcy, reorganization,  arrangement, insolvency or liquidation proceedings,
or other  proceedings  under any United  States  Federal or state  bankruptcy or
similar law in  connection  with any  obligations  relating  to the Notes,  this
Indenture or any of the Basic Documents.

              SECTION 11.18.  INSPECTION.  The Issuer agrees that, on reasonable
prior notice,  it will permit any  representative of the Indenture Trustee or of
the Insurer, during the Issuer's normal business hours, to examine all the books
of account, records, reports, and other papers of the Issuer, to make copies and
extracts therefrom,  to cause such books to be audited by independent  certified
public accountants,  and to discuss the Issuer's affairs,  finances and accounts
with  the  Issuer's  officers,   employees,  and  independent  certified  public
accountants,  all at such  reasonable  times  and as often as may be  reasonably
requested.  The Indenture Trustee shall and shall cause its  representatives  to
hold in confidence all such information  except to the extent  disclosure may be
required by law (and all reasonable  applications for confidential treatment are
unavailing)  and except to the extent that the Indenture  Trustee may reasonably
determine that such  disclosure is consistent  with its  Obligations  hereunder.

              SECTION 11.19. LIMITATION OF LIABILITY. It is expressly understood
and  agreed by the  parties  hereto  that (a) this  Indenture  is  executed  and
delivered by [Owner Trustee], not individually or personally but solely as Owner
Trustee of the Issuer under the Trust  Agreement,  in the exercise of the powers
and  authority  conferred  and  vested in it,  (b) each of the  representations,
undertakings  and  agreements  herein made on the part of the Issuer is made and
intended not as personal representations,  undertakings and agreements by [Owner
Trustee]  but is made and  intended for the purpose for binding only the Issuer,
(c) nothing  herein  contained  shall be construed as creating any  liability on
[Owner  Trustee]  individually  or  personally,  to perform any covenant  either
expressed  or  implied  contained  herein,  all such  liability,  if any,  being
expressly waived by the parties to this Indenture and by any person claiming by,
through or under them and (d) under no  circumstances  shall [Owner  Trustee] be
personally  liable for the payment of any indebtedness or expenses of the Issuer
or be  liable  for the  breach or  failure  of any  obligation,  representation,
warranty or covenant made or  undertaking  by the Issuer under this Indenture or
any related documents.

                                  ARTICLE XII

                            RAPID AMORTIZATION EVENTS

              SECTION 12.1.  RAPID  AMORTIZATION  EVENTS.  The  following  shall
constitute Rapid Amortization Events with respect to the Notes:

              (a)    failure  on the  part of the  Issuer,  the  Sponsor  or the
Servicer, as the case may be, (i) to make any payment or deposit required by the
terms of this Indenture, the Sale and

                                       55
<PAGE>

Servicing Agreement or the Insurance  Agreement,  within two Business Days after
notification  that such  payment or deposit is required  to be made,  or (ii) to
observe or perform in any material  respect the  covenants or  agreements of the
Issuer,  the Sponsor or the Servicer,  as the case may be, set forth in the Sale
and Servicing  Agreement or the Insurance  Agreement or this  Indenture,  as the
case may be, and which, in the case of clause (ii),  continues  unremedied for a
period  of 60 days  after  the date on which  written  notice  of such  failure,
requiring  the same to be  remedied,  shall have been given to the  Issuer,  the
Sponsor or the Servicer, as the case may be, by the Indenture Trustee, or to the
Issuer,  the  Sponsor or the  Servicer,  as the case may be,  and the  Indenture
Trustee  by the  Insurer or  Holders  of Notes  evidencing  more than 50% of the
Outstanding Amount;

              (b)    any  representation  or warranty  made by the  Issuer,  the
Sponsor or the  Servicer,  as the case may be, in this  Indenture,  the Sale and
Servicing  Agreement  or the  Insurance  Agreement  shall  prove  to  have  been
incorrect in any material  respect when made, as a result of which the interests
of the  Noteholders  or the Insurer are  materially  and adversely  affected and
which continues to be incorrect in any material  respect and continues to affect
materially  and adversely the interests of the  Noteholders or the Insurer for a
period  of 60 days  after  the date on which  written  notice  of such  failure,
requiring  the same to be  remedied,  shall have been given to the  Issuer,  the
Sponsor or the Servicer, as the case may be, by the Indenture Trustee, or to the
Issuer,  the  Sponsor or the  Servicer,  as the case may be,  and the  Indenture
Trustee by either the Insurer or the Holders of Notes  evidencing  more than 50%
of the  Outstanding  Amount;  PROVIDED,  HOWEVER,  that with respect to any such
representation  or warranty made with respect to the related  Mortgage  Loans, a
Rapid  Amortization  Event pursuant to this subparagraph (b) shall not be deemed
to  have  occurred  hereunder  if the  Servicer  or  the  Sponsor  has  accepted
retransfer of such related  Mortgage Loan or related  Mortgage Loans during such
period  (or such  longer  period  not to  exceed  an  additional  60 days as the
Indenture  Trustee may specify  with the consent of the  Insurer) in  accordance
with the provisions hereof;

              (c)    the  Servicer,  the  Sponsor  or the Issuer or any of their
Subsidiaries or Affiliates shall voluntarily go into liquidation, consent to the
appointment  of a conservator or receiver or liquidator or similar person in any
insolvency,  readjustment  of debt,  marshalling  of assets and  liabilities  or
similar proceedings of or relating to the Servicer,  the Sponsor or the Trust or
of or relating  to all or  substantially  all of such  Person's  property,  or a
decree  or  order  of  a  court  or  agency  or  supervisory   authority  having
jurisdiction  in the premises for the  appointment of a  conservator,  receiver,
liquidator  or  similar  person  in  any   insolvency,   readjustment  of  debt,
marshalling  of  assets  and  liabilities  or  similar  proceedings,  or for the
winding-up or  liquidation of its affairs,  shall have been entered  against the
Servicer,  the Sponsor of the Trust and such decree or order shall have remained
in force undischarged or unstayed for a period of 30 days; or the Servicer,  the
Sponsor or the Trust  shall  admit in  writing  its  inability  to pay its debts
generally  as  they  become  due,  file a  petition  to  take  advantage  of any
applicable  insolvency or  reorganization  statute,  make an assignment  for the
benefit of its creditors or voluntarily suspend payment of its obligations;

              (d)    the Issuer becomes  subject to regulation by the Securities
and  Exchange  Commission  as an  investment  company  within the meaning of the
Investment Company Act of 1940, as amended;

                                       56
<PAGE>

              (e)    any draw is made  under  the  Policy  with  respect  to any
Class;

              (f)    an Event of Servicing Termination has occurred;

              (g)    a default in the  payment of any  Deferred  Interest on the
Class A Notes on the Final Maturity Date; and

              (h)    default in the payment of any  interest,  principal  or any
installment of principal on the Notes when the same becomes due and payable, and
such default continues for a period of five Business Days.

              In the case of any event  described  in clauses  (a)  through  (h)
above, a Rapid Amortization Event will be deemed to have occurred only if, after
the  applicable  grace  period,  if any,  described in the Indenture or Sale and
Servicing  Agreement,  any of the Indenture  Trustee or Holders  holding Class A
Notes evidencing more than 50% of the outstanding principal balance of the Class
A Notes,  in each case with the prior written consent of the Insurer (so long as
no Insurer Default has occurred and is continuing or unless a Rapid Amortization
Event  described in clause (g) above has occurred) or the Insurer (so long as no
Insurer Default has occurred and is continuing), by written notice to the Trust,
the Insurer,  the Sponsor,  and the Servicer (and to the Indenture  Trustee,  if
given by the Noteholders or the Insurer) declare that a Rapid Amortization Event
has occurred as of the date of such notice.

              If so directed by the Insurer,  so long as no Insurer  Default has
occurred and is continuing,  the Indenture Trustee will and the Insurer (so long
as no Insurer Default has occurred and is continuing) or Holders holding Class A
Notes evidencing more than 50% of the outstanding principal balance of the Class
A Notes  (if a Rapid  Amortization  Event  described  in  clause  (g)  above has
occurred) shall have the right to direct the Indenture Trustee to sell,  dispose
of or otherwise  liquidate the Trust Property with respect to the Mortgage Loans
in a commercially  reasonable  manner and on commercially  reasonable  terms. So
long as no Event of Servicing  Termination  has occurred and is continuing,  any
such sale, disposal or liquidation will be "servicing retained" by the Servicer.
With respect to the Notes, the net proceeds of such sale will be paid (i) first,
to the Holders of the Notes  insofar as may be necessary to reduce the principal
balance  of such  Class,  together  with all  accrued  and unpaid  interest  due
thereon,  to zero,  (ii)  second,  to  reimburse  the  Insurer  to the extent of
unreimbursed draws under the Policy and other amounts owing to the Insurer,  and
(iii) third, to the Residual Certificateholder.

              In  addition to the  consequences  of a Rapid  Amortization  Event
discussed above, if the Sponsor  voluntarily files a bankruptcy petition or goes
into liquidation or any person is appointed a receiver or bankruptcy  trustee of
the Sponsor,  on the day of any such filing or appointment no further Additional
Balances  will be  transferred  to the Trust and the Sponsor will  promptly give
notice  to the  Indenture  Trustee  and  the  Insurer  of  any  such  filing  or
appointment.  Within 15 days,  the Indenture  Trustee  notify the Holders of the
Notes of the occurrence of such event.

                                       57
<PAGE>

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

                                   GREENPOINT HOME EQUITY LOAN TRUST 200_-_

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

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

                                   [INDENTURE TRUSTEE],
                                     not in its individual capacity but
                                     solely as Indenture Trustee

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

Acknowledged and Agreed:

GREENPOINT MORTGAGE SECURITIES LLC

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

<PAGE>

                             ANNEX A - DEFINED TERMS

              ACCELERATED  PRINCIPAL PAYMENT: With respect to any Payment Date a
payment received as a payment of principal by the  Noteholders,  for the purpose
of increasing the related  Overcollateralization Amount, and to be paid from the
Excess Cashflow,  and equal to for any Payment Date the lesser of (x) the amount
of the Excess Cashflow and (y) the Overcollateralization Deficiency Amount.

              ACT: As defined in Section 11.3(a) of the Indenture.

              ADDITIONAL BALANCE: As to the HELOC Mortgage Loans and any date of
determination,  the  aggregate  amount of all Draws  conveyed to the Issuer with
respect  to such  Pool  pursuant  to  Section  2.01 of the  Sale  and  Servicing
Agreement.

              ADDITIONAL BALANCE CONTRIBUTED AMOUNT: As to any Payment Date, the
difference,  if any,  between (a) the  aggregate  excess,  if any, for all prior
Payment Dates of (i) the aggregate  principal amount of all Additional  Balances
created  during the  Collection  Period  relating to each such Payment Date over
(ii) Principal  Collections relating to such Payment Date, and (b) the aggregate
Additional Balance  Contributed Amounts paid to the Sponsor on all prior Payment
Dates pursuant to Section 8.7(d)(iv) of the Indenture.

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

              APPRAISED  VALUE:  As  to  any  Mortgaged   Property,   the  value
established  by  either  a full  appraisal  or a  drive  by  inspection  of such
Mortgaged Property made to establish  compliance with the underwriting  criteria
then in effect in connection  with the application for the Mortgage Loan secured
by such Mortgaged Property.

              ASSIGNMENT  OF  MORTGAGE:   With  respect  to  any  Mortgage,   an
assignment,  notice of transfer or equivalent  instrument,  in recordable  form,
sufficient  under the laws of the  jurisdiction  in which the related  Mortgaged
Property  is  located  to  reflect  the sale of the  Mortgage  to the  Indenture
Trustee, which assignment, notice of transfer or equivalent instrument may be in
the form of one or more blanket assignments  covering the Mortgage Loans secured
by  Mortgaged  Properties  located  in the  same  jurisdiction,  to  the  extent
permitted by applicable law.

              AUTHORIZED  NEWSPAPER:  A newspaper of general  circulation in the
Borough of Manhattan,  The City of New York, printed in the English language and
customarily  published  on  each  Business  Day,  whether  or not  published  on
Saturdays, Sundays and holidays.

              AUTHORIZED  OFFICER:  With respect to the Issuer and the Servicer,
any officer or agent acting pursuant to a power of attorney of the Owner Trustee
or the Servicer, respectively, who is authorized to act for the Owner Trustee or
the Servicer,  respectively, in matters relating to the Issuer and the Servicer,
respectively, and who is identified on the list of Authorized Officers delivered
by each of the Owner  Trustee and the Servicer,  respectively,  to the Indenture
Trustee

<PAGE>

on the Closing Date (as such lists may be modified or supplemented  from time to
time thereafter).

              AVAILABLE FUNDS: With respect to any Payment Date, the amount then
on deposit in the  Collection  Account,  after  taking into account the deposits
thereto made pursuant to Section 8.7(a) of the  Indenture,  if any (exclusive of
the amount of any related Insured Amount or Preference Amount then on deposit in
the Policy Payment Account).

              BASIC   DOCUMENTS:   The  Indenture,   the  Notes,   the  Residual
Certificate,  the  Certificate  of  Trust,  the  Trust  Agreement,  the Sale and
Servicing Agreement, the Purchase Agreement, the Indemnification  Agreement, the
Management Agreement, the Insurance Agreement, the Demand Note and the Policy.

              BBA: The British Bankers' Association.

              BIF: The Bank  Insurance  Fund, as from time to time  constituted,
created under the Financial Institutions Reform, Recovery and Enhancement Act of
1989,  or if at any  time  after  the  execution  of this  instrument  the  Bank
Insurance  Fund is not  existing and  performing  duties now assigned to it, the
body performing such duties on such date.

              BILLING  CYCLE:  With respect to any Mortgage Loan and  Collection
Period,  the billing  period  specified in the related Loan  Agreement  and with
respect to which amounts billed are received during such Collection Period.

              BOOK-ENTRY  NOTES: A beneficial  interest in the Notes,  ownership
and  transfers of which shall be made through book entries by a Clearing  Agency
as described in Section 2.9 of the Indenture.

              BUSINESS DAY: Any day other than (i) a Saturday or Sunday,  (ii) a
day on which  banking  institutions  in the  state  of New  York,  the  state of
California  or the state in which the  Corporate  Trust  Office is  located  are
required or authorized by law or executive  order to be closed or (iii) a day on
which the Insurer is closed.

              CERTIFICATE  OF  TRUST:  The  certificate  of trust of the  Issuer
substantially in the form of Exhibit C to the Trust Agreement.

              CLASS A NOTE:  Any Note  designated as a "Class A Home Equity Loan
Asset-Backed  Note" on the face thereof in substantially the form of Exhibit A-1
to the Indenture.

              CLASS A NOTE  RATE:  (A) For the first  Interest  Accrual  Period,
______% and (B) for any Interest  Accrual Period  thereafter,  the lesser of the
Class A Formula Note Rate and the Maximum Rate.

              CLEARING AGENCY: An organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.

                                       2
<PAGE>

              CLEARING  AGENCY  PARTICIPANT:   A  broker,  dealer,  bank,  other
financial  institution  or other  Person  for whom from time to time a  Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.

              CLOSED-END  MORTGAGE LOANS:  Mortgage Loans  consisting  solely of
fixed-rate  closed-end second lien residential mortgage loans under the Mortgage
Notes.

              CLOSED-END  PRINCIPAL BALANCE: As to any Closed-End Mortgage Loan,
other than a  Liquidated  Mortgage  Loan,  and as of any date,  the Cut-Off Date
Principal  Balance  minus all  collections  credited  as  principal  against the
Closed-End Principal Balance of such Closed-End Mortgage Loan in accordance with
the related Mortgage Note prior to such day.

              CLOSING DATE: ________, 200_.

              CODE:  The Internal  Revenue Code of 1986, as amended from time to
time.

              COLLATERAL: As defined in the Granting Clause of the Indenture.

              COLLECTION  ACCOUNT:  That account  designated as the  "Collection
Account" and established pursuant to Section 8.3 of the Indenture.

              COLLECTION  PERIOD:  With  respect  to any  Payment  Date  and any
Mortgage Loans, the calendar month preceding such Payment Date.

              COMBINED  LOAN-TO-VALUE  RATIO:  (i)  With  respect  to any  HELOC
Mortgage  Loan as of any date,  the  percentage  equivalent  of a fraction,  the
numerator  of which is the sum of (A) the Credit  Limit and (B) the  outstanding
principal  balance as of the date of application for the related credit line (or
as of any  subsequent  date,  if any,  as of which  such  outstanding  principal
balance may be determined in connection with an increase in the Credit Limit for
such HELOC Mortgage Loan) of any mortgage loan or mortgage loans that are senior
in  priority  to the  HELOC  Mortgage  Loan and which  are  secured  by the same
Mortgaged  Property and the  denominator of which is (C) the Appraised  Value of
the related Mortgaged  Property as set forth in the Mortgage File as of the date
of the  appraisal or on such  subsequent  date,  if any, or (D) in the case of a
Mortgaged  Property  purchased  within one year of the date of  execution of the
related  Credit Line  Agreement,  the lesser of (x) the  Appraised  Value of the
related Mortgaged  Property as set forth in the loan files as of the date of the
appraisal and (y) the purchase  price of such  Mortgaged  Property and (ii) with
respect  to  any  Closed-End  Mortgage  Loan  as of  any  date,  the  percentage
equivalent of a fraction,  the numerator of which is the sum of (A) the original
principal  balance  of the  Closed-End  Mortgage  Loan  and (B) any  outstanding
principal  balances of mortgage  loans senior to such  Closed-End  Mortgage Loan
(calculated at the date of application for the Closed-End Mortgage Loan) and the
denominator  of  which  is (C) the  Appraised  Value  of the  related  Mortgaged
Property as set forth in the  Mortgage  File as of the date of the  appraisal or
(D) in the  case  of a  Mortgaged  Property  purchased  within  one  year of the
origination  of the  related  Closed-End  Mortgage  Loan,  the lesser of (x) the
Appraised Value of the related  Mortgaged  Property as set forth in the Mortgage
Files  as of the  date  of the  appraisal  and (y) the  purchase  price  of such
Mortgaged Property.

              COMPANY:  GreenPoint  Mortgage  Funding,  Inc.  or  any  successor
thereto.

                                       3
<PAGE>

              CONTROLLING  PARTY:  The  Insurer,  so long as no Insurer  Default
shall have occurred and be continuing, and the Indenture Trustee, for so long as
an Insurer Default shall have occurred and is continuing.

              CORPORATE TRUST OFFICE: With respect to (i) the Indenture Trustee,
the principal  corporate  trust office of the Indenture  Trustee at which at any
particular time its corporate trust business shall be administered, which office
at date of the execution of the Indenture is located at c/o [Indenture Trustee's
Address] and (ii) the Owner Trustee, the principal corporate trust office of the
Owner Trustee located at [Owner Trustee's Address],  or at such other address as
the Owner Trustee may designate by notice to the Noteholders and the Sponsor, or
the principal corporate trust office of any successor Owner Trustee (the address
of which the  successor  owner  trustee  will  notify  the  Noteholders  and the
Sponsor).

              CREDIT LIMIT: As to any HELOC Mortgage Loan, the maximum principal
balance permitted under the terms of the related Credit Line Agreement.

              CREDIT LIMIT  UTILIZATION RATE: As to any HELOC Mortgage Loan, the
percentage  equivalent of a fraction the numerator of which is the related HELOC
Principal Balance and the denominator of which is the related Credit Limit.

              CREDIT LINE  AGREEMENT:  With respect to any HELOC  Mortgage Loan,
the related home equity line of credit agreement and promissory note executed by
the related Mortgagor and any amendment or modification thereof.

              CREDIT  SCORES:  With respect to the Mortgage  Loans,  statistical
credit  scores  obtained  by  mortgage  lenders  in  connection  with  the  loan
application to help assess a borrower's creditworthiness.

              CUSTODIAN:  [Custodian], or any replacement Custodian named by the
Indenture  Trustee and  approved by the Insurer on prior  written  notice to the
Servicer, the Sponsor, the Issuer and the Insurer.

              CUT-OFF DATE: __________, 200_.

              CUT-OFF DATE PRINCIPAL BALANCE: With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-Off Date.

              DEFAULT:  Any  occurrence  that is, or with notice or the lapse of
time or both would become, a Rapid Amortization Event.

              DEFECTIVE  MORTGAGE  LOAN: A Mortgage  Loan subject to  retransfer
pursuant to Section 2.03 or 2.05 of the Sale and Servicing Agreement.

              DEFERRED  INTEREST:  With  respect  to the  Class A Notes  and any
Payment  Date,  the excess,  if any, of interest due at the Class A Formula Note
Rate over interest due at the Class A Note Rate.

                                       4
<PAGE>

              DEFICIENCY  AMOUNT:  With respect to the Class A Notes and (1) any
Payment  Date,  the excess,  if any, of (a) the sum of (i) the Interest  Payment
Amount (excluding any Relief Act Shortfalls,  any interest shortfalls  resulting
from prepayments on the Mortgage Loans, and any Deferred  Interest) and (ii) the
Overcollateralization  Deficit(which  prior to the earlier of (x) the expiration
of the Demand Note and (y) the twenty-fourth  Payment Date shall be deemed to be
zero for purposes of the Policy) over (b) the Total  Available  Funds and (2) on
the Final Scheduled Payment Date, the outstanding principal balance of the Class
A Notes then  outstanding,  after taking into account all payments to be made to
such Class A Notes on that date.

              DEFINITIVE NOTES: As defined in Section 2.11 of the Indenture.

              DELINQUENT:  A Mortgage  Loan is  "delinquent"  if any payment due
thereon  is not  made by the  close  of  business  on the day  such  payment  is
scheduled to be due. A Mortgage Loan is "30 days delinquent" if such payment has
not been received by the close of business on the corresponding day of the month
immediately  succeeding the month in which such payment was due, or, if there is
no such  corresponding  day (e.g., as when a 30-day month follows a 31-day month
in which a payment  was due on the 31st day of such  month) then on the last day
of such immediately  succeeding  month.  Similarly for "60 days delinquent," "90
days  delinquent"  and so on.

              DEMAND NOTE: The demand note issued by GreenPoint Bank, a New York
State chartered savings bank, to the Insurer on _________, 200_.

              DEMAND  NOTE  DRAW  AMOUNT:  As  defined  in  Section  8.5  of the
Indenture.

              DEMAND  NOTE  RESERVE  ACCOUNT:  As defined in Section  8.5 of the
Indenture.

              DEMAND NOTE RESERVE ACCOUNT DEPOSIT AMOUNT: An amount equal to the
sum of (i) (A) the dollar  amount of cash  deposited  in the Demand Note Reserve
Account pursuant to Section 8.5 of the Indenture  multiplied by (B) _____,  plus
(ii) (A) the dollar amount of U.S.  Treasury debt obligations  having a maturity
of less than one year deposited in the Demand Note Reserve  Account  pursuant to
Section 8.5 of the Indenture  multiplied by (B) _____, plus (iii) (A) the dollar
amount of U.S. Treasury debt obligations having a maturity of more than one year
but less than five years deposited in the Demand Note Reserve  Account  pursuant
to Section  8.5 of the  Indenture  multiplied  by (B)  _____,  plus (iv) (A) the
dollar amount of U.S.  Treasury debt obligations  having a maturity of more than
five years but less than ten years  deposited in the Demand Note Reserve Account
pursuant to Section 8.5 of the Indenture multiplied by (B) _____.

              DEPOSITORY:  The initial  Depository shall be The Depository Trust
Company, the nominee of which is Cede & Co., as the registered Holder of Class A
Notes evidencing  $______________  in initial aggregate  principal amount of the
Class A Notes. The Depository shall at all times be a "clearing  corporation" as
defined in Section 8-102(5) of the UCC of the State of New York.

              DEPOSITORY PARTICIPANT:  A broker, dealer, bank or other financial
institution  or other Person for whom from time to time the  Depository  effects
book-entry transfers and pledges of securities deposited with the Depository.

                                       5
<PAGE>

              DESIGNATED  TELERATE  PAGE:  The Dow Jones  Telerate  Service page
3750,  or such other page as may replace page 3750 on that service or such other
service as may be nominated by the BBA as the information vendor for the purpose
of  displaying  the BBA's  "Interest  Settlement  Rates"  for  deposits  in U.S.
dollars.

              DETERMINATION  DATE:  With respect to any Payment Date, the fourth
Business  Day  prior  to such  Payment  Date or such  earlier  day as  shall  be
designated by the Insurer and the Indenture Trustee.

              DRAW:  With  respect to any HELOC  Mortgage  Loan,  an  additional
borrowing by the Mortgagor subsequent to the Cut-Off Date in accordance with the
related Credit Line Agreement.

              DRAW PERIOD:  With respect to any HELOC  Mortgage Loan, the period
of time specified in the related  Credit Line Agreement  whereby a Mortgagor may
make a Draw under the  related  Credit  Line  Agreement,  not to exceed  five or
fifteen  years (as  applicable)  unless  extended  pursuant  to such Credit Line
Agreement and the Sale and Servicing Agreement,  such extension to be limited by
the provisions set forth in Section 2.04 of the Sale and Servicing Agreement.

              ELIGIBLE ACCOUNT: A segregated account that is (i) maintained with
a depository  institution  whose  short-term debt obligations at the time of any
deposit therein have the highest  short-term debt rating by the Rating Agencies,
(ii)  one or  more  accounts  maintained  with a  depository  institution  whose
long-term unsecured debt rating by the Rating Agencies is at least AA- and whose
accounts are fully insured by either the Savings  Association  Insurance Fund or
the Bank Insurance Fund of the Federal Deposit Insurance Corporation established
by such fund,  (iii) a segregated  trust account  maintained  with the Indenture
Trustee in its fiduciary capacity,  or (iv) otherwise  acceptable to each Rating
Agency and the Insurer as evidenced by a letter from each Rating  Agency and the
Insurer to the Indenture Trustee,  without reduction or withdrawal of their then
current ratings of the Class A Notes without regard to the Policy.

              ELIGIBLE INVESTMENTS:  One or more of the following (excluding any
callable investments purchased at a premium):

                     (i)    direct   obligations   of,  or   obligations   fully
       guaranteed as to timely  payment of principal and interest by, the United
       States  or any  agency or  instrumentality  thereof,  provided  that such
       obligations are backed by the full faith and credit of the United States;

                    (ii)   repurchase  agreements on  obligations  specified in

       clause (i)  maturing  not more than 30 days from the date of  acquisition
       thereof,  provided that (a) the short-term  unsecured debt obligations of
       the party agreeing to repurchase  such  obligations are at the time rated
       by each Rating Agency in its highest short-term rating category (which is
       A-1+ for Standard and Poor's and P-1 for  Moody's),  (b) the  obligations
       must be valued  daily at  current  market  price plus  accrued  interest,
       (c) the obligations,  pursuant to such evaluation,  must be equal, at all
       times,  to ____% of the cash  transferred  to the  Indenture  Trustee  in
       exchange for the obligations and (d) the

                                       6
<PAGE>

       obligations  must  be  delivered  to the  Indenture  Trustee  or,  if the
       Indenture  Trustee  is  supplying  the  obligations,  to an agent for the
       Indenture  Trustee,  in such a manner as to  accomplish  perfection  of a
       security  interest  in the  obligations  by  possession  of  certificated
       securities;

                     (iii)  certificates of deposit,  time deposits and bankers'
       acceptances  (which,  if Moody's is a Rating  Agency,  shall each have an
       original  maturity  of not more than 90 days and, in the case of bankers'
       acceptances, shall in no event have an original maturity of more than 365
       days) of any U.S.  depository  institution or trust company  incorporated
       under the laws of the United  States or any state  thereof and subject to
       supervision and examination by federal and/or state banking  authorities,
       provided  that  the  unsecured   short-term  debt   obligations  of  such
       depository  institution  or  trust  company  at the  date of  acquisition
       thereof  have been rated by each of  Standard & Poor's and Moody's in its
       highest unsecured short-term debt rating category;

                     (iv)   commercial paper (having original  maturities of not
       more than 270 days) of any corporation incorporated under the laws of the
       United States or any state thereof which on the date of  acquisition  has
       been rated by Standard & Poor's and Moody's in their  highest  short-term
       debt rating categories;

                     (v)    short-term  investment funds ("STIFS")  sponsored by
       any trust company or national banking association  incorporated under the
       laws of the  United  States  or any  state  thereof  which on the date of
       acquisition  has been rated by  Standard  & Poor's  and  Moody's in their
       respective highest applicable rating category;

                     (vi)  interests  in any money market fund which at the date
       of acquisition of the interests in such fund and throughout the time such
       interests are held in such fund has a rating of Aaa by Moody's and either
       AAAm AAAm-G by Standard & Poor's or such lower  rating as will not result
       in the  qualification,  downgrading  or  withdrawal  of the  then-current
       rating  assigned to the Notes by each Rating Agency without regard to the
       Policy; and

                     (vii)  other  obligations or securities that are acceptable
       to each Rating Agency and the Insurer as an Eligible Investment hereunder
       and will not  result in a  reduction  in the then  current  rating of the
       Notes  without  regard to the Policy,  as  evidenced  by a letter to such
       effect from such Rating  Agency and the Insurer and with respect to which
       the  Servicer has  received  confirmation  that,  for tax  purposes,  the
       investment complies with the last clause of this definition;

PROVIDED that no instrument  described hereunder shall evidence either the right
to receive (a) only interest  with respect to the  obligations  underlying  such
instrument or (b) both principal and interest  payments derived from obligations
underlying such instrument and the interest and principal  payments with respect
to such instrument provided a yield to maturity at par greater than ____% of the
yield to maturity at par of the underlying obligations;  and PROVIDED,  FURTHER,
that (x) no instrument  described  hereunder may be purchased at a price greater
than par if such  instrument  may be  prepaid or called at a price less than its
purchase  price prior to its stated  maturity and (y) all  Eligible  Investments
shall mature no later than the next Payment Date.

                                       7
<PAGE>

              ELIGIBLE  SUBSTITUTE MORTGAGE LOAN: A Mortgage Loan substituted by
the Sponsor,  with the consent of the  Insurer,  for a Defective  Mortgage  Loan
which must, on the date of such substitution,  (i) have an outstanding Principal
Balance (or, in the case of a substitution  of more than one Mortgage Loan for a
Defective Mortgage Loan, an aggregate Principal Balance),  equal to or less than
the  Principal  Balance  of the  Defective  Mortgage  Loan as of the  applicable
Cut-Off Date; (ii) except for HELOC Mortgage Loans still in their teaser period,
have a Loan Rate not less than the Loan Rate of the Defective  Mortgage Loan and
not more than ____% in excess of the Loan Rate of such Defective  HELOC Mortgage
Loan;  (iii) for HELOC Mortgage Loans,  have a Loan Rate based on the same Index
as the Defective  Mortgage Loan with  adjustments  to such Loan Rate made on the
same date on which the Defective  HELOC Mortgage  Loan's  interest rate adjusts;
(iv) for HELOC Mortgage Loans, have a Margin that is not less than the Margin of
the Defective HELOC Mortgage Loan and not more than 100 basis points higher than
the Margin for the Defective  HELOC  Mortgage  Loan;  (v) have a mortgage of the
same or higher level of priority as the Defective Mortgage Loan at the time such
Mortgage  Loan was  transferred  to the  Trust;  (vi) have a  remaining  term to
maturity  not more than ____ months  earlier and not more than ____ months later
than the remaining term to maturity of the Defective Mortgage Loan; (vii) comply
with each  representation and warranty as to the Mortgage Loans set forth in the
Sale and Servicing Agreement (deemed to be made as of the date of substitution);
(viii) have an original  Combined  Loan-to-Value  Ratio not greater than that of
the Defective  Mortgage Loan; and (ix) have a Credit Score greater than or equal
to the Credit Score of the  Defective  Mortgage  Loan at the time such  Mortgage
Loan was transferred to the Trust; (x) the related Mortgaged  Property is not an
investment  property  (unless the  Mortgaged  Property  related to the Defective
Mortgage Loan was an investment  property);  (xi) the related Mortgaged Property
is not a second home (unless the  Mortgaged  Property  related to the  Defective
Mortgage Loan was a second home); (xii) the Combined  Loan-to-Value Ratio is not
greater than 100%; and (xiii) in the case of HELOC Mortgage Loans, are no longer
in its teaser period.

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

              EVENT OF SERVICING TERMINATION:  As defined in Section 6.01 of the
Sale and Servicing Agreement.

              EVENT OF  TERMINATION:  As defined  in Article IX of the  Purchase
Agreement.

              EXCESS  CASHFLOW:  With respect to any Payment Date, the Available
Funds for such Payment Date which  remain on deposit in the  Collection  Account
after taking into account the distributions  listed in clauses (i) through (vii)
of Section 8.7(b) of the Indenture on such Payment Date.

              EXCESS  SPREAD  AMOUNT:  With  respect to any  Payment  Date,  the
fraction,  expressed as a percentage, equal to (x) (i) 12 multiplied by (ii) the
sum of the Available  Funds for the related Payment Date which remain on deposit
in the Collection Account after taking into account the distributions  listed in
clauses (i) through  (vii) of Section  8.7(d) of the  Indenture  with respect to
such Payment Date divided by (y) the Pool Balance as of such Payment Date.

              EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.

                                       8
<PAGE>

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

              FINAL SCHEDULED  PAYMENT DATE: For the Class A Notes,  the Payment
Date in _______  20__,  in each case  whereby the related  Noteholders  shall be
entitled to receive a payment of principal in an amount equal to the  respective
outstanding Note Principal Balance and any accrued and unpaid interest thereon.

              FORECLOSURE  PROFIT:  With respect to a Liquidated  Mortgage Loan,
the amount,  if any, by which (i) the aggregate of its Net Liquidation  Proceeds
exceeds (ii) the related  Principal  Balance (plus  accrued and unpaid  interest
thereon at the applicable Loan Rate from the date interest was last paid through
the last day in the related Collection Period) of such Liquidated  Mortgage Loan
immediately prior to the final recovery of its Liquidation Proceeds.

              FORMULA  NOTE RATE:  For any  Interest  Accrual  Period,  (x) with
respect to any Payment Date which occurs on or prior to the Optional  Redemption
Date, LIBOR plus ____% per annum and (y) for any Payment Date thereafter,  LIBOR
plus ____% per annum.

              GAAP:  Generally  accepted  accounting  principles,   consistently
applied.

              GRANT: Mortgage, pledge, bargain, sell, warrant, alienate, remise,
release,  convey,  assign,  transfer,  create,  grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the  Indenture.  A Grant  of the  Collateral  or of any  other  agreement  or
instrument  shall  include  all  rights,  powers  and  options  (but none of the
obligations)  of the Granting  party  thereunder,  including  the  immediate and
continuing right to claim for,  collect,  receive and give receipt for principal
and interest  payments in respect of the Collateral and all other monies payable
thereunder,  to give and  receive  notices  and  other  communications,  to make
waivers or other  agreements,  to  exercise  all rights  and  options,  to bring
proceedings  in the name of the Granting  party or otherwise and generally to do
and  receive  anything  that the  Granting  party is or may be entitled to do or
receive thereunder or with respect thereto.

              GROSS MARGIN:  As to any HELOC Mortgage Loans,  the percentage set
forth as the "Gross  Margin" for such HELOC  Mortgage  Loans on Exhibit A to the
Sale and Servicing Agreement.

              HELOC  MORTGAGE  LOANS:   Mortgage  Loans  consisting   solely  of
adjustable-rate  home equity  revolving  credit line loans under the Credit Line
Agreements.

              HELOC PRINCIPAL BALANCE: As to any HELOC Mortgage Loan, other than
a  Liquidated  Mortgage  Loan,  and as of any date,  the  related  Cut-Off  Date
Principal  Balance,  plus (i) any  Additional  Balance  in respect of such HELOC
Mortgage  Loan,  minus (ii) all  collections  credited as principal  against the
HELOC  Principal  Balance of any such HELOC Mortgage Loan in accordance with the
related Credit Line Agreement prior to such day.

              HOLDER  or  NOTEHOLDER:  The  Person  in  whose  name  a  Note  is
registered on the Note Register.

              INDEBTEDNESS:  With  respect  to  any  Person  at  any  time,  (a)
indebtedness  or  liability  of such Person for  borrowed  money  whether or not
evidenced by bonds, debentures,  notes or

                                       9
<PAGE>

other  instruments,  or for the deferred  purchase price of property or services
(including  trade  obligations);  (b) obligations of such Person as lessee under
leases  which  should  have been or  should  be, in  accordance  with  generally
accepted  accounting  principles,   recorded  as  capital  leases;  (c)  current
liabilities  of such Person in respect of funding  vested  benefits  under plans
covered by Title IV of ERISA; (d) obligations issued for or liabilities incurred
on the account of such Person;  (e)  obligations  or  liabilities of such Person
arising under  acceptance  facilities;  (f) obligations of such Person under any
guarantees,  endorsements  (other than for collection or deposit in the ordinary
course of business) and other  contingent  obligations  to purchase,  to provide
funds for  payment,  to supply  funds to invest in any  Person or  otherwise  to
assure a creditor  against loss;  (g)  obligations of such Person secured by any
lien on property or assets of such Person,  whether or not the obligations  have
been  assumed  by such  Person;  or (h)  obligations  of such  Person  under any
interest rate or currency exchange agreement.

              INDEMNIFICATION AGREEMENT: The Indemnification Agreement, dated as
of _______, 200_, by and among the Insurer and [Underwriter] as underwriter.

              INDENTURE:  The  Indenture,  dated as of  ________,  200_,  by and
between  the Issuer and the  Indenture  Trustee,  as the same may be amended and
supplemented from time to time.

              INDENTURE  TRUSTEE:  [Indenture  Trustee],  not in its  individual
capacity  but as  indenture  trustee  under  the  Indenture,  or  any  successor
indenture trustee under the Indenture.

              INDENTURE  TRUSTEE  ISSUER  SECURED  OBLIGATIONS:  All amounts and
obligations  which the Issuer may at any time owe to the  Indenture  Trustee for
the benefit of the Noteholders under the Indenture or the Notes.

              INDEPENDENT:  When used with respect to any specified Person, that
the Person (a) is in fact independent of the Issuer,  any other obligor upon the
Notes, the Sponsor and any Affiliate of any of the foregoing  Persons,  (b) does
not have any  direct  financial  interest  or any  material  indirect  financial
interest in the Issuer, any such other obligor,  the Sponsor or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer,  any such
other obligor,  the Sponsor or any Affiliate of any of the foregoing  Persons as
an officer,  employee,  promoter,  underwriter,  trustee,  partner,  director or
Person performing similar functions.

              INDEPENDENT  CERTIFICATE:  A certificate,  verification  report or
opinion to be  delivered  to the  Indenture  Trustee and the  Insurer  under the
circumstances  described  in,  and  otherwise  complying  with,  the  applicable
requirements  of  Section  11.1 of the  Indenture,  prepared  by an  Independent
appraiser or other expert appointed  pursuant to an Issuer Order and approved by
the Indenture  Trustee and the Insurer in the exercise of reasonable  care,  and
such opinion or certificate  shall state that the signer has read the definition
of "Independent" in the Indenture and that the signer is Independent  within the
meaning thereof.

              INDEX:  With respect to each Interest Rate  Adjustment  Date for a
HELOC  Mortgage Loan, the highest "prime rate" as published in the "Money Rates"
table of THE WALL STREET  JOURNAL as of the last  business  day of the  previous
Billing Cycle.

              INITIAL POOL BALANCE: $_______________.

                                       10
<PAGE>

              INSURANCE  AGREEMENT:   The  Insurance  Agreement,   dated  as  of
________,  200_, by and among the Insurer, the Seller, the Servicer, the Sponsor
and the Indenture Trustee.

              INSURANCE POLICY: Any hazard,  title or primary mortgage insurance
policy relating to a Mortgage Loan, but shall not include the Policy.

              INSURANCE  PROCEEDS:  Proceeds paid by any insurer (other than the
Insurer)  pursuant to any Insurance  Policy covering a Mortgage Loan, or amounts
required to be paid by the  Servicer  pursuant  to the last  sentence of Section
3.04 of the Sale and  Servicing  Agreement,  net of any  component  thereof  (i)
covering  any expenses  incurred by or on behalf of the  Servicer in  connection
with obtaining such proceeds,  (ii) that is applied to the restoration or repair
of the related Mortgaged Property, (iii) released to the Mortgagor in accordance
with the Servicer's  normal servicing  procedures or (iv) required to be paid to
any holder of a mortgage senior to such Mortgage Loan.

              INSURED AMOUNT: As defined in the Policy with respect to the Class
A Notes and as of any Payment Date

              INSURED  PAYMENT:  As defined in the  Policy  with  respect to the
Class A Notes.

              INSURER: [Insurer], and any successor thereto.

              INSURER  DEFAULT:  Any of (i) the failure by the Insurer to make a
payment required under the Policy in accordance with the terms thereof, (ii) the
voluntary or involuntary filing of a petition or other invocation of the process
of any court or government authority for the purpose of commencing or sustaining
a case under any federal or state bankruptcy,  insolvency or similar law against
the  Insurer  or (iii)  the  appointing  of a  receiver,  liquidator,  assignee,
trustee, custodian, sequestrator or other similar official of the Insurer or any
substantial  part of its property,  or ordering the winding up or liquidation of
the affairs of the Insurer.

              INSURER ISSUER SECURED  OBLIGATIONS:  All amounts and  obligations
which the  Issuer may at any time owe to or on behalf of the  Insurer  under the
Indenture, the Insurance Agreement or any other Basic Document.

              INTEREST  ACCRUAL  PERIOD:  With respect to any Payment Date,  the
period  from and  including  the  prior  Payment  Date  (or,  in the case of the
________  200_  Payment  Date,  from and  including  the  Closing  Date) to, but
excluding,  the current  Payment Date, with interest being computed on the basis
of the actual number of days in such Interest Accrual Period and a 360-day year.

              INTEREST COLLECTIONS: With respect to any Payment Date, the sum of
all payments by or on behalf of Mortgagors  and any other  amounts  constituting
interest,  including  the  portion of Net  Liquidation  Proceeds  and  Insurance
Proceeds  allocated  to  interest  pursuant  to the  terms of the  related  Loan
Agreement (net of the  applicable  servicing fees and excluding the fees or late
charges or similar  administrative  fees paid by  Mortgagors),  less the related
Servicing Fee for the related  Collection  Period. The terms of the related Loan
Agreement  shall  determine  the  portion  of each  payment  in  respect of such
Mortgage Loan that constitutes principal or interest.

                                       11
<PAGE>

              INTEREST  DETERMINATION  DATE:  (i) With  respect to any  Interest
Accrual  Period (other than the initial  Interest  Accrual  Period),  the second
LIBOR  Business Day preceding the first day of such Interest  Accrual Period and
(ii) with  respect to the initial  Interest  Accrual  Period,  the second  LIBOR
Business Day preceding the Closing Date.

              INTEREST PAYMENT AMOUNT: With respect to the Class A Notes and any
Payment  Date,  (x) the  Class A Note  Rate  applicable  to  such  Payment  Date
multiplied by (y) the Note Principal  Balance  immediately prior to such Payment
Date  multiplied by (z) a fraction,  the numerator of which is the actual number
of days in the related  Interest  Accrual Period and the denominator of which is
360.

              INTEREST RATE ADJUSTMENT DATE: With respect to each HELOC Mortgage
Loan, any date on which the Loan Rate is adjusted in accordance with the related
Credit Line Agreement.

              INTEREST  SETTLEMENT RATES: Those rates which are displayed on the
Designated Telerate Page.

              ISSUER or TRUST:  GreenPoint  Home  Equity  Loan Trust  200_-_,  a
Delaware statutory trust, until a successor  replaces it and,  thereafter,  such
successor.

              ISSUER ORDER and ISSUER REQUEST: A written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.

              ISSUER SECURED OBLIGATIONS: The Insurer Issuer Secured Obligations
and the Indenture Trustee Issuer Secured Obligations.

              ISSUER SECURED PARTIES:  Each of the Indenture  Trustee in respect
of the Indenture  Trustee Issuer Secured  Obligations and the Insurer in respect
of the Insurer Issuer Secured Obligations.

              LATE PAYMENT  RATE:  For any Payment  Date,  the lesser of (a) the
greater of (i) the per annum rate of interest  publicly  announced  from time to
time by  Citibank,  N.A. as its prime  lending  rate (any change in such rate of
interest to be  effective  on the date such  change is  announced  by  Citibank,
N.A.), plus __% per annum and (ii) the then applicable  highest rate of interest
on the Class A Notes and (b) the maximum rate permissible under applicable usury
or similar laws limiting interest rates. The Late Payment Rate shall be computed
on the basis of the actual number of days elapsed over a year of 360 days.

              LIBOR:  With  respect to any  Interest  Accrual  Period,  the rate
determined by the Indenture Trustee on the related Interest  Determination  Date
appearing on the Designated  Telerate Page on that Interest  Determination  Date
based on the  Interest  Settlement  Rate for U.S.  dollar  deposits of one-month
maturity  set by the BBA as of the  Interest  Determination  Date.  If the BBA's
Interest  Settlement Rate does not appear on the Designated  Telerate Page as of
11:00 a.m. (London time) on such date, or if the Designated Telerate Page is not
available  on such date,  the  Indenture  Trustee will obtain such rate from the
Reuters  Monitor Money Rates Service page  "LIBOR01" or the Bloomberg  L.P. page
"BBAM." If such rate is not  published  for such  Interest  Determination  Date,
LIBOR for such  date will be the most  recently  published  Interest  Settlement

                                       12
<PAGE>

Rate. In the event that the BBA no longer sets an Interest  Settlement Rate, the
Indenture Trustee, with the prior written consent of the Insurer (but only if an
Insurer  Default shall not have occurred and be  continuing),  will designate an
alternative  index that has performed in a manner  substantially  similar to the
BBA's Interest Settlement Rate.

              LIBOR  BUSINESS DAY: Any day on which banks in London and New York
are open for conducting transactions in foreign currency and exchange.

              LIEN:   Any   mortgage,   deed  of  trust,   pledge,   conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other),  preference,  priority right or interest or other security
agreement  or  preferential  arrangement  of  any  kind  or  nature  whatsoever,
including,  without  limitation,  any conditional  sale or other title retention
agreement,  any financing lease having substantially the same economic effect as
any of the  foregoing and the filing of any  financing  statement  under the UCC
(other than any such financing statement filed for informational  purposes only)
or  comparable  law of  any  jurisdiction  to  evidence  any  of the  foregoing;
PROVIDED,  HOWEVER, that any assignment pursuant to Section 5.02 of the Sale and
Servicing Agreement shall not be deemed to constitute a Lien.

              LIFETIME RATE CAP:  With respect to each HELOC  Mortgage Loan with
respect to which the related Mortgage Note provides for a lifetime rate cap, the
maximum Loan Rate  permitted over the life of such HELOC Mortgage Loan under the
terms of the related Credit Line Agreement previously delivered to the Indenture
Trustee.

              LIQUIDATED  MORTGAGE  LOAN: As to any Payment  Date,  any Mortgage
Loan in respect of which the Servicer has  determined,  in  accordance  with the
servicing procedures  specified in the Sale and Servicing  Agreement,  as of the
end of the related  Collection  Period,  that all Liquidation  Proceeds which it
expects to recover with respect to the  disposition of such Mortgage Loan or the
related REO have been recovered.

              LIQUIDATION   EXPENSES:   Out-of-pocket   expenses  (exclusive  of
overhead)  which are incurred by the Servicer in connection with the liquidation
of any Mortgage Loan and not recovered  under any Insurance  Policy,  including,
without  limitation,  legal fees and expenses,  any unreimbursed amount expended
pursuant to Section 3.06 of the Sale and Servicing Agreement (including, without
limitation,  amounts  advanced to correct defaults on any mortgage loan which is
senior to such Mortgage  Loan and amounts  advanced to keep current or pay off a
mortgage  loan that is senior to such  Mortgage  Loan)  respecting  the  related
Mortgage Loan and any related and unreimbursed expenditures with respect to real
estate  property  taxes,  water or sewer taxes,  condominium  association  dues,
property  restoration or preservation  or insurance  against  casualty,  loss or
damage.

              LIQUIDATION  LOSS  AMOUNTS:  With  respect to any Payment Date and
Mortgage  Loan  that  became a  Liquidated  Mortgage  Loan  during  the  related
Collection  Period,  the unrecovered  portion of the related  Principal  Balance
thereof at the end of such  Collection  Period,  after giving  effect to the Net
Liquidation Proceeds applied in reduction of such Principal Balance.

                                       13
<PAGE>

              LIQUIDATION  PROCEEDS:  Proceeds  (including  Insurance  Proceeds)
received in connection with the liquidation of any Mortgage Loan or related REO,
whether through trustee's sale, condemnation, foreclosure sale or otherwise.

              LOAN AGREEMENT: Any Credit Line Agreement or Mortgage Note.

              LOAN PURCHASE  PRICE:  With respect to any Mortgage Loan purchased
from the  Trust  pursuant  to  Section  2.03 or 2.05 of the  Sale and  Servicing
Agreement,  an amount equal to the Principal Balance of such Mortgage Loan as of
the date of purchase,  plus one month's  interest on the  outstanding  Principal
Balance thereof as of the beginning of the preceding  Collection Period computed
at the Loan Rate less the Servicing  Fee plus any costs and damages  incurred by
the  Trust  in  connection  with  any  violation  by such  Mortgage  Loan of any
predatory or abusive  lending  law,  together  with,  without  duplication,  the
aggregate  amount  of (i) all  delinquent  interest,  all  advances  made by the
Servicer and not subsequently  recovered from the related Mortgage Loan and (ii)
any Reimbursement Amount related to such Mortgage Loan.

              LOAN RATE:  With respect to any HELOC  Mortgage Loan and as of any
day,  the per annum rate of interest  applicable  under the related  Credit Line
Agreement to the  calculation of interest for such day on the Principal  Balance
of such HELOC Mortgage Loan. With respect to any Closed-End Mortgage Loan and as
of any day, the per annum rate of interest applicable under the related Mortgage
Note to the  calculation  of interest for such day on the  Principal  Balance of
such Closed-End Mortgage Loan.

              LOAN RATE CAP: With respect to each Mortgage  Loan,  the lesser of
(i) the Lifetime Rate Cap, if any, or (ii) the  applicable  state usury ceiling,
if any.

              LOSSES:  Any  and  all  out-of-pocket  losses,  claims,   damages,
liabilities or expenses (including reasonable attorneys' fees and disbursements)
directly incurred by any Person specified in the Purchase  Agreement,  resulting
from  transactions  entered  into  under  the  Purchase  Agreement  (other  than
liability   for  taxes).   Losses  must  be  accounted  for  and  presented  for
reimbursement documented in reasonable detail and within a reasonable time.

              MANAGED  AMORTIZATION  PERIOD:  With respect to the Class A Notes,
the period  commencing on the Closing Date and ending on the earlier to occur of
(x) the _______ 200_  Payment  Date and (y) the Payment  Date which  immediately
precedes the occurrence of a Rapid  Amortization Event with respect to the Class
A Notes.

              MANAGEMENT  AGREEMENT:  The  Management  Agreement,  dated  as  of
________, 200_, by and between the Company and the Issuer.

              MANAGEMENT FEE: $____ per month.

              MANAGER:  The  Person  acting  in such  capacity  pursuant  to the
Management Agreement or its successors or assigns,  which shall initially be the
Company.

              MARGIN:  With  respect  to each  HELOC  Mortgage  Loan,  the fixed
percentage  amount set forth in the related Loan Agreement which amount is added
to the Prime Rate in

                                       14
<PAGE>

accordance  with the terms of the related Loan  Agreement to determine  the Loan
Rate for such HELOC Mortgage Loan, subject to any maximum.

              MATERIAL  ADVERSE  CHANGE:  A material  adverse  change in (i) the
business,  results of  operations  or  properties  of the  Servicer  or (ii) the
ability of the Servicer to perform its obligations  under the Sale and Servicing
Agreement.

              MAXIMUM PRINCIPAL  PAYMENT:  With respect to the Class A Notes and
(i) any Payment Date during the Managed  Amortization  Period, the Net Principal
Collections and (ii) any Payment Date during the Rapid Amortization Period, 100%
of the Principal Collections relating to such Payment Date.

              MAXIMUM  RATE:  With  respect  to the  Class A Notes and as to any
Interest  Accrual  Period,  the  Weighted  Average Net Loan Rate of the Mortgage
Loans for the Collection Period during which such Interest Accrual Period begins
(adjusted to an effective rate  reflecting  accrued  interest  calculated on the
basis of the actual  number of days in the  Interest  Accrual  Period and a year
assumed to consist of 360 days).

              MERS:   Mortgage   Electronic   Registration   Systems,   Inc.,  a
corporation  organized and existing under the laws of the State of Delaware,  or
any successor thereto.

              MERS MORTGAGE LOAN: Any Mortgage Loan  registered with MERS on the
MERS System.

              MERS  SYSTEM:  The  system of  recording  transfers  of  mortgages
electronically maintained by MERS.

              MINIMUM MONTHLY PAYMENT: With respect to any Mortgage Loan and any
month,  the minimum amount required to be paid by the related  Mortgagor in that
month.

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

              MORTGAGE: The mortgage, deed of trust or other instrument creating
a first or junior  lien on an estate in fee  simple  interest  in real  property
securing a Mortgage Note or Credit Line Agreement.

              MORTGAGE FILE: The mortgage documents listed in Section 2.01(c) to
the Sale and Servicing  Agreement  pertaining to a particular  Mortgage Loan and
any additional  documents  required to be added to the Mortgage File pursuant to
the Sale and Servicing Agreement.

              MORTGAGE LOAN SCHEDULE:  With respect to any date, the schedule of
Mortgage  Loans  included  in the Trust on such date.  The  schedule of Mortgage
Loans as of the Cut-Off  Date is the schedule set forth in Exhibit A to the Sale
and  Servicing  Agreement,  which  schedule  sets forth as to each such Mortgage
Loan, to the extent applicable, (i) the Cut-Off Date Principal Balance, (ii) the
Credit  Limit,  (iii) the Gross  Margin,  (iv) the  Lifetime  Rate Cap,  (v) the
account  number,  (vi) the current Loan Rate,  (vii) the Combined  Loan-to-Value
Ratio,  (viii) a code  specifying  the  property  type,  (ix) a code  specifying
documentation type and (x) a code specifying

                                       15
<PAGE>

lien position. The Mortgage Loan Schedule will be deemed to be amended from time
to time to reflect Additional Balances and Eligible Substitute Mortgage Loans.

              MORTGAGE LOANS: Any HELOC Mortgage Loans, including any Additional
Balances with respect thereto,  as well as any Closed-End  Mortgage Loans,  that
are transferred to the Trust and assigned to the Indenture  Trustee  pursuant to
Sections  2.01 of the Sale and  Servicing  Agreement,  together with the Related
Documents,  exclusive of mortgage loans that are retransferred to the Sponsor or
the Servicer  from time to time pursuant to Sections  2.03,  2.05 or 2.07 of the
Sale  and  Servicing  Agreement  as from  time to time are held as a part of the
Trust. The Mortgage Loans originally so held are identified in the Mortgage Loan
Schedule  delivered on the Closing Date.  The Mortgage  Loans shall also include
any  Eligible  Substitute  Mortgage  Loans  substituted  by  the  Sponsor  for a
Defective  Mortgage  Loan  pursuant  to  Sections  2.03 and 2.05 of the Sale and
Servicing Agreement. The term "Mortgage Loan" includes the terms "HELOC Mortgage
Loans" and "Closed-End Mortgage Loans."

              MORTGAGE  NOTE:  The  note  or  other  evidence  of   indebtedness
evidencing the indebtedness of a Mortgagor under a Closed-End Mortgage Loan.

              MORTGAGED PROPERTY:  The underlying  property,  including any real
property and improvements thereon, securing a Mortgage Loan.

              MORTGAGOR:   The  obligor  on  a  Mortgage  Note  or  Credit  Line
Agreement.

              NET LIQUIDATION PROCEEDS:  With respect to any Liquidated Mortgage
Loan,  Liquidation  Proceeds net of  Liquidation  Expenses;  PROVIDED,  that Net
Liquidation Proceeds shall not be an amount less than zero.

              NET LOAN RATE:  With  respect to any  Mortgage  Loan and as to any
day, the Loan Rate (assuming each HELOC Mortgage Loan is fully indexed) less the
Servicing Fee Rate, the Premium Percentage and the Trustee Fee Rate.

              NET PRINCIPAL COLLECTIONS: The excess of (x) Principal Collections
over (y) the sum of (A) the aggregate amount of all Additional  Balances arising
during the related Collection Period plus (B) the Additional Balance Contributed
Amounts  outstanding as of the opening of business on the related  Payment Date;
PROVIDED,  HOWEVER, that in no event will Net Principal Collections be less than
zero with respect to any Payment Date.

              NOTE: A Class A Note, but not any Residual Certificate.

              NOTEHOLDERS: Any Holder of a Class A Note.

              NOTE OWNER:  With respect to a Book-Entry  Note, the Person who is
the owner of such  Book-Entry  Note,  with  respect to a  Definitive  Note,  the
registered owner of such Definitive Note.

              NOTE PAYING AGENT: The Indenture  Trustee or any other Person that
meets the eligibility  standards for the Indenture  Trustee specified in Section
6.11 of the Indenture and is

                                       16
<PAGE>

authorized  by the  Issuer  to  make  payments  to and  distributions  from  the
Collection  Account,  including payment of principal of or interest on the Notes
on behalf of the Issuer.

              NOTE PRINCIPAL  BALANCE:  With respect to the Class A Notes and as
of any time of  determination,  the Original Note  Principal  Balance,  less any
amounts  actually  distributed  as  principal  to the Class A Notes on all prior
Payment Dates.

              NOTE REGISTER: As defined in Section 2.3 of the Indenture.

              NOTE REGISTRAR: As defined in Section 2.3 of the Indenture.

              NOTEHOLDER  or HOLDER:  Any Holder of a Class A Note whose name is
registered on the Note Register.

              OFFICER'S  CERTIFICATE:  A  certificate  signed by any  Authorized
Officer of a Person that complies with the  applicable  requirements  of Section
11.1 of the Indenture.

              OPINION OF  COUNSEL:  One or more  opinions  of  counsel  who may,
except as  otherwise  expressly  provided in the  Indenture,  be employees of or
counsel to the Issuer and, if  addressed to the  Insurer,  satisfactory  to such
party,  and which shall comply with any applicable  requirements of Section 11.1
of the Indenture, and if addressed to the Insurer, shall be satisfactory to such
party; PROVIDED, that any opinion relating to matters of federal, state or local
taxation must be provided by independent, outside counsel.

              OPTIONAL  REDEMPTION  DATE: The date on which the Sponsor is first
able to exercise its right of optional  redemption of the Class A Notes pursuant
to Section 10.1 of the Indenture or Section 7.01(b)(i) of the Sale and Servicing
Agreement.

              ORIGINAL NOTE PRINCIPAL BALANCE: $_____________.

              ORIGINAL POOL BALANCE: $____________.

              OUTSTANDING:   As  of  the  date  of   determination,   all  Notes
theretofore authenticated and delivered under the Indenture except:

                     (i)    Notes theretofore  canceled by the Note Registrar or
       delivered to the Note Registrar for cancellation;

                     (ii)   Notes or  portions  thereof  the  payment  for which
       money in the necessary  amount has been  theretofore  deposited  with the
       Indenture  Trustee or any Note  Paying  Agent in trust for the Holders of
       such Notes  (PROVIDED,  HOWEVER,  that if such Notes are to be  redeemed,
       notice of such  redemption  has been duly given pursuant to the Indenture
       or provision therefor, satisfactory to the Indenture Trustee); and

                     (iii)  Notes  in  exchange  for or in lieu of  other  Notes
       which have been  authenticated  and  delivered  pursuant to the Indenture
       unless proof  satisfactory to the Indenture Trustee is presented that any
       such Notes are held by a bona fide purchaser;

                                       17
<PAGE>

PROVIDED,  HOWEVER,  that Notes which have been paid with proceeds of the Policy
shall  continue to remain  Outstanding  for purposes of the Indenture  until the
Insurer has been paid as subrogee  under the Insurance  Agreement or the Insurer
has been  reimbursed  pursuant to the  Insurance  Agreement,  as  evidenced by a
written  notice from the Insurer  delivered to the  Indenture  Trustee,  and the
Insurer  shall be deemed to be the Holder  thereof to the extent of any payments
thereon made by the Insurer; PROVIDED,  FURTHER, that in determining whether the
Holders of the requisite Outstanding Amount of the Notes have given any request,
demand,  authorization,  direction, notice, consent or waiver hereunder or under
any Basic Document, Notes owned by the Issuer, any other obligor upon the Notes,
the  Sponsor  or  any  Affiliate  of  any  of the  foregoing  Persons  shall  be
disregarded  and deemed  not to be  Outstanding,  except  that,  in  determining
whether  the  Indenture  Trustee  shall be  protected  in relying  upon any such
request, demand, authorization, direction, notice, consent or waiver, only Notes
that a Responsible  Officer of the Indenture Trustee either actually knows to be
so owned or has received  written notice thereof shall be so disregarded.  Notes
so owned that have been pledged in good faith may be regarded as  Outstanding if
the  pledgee  establishes  to the  satisfaction  of the  Indenture  Trustee  the
pledgee's right so to act with respect to such Notes and that the pledgee is not
the Issuer,  any other  obligor upon the Notes,  the Sponsor or any Affiliate of
any of the foregoing Persons.

              OUTSTANDING AMOUNT: With respect to any date of determination, the
aggregate Note Principal Balance of all the Notes Outstanding as of such date of
determination.

              OVERCOLLATERALIZATION  AMOUNT:  With  respect to the Class A Notes
and as of any Payment  Date,  the excess,  if any, of (x) the Pool Balance as of
such  Payment Date over (y) the Note  Principal  Balance as of such Payment Date
(after  taking  into  account  any  reductions  to such Note  Principal  Balance
resulting  from payments made pursuant to clauses (v) and (vi) of Section 8.7(b)
of the Indenture on such Payment Date).

              OVERCOLLATERALIZATION DEFICIENCY AMOUNT: With respect to the Class
A Notes  and  any  Payment  Date,  the  excess,  if  any,  of (i) the  Specified
Overcollateralization  Amount  applicable  to such  Payment  Date  over (ii) the
Overcollateralization Amount applicable to such Payment Date.

              OVERCOLLATERALIZATION  DEFICIT:  With respect to the Class A Notes
and any Payment  Date,  the  amount,  if any,  by which (i) the  aggregate  Note
Principal  Balance,  after taking into account the payment to the Noteholders of
all principal  from sources other than the Policy on such Payment Date,  exceeds
(ii) the Pool  Balance  as of such  Payment  Date.  Solely  for the  purpose  of
drawings  under  the  Policy,  the  Insurer  will  not be  required  to pay  any
Overcollateralization  Deficit until the Demand Note has expired;  PROVIDED that
if GreenPoint Bank fails to make any payments of  Overcollateralization  Deficit
required to be paid under the Demand Note when due on the twenty-fourth  Payment
Date or if an  Overcollateralization  Deficit remains after  GreenPoint Bank has
made payment under the Demand Note on that date, then the Policy shall cover any
such Overcollateralization Deficit.

              OVERCOLLATERALIZATION  REDUCTION AMOUNT: With respect to the Class
A   Notes   and  any   Payment   Date,   the   excess,   if  any,   of  (x)  the
Overcollateralization Amount over (y) the Specified Overcollateralization Amount
assuming  that  the  Maximum  Principal  Payment  had  been  distributed  to the
Noteholders on such Payment Date.

                                       18
<PAGE>

              OWNER TRUSTEE:  [Owner Trustee],  not in its individual  capacity,
but solely as owner trustee under the Trust  Agreement,  and any successor Owner
Trustee thereunder.

              OWNER TRUSTEE FEE: A fee which is separately agreed to between the
Servicer and the Owner Trustee and is payable to the Owner Trustee .

              OWNER  TRUSTEE  FEE RATE:  The per  annum  rate at which the Owner
Trustee Fee is calculated.

              PAYMENT DATE:  The fifteenth day of each month,  or if such day is
not a  Business  Day,  then  the  next  Business  Day,  beginning  in the  month
immediately following the Closing Date.

              PERCENTAGE  INTEREST:  As to any Note, the percentage  obtained by
dividing  the  principal  denomination  of  such  Note by the  aggregate  of the
principal  denominations  of all  Notes.  As to any  Residual  Certificate,  the
percentage set forth on the face of such Residual Certificate.

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

              POLICY:  The financial  guaranty  insurance policy No. ___________
and any endorsement thereto,  with respect to the Class A Notes, dated ________,
200_,  issued by the  Insurer to the  Indenture  Trustee  for the benefit of the
Noteholders.

              POLICY  PAYMENT  ACCOUNT:  As  defined  in  Section  8.5(c) of the
Indenture.

              POOL: The pool of Mortgage Loans held by the Issuer  including any
Eligible Substitute Mortgage Loan delivered in the replacement thereof.

              POOL  BALANCE:  With  respect to any date,  the  aggregate  of the
Principal Balances of all of the Mortgage Loans as of such date.

              POOL DELINQUENCY RATE: With respect to any Collection  Period, the
fraction,  expressed  as a  percentage,  equal  to (x) the  aggregate  Principal
Balances of all Mortgage  Loans that are 90 or more days  delinquent  (including
all foreclosures and REO properties) as of the close of business on the last day
of such Collection  Period over (y) the Pool Balance as of the close of business
on the last day of such Collection Period.

              POOL  FACTOR:  A  seven-digit  decimal  which the  Servicer  shall
compute monthly expressing the related Note Principal Balance as of each Payment
Date (after giving effect to any distribution of principal on such Payment Date)
as a proportion of the Original Note Principal Balance. On the Closing Date, the
Pool Factor will be  1.0000000.  Thereafter,  the Pool Factor  shall  decline to
reflect reductions in the Note Principal Balance resulting from distributions of
principal to the Notes.

                                       19
<PAGE>

              PREDECESSOR  NOTE:  With  respect to any  particular  Note,  every
previous Note evidencing all or a portion of the same interest as that evidenced
by such  particular  Note;  and,  for the purpose of this  definition,  any Note
authenticated  and  delivered  under  Section 2.4 of the  Indenture in lieu of a
mutilated,  lost,  destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.

              PREFERENCE AMOUNT: As defined in the Policy.

              PREFERENCE CLAIM: As defined in Section 5.13(b) of the Indenture.

              PREMIUM  AMOUNT:  With  respect to the Notes and as to any Payment
Date, the product of (x) the Premium Percentage,  (y) the Note Principal Balance
immediately  prior to such  Payment  Date and (z) the  fraction,  expressed as a
percentage,  the  numerator of which is the number of days elapsed from the last
Payment Date to the related Payment Date and the denominator of which is 360.

              PREMIUM PERCENTAGE: As defined in the Insurance Agreement.

              PRIME  RATE:  The  interest  rate  entitled  "Prime  Rate"  in the
published Money Rates table of THE WALL STREET JOURNAL.

              PRINCIPAL BALANCE: As of any date and with respect to any Mortgage
Loan,  the HELOC  Principal  Balance or the  Closed-End  Principal  Balance,  as
applicable. For purposes of this definition, a Liquidated Mortgage Loan shall be
deemed to have a Principal Balance equal to the Principal Balance of the related
Mortgage Loan  immediately  prior to the final  recovery of related  Liquidation
Proceeds and a Principal Balance of zero thereafter.

              PRINCIPAL  COLLECTIONS:  With respect to any Payment Date, the sum
of all payments by or on behalf of Mortgagors and any other amounts constituting
principal  (including,  but not limited to, Substitution Amounts and any portion
of Insurance  Proceeds,  Net Liquidation  Proceeds or amounts to be deposited to
the  Collection  Account  pursuant  to  Section  7.01 of the Sale and  Servicing
Agreement  that are  applicable  to  principal,  in each  case as  allocable  to
principal of the applicable  Mortgage Loan, but excluding  Foreclosure  Profits)
collected by the Servicer  under the related  Mortgage  Loans during the related
Collection  Period. The terms of the related Loan Agreements shall determine the
portion of each payment in respect of a Mortgage Loan that constitutes principal
or interest.

              PRINCIPAL PAYMENT AMOUNT: With respect to the Class A Notes on any
Payment Date, the excess,  if any, of (x) the Maximum Principal Payment over (y)
the Overcollateralization Reduction Amount.

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

              PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement, dated as
of  ________,  200_,  by and between the Company and the Sponsor with respect to
the Mortgage Loans.

                                       20
<PAGE>

              PURCHASED  ASSETS:  As  defined in  Section  2.01 of the  Purchase
Agreement.

              PURCHASE  PRICE:  With  respect  to the  Mortgage  Loans as of the
Cut-Off  Date  (and  any  Eligible  Substitute  Mortgage  Loan  as of  the  date
delivered),  at  least  100%  of the  Principal  Balance;  with  respect  to all
Additional  Balances,  at least 100% of the  Principal  Balance (as such term is
used in Section 2.01 of the Purchase Agreement).

              PURCHASER  NOTE:  As  defined  in  Section  10.02 of the  Purchase
Agreement.

              RAPID AMORTIZATION EVENT: Any of those "Rapid Amortization Events"
described in Section 12.1 of the Indenture.

              RAPID AMORTIZATION  PERIOD: With respect to the Class A Notes, the
period which immediately follows the end of the Managed Amortization Period.

              RATING  AGENCY:  [Each of Moody's and Standard & Poor's].  If such
agency or a successor is no longer in existence,  "Rating  Agency" shall be such
statistical credit rating agency, or other comparable Person,  designated by the
Sponsor  and the  Insurer,  notice  of which  designation  shall be given to the
Indenture  Trustee.  References in any Basic  Document to the highest short term
unsecured rating category of a Rating Agency shall means "A-1+" or better in the
case of Standard & Poor's and "P-1" or better in the case of Moody's, and in the
case of any other Rating  Agency shall mean the ratings such other Rating Agency
deems equivalent to the foregoing  ratings.  References in any Basic Document to
the highest long-term rating category of a Rating Agency shall mean "AAA" in the
case of Standard & Poor's and "Aaa" in the case of  Moody's,  and in the case of
any other Rating Agency, the rating such other Rating Agency deems equivalent to
the foregoing ratings.

              REALIZED  LOSSES:  For any  Payment  Date will equal the  positive
difference  between (i) the Principal  Balances of all Mortgage  Loans that were
liquidated  during the related  Collection Period and (ii) the principal portion
of Net Liquidation Proceeds of such Mortgage Loans.

              RECORDATION  EVENT: Any of (i) the long-term senior unsecured debt
rating of  GreenPoint  Bank no longer  being rated at least "BBB-" by Standard &
Poor's  and "Baa3" by  Moody's,  (ii) the  resignation  of  GreenPoint  Mortgage
Funding,  Inc.,  as  Servicer,  (iii) the  occurrence  of an Event of  Servicing
Termination,  (iv) the  failure  of  GreenPoint  Bank to  maintain  the  capital
standards  established  for "well  capitalized"  institutions  under the  prompt
corrective action  regulations  issued pursuant to the Federal Deposit Insurance
Corporation  Improvement  Act of 1991,  as amended,  or (v) the  occurrence of a
bankruptcy, insolvency or foreclosure relating to the Issuer; PROVIDED, that any
Recordation  Event may be waived by the Insurer by its providing  written notice
of such  waiver  to the  Servicer  and the  Indenture  Trustee;  and (vi) at the
written request of the Insurer to the Indenture Trustee to record Assignments of
Mortgages because the Insurer has determined,  in the exercise of its reasonable
judgment,  that such recordation is necessary to protect the Insurer's  interest
with respect to such Mortgage  Loans because (a) a Material  Adverse Change with
respect to the  Servicer  has  occurred,  (b) the Insurer has been so advised by
counsel  as a  result  of a change  that  occurred  after  the  Closing  Date in

                                       21
<PAGE>

applicable law or the interpretation thereof or (c) with respect to a particular
Mortgage Loan, the insolvency of the related Mortgagor.

              RECORD DATE:  The Business Day  immediately  preceding the related
Payment Date;  PROVIDED,  HOWEVER,  that following the date on which  Definitive
Notes are  available,  the Record Date for the Notes shall be the last  Business
Day of the calendar month  preceding the month in which the related Payment Date
occurs.

              REDEMPTION DATE: In the case of a redemption of any Notes pursuant
to Section  10.1 of the  Indenture,  the Payment  Date  specified by the Sponsor
pursuant to Section 7.01(b) of the Sale and Servicing Agreement.

              REDEMPTION  PRICE:  In the  case  of a  redemption  of  any  Notes
pursuant  to  Section  10.1 of the  Indenture,  an  amount  equal to the  unpaid
principal  amount of the then  outstanding  principal  amount of the Notes being
redeemed,  plus  accrued  and  unpaid  interest  thereon  to but  excluding  the
Redemption Date, plus any outstanding, Reimbursement Amount.

              REIMBURSEMENT  AMOUNT:  As of any Payment Date with respect to the
Class A Notes,  the sum of (x)(i) all  Insured  Payments  made  pursuant  to the
Policy by the  Insurer  and in each case not  previously  repaid to the  Insurer
pursuant to Section 8.7(d)(vii) of the Indenture,  plus (ii) interest accrued on
each such payment made pursuant to the Policy not previously  repaid  calculated
at the Late  Payment  Rate  from the date the  Indenture  Trustee  received  the
related Insured  Payments and (y)(i) any other amounts then due and owing to the
Insurer under the Insurance Agreement, plus (ii) interest on such amounts at the
Late Payment Rate.

              RELATED  DOCUMENTS:  As defined in Section 2.01(c) of the Sale and
Servicing Agreement.

              RELIEF ACT SHORTFALL: Shortfalls in interest collections resulting
from the  application of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended or similar state laws.

              REMOVAL DATE: As defined in Section 2.07 of the Sale and Servicing
Agreement.

              REMOVAL  NOTICE  DATE:  As defined in Section 2.07 of the Sale and
Servicing Agreement.

              REO:  A  Mortgaged  Property  acquired  by  the  Servicer  or  any
sub-servicer  on behalf of the Trust  through  foreclosure  or  deed-in-lieu  of
foreclosure in connection with a defaulted Mortgage Loan.

              REPURCHASE PRICE: The sum of (a) the outstanding principal balance
of the related  Mortgage Loan as of such date of repurchase plus (b) any accrued
interest as of such date.

              RESIDUAL  CERTIFICATE:  As  defined  in  Section  1.1 of the Trust
Agreement.

              RESIDUAL CERTIFICATEHOLDER: Holder of the Residual Certificate.

                                       22
<PAGE>

              RESPONSIBLE OFFICER:  With respect to the Indenture Trustee or any
officer  of  the   Indenture   Trustee  with  direct   responsibility   for  the
administration of the Indenture and, also, with respect to a particular  matter,
any other  officer to whom such  matter is  referred  because of such  officer's
knowledge of and familiarity with the particular subject.

              SAIF: The Savings Association Insurance Fund, as from time to time
constituted,  created  under the  Financial  Institutions  Reform,  Recovery and
Enhancement Act of 1989, or if at any time after the execution of the Indenture,
the Savings Association Insurance Fund is not existing and performing duties now
assigned to it, the body performing such duties on such date.

              SALE AND SERVICING  AGREEMENT:  The Sale and Servicing  Agreement,
dated as of May 1 , 2003, by and among the Issuer, the Sponsor, the Servicer and
the Indenture  Trustee,  as the same may be amended or supplemented from time to
time.

              SEC: The  Securities  and Exchange  Commission  and any  successor
thereto.

              SELLER: GreenPoint Mortgage Funding, Inc., a New York corporation,
in its capacity as Seller pursuant to the Purchase Agreement.

              SERVICER:   GreenPoint   Mortgage   Funding,   Inc.,  a  New  York
corporation,  any successor thereto and, after its termination or resignation as
Servicer, any successor.

              SERVICING  CERTIFICATE:  A certificate completed and executed by a
Servicing  Officer in  accordance  with Section  4.01 of the Sale and  Servicing
Agreement.

              SERVICING  FEE: With respect to any Payment  Date,  the product of
(i)  one-twelfth  of the  Servicing  Fee Rate and (ii) the  aggregate  Principal
Balance  of the  Mortgage  Loans  on the  first  day  of the  Collection  Period
preceding  such  Payment  Date (or at the Cut-Off Date with respect to the first
Payment Date).

              SERVICING FEE RATE: ____% per annum.

              SERVICING  OFFICER:  Any officer of the  Servicer  involved in, or
responsible  for, the  administration  and  servicing of the Mortgage Loan whose
name and specimen  signature appear on a list of servicing officers furnished to
the  Indenture  Trustee  (with a copy to the  Insurer)  by the  Servicer  on the
Closing Date, as such list may be amended from time to time.

              SPECIFIED   OVERCOLLATERALIZATION  AMOUNT:  With  respect  to  any
Payment Date, the amount equal to the greater of: (I) the sum of (a) the related
Spread Squeeze  Amount plus (b) ___% of the Principal  Balance of Mortgage Loans
which are 180 or more days  Delinquent  as of the close of  business of the last
day of the related Collection Period plus (c)(i) prior to the 31st Payment Date,
the  greater of (x) ____% of the  Original  Note  Principal  Balance and (y) the
Step-Up  Overcollateralization Amount and (ii) on or after the 31st Payment Date
the  greater  of (x) the  lesser of (A)  ____% of the  Original  Note  Principal
Balance and (B) ____% of the Pool Balance as of the current Payment Date and (y)
the Step-Up Overcollateralization Amount; and (II) the sum of the related Spread
Squeeze  Amount and ____% of the  Original  Note  Principal  Balance;  PROVIDED,
HOWEVER,  that no reduction in clause  (c)(ii)  shall occur unless (i) aggregate
cumulative

                                       23
<PAGE>

Liquidation Loss Amounts with respect to the Pool as a percentage of the Initial
Pool  Balance are less than ____% and (ii) the Three Month  Rolling  Delinquency
Rate for is less than ____%.

              SPONSOR:  GreenPoint  Mortgage  Securities LLC, a Delaware limited
liability company, or its successors-in-interest.

              SPREAD SQUEEZE  AMOUNT:  As of any Payment Date (A) on or prior to
the twelfth  Payment Date,  $0 and (B) after the twelfth  Payment Date, a number
equal to the  product of (I) two times the  positive  difference,  if any of (x)
____% and (y) the related Spread Squeeze Percentage and (II) the Pool Balance as
of such Payment Date.

              SPREAD  SQUEEZE  PERCENTAGE:  As of any  Payment  Date  after  the
twelfth Payment Date, a fraction  (expressed as a percentage),  the numerator of
which is the product of ___ and the  related  Available  Funds for such  Payment
Date which remain on deposit in the Collection Account after taking into account
the  distributions  listed in clauses (i) through (vii) of Section 8.7(b) of the
Indenture with respect to such Payment Date and the  denominator of which is the
related Pool Balance as of such Payment Date.

              STANDARD & POOR'S:  Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc., or its successor in interest.

              STEPDOWN  DATE:  With  respect to the Class A Notes,  the later to
occur of (a) the 31st Payment  Date and (b) the first  Payment Date on which the
Pool  Balance  has been  reduced  to 50% or less of the Pool  Balance  as of the
Cut-Off Date.

              STEP-UP  OVERCOLLATERALIZATION  AMOUNT:  If  aggregate  cumulative
Liquidation Loss Amounts as a percentage of the Original Note Principal  Balance
exceed the following percentages on the specified Payment Dates,

                    PAYMENT DATES            PERCENTAGE
                    -------------            ----------
                    1st - ___th              ____%
                    ___th - ___th            ____%
                    ___th - ___th            ____%
                    ___th - ___th            ____%
                    ___th +                  ____%

the Step-Up  Overcollateralization  Amount will equal (a) ____% of the  Original
Note Principal  Balance,  prior to the 31st Payment Date and (b) on or after the
31st  Payment  Date,  the  lesser of (x) ____% of the  Original  Note  Principal
Balance and (y) ____% of the Pool Balance as of current Payment Date. Otherwise,
the Step-Up Overcollateralization Amount is zero.

              SUBSTITUTE  CUT-OFF DATE: With respect to any Eligible  Substitute
Mortgage Loan, the opening of business on the first day of the calendar month in
which such Eligible Substitute Mortgage Loan is conveyed to the Trust.

                                       24
<PAGE>

              SUBSTITUTION  AMOUNTS:  In  connection  with the  delivery  of any
Eligible Substitute  Mortgage Loan, if the outstanding  principal amount of such
Eligible Substitute  Mortgage Loan as of the applicable  Substitute Cut-Off Date
is less than the related  Principal  Balance of the Mortgage Loan being replaced
as of such Substitute Cut-Off Date, an amount equal to such difference  together
with accrued and unpaid interest on such amount  calculated at the Loan Rate net
of the Servicing Fee, if any, of the Mortgage Loan being replaced.

              TERMINATION  DATE: The latest of (i) the termination of the Policy
and the return of the Policy to the Insurer for  cancellation,  (ii) the date on
which the Insurer  shall have  received all amounts due and owing to the Insurer
under the Insurance  Agreement and (iii) the date on which the Indenture Trustee
shall have received  payment and  performance  of all Indenture  Trustee  Issuer
Secured Obligations.

              THREE MONTH  ROLLING  DELINQUENCY  RATE:  As of any  Payment  Date
beginning  with the third  Payment  Date,  a number  equal to the average of the
related  Pool  Delinquency  Rates  for each of the three  immediately  preceding
Collection Periods.

              TOTAL AVAILABLE  FUNDS:  With respect to any Payment Date, the sum
of (i) Available Funds (after taking into account the distributions  pursuant to
clauses (i) and (ii) of Section  8.7(d) of the  Indenture for such Payment Date)
and (ii) amounts available from the Demand Note, in each case as of such Payment
Date.

              TRANSFER DATE: With respect to each Eligible  Substitute  Mortgage
Loan, the date on which such Eligible  Substitute  Mortgage Loan shall have been
transferred to the Trust.

              TRUST AGREEMENT: The Trust Agreement,  dated as of ________, 200_,
by and between the Sponsor and the Owner Trustee, as the same may be amended and
supplemented from time to time.

              TRUST  PROPERTY:  All property and proceeds  conveyed  pursuant to
Section 2.01 of the Sale and Servicing Agreement, and certain other rights under
that Agreement.

              TRUSTEE  FEE:  A fee which is  separately  agreed to  between  the
Servicer and the Indenture Trustee.

              TRUSTEE  FEE RATE:  The per annum rate at which the Trustee Fee is
calculated.

              UCC: Unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.

              WEIGHTED AVERAGE NET LOAN RATE: As to any Collection  Period,  the
average of the daily Net Loan Rate for each  Mortgage Loan i for each day during
the related  Billing  Cycle,  weighted on the basis of the daily  average of the
related Principal  Balances for each day in such Billing Cycle for each Mortgage
Loan as  determined  by the Servicer in accordance  with the  Servicer's  normal
servicing procedures.

                                       25
<PAGE>

                                                                       EXHIBIT A

                                 [Form of Note]

              GREENPOINT HOME EQUITY LOAN TRUST 200_-_ CLASS A NOTE

REGISTERED                                                         $____________

No. A-1                                                   CUSIP NO. ____________

              Unless  this  Class  A  Note  is   presented   by  an   authorized
representative of The Depository Trust Company, a New York corporation  ("DTC"),
to the Issuer or its agent for  registration  of transfer,  exchange or payment,
and any Class A Note issued is  registered  in the name of Cede & Co. or in such
other  name as is  requested  by an  authorized  representative  of DTC (and any
payment  is made to Cede & Co. or to such  other  entity as is  requested  by an
authorized  representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR  OTHERWISE BY OR TO ANY PERSON IS WRONGFUL  inasmuch as the  registered
owner hereof, Cede & Co., has an interest herein.

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

<PAGE>

                    GREENPOINT HOME EQUITY LOAN TRUST 200_-_

                   CLASS A-1 VARIABLE RATE ASSET BACKED NOTES

              GreenPoint  Home  Equity  Loan Trust  200_-_,  a  statutory  trust
organized and existing under the laws of the State of Delaware  (herein referred
to as the "ISSUER"),  for value received,  hereby promises to pay to CEDE & CO.,
or registered  assigns,  the principal sum of  ________________________  MILLION
DOLLARS  ($____________),  such amount payable on each Payment Date in an amount
equal to the result  obtained by  multiplying  (i) a fraction  the  numerator of
which is  $_____________  and the denominator of which is $_____________ by (ii)
the aggregate amount, if any, payable from the Collection  Account in respect of
principal  on the  Class A  Notes  pursuant  to  Section  8.7 of the  Indenture;
PROVIDED,  HOWEVER, that the entire unpaid principal amount of this Class A Note
shall be due and  payable  on the  Payment  Date in  _______  20__  (the  "FINAL
SCHEDULED PAYMENT DATE").  The Issuer will pay interest on this Note at the rate
per annum provided in the Indenture on each Payment Date on the principal amount
of this Class A Note  outstanding  on the  preceding  Payment Date (after giving
effect  to all  payments  of  principal  made on the  preceding  Payment  Date).
Interest  on this Class A Note will accrue for each  Payment  Date from the most
recent  Payment  Date on which  interest  has been  paid to but  excluding  such
Payment Date or, if no interest has yet been paid, from ______,  200_.  Interest
will be computed on the basis of the actual  number of days elapsed in a 360-day
year.  Such  principal of and interest on this Class A Note shall be paid in the
manner specified on the reverse hereof.

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

              The Notes are  entitled to the  benefits  of a financial  guaranty
insurance policy (the "POLICY") issued by [Insurer] (the "INSURER"), pursuant to
which the Insurer has unconditionally guaranteed payments of the Insured Amounts
with respect to the Class A Notes on each Payment Date and  Preference  Amounts,
all as more fully set forth in the Policy.

              For  purposes  of  federal  income,  state  and local  income  and
franchise  and any  other  income  taxes,  the  Issuer  will  treat the Notes as
indebtedness of the Sponsor and hereby instructs the Indenture  Trustee to treat
the Notes as  indebtedness  of the Sponsor  for federal and state tax  reporting
purposes.  Each  Noteholder  by  acceptance  of a  Note  (and  each  owner  of a
beneficial interest in a Note by acceptance of such beneficial  interest) agrees
to treat the Notes for federal income,  state and local income and franchise and
any other income taxes as indebtedness of the Sponsor.

              Each  Noteholder or Note Owner, by acceptance of this Class A Note
or, in the case of a Note Owner, a beneficial interest in a Note,  covenants and
agrees that no recourse may be taken,  directly or  indirectly,  with respect to
the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Class A Notes  or under  the  Indenture  or any  certificate  or  other  writing
delivered in connection  therewith,  against (i) the Sponsor, the Servicer,  the
Indenture

                                     A-1-2
<PAGE>

Trustee,  or the Owner Trustee in its individual  capacity,  (ii) any owner of a
beneficial  interest  in the  Issuer or (iii)  any  owner,  beneficiary,  agent,
officer,  director or employee  of the  Sponsor,  the  Servicer,  the  Indenture
Trustee,  or the Owner  Trustee  in its  individual  capacity,  any  holder of a
beneficial interest in the Issuer, the Sponsor, the Servicer,  the Owner Trustee
or the  Indenture  Trustee or of any  successor  or assign of the  Sponsor,  the
Servicer,  the  Indenture  Trustee,  or the  Owner  Trustee  in  its  individual
capacity,  except  as any  such  Person  may have  expressly  agreed  (it  being
understood  that  the  Indenture  Trustee  and the  Owner  Trustee  have no such
obligations  in their  individual  capacity)  and except  that any such owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid  consideration for stock,  unpaid capital  contribution or failure to
pay any installment or call owing to such entity.

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

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

              This  Class A Note is one of a duly  authorized  issue of Notes of
the Issuer,  designated  as its Class A Variable Rate Asset Backed Notes (herein
called the "CLASS A NOTES"),  all issued under an Indenture dated as of _______,
200_  (such  agreement,  as  supplemented  or  amended,  is  herein  called  the
"INDENTURE"),  between the Issuer and [Indenture Trustee],  as Indenture Trustee
(the "INDENTURE  TRUSTEE"),  which term includes any successor Indenture Trustee
under the Indenture.

              All  terms  used in this  Class A Note  that  are  defined  in the
Indenture,  as supplemented or amended, shall have the meanings assigned to them
in or pursuant to the  Indenture,  as so  supplemented  or amended.  If any such
terms are not defined in the Indenture,  as supplemented  or amended,  then such
terms  shall have the  meanings  assigned  to them in or  pursuant  to the Trust
Agreement dated as of _______,  200_ (such trust  agreement,  as supplemented or
amended is herein called the "TRUST  AGREEMENT"),  between  GreenPoint  Mortgage
Securities LLC, as sponsor,  and [Owner  Trustee],  as Owner Trustee (the "OWNER
TRUSTEE,"  which term  includes  any  successor  Owner  Trustee  under the Trust
Agreement), as so supplemented or amended.

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

              Principal  of the Class A Notes will be  payable  on each  Payment
Date in an amount described in the Indenture. "Payment Date" means the fifteenth
day of each  month,  or,  if any  such  date is not a  Business  Day,  the  next
succeeding  Business Day, commencing _____, 200_. The term "Payment Date," shall
be deemed to include the Final Scheduled Payment Date.

              As described  above,  the entire unpaid  principal  amount of this
Class A Note  shall be due and  payable on the  earlier  of the Final  Scheduled
Payment Date and the Redemption

                                     A-1-3
<PAGE>

Date, if any,  pursuant to Section 10.1 of the  Indenture.  Notwithstanding  the
foregoing,  on the date on which a Rapid  Amortization  Period as  described  in
Section  5.1(a)  shall have  occurred  and be  continuing  and,  in the  limited
instances specified in the Indenture,  the Holders representing more than 50% of
the Outstanding  Amount of the Class A Notes,  with the prior written consent of
the Insurer (so long as there is no continuing  Insurer  Default) shall have the
right among  others to direct the  Indenture  Trustee to sell or  liquidate  the
Mortgage Loans as provided in Section 12.1 of the Indenture and pay such amounts
to the Holders of the Class A Notes. All principal payments on the Class A Notes
shall be made PRO RATA to the Holders of the Class A Notes entitled thereto.

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

              The Issuer shall pay interest on overdue  installments of interest
at the Class A-1 Interest Rate to the extent lawful.

              As  provided in the  Indenture,  the Class A Notes may be redeemed
pursuant to Section 10.1 of the  Indenture,  in whole,  but not in part,  at the
option  of  the  Sponsor   (with  the  consent  of  the  Insurer  under  certain
circumstances),  on any Payment  Date after the  Payment  Date on which the Note
Principal Balance is less than or equal to 10% of the Pool Balance, after taking
into account all distributions made on such Payment Date.

              As provided in the  Indenture  and subject to certain  limitations
set forth  therein,  the transfer of this Class A Note may be  registered on the
Note Register upon surrender of this Class A Note for  registration  of transfer
at the office or agency designated by the Issuer pursuant to the Indenture,  (i)
duly  endorsed by, or  accompanied  by a written  instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his
attorney  duly  authorized  in writing,  with such  signature  guaranteed  by an
"eligible guarantor  institution" meeting the requirements of the Note Registrar
which requirements include membership or

                                     A-1-4
<PAGE>

participation in Notes Transfer Agents Medallion Program ("STAMP") or such other
"signature  guarantee program" as may be determined by the Registrar in addition
to, or in substitution  for, Stamp, all in accordance with the Exchange Act, and
(ii)  accompanied by such other documents as the Indenture  Trustee may require,
and thereupon one or more new Notes of authorized  denominations and in the same
aggregate  principal  amount  will be issued  to the  designated  transferee  or
transferees.  No service charge will be charged for any registration of transfer
or exchange of this Class A Note,  but the  transferor  may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such registration of transfer or exchange.

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

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

              Prior to the due presentment for  registration of transfer of this
Note,  the Issuer,  the  Indenture  Trustee and the Insurer and any agent of the
Issuer,  the Indenture Trustee or the Insurer may treat the Person in whose name
this Note (as of the day of  determination  or as of such  other  date as may be
specified in the  Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be  overdue,  and neither  the  Issuer,  the  Indenture
Trustee nor any such agent shall be affected by notice to the contrary.

              The  Indenture   permits,   with  certain  exceptions  as  therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the Issuer  and the rights of the  Holders of the Note under the
Indenture  at any time by the Issuer  with the consent of the Insurer and of the
Holders of Notes  representing a majority of the Outstanding Amount of all Notes
at the time  Outstanding.  Any such consent or waiver by the Holder of this Note
(or any

                                     A-1-5
<PAGE>

one of more Predecessor  Notes) shall be conclusive and binding upon such Holder
and upon all  future  Holders  of this  Note  and of any  Note  issued  upon the
registration  of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note.  The Indenture
also  permits  the  Indenture  Trustee  to  amend  or waive  certain  terms  and
conditions  set forth in the  Indenture  without  the  consent of Holders of the
Notes issued thereunder but with the consent of the Insurer.

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

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

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

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

              Anything  herein  to  the  contrary  notwithstanding,   except  as
expressly provided in the Trust Agreement, the Indenture or the Basic Documents,
neither [Owner  Trustee] in its individual  capacity,  any owner of a beneficial
interest  in the  Issuer,  nor any of their  respective  beneficiaries,  agents,
officers,  directors,  employees or  successors  or assigns  shall be personally
liable  for,  nor shall  recourse  be had to any of them  for,  the  payment  of
principal of or interest on, or performance  of, or omission to perform,  any of
the  covenants,  obligations or  indemnifications  contained in this Note or the
Indenture,  it being expressly  understood that said covenants,  obligations and
indemnifications  have been made by the Issuer for the sole  purposes of binding
the interests of the Issuer in the assets of the Issuer. The Holder of this Note
by the  acceptance  hereof  agrees  that  except as  expressly  provided  in the
Indenture or the Basic Documents in the case of a Rapid  Amortization Event with
respect to the Class A Notes under the Indenture, the Holder shall have no claim
against  any of the  foregoing  for any  deficiency,  loss or  claim  therefrom;
PROVIDED,  HOWEVER,  that  nothing  contained  herein  shall be taken to prevent
recourse to, and enforcement  against,  the assets of the Issuer for any and all
liabilities,  obligations and undertakings contained in the Indenture or in this
Note.

                                     A-1-6
<PAGE>

              IN WITNESS  WHEREOF,  the Issuer has caused this  instrument to be
signed, manually or in facsimile, by its Authorized Officer.

Date:  _______, 200_         GREENPOINT HOME EQUITY LOAN TRUST 200_-_

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

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

                                     A-1-7
<PAGE>

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Date:  ________, 200_                 [Indenture Trustee], not in its individual
                                      capacity but solely as Indenture Trustee

                                      By:
                                         ---------------------------------------
                                                  Authorized Signatory

                                     A-1-8
<PAGE>

                                    EXHIBIT B

                           FORM OF OPINION OF COUNSEL

                                      B-1
<PAGE>

                                    EXHIBIT C

                     FORM OF CERTIFICATION TO BE PROVIDED TO
        GREENPOINT HOME EQUITY LOAN TRUST 200_-_ BY THE INDENTURE TRUSTEE

             GreenPoint Home Equity Loan Trust 200_-_ (the "Trust")
                    Class A Variable Rate Asset Backed Notes

I,  ______________________,  a _____________________  of [Indenture Trustee], as
Indenture  Trustee  for  the  Trust,   hereby  certify  to  GreenPoint  Mortgage
Securities LLC (the "Sponsor"), and its offices,  directions and affiliates, and
with the knowledge and intent that they will rely upon this certification that:

       1.     The Sponsor has caused it to be provided to the Indenture  Trustee
a written  notice  listing all of the  monthly  distribution  reports  that were
prepared by the  Indenture  Trustee  and that will be included in the  Sponsor's
Form 10-K for the Trust's  fiscal year ending on  ___________.  I have  reviewed
each of such distribution reports.

       2.     Based on my  knowledge,  the  information  in  these  distribution
reports prepared by the Indenture  Trustee,  taken as a whole,  does not contain
any  untrue  statement  of a  material  fact or omit to  state a  material  fact
necessary to make the statements made, in light of the circumstances under which
such  statements  were  made,  not  misleading  as of the last day of the period
covered by that annual report.

       3.     Based on my knowledge, the distribution information required to be
provided by the  Indenture  Trustee  under the  Indenture,  dated as of _______,
200_, the Trust and the Indenture Trustee is included in these reports.

                      [SIGNATURE PAGE IMMEDIATELY FOLLOWS]

                                      C-1
<PAGE>

                                       [INDENTURE TRUSTEE]
                                       as Indenture Trustee

Dated:________________                 By:
                                          --------------------------------------
                                       Name:
                                       Title:

                                      C-2GREENPOINT MORTGAGE SECURITIES LLC,
                          as Depositor and Transferor,

                       GREENPOINT MORTGAGE FUNDING, INC.,
                             as Seller and Servicer,

                                       and

                                   [TRUSTEE],
                                   as Trustee

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

                         POOLING AND SERVICING AGREEMENT

                          Dated as of __________, 200_

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

              Revolving Home Equity Loan Asset-Backed Certificates

                                  Series 200_-_

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

                                    ARTICLE I

                                   Definitions

Section 1.01.      Definitions.................................................1
Section 1.02.      Interest Calculations......................................20

                                   ARTICLE II

                          Conveyance of Mortgage Loans;
                       Original Issuance of Certificates;
                                  Tax Treatment

Section 2.01.      Conveyance of Mortgage Loans; Retention of Obligation to
                   Fund Advances Under Credit Line Agreements.................20
Section 2.02.      Acceptance by Trustee; Retransfer of Mortgage Loans........24
Section 2.03.      Representations and Warranties Regarding the Servicer and
                   the Transferor.............................................26
Section 2.04.      Representations and Warranties of the Transferor Regarding
                   the Mortgage Loans; Retransfer of Certain Mortgage Loans...28
Section 2.05.      Covenants of the Depositor and the Transferor..............34
Section 2.06.      Retransfers of Mortgage Loans at Election of Transferor....34
Section 2.07.      Execution and Authentication of Certificates...............36
Section 2.08.      Tax Treatment..............................................36
Section 2.09.      Representations and Warranties of the Depositor............36
Section 2.10.      Conveyance of the Subsequent Mortgage Loans................37

                                   ARTICLE III

                 Administration and Servicing of Mortgage Loans

Section 3.01.      The Servicer...............................................39
Section 3.02.      Collection of Certain Mortgage Loan Payments...............40
Section 3.03.      Withdrawals from the Collection Account....................42
Section 3.04.      Maintenance of Hazard Insurance; Property Protection
                   Expenses...................................................42
Section 3.05.      Assumption and Modification Agreements.....................43
Section 3.06.      Realization Upon Defaulted Mortgage Loans; Repurchase of
                   Certain Mortgage Loans.....................................44
Section 3.07.      Trustee to Cooperate.......................................45
Section 3.08.      Servicing Compensation; Payment of Certain Expenses by
                   Servicer...................................................45
Section 3.09.      Annual Statement as to Compliance..........................46
Section 3.10.      Annual Servicing Report....................................46
Section 3.11.      Annual Opinion of Counsel..................................46

                                       i
<PAGE>

Section 3.12.      Access to Certain Documentation and Information Regarding
                   the Mortgage Loans.........................................46
Section 3.13.      Maintenance of Certain Servicing Insurance Policies........47
Section 3.14.      Reports to the Securities and Exchange Commission..........47
Section 3.15.      Tax Returns................................................47
Section 3.16.      Information Required by the Internal Revenue Service
                   Generally and Reports of Foreclosures and Abandonments
                   of Mortgaged Property......................................48

                                   ARTICLE IV

                              Servicing Certificate

Section 4.01.      Servicing Certificate......................................48
Section 4.02.      Claims upon the Policy.....................................51
Section 4.03.      Spread Account.............................................52
Section 4.04.      Effect of Payments by the Credit Enhancer; Subrogation.....52

                                    ARTICLE V

                             Payments and Statements
               to Certificateholders; Rights of Certificateholders

Section 5.01.      Distributions..............................................53
Section 5.02.      Calculation of the Class A Certificate Rate................56
Section 5.03.      Statements to Certificateholders...........................56
Section 5.04.      Rights of Certificateholders...............................58
Section 5.05.      Funding Account............................................58

                                   ARTICLE VI

                                The Certificates

Section 6.01.      The Certificates...........................................59
Section 6.02.      Registration of Transfer and Exchange of Investor
                   Certificates; Appointment of Registrar.....................60
Section 6.03.      Mutilated, Destroyed, Lost or Stolen Certificates..........62
Section 6.04.      Persons Deemed Owners......................................62
Section 6.05.      Restrictions on Transfer of Transferor Certificates........62
Section 6.06.      Appointment of Paying Agent................................64
Section 6.07.      Acceptance of Obligations..................................65

                                   ARTICLE VII

                 The Servicer, the Transferor and the Depositor

Section 7.01.      Liability of the Transferor, the Servicer and the
                   Depositor..................................................65
Section 7.02.      Merger or Consolidation of, or Assumption of the
                   Obligations of, the Servicer, the Transferor or the
                   Depositor..................................................65
                                       ii
<PAGE>

Section 7.03.      Limitation on Liability of the Servicer and Others.........65
Section 7.04.      Servicer Not to Resign.....................................66
Section 7.05.      Delegation of Duties.......................................66
Section 7.06.      Indemnification of the Trust by the Servicer...............67
Section 7.07.      Indemnification of the Trust by the Transferor.............67
Section 7.08.      Limitation on Liability of the Transferor..................67
Section 7.09.      Limitation on Liability of the Depositor...................68

                                  ARTICLE VIII

                              Servicing Termination

Section 8.01.      Events of Servicing Termination............................68
Section 8.02.      Trustee to Act; Appointment of Successor...................70
Section 8.03.      Notification to Certificateholders.........................71

                                   ARTICLE IX

                                   The Trustee

Section 9.01.      Duties of Trustee..........................................71
Section 9.02.      Certain Matters Affecting the Trustee......................72
Section 9.03.      Trustee Not Liable for Certificates or Mortgage Loans......74
Section 9.04.      Trustee May Own Certificates...............................75
Section 9.05.      Servicer to Pay Trustee's Fees and Expenses; Servicer to
                   Indemnify..................................................75
Section 9.06.      Eligibility Requirements for Trustee.......................75
Section 9.07.      Resignation or Removal of Trustee..........................75
Section 9.08.      Successor Trustee..........................................76
Section 9.09.      Merger or Consolidation of Trustee.........................77
Section 9.10.      Appointment of Co-Trustee or Separate Trustee..............77
Section 9.11.      Limitation of Liability....................................78
Section 9.12.      Trustee May Enforce Claims Without Possession of
                   Certificates...............................................78
Section 9.13.      Suits for Enforcement......................................79

                                    ARTICLE X

                                   Termination

Section 10.01.     Termination................................................79

                                   ARTICLE XI

                            Rapid Amortization Events

Section 11.01.     Rapid Amortization Events..................................81
Section 11.02.     Additional Rights Upon the Occurrence of Certain Events....83

                                      iii
<PAGE>

                                   ARTICLE XII

                            Miscellaneous Provisions

Section 12.01.     Amendment..................................................84
Section 12.02.     Recordation of Agreement...................................86
Section 12.03.     Limitation on Rights of Certificateholders.................86
Section 12.04.     Governing Law..............................................87
Section 12.05.     Notices....................................................87
Section 12.06.     Severability of Provisions.................................88
Section 12.07.     Assignment.................................................88
Section 12.08.     Certificates Nonassessable and Fully Paid..................88
Section 12.09.     Third-Party Beneficiaries..................................88
Section 12.10.     Counterparts...............................................88
Section 12.11.     Effect of Headings and Table of Contents...................88
Section 12.12.     Insurance Agreement........................................88

EXHIBIT

EXHIBIT A - FORM OF CERTIFICATE..............................................A-1
EXHIBIT B - FORM OF TRANSFEROR CERTIFICATE...................................B-1
EXHIBIT C - MORTGAGE LOAN SCHEDULE...........................................C-1
EXHIBIT D - RESERVED.........................................................D-1
EXHIBIT E - ANNUAL OPINION OF COUNSEL........................................E-1
EXHIBIT F - FORM OF CREDIT LINE AGREEMENT....................................F-1
EXHIBIT G - RESERVED.........................................................G-1
EXHIBIT H - RESERVED.........................................................H-1
EXHIBIT I - LETTER OF REPRESENTATIONS........................................I-1
EXHIBIT J - RESERVED.........................................................J-1
EXHIBIT K - FORM OF INVESTMENT LETTER........................................K-1
EXHIBIT L - FORM OF REQUEST FOR RELEASE......................................L-1

                                       iv
<PAGE>

         This Pooling and Servicing  Agreement,  dated as of  __________,  200_,
among GREENPOINT  MORTGAGE  SECURITIES LLC, as Depositor (in such capacity,  the
"DEPOSITOR") and as Transferor (in such capacity, the "TRANSFEROR"),  GREENPOINT
MORTGAGE FUNDING, INC., as Seller and Servicer (in such capacities, the "SELLER"
and the "SERVICER"), and [TRUSTEE], as Trustee (the "TRUSTEE"),

                          W I T N E S S E T H T H A T:

         In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:

                                   ARTICLE I

                                   Definitions

         Section 1.01.  DEFINITIONS.  Except as otherwise  specified herein, the
following terms have the respective meanings set forth in this Article.

         ACCELERATED PRINCIPAL  DISTRIBUTION AMOUNT: With respect to any Payment
Date, the amount, if any,  required to reduce the Class A Certificate  Principal
Balance (after giving effect to the  distribution of all other amounts  actually
distributed  on the  Class A  Certificates  on such  Payment  Date)  so that the
Invested  Amount  (immediately  following such Payment Date) exceeds the Class A
Certificate    Principal    Balance   (as   so   reduced)   by   the    Required
Overcollateralization Amount.

         ADDITIONAL  BALANCE:  As to  any  HELOC  Mortgage  Loan  and  day,  the
aggregate amount of all Draws conveyed to the Trust pursuant to Section 2.01.

         ADJUSTMENT  DATE:  With respect to any HELOC Mortgage Loan and Interest
Period,  the second LIBOR  Business Day preceding the first day of such Interest
Period.

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

         AGREEMENT:  This Pooling and  Servicing  Agreement  and all  amendments
hereof and supplements hereto.

         ALTERNATIVE  PRINCIPAL PAYMENT:  As to any Payment Date, the greater of
(x) ___% of the Class A Certificate  Principal Balance  immediately prior to the
Payment  Date or (y) the  amount  (but not less than  zero)  equal to  Principal
Collections  for such Payment Date less the  aggregate of Draws under the Credit
Line Agreements during the related Collection Period.

         APPRAISED VALUE: As to any Mortgaged Property, the value established by
a drive by inspection of such  Mortgaged  Property made to establish  compliance
with the

<PAGE>

underwriting  criteria then in effect in connection with the application for the
Mortgage Loan secured by such Mortgaged Property.

         ASSET  BALANCE:  As to any  Mortgage  Loan,  other  than  a  Liquidated
Mortgage  Loan, and day, the related  Cut-Off Date Asset Balance,  PLUS (i) with
respect to each HELOC Mortgage  Loan, any Additional  Balance in respect of such
HELOC  Mortgage  Loan,  MINUS  (ii) with  respect  to each  Mortgage  Loan,  all
collections credited as principal against the Asset Balance of any such Mortgage
Loan in  accordance  with the  related  Loan  Agreement.  For  purposes  of this
definition,  a Liquidated Mortgage Loan shall be deemed to have an Asset Balance
equal to the Asset Balance of the related Mortgage Loan immediately prior to the
final  recovery of related  Liquidation  Proceeds  and an Asset  Balance of zero
thereafter.

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

         AUTHORIZED NEWSPAPER: A newspaper of general circulation in the Borough
of  Manhattan,  The  City of New  York,  printed  in the  English  language  and
customarily  published  on  each  Business  Day,  whether  or not  published  on
Saturdays, Sundays and holidays.

         BIF: The Bank Insurance Fund, as from time to time constituted, created
under the Financial  Institutions Reform,  Recovery and Enhancement Act of 1989,
or if at any time after the execution of this instrument the Bank Insurance Fund
is not existing and  performing  duties now assigned to it, the body  performing
such duties on such date.

         BILLING CYCLE: With respect to any Mortgage Loan and Collection Period,
the billing  period  specified in the related Loan Agreement and with respect to
which amounts billed are received during such Collection Period.

         BOOK-ENTRY CERTIFICATE: Any Investor Certificate registered in the name
of the  Depository or its nominee,  ownership of which is reflected on the books
of the  Depository or on the books of a Person  maintaining an account with such
Depository  (directly or as an indirect participant in accordance with the rules
of such Depository).

         BUSINESS  DAY: Any day other than a Saturday,  a Sunday or other day on
which banking institutions in the State of New York,  California or the State in
which the Corporate Trust Office is located are required or authorized by law or
executive order to be closed.

         CERTIFICATE:  A  Class  A  Certificate,  a  Class  S  Certificate  or a
Transferor Certificate.

                                       2
<PAGE>

         CERTIFICATE  OWNER:  The  Person  who  is  the  beneficial  owner  of a
Book-Entry Certificate.

         CERTIFICATE REGISTER AND CERTIFICATE REGISTRAR: The register maintained
and the registrar appointed pursuant to Section 6.02.

         CERTIFICATEHOLDER  OR HOLDER: The Person in whose name a Certificate is
registered in the Certificate  Register,  except that, solely for the purpose of
giving any consent, direction, waiver or request pursuant to this Agreement, (x)
any Investor Certificate registered in the name of the Transferor, or any Person
known to a Responsible Officer to be an Affiliate of either the Depositor or the
Transferor and (y) any Investor  Certificate  for which the  Transferor,  or any
Person known to a  Responsible  Officer to be an Affiliate of either such entity
is the  Certificate  Owner shall be deemed not to be outstanding  (unless to the
knowledge of a  Responsible  Officer (i) the  Transferor,  or such  Affiliate is
acting  as  trustee  or  nominee  for a Person  who is not an  Affiliate  of the
Transferor  and who makes the voting  decision  with  respect  to such  Investor
Certificate or (ii) the Transferor,  or such Affiliate is the Certificate  Owner
of all the Investor  Certificates) and the Percentage Interest evidenced thereby
shall not be taken into account in determining  whether the requisite  amount of
Percentage Interests necessary to effect any such consent,  direction, waiver or
request has been obtained.

         CLASS A CERTIFICATE:  Any certificate executed and authenticated by the
Trustee substantially in the form set forth in Exhibit A-1 hereto.

         CLASS A CERTIFICATE CARRY FORWARD INTEREST: As to any Payment Date, the
amount,  if any, by which interest  accrued on the Class A  Certificates  at the
Class A Certificate Rate (without giving effect to the proviso in the definition
thereof) for the related  Interest  Period exceeds the Class A Interest  Payment
Cap.

         CLASS A CERTIFICATE  DISTRIBUTION  AMOUNT:  As to any Payment Date, the
sum of all  amounts to be  distributed  to the  Holders of Class A  Certificates
pursuant to Article V and Article hereof.

         CLASS  A  CERTIFICATE  INTEREST:  With  respect  to any  Payment  Date,
interest for the related  Interest Period at the applicable  Class A Certificate
Rate on the Class A  Certificate  Principal  Balance as of the first day of such
Interest Period (after giving effect to the distributions  made on the first day
of such Interest Period).

         CLASS A  CERTIFICATE  PRINCIPAL  BALANCE:  With  respect to any Payment
Date,  (a) the  Original  Class A  Certificate  Principal  Balance  less (b) the
aggregate  of  amounts  actually   distributed  as  principal  on  the  Class  A
Certificates.

         CLASS A CERTIFICATE  RATE:  With respect to the first Interest  Period,
_____%,  and for any subsequent  Interest Period, the sum of (a) LIBOR as of the
second LIBOR Business Day prior to the first day of such Interest Period and (b)
_____%;  PROVIDED,  HOWEVER, that in no event shall the Class A Certificate Rate
with respect to any Interest  Period  exceed the Maximum Rate for such  Interest
Period.

                                       3
<PAGE>

         CLASS A CERTIFICATEHOLDER: The Holder of a Class A Certificate.

         CLASS A INTEREST  PAYMENT  CAP:  With respect to any Payment  Date,  an
amount equal to accrued  interest on the Class A Certificate  Principal  Balance
for the related Interest Period at the Maximum Rate.

         CLASS S CERTIFICATE:  Any Certificate executed and authenticated by the
Trustee substantially in the form set forth in Exhibit A-2.

         CLASS  S  CERTIFICATE  INTEREST:  With  respect  to any  Payment  Date,
interest for the related  Interest Period at the Class S Certificate Rate on the
Class S  Notional  Amount  as of the first day of such  Interest  Period  (after
giving effect to distributions made on the first day of such Interest Period).

         CLASS S CERTIFICATEHOLDER: The Holder of a Class S Certificate.

         CLASS S NOTIONAL AMOUNT:  With respect to any Payment Date, the Class A
Certificate  Principal  Balance for such Payment Date (before  giving  effect to
distributions made on such Payment Date).

         CLOSED-END  MORTGAGE LOAN: Each Mortgage Loan  originated  under a Loan
Agreement providing for a single advance of funds on the date of origination and
no additional advances during the term of such Mortgage Loan.

         CLOSING DATE:  ___________, 200_.

         CODE:  The Internal  Revenue  Code of 1986,  as the same may be amended
from time to time (or any successor statute thereto).

         COLLECTION  ACCOUNT:  The  custodial  account or  accounts  created and
maintained  for the benefit of the  Investor  Certificateholders  and the Credit
Enhancer  pursuant  to  Section  3.02(b).  The  Collection  Account  shall be an
Eligible Account.

         COLLECTION  PERIOD:  With  respect to any Payment Date and any Mortgage
Loan, the calendar month preceding such Payment Date.

         COMBINED  LOAN-TO-VALUE  RATIO:  (i) With respect to any HELOC Mortgage
Loan as of any date, the percentage  equivalent of a fraction,  the numerator of
which  is the sum of (A) the  Credit  Limit  and (B) the  outstanding  principal
balance as of the date of application  for the related Credit Line Agreement (or
as of any  subsequent  date,  if any,  as of which  such  outstanding  principal
balance may be determined in connection with an increase in the Credit Limit for
such HELOC Mortgage Loan) of any mortgage loan or mortgage loans that are senior
in  priority  to the  HELOC  Mortgage  Loan and which  are  secured  by the same
Mortgaged  Property and the  denominator of which is (C) the Appraised  Value of
the related Mortgaged  Property as set forth in the Mortgage File as of the date
of the  appraisal or on such  subsequent  date,  if any, or (D) in the case of a
Mortgage  Property  purchased  within one year of the date of  execution  of the
related  Credit Line  Agreement,  the lesser of (x) the  Appraised  Value of the
related Mortgaged

                                       4
<PAGE>

Property as set forth in the loan files as of the date of the  appraisal and (y)
the  purchase  price of such  Mortgaged  Property  and (ii) with  respect to any
Closed-End Mortgage Loan Mortgage Loan as of any date, the percentage equivalent
of a fraction,  the numerator of which is the sum of (A) the original  principal
balance  of such  Closed-End  Mortgage  Loan and (B) any  outstanding  principal
balances  senior to such  Closed-End  Mortgage Loan  (calculated  at the rate of
application  for the Closed-End  Mortgage Loan) and the  denominator of which is
(C) the Appraised  Value of the related  Mortgaged  Property as set forth in the
Mortgage  File as of the date of the appraisal or (D) in the case of a Mortgaged
Property  purchased within one year of the origination of the related Closed-End
Mortgage  Loan, the lesser of (x) the Appraised  Value of the related  Mortgaged
Property as set forth in the Mortgage  Files as of the date of the appraisal and
(y) the purchase price of such Mortgaged Property.

         CORPORATE TRUST OFFICE: The principal office of the Trustee at which at
any particular time its corporate  business shall be administered,  which office
on the Closing Date is located at [Address].

         CREDIT ENHANCEMENT DRAW AMOUNT: As to any Payment Date, an amount equal
to the sum of (1) the  amount  by which  (a) the  amount  to be  distributed  to
Investor  Certificateholders  pursuant to Sections  5.01(a)(iii) and 5.01(a)(iv)
exceeds  (b) the sum of (i) the  amount  of  Investor  Interest  Collections  on
deposit in the  Collection  Account on the Business Day  preceding  such Payment
Date  that is  available  to be  applied  therefor,  (ii)  the  amount,  if any,
deposited in the Collection  Account in respect of such Payment Date pursuant to
Section 4.05,  (iii) the amount  transferred to the Collection  Account from the
Funding Account pursuant to Section 5.05(c)(iii) and (iv) any amount transferred
from the Spread Account to the Collection  Account pursuant to Section 4.03, (2)
the Guaranteed  Principal  Distribution  Amount and (3) any Preference Claim for
such Payment Date.

         CREDIT ENHANCER:  [Credit Enhancer], a [State] monoline stock insurance
company,  any successor thereto or any replacement  credit enhancer  substituted
pursuant to Section 4.03.

         CREDIT ENHANCER  DEFAULT:  The failure by the Credit Enhancer to make a
payment required under the Policy in accordance with the terms thereof.

         CREDIT LIMIT:  As to any HELOC Mortgage Loan, the maximum Asset Balance
permitted under the terms of the related Credit Line Agreement.

         CREDIT LIMIT  UTILIZATION  RATE:  As to any HELOC  Mortgage  Loan,  the
percentage  equivalent  of a fraction the numerator of which is the Cut-Off Date
Asset Balance for such Mortgage Loan and the denominator of which is the related
Credit Limit.
         CREDIT LINE  AGREEMENT:  With respect to any HELOC  Mortgage  Loan, the
related home equity line of credit agreement and promissory note executed by the
related Mortgagor and any amendment or modification thereof.

                                       5
<PAGE>

         CUSTODIAL AGREEMENT:  Any Custodial Agreement between any Custodian and
the Trustee,  which is reasonably acceptable in form and substance to the Credit
Enhancer,  relating  to the  custody  of the  Mortgage  Loans  and  the  Related
Documents.

         CUSTODIAN:  Any  custodian  appointed by the Trustee  under a Custodial
Agreement to maintain all or a portion of the Mortgage Files pursuant to Section
2.01(b).

         CUT-OFF DATE: With respect to each Initial  Mortgage Loan,  __________,
200_ and with respect to each  Subsequent  Mortgage Loan, the date on which such
Subsequent Mortgage Loan was transferred to the Trust.

         CUT-OFF DATE ASSET  BALANCE:  With respect to any  Mortgage  Loan,  the
unpaid principal balance thereof as of the Cut-Off Date.

         CUT-OFF DATE POOL  BALANCE:  The Pool Balance  calculated as of the Cut
Off Date.

         DEFECTIVE MORTGAGE LOAN: A Mortgage Loan subject to retransfer pursuant
to Section 2.02, 2.04 or 2.09.

         DEFINITIVE CERTIFICATES: As defined in Section 6.02(c).

         DELIVERY EVENT: As defined in Section 2.01.

         DEPOSITOR:  GreenPoint  Mortgage  Securities  LLC or its  successor  in
interest.

         DEPOSITORY:  The  initial  Depository  shall  be The  Depository  Trust
Company, the nominee of which is Cede & Co., as the registered Holder of Class A
Certificates evidencing $__________ in initial aggregate principal amount of the
Class A  Certificates  and as the  registered  Holder  of  Class S  Certificates
evidencing  $__________  in  initial  aggregate  notional  amount of the Class S
Certificates.  The Depository shall at all times be a "clearing  corporation" as
defined in Section 8-102(3) of the UCC of the State of New York.

         DEPOSITORY  PARTICIPANT:  A  broker,  dealer,  bank or other  financial
institution  or other Person for whom from time to time the  Depository  effects
book-entry transfers and pledges of securities deposited with the Depository.

         DETERMINATION  DATE:  With  respect  to any  Payment  Date,  the  third
Business Day prior to such Payment Date.

         PAYMENT DATE: The  [fifteenth] day of each month, or if such day is not
a Business Day, then the next Business Day,  beginning in the month  immediately
following the month of the initial issuance of the Certificates.

         DRAW:  With  respect  to any HELOC  Mortgage  Loan  Mortgage  Loan,  an
additional  borrowing  by the  Mortgagor  subsequent  to  the  Cut-Off  Date  in
accordance with the related Mortgage Note.

                                       6
<PAGE>

         DUE DATE: As to any Mortgage Loan, the twenty-fifth day of the month.

         ELECTRONIC  LEDGER:  The electronic master record of home equity credit
line  mortgage  loans  maintained  by  the  Servicer  or by the  Transferor,  as
appropriate.

         ELIGIBLE  ACCOUNT:  A segregated  account that is (i) maintained with a
depository  institution  whose  short-term  debt  obligations at the time of any
deposit therein have the highest  short-term debt rating by the Rating Agencies,
(ii)  one or  more  accounts  maintained  with a  depository  institution  whose
long-term unsecured debt rating by the Rating Agencies is at least AA- and whose
accounts are fully insured by either the Savings  Association  Insurance Fund or
the Bank Insurance Fund of the Federal Deposit Insurance Corporation established
by such fund,  (iii) a segregated  trust account  maintained with the Trustee in
its fiduciary  capacity or (iv)  otherwise  acceptable to each Rating Agency and
the Credit  Enhancer as  evidenced  by a letter from each Rating  Agency and the
Credit  Enhancer to the Trustee,  without  reduction or withdrawal of their then
current ratings of the Class A Notes without regard to the Policy.

         ELIGIBLE  INVESTMENTS:  One or more  of the  following  (excluding  any
callable investments purchased at a premium):

                  (i) direct  obligations of, or obligations fully guaranteed as
         to timely  payment of principal  and interest by, the United  States or
         any agency or instrumentality  thereof,  provided that such obligations
         are backed by the full faith and credit of the United States;

                  (ii) repurchase  agreements on obligations specified in clause
         (i) maturing  not more than three  months from the date of  acquisition
         thereof, provided that the short-term unsecured debt obligations of the
         party agreeing to repurchase such  obligations are at the time rated by
         each Rating Agency in its highest  short-term rating category (which is
         A-1+ for Standard & Poor's and P-1 for Moody's);

                  (iii)  certificates  of deposit,  time  deposits  and bankers'
         acceptances  (which, if Moody's is a Rating Agency,  shall each have an
         original maturity of not more than 90 days and, in the case of bankers'
         acceptances,  shall in no event have an original  maturity of more than
         365  days)  of  any  U.S.  depository   institution  or  trust  company
         incorporated  under the laws of the United  States or any state thereof
         and subject to  supervision  and  examination  by federal  and/or state
         banking  authorities,  provided  that  the  unsecured  short-term  debt
         obligations of such depository institution or trust company at the date
         of acquisition  thereof have been rated by each of Moody's and Standard
         & Poor's in its highest unsecured short-term debt rating category;

                  (iv) commercial paper (having original  maturities of not more
         than 270 days) of any  corporation  incorporated  under the laws of the
         United States or any state thereof which on the date of acquisition has
         been rated by Standard & Poor's and Moody's in their highest short-term
         debt rating categories;

                                       7
<PAGE>

                  (v) short-term  investment  funds  ("STIFS")  sponsored by any
         trust company or national banking  association  incorporated  under the
         laws of the  United  States or any state  thereof  which on the date of
         acquisition  has been rated by  Standard & Poor's and  Moody's in their
         respective highest applicable rating category;

                  (vi)  interests  in any money market fund which at the date of
         acquisition  of the interests in such fund and throughout the time such
         interests  are held in such  fund has a rating  of Aaa by  Moody's  and
         either AAAm or AAAm-G by Standard & Poor's or such lower rating as will
         not  result in the  qualification,  downgrading  or  withdrawal  of the
         then-current  rating assigned to the Certificates by each Rating Agency
         without regard to the Policy; and

                  (vii) other  obligations or securities  that are acceptable to
         each Rating  Agency and the Credit  Enhancer as an Eligible  Investment
         hereunder and will not result in a reduction in the then current rating
         of the  Certificates  without  regard to the Policy,  as evidenced by a
         letter to such effect from such Rating  Agency and the Credit  Enhancer
         and with respect to which the Servicer has received  confirmation that,
         for tax purposes,  the investment complies with the last clause of this
         definition;

PROVIDED that no instrument  described hereunder shall evidence either the right
to receive (a) only interest  with respect to the  obligations  underlying  such
instrument or (b) both principal and interest  payments derived from obligations
underlying such instrument and the interest and principal  payments with respect
to such instrument  provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations;  and PROVIDED,  FURTHER,
that (x) no instrument  described  hereunder may be purchased at a price greater
than par if such  instrument  may be  prepaid or called at a price less than its
purchase  price prior to its stated  maturity and (y) all  Eligible  Investments
shall mature no later than the next Payment Date.

         ELIGIBLE  SUBSTITUTE  MORTGAGE LOAN: A Mortgage Loan substituted by the
Depositor,  with the consent of the Credit  Enhancer,  for a Defective  Mortgage
Loan  which  must,  on the date of such  substitution,  (i) have an  outstanding
Principal  Balance (or, in the case of a substitution  of more than one Mortgage
Loan for a Defective Mortgage Loan, an aggregate Principal Balance), equal to or
less  than  the  Principal  Balance  of the  Defective  Mortgage  Loan as of the
applicable  Cut-Off Date;  (ii) except for HELOC  Mortgage  Loans still in their
teaser  period,  have a Loan Rate not less  than the Loan Rate of the  Defective
Mortgage  Loan  and not  more  than  ____% in  excess  of the Loan  Rate of such
Defective HELOC Mortgage Loan; (iii) for HELOC Mortgage Loans,  have a Loan Rate
based on the same Index as the Defective  Mortgage Loan with adjustments to such
Loan Rate made on the same date on which the  Defective  HELOC  Mortgage  Loan's
interest rate adjusts;  (iv) for HELOC Mortgage Loans, have a Margin that is not
less than the Margin of the Defective  HELOC Mortgage Loan and not more than ___
basis points higher than the Margin for the Defective  HELOC  Mortgage Loan; (v)
have a  mortgage  of the same or  higher  level  of  priority  as the  Defective
Mortgage Loan at the time such Mortgage Loan was transferred to the Trust;  (vi)
have a remaining  term to maturity not

                                       8
<PAGE>

more  than ___  months  earlier  and not more  than ___  months  later  than the
remaining  term to maturity of the Defective  Mortgage  Loan;  (vii) comply with
each  representation and warranty as to the Mortgage Loans set forth in the Sale
and  Servicing  Agreement  (deemed  to be made as of the date of  substitution);
(viii) have an original  Combined  Loan-to-Value  Ratio not greater than that of
the Defective  Mortgage Loan; and (ix) have a Credit Score greater than or equal
to the Credit Score of the  Defective  Mortgage  Loan at the time such  Mortgage
Loan was transferred to the Trust; (x) the related Mortgaged  Property is not an
investment  property;  (xi) the related Mortgaged Property is not a second home;
and (xii) the Combined Loan-to-Value Ratio is not greater than ___%.

         ENDORSEMENT:  As defined in the Policy.

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

         EVENT OF SERVICING TERMINATION: As defined in Section 8.01.

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

         FISCAL AGENT:  As defined in the Policy.

         FORECLOSURE  PROFIT:  With respect to a Liquidated  Mortgage  Loan, the
amount,  if any,  by which (i) the  aggregate  of its Net  Liquidation  Proceeds
exceeds (ii) the related Asset Balance (plus accrued and unpaid interest thereon
at the  applicable  Loan Rate from the date  interest  was last paid through the
last day in the related  Collection  Period) of such  Liquidated  Mortgage  Loan
immediately prior to the final recovery of its Liquidation Proceeds.

         FUNDING  ACCOUNT:  The custodial  account or accounts  established  and
maintained  with the Trustee for the benefit of the Investor  Certificateholders
pursuant to Section 5.05. The Funding Account shall be an Eligible Account.

         FUNDING PERIOD: The period commencing on the Closing Date and ending on
the earlier of (i) the close of business on the  __________  200_ Payment  Date,
and (ii) the commencement of the Rapid Amortization Period.

         GROSS  MARGIN:  As to  any  HELOC  Mortgage  Loan  Mortgage  Loan,  the
percentage set forth as the "Gross Margin" for such HELOC Mortgage Loan Mortgage
Loan on Exhibit C hereto.

         GUARANTEED  DISTRIBUTION:  With respect to any Payment Date, the sum of
the (i) the Guaranteed  Principal  Distribution Amount and (ii) the amount to be
distributed  to   Certificateholders   pursuant  to  Sections  5.01(a)(iii)  and
5.01(a)(iv) for such Payment Date.

         GUARANTEED  PRINCIPAL  DISTRIBUTION  AMOUNT:  With  respect  to (i) any
Payment  Date on or after  which the  Transferor  Subordinated  Amount  has been
reduced to zero, other than the Payment Date in __________ 200_, the amount,  if
any, required to reduce the Class A Certificate  Principal Balance (after giving
effect to the  distributions of Interest

                                       9
<PAGE>

Collections  and  Principal  Collections  that are allocable to principal on the
Class A Certificates  on such Payment Date) to the Invested  Amount  immediately
following  such Payment Date and (ii) the Payment Date in __________  200_,  the
amount by which the  outstanding  Class A Certificate  Principal  Balance (after
giving effect to Interest  Collections  allocable and distributable to principal
on the Class A Certificates on such Payment Date) exceeds the sum of the amounts
on deposit in the Collection  Account available to be distributed to the Class A
Certificateholders pursuant to Section 5.01(b) hereof.

         HELOC  MORTGAGE  LOAN  MORTGAGE  LOAN:  Any  Mortgage  Loan  originated
pursuant to a Loan Agreement providing for Draws.

         INDEX:  With respect to each Interest Rate  Adjustment Date for a HELOC
MORTGAGE LOAN MORTGAGE LOAN, the highest "prime rate" as published in the "Money
Rates"  table of THE WALL  STREET  JOURNAL as of the first  business  day of the
calendar month.

         INITIAL  CLOSED-END   MORTGAGE  LOAN:  Each  Closed-End  Mortgage  Loan
transferred and assigned to the Trustee on the Closing Date.

         INITIAL CUT-OFF DATE POOL BALANCE:  $______________.

         INITIAL HELOC  MORTGAGE LOAN MORTGAGE  LOAN:  Each HELOC  MORTGAGE LOAN
MORTGAGE LOAN transferred and assigned to the Trustee on the Closing Date.

         INITIAL  MORTGAGE  LOAN:  Each Initial HELOC  Mortgage Loan and Initial
Closed-End Mortgage Loan.

         INSOLVENCY EVENT:  As defined in Section 11.02.

         INSURANCE AGREEMENT:  The Insurance and Indemnity agreement dated as of
__________,  200_ among the Depositor, the Transferor, the Servicer, the Trustee
and the Credit Enhancer, including any amendments and supplements thereto.

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

         INTEREST  COLLECTIONS:  With  respect to each Pool and for any  Payment
Date,  the sum of all  payments  by or on  behalf  of  Mortgagors  and any other
amounts constituting interest, including the portion of Net Liquidation Proceeds
and Insurance  Proceeds  allocated to interest on the applicable  Mortgage Loan)
collected  by  the  Servicer  under  the  Mortgage  Loans  (excluding  any  fees
(including annual fees) or late charges or similar  administrative  fees paid by
Mortgagors) during the related Collection Period minus the

                                       10
<PAGE>

Servicing  Fee payable to the Servicer  with  respect to the related  Collection
Period.  The terms of the related Loan Agreement  shall determine the portion of
each  payment in respect of such  Mortgage  Loan that  constitutes  principal or
interest.

         INTEREST PERIOD:  With respect to any Payment Date other than the first
Payment Date, the period  beginning on the preceding  Payment Date and ending on
the day preceding  such Payment Date, and in the case of the first Payment Date,
the period  beginning  on the Closing Date and ending on the day  preceding  the
first Payment Date.

         INTEREST  RATE  ADJUSTMENT  DATE:  With respect to each HELOC  Mortgage
Loan, any date on which the Loan Rate is adjusted in accordance with the related
Credit Line Agreement.

         INVESTED  AMOUNT:  With respect to any Payment Date, an amount equal to
the  Original  Invested  Amount  minus (i) the amount of  Principal  Collections
previously   distributed  to  Class  A  Certificateholders   (including  amounts
previously distributed to Class A Certificateholders  from Principal Collections
on deposit in the Funding  Account) and minus (ii) the Investor Loss Amounts for
prior Payment Dates.

         INVESTOR CERTIFICATE: Any Class A Certificate or Class S Certificate.

         INVESTOR CERTIFICATEHOLDER: The Holder of an Investor Certificate.

         INVESTOR FIXED ALLOCATION PERCENTAGE: ____%.

         INVESTOR FLOATING  ALLOCATION  PERCENTAGE:  With respect to any Payment
Date,  the  percentage  equivalent of a fraction,  the numerator of which is the
Invested  Amount at the close of business on the  preceding  Payment Date (or at
the Closing Date in the case of the first Payment Date) and the  denominator  of
which is the sum of (a) the Pool Balance,  calculated as of the beginning of the
related Collection Period and (b) the amount of Principal Collections on deposit
in the  Funding  Account as of the close of business  on the  preceding  Payment
Date.

         INVESTOR INTEREST  COLLECTIONS:  As to any Payment Date, the product of
(i) the Interest  Collections  during the related Collection Period and (ii) the
Investor Floating Allocation Percentage for such Payment Date.

         INVESTOR  LOSS  AMOUNT:  With respect to any Payment  Date,  the amount
equal to the product of (i) the Investor Floating Allocation Percentage for such
Payment  Date and (ii) the  aggregate of the  Liquidation  Loss Amounts for such
Payment Date.

         INVESTOR LOSS REDUCTION  AMOUNT:  With respect to any Payment Date, the
portion, if any, of the Investor Loss Amount for such Payment Date and all prior
Payment Dates that has not been (a) distributed to Class A Certificateholders on
such Payment Date pursuant to Section 5.01(a)(iv) or 5.01(a)(v) or by way of the
Credit  Enhancement  Draw Amount or (b) reallocated to the Transferor  Principal
Balance pursuant to Section 5.01(c).

                                       11
<PAGE>

         LIBOR:  As to any date, the rate for United States dollar  deposits for
one month which appear on the Telerate  Screen LIBOR Page 3750 as of 11:00 A.M.,
London  time.  If such rate does not  appear on such page (or such other page as
may replace that page on that service,  or if such service is no longer offered,
such other service for displaying LIBOR or comparable rates as may be reasonably
selected by the Depositor after consultation with the Trustee), the rate will be
the Reference Bank Rate. If no such  quotations can be obtained and no Reference
Bank Rate is available,  LIBOR will be LIBOR applicable to the preceding Payment
Date.

         LIBOR  BUSINESS  DAY: Any day on which banks in London and New York are
open for conducting transactions in foreign currency and exchange.

         LIEN: Any mortgage, deed of trust, pledge,  conveyance,  hypothecation,
assignment,  participation, deposit arrangement, encumbrance, lien (statutory or
other),  preference,  priority right or interest or other security  agreement or
preferential  arrangement of any kind or nature whatsoever,  including,  without
limitation,  any  conditional  sale or  other  title  retention  agreement,  any
financing  lease having  substantially  the same  economic  effect as any of the
foregoing  and the filing of any financing  statement  under the UCC (other than
any  such  financing  statement  filed  for  informational   purposes  only)  or
comparable law of any  jurisdiction to evidence any of the foregoing;  PROVIDED,
HOWEVER, that any assignment pursuant to Section 7.02 hereof shall not be deemed
to constitute a Lien.

         LIFETIME  RATE CAP:  With  respect  to each  HELOC  Mortgage  Loan with
respect to which the related Mortgage Note provides for a lifetime rate cap, the
maximum Loan Rate  permitted over the life of such HELOC Mortgage Loan under the
terms of the related Credit Line Agreement, as set forth on Exhibit C hereto.

         LIQUIDATED  MORTGAGE LOAN: As to any Payment Date, any Mortgage Loan in
respect of which the Servicer has  determined,  in accordance with the servicing
procedures  specified  herein, as of the end of the related  Collection  Period,
that all  Liquidation  Proceeds  which it expects to recover with respect to the
disposition of such Mortgage Loan or the related REO have been recovered.

         LIQUIDATION  EXPENSES:  Out-of-pocket  expenses (exclusive of overhead)
which are incurred by the Servicer in  connection  with the  liquidation  of any
Mortgage Loan and not recovered under any insurance policy,  including,  without
limitation,  legal fees and expenses,  any unreimbursed amount expended pursuant
to Section 3.06  (including,  without  limitation,  amounts  advanced to correct
defaults on any mortgage  loan which is senior to such Mortgage Loan and amounts
advanced  to keep  current  or pay off a  mortgage  loan  that is senior to such
Mortgage  Loan)  respecting  the  related  Mortgage  Loan  and any  related  and
unreimbursed  expenditures with respect to real estate property taxes,  water or
sewer taxes,  condominium association dues, property restoration or preservation
or insurance against casualty, loss or damage.

         LIQUIDATION  LOSS  AMOUNT:  With  respect to any  Payment  Date and any
Mortgage  Loan that  becomes a  Liquidated  Mortgage  Loan  during  the  related
Collection  Period,  the

                                       12
<PAGE>

unrecovered  Asset Balance thereof at the end of such Collection  Period,  after
giving effect to the Net Liquidation Proceeds applied in reduction of such Asset
Balance.

         LIQUIDATION PROCEEDS:  Proceeds (including Insurance Proceeds) received
in connection with the liquidation of any Mortgage Loan or related REO,  whether
through trustee's sale, foreclosure sale or otherwise.

         LOAN AGREEMENT: Any Credit Line Agreement or Mortgage Note.

         LOAN RATE:  With respect to any HELOC  Mortgage Loan and as of any day,
the per  annum  rate of  interest  applicable  under  the  related  Credit  Line
Agreement to the  calculation  of interest for such day on the Asset  Balance of
such HELOC Mortgage Loan. With respect to any Closed-End Mortgage Loan and as of
any day, the per annum rate of interest  applicable  under the related  Mortgage
Note to the  calculation  of interest for such day on the Asset Balance for such
Closed-End Mortgage Loan.

         LOAN RATE CAP: With respect to each HELOC  Mortgage Loan, the lesser of
(i) the Lifetime Rate Cap, if any, or (ii) the  applicable  state usury ceiling,
if any.

         MANAGED  AMORTIZATION  PERIOD:  The period from the  termination of the
Funding Period to the Rapid Amortization Commencement Date.

         MAXIMUM  PRINCIPAL  PAYMENT:  With  respect to any  Payment  Date,  the
Investor  Fixed  Allocation  Percentage  of the Principal  Collections  for such
Payment Date.

         MAXIMUM RATE: As to any Interest Period,  the Weighted Average Net Loan
Rate  for the  Collection  Period  during  which  such  Interest  Period  begins
(adjusted to an effective rate  reflecting  accrued  interest  calculated on the
basis of the actual number of days in the  Collection  Period  commencing in the
month in which such Interest  Period  commences and a year assumed to consist of
360 days).

         MINIMUM  MONTHLY  PAYMENT:  With respect to any  Mortgage  Loan and any
month,  the minimum amount required to be paid by the related  Mortgagor in that
month.

         MINIMUM TRANSFEROR INTEREST:  With respect to any date, an amount equal
to the  lesser  of (a)  ___%  of the  Pool  Balance  on  such  date  and (b) the
Transferor Principal Balance as of the Closing Date.

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

         MORTGAGE:  The mortgage,  deed of trust or other instrument  creating a
first or junior  lien on an  estate  in fee  simple  interest  in real  property
securing a Mortgage Note or Credit Line Agreement.

         MORTGAGE FILE: The mortgage documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional  documents required to be added
to the Mortgage File pursuant to this Agreement.

                                       13
<PAGE>

         MORTGAGE  LOAN  SCHEDULE:  With  respect to any date,  the  schedule of
Mortgage  Loans  included  in the Trust on such date.  The  schedule  of Initial
Mortgage  Loans as of the Cut-Off  Date is the  schedule set forth in Exhibit C,
which  schedule  sets  forth  as to  each  such  Mortgage  Loan,  to the  extent
applicable, (i) the Cut-Off Date Asset Balance, (ii) the Credit Limit, (iii) the
Gross  Margin,  (iv) the  Lifetime  Rate Cap, (v) the account  number,  (vi) the
current  Loan  Rate,  (vii)  the  Combined  Loan-to-Value  Ratio,  (viii) a code
specifying the property type, (ix) a code specifying  documentation type and (x)
a code specifying lien position. The Mortgage Loan Schedule will be deemed to be
amended from time to time to reflect Additional  Balances,  Eligible  Substitute
Mortgage Loans and Subsequent Mortgage Loans.

         MORTGAGE  LOANS:  Any HELOC  Mortgage  Loans,  including any Additional
Balances with respect thereto,  as well as any Closed-End  Mortgage Loans,  that
are transferred and assigned to the Trustee  pursuant to Section 2.01,  together
with the Related  Documents,  exclusive of Mortgage Loans that are retransferred
to the Depositor,  the Servicer or the Transferor  from time to time pursuant to
Section 2.02,  2.04, 2.05, 2.06, 2.09 or 3.01 as from time to time are held as a
part of the Trust.  The mortgage loans  originally so held are identified in the
Mortgage Loan Schedule  delivered on the Closing Date.  The Mortgage Loans shall
also include any Eligible Substitute Mortgage Loan substituted by the Transferor
for a Defective  Mortgage  Loan  pursuant to  Sections  2.02 and 2.04.  The term
"Mortgage  Loans"  includes the terms  "HELOC  Mortgage  Loans" and  "Closed-End
Mortgage Loans".

         MORTGAGE NOTE: The note or other  evidence of  indebtedness  evidencing
the indebtedness of a Mortgagor under a Closed-End Mortgage Loan.

         MORTGAGED  PROPERTY:  The  underlying  property,   including  any  real
property and improvements thereon, securing a Mortgage Loan.

         MORTGAGOR: The obligor on a Mortgage Note or Credit Line Agreement

         NET LIQUIDATION PROCEEDS: With respect to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses.

         NET LOAN RATE: With respect to any Mortgage Loan and as to any day, the
Loan  Rate  (assuming  each  HELOC  Mortgage  Loan is  fully  indexed)  less the
Servicing Fee Rate, the Premium Rate (multiplied by a fraction, the numerator of
which  is the Note  Principal  Balance  of the  related  Class of Notes  and the
denominator of which is the related Pool Balance) and the Trustee Fee Rate.

         OFFICER'S  CERTIFICATE:  A  certificate  signed  by the  President,  an
Executive  Vice  President,  a  Senior  Vice  President,  a Vice  President,  an
Assistant Vice  President,  the Treasurer,  Assistant  Treasurer,  Controller or
Assistant  Controller of the Depositor,  the Servicer or the Transferor,  as the
case may be, and delivered to the Trustee.

         OPINION OF COUNSEL:  One or more opinions of counsel who may, except as
otherwise expressly provided in the Agreement, be employees of or counsel to the
Trust and, if addressed to

                                       14
<PAGE>

the Credit Enhancer,  satisfactory to such party, and if addressed to the Credit
Enhancer,  shall be  satisfactory  to such  party;  PROVIDED,  that any  opinion
relating  to matters of  federal,  state or local  taxation  must be provided by
independent, outside counsel.

         ORIGINAL CLASS A CERTIFICATE PRINCIPAL BALANCE: $__________.

         ORIGINAL  INVESTED  AMOUNT:   $_________  (Same  as  Original  Class  A
Certificate Principal Balance.)

         OVERCOLLATERALIZATION  AMOUNT:  At the time of reference  thereto,  the
amount,  if any, by which the Invested  Amount  exceeds the Class A  Certificate
Principal Balance.

         PAYING AGENT: Any paying agent appointed pursuant to Section 6.06.

         PERCENTAGE  INTEREST:  As to any Investor  Certificate,  the percentage
obtained by dividing the  principal  denomination  (or notional  amount) of such
Investor  Certificate  by the  aggregate  of  the  principal  denominations  (or
notional amounts) of all Investor Certificates of the same class.

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

         POLICY:  The  financial  guaranty  insurance  policy No.  _______  with
respect to the Class A Certificates, dated as of __________, 200_, issued by the
Credit   Enhancer   to  the   Trustee   for   the   benefit   of  the   Investor
Certificateholders.

         POOL  BALANCE:  With  respect to any date,  the  aggregate of the Asset
Balances of all Mortgage Loans, as applicable, as of such date.

         POOL FACTOR:  A seven-digit  decimal  which the Servicer  shall compute
monthly expressing the related Certificate  Principal Balance as of each Payment
Date (after giving effect to any distribution of principal on such Payment Date)
as a proportion of the Original  Class A Certificate  Principal  Balance for the
related  Class.  On the  Closing  Date,  the Pool  Factor  for each Pool will be
1.0000000.  Thereafter,  the Pool Factor shall decline to reflect  reductions in
the related Class A Certificate  Principal Balance resulting from  distributions
of principal to the related Certificates.

         PREFERENCE CLAIM:  As defined in Section 4.02.

         PREMIUM FEE RATE: As described in the Insurance Agreement.

         PRINCIPAL COLLECTIONS:  As to any Payment Date, the sum of all payments
by or on  behalf of  Mortgagors  and any other  amounts  constituting  principal
(including,  but  not  limited  to,  Substitution  Amounts  and any  portion  of
Insurance  Proceeds or Net  Liquidation  Proceeds  allocable to principal of the
applicable   Mortgage  Loan,  and  Transfer  Deposit   Amounts,   but  excluding
Foreclosure  Profits)  collected by the Servicer under the Mortgage Loans during
the related  Collection  Period.  The terms of the related

                                       15
<PAGE>

Loan  Agreement  shall  determine  the  portion of each  payment in respect of a
Mortgage Loan that constitutes principal or interest.

         PURCHASE  AGREEMENT:  The Mortgage  Loan Purchase  Agreement,  dated as
__________,  200_,  between  GreenPoint  Mortgage Funding,  Inc., as seller, and
GreenPoint Mortgage  Securities LLC, as purchaser,  with respect to the Mortgage
Loans.

         RAPID  AMORTIZATION  COMMENCEMENT  DATE:  With respect to each Class of
Certificates, the earlier of (i) the Payment Date in ______________ and (ii) the
Payment Date next succeeding the Collection Period in which a Rapid Amortization
Event is deemed to occur pursuant to Section 11.01.

         RAPID AMORTIZATION EVENT: As defined in Section 11.01.

         RAPID   AMORTIZATION   PERIOD:  The  period  commencing  on  the  Rapid
Amortization  Date and continuing until the termination of the Trust pursuant to
Section 10.01.

         RATING AGENCY: Each of Moody's and Standard & Poor's. If such agency or
a successor is no longer in existence, "Rating Agency" shall be such statistical
credit rating agency,  or other comparable  Person,  designated by the Depositor
and the  Credit  Enhancer,  notice  of which  designation  shall be given to the
Trustee. References in this Agreement to the highest short term unsecured rating
category of a Rating Agency shall means ___ or better in the case of Moody's and
___ or better  in the case of  Standard  & Poor's,  and in the case of any other
Rating Agency shall mean the ratings such other Rating  Agency deems  equivalent
to the foregoing ratings.  References in this Agreement to the highest long-term
rating  category of a Rating  Agency shall mean "___" in the case of Moody's and
"___" in the case of  Standard  & Poor's,  and in the case of any  other  Rating
Agency,  the rating such other Rating  Agency deems  equivalent to the foregoing
ratings.

         RECORD DATE: The Business Day immediately preceding the related Payment
Date;   PROVIDED,   HOWEVER,   that  following  the  date  on  which  Definitive
Certificates  are available  pursuant to Section 6.02(c) the Record Date for the
Certificates  shall be the last Business Day of the calendar month preceding the
month in which the related Payment Date occurs.

         REFERENCE  BANK  RATE:  As to  any  Interest  Period  as  follows:  the
arithmetic mean (rounded upwards, if necessary,  to the nearest one sixteenth of
a percent) of the offered rates for United States dollar  deposits for one month
which are offered by the Reference  Banks as of 11:00 A.M.,  London time, on the
second  LIBOR  Business  Day prior to the first day of such  Interest  Period to
prime banks in the London  interbank market for a period of one month in amounts
approximately  equal to the outstanding Class A Certificate  Principal  Balance;
PROVIDED that at least two such Reference Banks provide such rate. If fewer than
two offered rates appear, the Reference Bank Rate will be the arithmetic mean of
the rates  quoted by one or more major  banks in New York City,  selected by the
Depositor after  consultation with the Trustee,  as of 11:00 A.M., New York City
time,  on such date for loans in U.S.  Dollars to leading  European  Banks for a

                                       16
<PAGE>

period of one month in amounts  approximately  equal to the outstanding  Class A
Certificate  Principal  Balance.  If no such  quotations  can be  obtained,  the
Reference Bank Rate shall be LIBOR applicable to the preceding Interest Period.

         REFERENCE  BANKS:  Three  major  banks  that are  engaged in the London
interbank market, selected by the Depositor after consultation with the Trustee.

         RELATED DOCUMENTS:  As defined in Section 2.01.

         REO: A Mortgaged  Property  acquired by the Trust in  foreclosure or by
deed in lieu of foreclosure in connection with a defaulted Mortgage Loan

         REQUIRED  OVERCOLLATERALIZATION  AMOUNT:  As defined  in the  Insurance
Agreement.

         RESPONSIBLE OFFICER:  With respect to the Trustee or any officer of the
Trustee with direct  responsibility for the administration of this Agreement and
also, with respect to a particular matter, any other officer to whom such matter
is referred  because of such  officer's  knowledge of and  familiarity  with the
particular subject.

         RETRANSFER DATE:  As defined in Section 2.06.

         RETRANSFER NOTICE DATE: As defined in Section 2.06.

         SAIF:  The Savings  Association  Insurance  Fund,  as from time to time
constituted,  created  under the  Financial  Institutions  Reform,  Recovery and
Enhancement  Act  of  1989,  or if at any  time  after  the  execution  of  this
instrument the Savings Association Insurance Fund is not existing and performing
duties now assigned to it, the body performing such duties on such date.

         SCHEDULED PRINCIPAL  COLLECTIONS  DISTRIBUTION  AMOUNT: With respect to
any Payment Date during the Funding  Period or the Managed  Amortization  Period
and the Class A  Certificates,  an amount equal to the lesser of (i) the Maximum
Principal Payment and (ii) the Alternative  Principal  Payment.  With respect to
any  Payment  Date in  respect of the Rapid  Amortization  Period,  the  Maximum
Principal Payment.

         SELLER:  GreenPoint Mortgage Funding,  Inc., a New York corporation and
any successor thereto.

         SERVICER:  GreenPoint  Mortgage Funding,  Inc., a New York corporation,
any successor  thereto and,  after its  termination  as Servicer,  any successor
hereunder.

         SERVICING  CERTIFICATE:  A  certificate  completed  and  executed  by a
Servicing Officer in accordance with Section 4.01.

         SERVICING  FEE:  With respect to any Payment  Date,  the product of (i)
one-twelfth  of the Servicing  Fee Rate and (ii) the aggregate  Asset Balance of
the Mortgage  Loans on the first day of the  Collection  Period  preceding  such
Payment Date (or at the Cut-Off Date with respect to the first Payment Date).

                                       17
<PAGE>

         SERVICING FEE RATE:  ____% per annum.

         SERVICING  OFFICER:  Any  officer  of  the  Servicer  involved  in,  or
responsible  for, the  administration  and servicing of the Mortgage Loans whose
name and specimen  signature appear on a list of servicing officers furnished to
the Trustee (with a copy to the Credit  Enhancer) by the Servicer on the Closing
Date, as such list may be amended from time to time.

         SPREAD  ACCOUNT:  The  account  created  pursuant  to Section  4.03 and
maintained pursuant to the Insurance Agreement.

         SPREAD ACCOUNT MAXIMUM: As defined in the Insurance Agreement.

         STANDARD & POOR'S:  Standard & Poor's,  a division  of The  McGraw-Hill
Companies, Inc., or its successor in interest.

         SUBSEQUENT MORTGAGE LOAN: Each HELOC Mortgage Loan acquired pursuant to
Section  2.10 with funds on deposit in the  Funding  Account  during the Funding
Period on the related Subsequent Transfer Date.

         SUBSEQUENT  TRANSFER DATE:  With respect to Subsequent  Mortgage Loans,
any Payment Date during the Funding Period.

         TELERATE SCREEN LIBOR PAGE 3750: The display designated as page 3750 on
the  Telerate  Service  (or such  other  page as may  replace  page 3750 on that
service for the purpose of displaying London  inter-bank  offered rates of major
banks).

         TRANSFER  DATE:  With respect to each  Subsequent  Mortgage  Loan,  the
Subsequent  Transfer Date, and with respect to each Eligible Substitute Mortgage
Loan, the date on which such Eligible  Substitute  Mortgage Loan shall have been
transferred to the Trust.

         TRANSFER DEFICIENCY:  As defined in Section 2.02.

         TRANSFER DEPOSIT AMOUNT: As defined in Section 2.02.

         TRANSFEROR  OR  TRANSFEROR  CERTIFICATEHOLDERS:   The  Holders  of  the
Transferor  Certificates which shall initially be GreenPoint Mortgage Securities
LLC.

         TRANSFEROR  AVAILABLE  FUNDS:  As  to  any  Payment  Date,   Transferor
Collections  up  to  but  not  exceeding  the  Transferor   Subordinated  Amount
immediately prior to such Payment Date.

         TRANSFEROR CERTIFICATES: The certificates executed and authenticated by
the Trustee substantially in the form set forth in Exhibit B hereto.

         TRANSFEROR  COLLECTIONS:  As to  any  period,  the  sum  of  Transferor
Interest Collections and Transferor Principal Collections for such period.

                                       18
<PAGE>

         TRANSFEROR  INTEREST  COLLECTIONS:  Interest  Collections  that are not
Investor Interest Collections.

         TRANSFEROR  PRINCIPAL  BALANCE:  As of any date of  determination,  the
amount equal to (i) the Pool Balance at the end of the day next  preceding  such
date of determination  less (ii) the Invested Amount as of the close of business
on the preceding Payment Date plus (iii) Principal Collections on deposit in the
Funding Account.

         TRANSFEROR  PRINCIPAL  COLLECTIONS:  On  any  Payment  Date,  Principal
Collections  received during the related  Collection  Period minus the amount of
such   Principal   Collections   required   to  be   distributed   to   Class  A
Certificateholders  pursuant to Section  5.01(b) or required to be  deposited to
the Funding Account pursuant to Section 5.05.

         TRANSFEROR  SUBORDINATED  AMOUNT: At the time of reference thereto, the
lesser  of (a)  $_____________  less  the sum of (i)  the  aggregate  amount  of
Transferor  Collections previously applied pursuant to Section 5.01(c), (ii) the
aggregate  amount of Investor Loss Amounts that have previously been reallocated
to the Transferor  Principal  Balance pursuant to the second sentence of Section
5.01(c) and (iii) the amount by which the  Overcollateralization  Amount exceeds
$_______________  and (b) the  Transferor  Subordinated  Amount on the  previous
Payment Date; PROVIDED that the Transferor Subordinated Amount shall not be less
than zero.

         TRUST:  The  trust  created  by this  Agreement,  the  corpus  of which
consists of the Mortgage Loans,  such other assets as shall from time to time be
identified  as  deposited  in the  Collection  Account in  accordance  with this
Agreement,  property  that secured a Mortgage  Loan and that has become REO, the
interest of the Depositor in certain hazard insurance policies maintained by the
Mortgagors  or the Servicer in respect of the  Mortgage  Loans,  the Policy,  an
assignment of the Transferor's rights under the Purchase Agreement,  such assets
as may be  deposited  from time to time in the Spread  Account  and the  Funding
Account,  and all proceeds of each of the  foregoing  (exclusive  of payments of
accrued  interest on the Mortgage Loans which are due on or prior to the Cut-Off
Date).

         TRUSTEE:  [Trustee] or any  successor  Trustee  appointed in accordance
with this Agreement that has accepted such  appointment in accordance  with this
Agreement.

         TRUSTEE FEE: A fee which is  separately  agreed to between the Servicer
and the Trustee.

         TRUSTEE  FEE RATE:  The per  annum  rate at which  the  Trustee  Fee is
calculated.

         UCC:  Unless the context  otherwise  requires,  the Uniform  Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.

         UNPAID CLASS A CERTIFICATE CARRY FORWARD INTEREST AMOUNT:  With respect
to any Payment Date,  the aggregate  amount,  if any, of any Class A Certificate
Carry  Forward  Interest  that was accrued in respect of prior Payment Dates and
which has not been distributed to Class A Certificateholders.

                                       19
<PAGE>

         UNPAID  CLASS A  CERTIFICATE  INTEREST  SHORTFALL:  With respect to any
Payment Date, the aggregate amount, if any, of Class A Certificate Interest that
was accrued in respect of a prior Payment Date and has not been  distributed  to
Class A Certificateholders.

         UNPAID  CLASS S  CERTIFICATE  INTEREST  SHORTFALL:  With respect to any
Payment Date, the aggregate amount, if any, of Class S Certificate Interest that
was accrued in respect of a prior Payment Date and has not been  distributed  to
Class S Certificateholders.

         VALUATION:  With respect to any Mortgaged Property and time referred to
herein, the Appraised Value of the Mortgaged Property.

         VOTING  RIGHTS:  The portion of the aggregate  voting rights of all the
Certificates evidenced by a Class of Certificates.  At all times during the term
of this  Agreement,  ___% of all of the Voting  Rights shall be allocated  among
Holders of the Class A Certificates  and the Holders of the Class S Certificates
shall be entitled to ___% of all of the Voting Rights.  Voting Rights  allocated
to a Class of  Certificates  shall be allocated  among the  Certificates of each
such Class in accordance with their respective Percentage Interests.

         WEIGHTED  AVERAGE  NET LOAN  RATE:  As to any  Collection  Period,  the
average  of the daily Net Loan Rate for each  Mortgage  Loan for each day during
the related  Billing  Cycle,  weighted on the basis of the daily  average of the
related Asset Balances  outstanding  for each day in such Billing Cycle for each
Mortgage Loan as determined  by the Servicer in accordance  with the  Servicer's
normal servicing procedures.

         Section  1.02.  INTEREST  CALCULATIONS.  All  calculations  of interest
hereunder that are made in respect of the Asset Balance of a Mortgage Loan shall
be made on a daily basis using a 365-day year. All  calculations  of interest on
the  Investor  Certificates  shall be made on the basis of the actual  number of
days in an  Interest  Period and a year  assumed  to  consist  of 360 days.  The
calculation  of the  Servicing  Fee shall be made on the basis of a 360-day year
consisting of twelve 30-day  months.  All dollar  amounts  calculated  hereunder
shall be rounded to the nearest  penny with  one-half of one penny being rounded
down.

                                   ARTICLE II

                          Conveyance of Mortgage Loans;
                       Original Issuance of Certificates;
                                  Tax Treatment

         Section 2.01. CONVEYANCE OF MORTGAGE LOANS;  RETENTION OF OBLIGATION TO
FUND  ADVANCES  UNDER  CREDIT LINE  AGREEMENTS.  The  Transferor  hereby  sells,
transfers,  assigns,  sets over and otherwise conveys to the Depositor,  without
recourse  (subject  to  Section  2.02 and  2.04),  all of its  right,  title and
interest in and to (i) each Initial  Mortgage Loan,  including its Asset Balance
and all  collections  in respect  thereof  received on or after the Cut-Off Date
(excluding  payments  in respect of accrued  interest  due prior to the  Cut-Off
Date);  (ii) property that secured an Initial  Mortgage Loan that is acquired by
foreclosure

                                       20
<PAGE>

or deed in lieu of foreclosure; (iii) the Transferor's rights under the Purchase
Agreement  (including all representations and warranties of the Seller contained
therein);  and (iv) the Transferor's rights under the hazard insurance policies.
The Transferor has entered into this Agreement in consideration for the purchase
of the  Mortgage  Loans by the  Depositor  and has  agreed  to take the  actions
specified herein.

         The  Depositor,  concurrently  with the  execution and delivery of this
Agreement, hereby sells, transfers,  assigns, sets over and otherwise conveys to
the Trust,  without  recourse  (subject to Sections  2.02 and 2.04),  all of its
right,  title and interest in and to (i) each Initial  Mortgage Loan,  including
its Asset Balance and all  collections in respect  thereof  received on or after
the Cut-Off Date (excluding payments in respect of accrued interest due prior to
the Cut-off Date);  (ii) property that secured an Initial  Mortgage Loan that is
acquired by foreclosure or deed in lieu of  foreclosure;  (iii) all rights under
the Purchase  Agreement  assigned by the Transferor to the Depositor  (including
all representations  and warranties of the Seller contained  therein);  (iv) the
Depositor's rights under the hazard insurance policies;  (v) the Spread Account;
(vi) the Policy; (vii) the Funding Account; and (viii) all other assets included
or to be included in the Trust for the benefit of Certificateholders;  PROVIDED,
HOWEVER,  neither  the Trustee nor the Trust  assumes the  obligation  under any
Credit Line  Agreement  that provides for the funding of future  advances to the
Mortgagor  thereunder,  and neither the Trust nor the Trustee shall be obligated
or  permitted  to fund any such  future  advances.  With  respect  to the  HELOC
Mortgage Loans,  Additional  Balances shall be part of the related Asset Balance
and are hereby  transferred  to the Trust on the Closing  Date  pursuant to this
Section 2.01, and therefore part of the Trust property. In addition, on or prior
to the Closing Date,  the Depositor  shall cause the Credit  Enhancer to deliver
the Policy to the Trustee for the  benefit of the  Investor  Certificateholders.
The foregoing transfer,  assignment,  set-over and conveyance to the Trust shall
be made to the  Trustee,  on behalf of the  Trust,  and each  reference  in this
Agreement  to such  transfer,  assignment,  set-over  and  conveyance  shall  be
construed accordingly.

         Each of the Transferor and the Depositor  agrees to take or cause to be
taken such actions and execute such documents  (including,  without  limitation,
the filing of all  necessary  continuation  statements  for the UCC-1  financing
statements filed in the States of ( ) and ( ),  respectively,  (which shall have
been filed within 10 days of the Closing Date) describing the Cut-Off Date Asset
Balances and Additional Balances and naming (i) the Transferor as debtor and the
Depositor as secured  party and (ii) the  Depositor as debtor and the Trustee as
secured  party and any  amendments  to UCC-1  financing  statements  required to
reflect a change in the name or  corporate  structure of the  Transferor  or the
Depositor or the filing of any additional UCC-1 financing  statements due to the
change in the  principal  office of the  Depositor  (within 10 days of any event
necessitating  such  filing)  as  are  necessary  to  perfect  and  protect  the
Certificateholders'  and Credit Enhancer's  interests in each Cut-Off Date Asset
Balance and Additional Balances and the proceeds thereof (other than maintaining
possession by the Trustee of the Mortgage Loans and the Mortgage Files).

         In connection  with such transfer and  assignment,  the Servicer  shall
deliver to the Trustee the  following  documents or  instruments  (the  "RELATED
DOCUMENTS")  with respect

                                       21
<PAGE>

to each Initial  Mortgage Loan on the Closing Date and will deliver with respect
to each Subsequent Mortgage Loan on the related Subsequent Transfer Date:

                  (i) the original Mortgage Note endorsed in blank;

                  (ii) an original Assignment of Mortgage in blank in recordable
         form;

                  (iii) the original  recorded  Mortgage  or, if, in  connection
         with any Mortgage Loan, the original recorded Mortgage with evidence of
         recording  thereon  cannot be delivered on or prior to the Closing Date
         because of a delay  caused by the public  recording  office  where such
         original  Mortgage has been  delivered for  recordation or because such
         original  Mortgage has been lost, the  Transferor,  at the direction of
         the Depositor, shall deliver or cause to be delivered to the Custodian,
         as agent for the  Trustee,  a true and correct  copy of such  Mortgage,
         together with (i) in the case of a delay caused by the public recording
         office,  an Officer's  Certificate  of the Depositor  stating that such
         original  Mortgage  has  been  dispatched  to  the  appropriate  public
         recording official or (ii) in the case of an original Mortgage that has
         been lost, a certificate by the  appropriate  county  recording  office
         where such Mortgage is recorded;

                  (iv) if applicable,  the original intervening assignments,  if
         any ("INTERVENING  ASSIGNMENTS"),  with evidence of recording  thereon,
         showing a complete  chain of title to the Mortgage from the  originator
         to the Depositor or, if any such original  Intervening  Assignment  has
         not been  returned  from the  applicable  recording  office or has been
         lost, a true and correct copy thereof, together with (i) in the case of
         a delay caused by the public recording office, an Officer's Certificate
         of the Transferor stating that such original Intervening Assignment has
         been  dispatched  to the  appropriate  public  recording  official  for
         recordation or (ii) in the case of an original  Intervening  Assignment
         that has been lost, a certificate by the appropriate  county  recording
         office where such Mortgage is recorded;

                  (v) either a title policy, a title search or guaranty of title
         with respect to the related Mortgaged Property;

                  (vi) the original of any guaranty  executed in connection with
         the Mortgage Note;

                  (vii)  the   original   of  each   assumption,   modification,
         consolidation  or  substitution  agreement,  if  any,  relating  to the
         Mortgage Loan; and

                  (viii) any security agreement,  chattel mortgage or equivalent
         instrument executed in connection with the Mortgage;

PROVIDED,  HOWEVER,  that as to any  Mortgage  Loan,  if (a) as  evidenced by an
Opinion of Counsel  delivered to and in form and substance  satisfactory  to the
Trustee and the Credit Enhancer, (x) an optical image or other representation of
the  related  documents  specified  in  clauses  (i)  through  (viii)  above are
enforceable in the relevant  jurisdictions to the same

                                       22
<PAGE>

extent as the  original of such  document  and (y) such  optical  image or other
representation  does not impair the ability of an owner of such Mortgage Loan to
transfer  its  interest in such  Mortgage  Loan,  and (b) the  retention of such
documents  in such  format will not result in a  reduction  in the then  current
rating of the Investor Certificates,  without regard to the Policy, such optical
image or other representation may be held by the Servicer,  as custodian for the
Trustee or assignee in lieu of the physical documents specified above.

         The  Transferor  hereby  confirms to the Trustee that it has caused the
portions of the Electronic  Ledgers relating to the Initial Mortgage Loans as of
the Closing Date, and that it will cause such Electronic Ledgers with respect to
each Subsequent  Mortgage Loan as of the related Subsequent Transfer Date, to be
clearly and  unambiguously  marked,  and has made, or will make, the appropriate
entries in its general  accounting  records to indicate that such Mortgage Loans
have been  transferred to the Trust. The Servicer hereby confirms to the Trustee
that it has clearly and  unambiguously  made appropriate  entries in its general
accounting  records  indicating that such Mortgage Loans  constitute part of the
Trust and are serviced by it on behalf of the Trust in accordance with the terms
hereof.  The  Servicer  hereby  confirms to the Trustee that it will clearly and
unambiguously  make  appropriate  entries  in  its  general  accounting  records
indicating that each Subsequent  Mortgage Loan constitutes part of the Trust and
is serviced by it on behalf of the Trust in accordance  with the terms hereof as
of the related Subsequent Transfer Date.

         Notwithstanding  the  characterization  of the Class A Certificates  as
debt for Federal, state and local income and franchise tax purposes, the parties
hereto  intend  to treat  the  transfer  of the  Mortgage  Loans to the Trust as
provided herein as a sale, for certain non-tax purposes, of all the Transferor's
and Depositor's right, title and interest in and to the Mortgage Loans,  whether
now existing or hereafter  created,  and the other property  described above and
all proceeds thereof.  In the event such transfer is deemed not to be a sale for
such purposes,  the Transferor  hereby grants to the Depositor and the Depositor
grants to the Trust, a security interest in all of such party's right, title and
interest in, to and under the Mortgage Loans,  whether now existing or hereafter
created,  and the other property  described above and all proceeds thereof;  and
this Agreement shall constitute a security agreement under applicable law.

         Within 90 days following  delivery of the Mortgage Files to the Trustee
pursuant to this  Section,  the Trustee  shall review each such Mortgage File to
ascertain  that all required  documents set forth in this Section 2.01 have been
executed and  received,  and that such  documents  relate to the Mortgage  Loans
identified on the Mortgage Loan Schedule and in so doing the Trustee may rely on
the purported due execution and genuineness of any signature thereon.  If within
such  90-day  period the Trustee  finds any  document  constituting  a part of a
Mortgage  File not to have been  executed or received or to be  unrelated to the
Mortgage Loans identified in said Mortgage Loan Schedule or, if in the course of
its  review,  the  Trustee  determines  that  such  Mortgage  File is  otherwise
defective  in  any  material  respect,  the  Trustee  shall  promptly  upon  the
conclusion  of its review  notify the  Transferor,  the Depositor and the Credit
Enhancer,  and the  Transferor  shall have a period of 90 days after such notice
within which to correct or cure any such defect.

                                       23
<PAGE>

         The Trustee  shall have no  responsibility  for  reviewing any Mortgage
File except as  expressly  provided  in this  Section  2.01.  In  reviewing  any
Mortgage File pursuant to this Section, the Trustee shall have no responsibility
for determining  whether any document is valid and binding,  whether the text of
any  assignment  or  endorsement  is in proper or recordable  form  (except,  if
applicable,  to determine if the Trustee is the assignee or  endorsee),  whether
any  document  has been  recorded in  accordance  with the  requirements  of any
applicable  jurisdiction,  or whether a blanket  assignment  is permitted in any
applicable jurisdiction, whether any Person executing any document is authorized
to do so or whether any signature thereon is genuine, but shall only be required
to determine whether a document has been executed, that it appears to be what it
purports to be, and, where applicable, that it purports to be recorded.

Section 2.02. ACCEPTANCE  BY  TRUSTEE;  RETRANSFER  OF  MORTGAGE  LOANS. (a) The
Trustee hereby  acknowledges  its receipt of the Policy and the Mortgage  Loans,
and declares  that the Trustee holds and will hold such  instrument,  and to the
extent that any documents  are  delivered to it pursuant to Section  2.01,  will
hold such documents, and all amounts received by it thereunder and hereunder, in
trust,  upon the terms herein set forth,  for the use and benefit of all present
and future  Certificateholders  and the Credit Enhancer. If the time to cure any
defect in respect of any  Mortgage  Loan of which the Trustee has  notified  the
Transferor and the Depositor  following the review  pursuant to Section 2.01 has
expired or if at any time any loss is  suffered  by the Trustee on behalf of the
Certificateholders  or the Credit Enhancer, in respect of any Mortgage Loan as a
result of (i) a defect in any document  constituting a part of its Mortgage File
or (ii) an  Assignment  of Mortgage  to the Trustee not having been  recorded as
required by Section  2.01,  then on the next  succeeding  Business  Day upon the
deposit to the Collection  Account of the Transfer  Deposit Amount,  if any, and
upon  satisfaction of the applicable  conditions  described  herein,  all right,
title and interest of the Trust in and to such  Mortgage Loan shall be deemed to
be  retransferred,   reassigned  and  otherwise  reconveyed,  without  recourse,
representation or warranty, to the Transferor on such Business Day and the Asset
Balance of such Mortgage Loan shall be deducted from the Pool Balance; PROVIDED,
HOWEVER, that interest accrued on the Asset Balance of such Mortgage Loan to the
end of the related  Collection  Period shall be the  property of the Trust.  The
Trustee  shall  determine if the  reduction of such Asset  Balance from the Pool
Balance in accordance  with the preceding  sentence  would cause the  Transferor
Principal  Balance to be less than the Minimum  Transferor  Interest  ("TRANSFER
DEFICIENCY"),  in which event the Trustee shall deliver  written  notice of such
deficiency to the  Transferor,  and within five Business Days after the Business
Day of such  retransfer the  Transferor  shall either (i) substitute an Eligible
Substitute  Mortgage Loan or (ii) deposit into the Collection  Account an amount
(the  "TRANSFER  DEPOSIT  AMOUNT") in immediately  available  funds equal to the
Transfer  Deficiency or a combination of both (i) and (ii) above. Such reduction
or substitution and the actual payment of any Transfer  Deposit Amount,  if any,
shall be deemed to be payment in full for such  Mortgage  Loan.  Upon receipt of
any Eligible  Substitute  Mortgage Loan or of written  notification  signed by a
Servicing Officer to the effect that the Transfer Deposit Amount in respect of a
Defective  Mortgage Loan has been deposited  into the Collection  Account or, if
the  Transferor  Principal  Balance is not reduced below the Minimum  Transferor
Interest as a result of the deemed retransfer of a Defective Mortgage Loan, then
as promptly as  practicable  following such deemed

                                       24
<PAGE>

transfer,  the Trustee shall execute such documents and  instruments of transfer
presented by the Transferor,  in each case without  recourse,  representation or
warranty,  and take such other  actions as shall  reasonably be requested by the
Transferor to effect such transfer by the Trust of such Defective  Mortgage Loan
pursuant to this Section. It is understood and agreed that the obligation of the
Transferor  to accept a  transfer  of a  Defective  Mortgage  Loan and to either
convey an Eligible  Substitute Mortgage Loan or to make a deposit of any related
Transfer  Deposit Amount into the Collection  Account shall  constitute the sole
remedy respecting such defect available to  Certificateholders,  the Trustee and
the Credit Enhancer against the Transferor.

         The Servicer,  promptly  following the transfer of a Defective Mortgage
Loan from or to the Trust  pursuant to this  Section,  shall amend the  Mortgage
Loan Schedule and make  appropriate  entries in its general  account  records to
reflect  such  transfer.   The  Servicer  shall,   following  such   retransfer,
appropriately  mark its records to indicate that it is no longer  servicing such
Mortgage Loan on behalf of the Trust.  The Transferor,  promptly  following such
transfer,  shall  appropriately  mark its Electronic Ledger and make appropriate
entries in its general account records to reflect such transfer.

         Notwithstanding  any other provision of this Section, a retransfer of a
Defective  Mortgage Loan to the  Transferor  pursuant to this Section that would
cause the Transferor  Principal  Balance to be less than the Minimum  Transferor
Interest  shall not occur if either the  Transferor  fails to convey an Eligible
Substitute  Mortgage Loan or to deposit into the Collection  Account any related
Transfer Deposit Amount required by this Section with respect to the transfer of
such Defective Mortgage Loan.

As to any Eligible  Substitute  Mortgage  Loan or Loans,  the  Transferor  shall
deliver to the Trustee with respect to such Eligible Substitute Mortgage Loan or
Loans such documents and agreements as are required to be held by the Trustee in
accordance  with  Section  2.01.  For any  Collection  Period  during  which the
Transferor  substitutes  one or more Eligible  Substitute  Mortgage  Loans,  the
Servicer  shall  determine  the  Transfer  Deposit  Amount which amount shall be
deposited  by  the  Transferor  in  the  Collection   Account  at  the  time  of
substitution.  All  amounts  received  in  respect  of the  Eligible  Substitute
Mortgage Loan or Loans during the Collection  Period in which the  circumstances
giving rise to such substitution occur shall not be a part of the Trust Fund and
shall not be deposited by the Servicer in the  Collection  Account.  All amounts
received by the Servicer during the Collection Period in which the circumstances
giving rise to such substitution occur in respect of any Defective Mortgage Loan
so  removed  by the  Trust  Fund  shall  be  deposited  by the  Servicer  in the
Collection  Account.  Upon such substitution,  the Eligible  Substitute Mortgage
Loan or Loans shall be subject to the terms of this  Agreement in all  respects,
and the  Transferor  shall be deemed to have made with respect to such  Eligible
Substitute  Mortgage  Loan  or  Loans,  as of  the  date  of  substitution,  the
covenants,  representations  and  warranties  set  forth in  Section  2.04.  The
procedures  applied by the  Transferor  in selecting  each  Eligible  Substitute
Mortgage Loan shall not be  materially  adverse to the interests of the Trustee,
the Certificateholders and the Credit Enhancer.

                                       25
<PAGE>

         Section 2.03. REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICER AND
THE TRANSFEROR.  (a) The Servicer represents and warrants to the Trustee and the
Credit  Enhancer that as of the Closing Date and as of the  Subsequent  Transfer
Date:

                  (i) The Servicer is a California corporation, validly existing
         and in good standing under the laws of the State of California, and has
         the  corporate  power to own its assets and to transact the business in
         which it is currently  engaged.  The  Servicer is duly  qualified to do
         business  as a  foreign  corporation  and is in good  standing  in each
         jurisdiction in which the character of the business transacted by it or
         any properties owned or leased by it requires such qualification and in
         which the failure so to qualify would have a material adverse effect on
         the business,  properties, assets, or condition (financial or other) of
         the Servicer;

                  (ii)  The  Servicer  has the  power  and  authority  to  make,
         execute, deliver and perform this Agreement and all of the transactions
         contemplated under the Agreement, and has taken all necessary corporate
         action to authorize the  execution,  delivery and  performance  of this
         Agreement.  When executed and delivered, this Agreement will constitute
         the legal, valid and binding obligation of the Servicer  enforceable in
         accordance  with its terms,  except as enforcement of such terms may be
         limited by bankruptcy, insolvency, reorganization,  moratorium or other
         similar laws affecting the enforcement of creditors'  rights  generally
         and by the availability of equitable remedies;

                  (iii) The  Servicer  is not  required to obtain the consent of
         any other party or any  consent,  license,  approval  or  authorization
         from, or registration or declaration with, any governmental  authority,
         bureau  or  agency  in  connection   with  the   execution,   delivery,
         performance,  validity or enforceability of this Agreement,  except for
         such consent,  license,  approval or authorization,  or registration or
         declaration,  as shall have been obtained or filed, as the case may be,
         prior to the Closing Date;

                  (iv) The execution, delivery and performance of this Agreement
         by the Servicer  will not violate any  provision of any existing law or
         regulation  or any  order or  decree  of any  court  applicable  to the
         Servicer or any provision of the Certificate of Incorporation or Bylaws
         of the  Servicer,  or  constitute  a material  breach of any  mortgage,
         indenture, contract or other agreement to which the Servicer is a party
         or by which the Servicer may be bound; and

                  (v) No  litigation or  administrative  proceeding of or before
         any court,  tribunal or governmental body is currently  pending,  or to
         the knowledge of the Servicer  threatened,  against the Servicer or any
         of its properties or with respect to this Agreement or the Certificates
         which in the opinion of the  Servicer has a  reasonable  likelihood  of
         resulting in a material adverse effect on the transactions contemplated
         by this Agreement.

The  representations  and  warranties  set forth in this Section  2.03(a)  shall
survive  the sale and  assignment  of the  Mortgage  Loans  to the  Trust.  Upon
discovery of a breach of any

                                       26
<PAGE>

representations  and  warranties  which  materially  and  adversely  affects the
interests  of  the   Certificateholders  or  the  Credit  Enhancer,  the  person
discovering  such breach shall give prompt  written  notice to the other parties
and to the Credit  Enhancer.  Within 90 days of its  discovery or its receipt of
notice of breach, or, with the prior written consent of a Responsible Officer of
the Trustee,  such longer period  specified in such consent,  the Servicer shall
cure such breach in all material respects.

         (b) The  Transferor  represents  and  warrants  to the  Trustee and the
Credit Enhancer that as of the Closing Date and as of each  Subsequent  Transfer
Date:

                  (i) The Transferor is a Delaware  limited  liability  company,
         validly  existing and in good  standing  under the laws of the State of
         Delaware,  and has the  power to own its  assets  and to  transact  the
         business  in which it is  currently  engaged.  The  Transferor  is duly
         qualified to do business as a foreign  company and is in good  standing
         in each jurisdiction in which the character of the business  transacted
         by  it  or  any  properties   owned  or  leased  by  it  requires  such
         qualification  and in which the  failure  so to  qualify  would  have a
         material  adverse  effect  on  the  business,  properties,  assets,  or
         condition (financial or other) of the Transferor;

                  (ii) The  Transferor  has the  power  and  authority  to make,
         execute, deliver and perform this Agreement and all of the transactions
         contemplated under the Agreement, and has taken all necessary action to
         authorize the execution,  delivery and  performance of this  Agreement.
         When executed and delivered,  this Agreement will constitute the legal,
         valid  and  binding   obligation  of  the  Transferor   enforceable  in
         accordance  with its terms,  except as enforcement of such terms may be
         limited by bankruptcy, insolvency, reorganization,  moratorium or other
         similar laws affecting the enforcement of creditors'  rights  generally
         and by the availability of equitable remedies;

                  (iii) The  Transferor is not required to obtain the consent of
         any other party or any  consent,  license,  approval  or  authorization
         from, or registration or declaration with, any governmental  authority,
         bureau  or  agency  in  connection   with  the   execution,   delivery,
         performance,  validity or enforceability of this Agreement,  except for
         such consent,  license,  approval or authorization,  or registration or
         declaration,  as shall have been obtained or filed, as the case may be,
         prior to the Closing Date;

                  (iv) The execution, delivery and performance of this Agreement
         by the Transferor will not violate any provision of any existing law or
         regulation  or any  order or  decree  of any  court  applicable  to the
         Transferor  or  any  provision  of  the  certificate  of  formation  or
         operating agreement of the Transferor,  or constitute a material breach
         of any mortgage,  indenture,  contract or other  agreement to which the
         Transferor is a party or by which the Transferor may be bound; and

                  (v) No  litigation or  administrative  proceeding of or before
         any court,  tribunal or governmental body is currently  pending,  or to
         the knowledge of the Transferor  threatened,  against the Transferor or
         any  of its  properties  or  with

                                       27
<PAGE>

         respect to this Agreement or the  Certificates  which in the opinion of
         the Transferor  has a reasonable  likelihood of resulting in a material
         adverse effect on the transactions contemplated by this Agreement.

The  representations  and  warranties  set forth in this Section  2.03(b)  shall
survive  the sale and  assignment  of the  Mortgage  Loans  to the  Trust.  Upon
discovery of a breach of any representations and warranties which materially and
adversely  affects  the  interests  of  the  Certificateholders  or  the  Credit
Enhancer, the person discovering such breach shall give prompt written notice to
the other parties and to the Credit Enhancer. Within 90 days of its discovery or
its  receipt  of notice of  breach,  or,  with the prior  written  consent  of a
Responsible  Officer  of the  Trustee,  such  longer  period  specified  in such
consent, the Transferor shall cure such breach in all material respects.

         Section  2.04.   REPRESENTATIONS   AND  WARRANTIES  OF  THE  TRANSFEROR
REGARDING THE MORTGAGE  LOANS;  RETRANSFER OF CERTAIN  MORTGAGE  LOANS.  (a) The
Transferor hereby represents and warrants to the Trustee,  the Depositor and the
Credit  Enhancer that as of the Closing Date with respect to the Mortgage  Loans
and as of the applicable  Transfer Date with respect to any Subsequent  Mortgage
Loan and any Eligible Substitute Mortgage Loan,

                  (i)  As of the  Closing  Date  with  respect  to  the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent Mortgage Loan and any Eligible Substitute Mortgage Loan 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) The  applicable  Cut-Off Date Asset  Balance has not been
         assigned or pledged, and the Transferor is the sole owner and holder of
         such  Cut-Off  Date Asset  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  Loan, to
         sell, assign or transfer the same pursuant to the Purchase Agreement;

                  (iii) As of the  Closing  Date  with  respect  to the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent Mortgage Loan and any Eligible Substitute Mortgage Loan, the
         related  Mortgage  Note and the Mortgage  with respect to each Mortgage
         Loan have not been assigned or pledged,  and the Transferor is the sole
         owner  and  holder of the  Mortgage  Loan 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 and assign the same pursuant to the Purchase Agreement;

                                       28
<PAGE>

                  (iv)  As of the  Closing  Date  with  respect  to the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent Mortgage Loan and any Eligible Substitute Mortgage Loan, the
         related Mortgage is a valid and subsisting first or second lien, as set
         forth on the  Mortgage  Loan  Schedule  with  respect  to each  related
         Mortgage  Loan,  on  the  property  therein  described,  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;  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;

                  (v)  As of the  Closing  Date  with  respect  to  the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent  Mortgage Loan and any Eligible  Substitute  Mortgage  Loan,
         there is no valid offset,  defense or counterclaim of any obligor under
         any Loan Agreement or Mortgage;

                  (vi)  To  the  best  knowledge  of the  Transferor,  as of the
         Closing  Date  with  respect  to the  Initial  Mortgage  Loans  and the
         applicable  Transfer Date with respect to any Subsequent  Mortgage Loan
         and any  Eligible  Substitute  Mortgage  Loan,  there is no  delinquent
         recording  or other tax or fee or  assessment  lien against any related
         Mortgaged Property;

                  (vii) As of the  Closing  Date  with  respect  to the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent  Mortgage Loan and any Eligible  Substitute  Mortgage  Loan,
         there  is no  proceeding  pending  or,  to the  best  knowledge  of the
         Transferor,  threatened  for the total or partial  condemnation  of the
         related  Mortgaged  Property,  and such  property  is free of  material
         damage;

                  (viii)  To the best  knowledge  of the  Transferor,  as of the
         Closing  Date  with  respect  to the  Initial  Mortgage  Loans  and the
         applicable  Transfer Date with respect to any Subsequent  Mortgage Loan
         and any Eligible  Substitute  Mortgage Loan, 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,  except liens
         which are fully insured against by the title insurance  policy referred
         to in clause (xiv);

                  (ix)  No  Minimum   Monthly  Payment  is  more  than  89  days
         delinquent  (measured on a contractual  basis); and with respect to the
         Mortgage Loans no more than ___% (by Initial Cut-Off Date Pool Balance)
         were 30-59 days  delinquent  (measured on a  contractual  basis) and no
         more than ____% (by Initial

                                       29
<PAGE>

         Cut-Off Date Pool  Balance) were 60-89 days  delinquent  (measured on a
         contractual basis);

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

                  (xi) The related  Mortgage  Note and the  related  Mortgage at
         origination complied in all material respects with applicable state and
         federal laws, including, without limitation,  usury,  truth-in-lending,
         real estate settlement  procedures,  consumer credit protection,  equal
         credit opportunity or disclosure laws applicable to the Mortgage Loan;

                  (xii) Either a lender's title  insurance  policy or binder was
         issued on the date of  origination  of the Mortgage  Loan and each such
         policy is valid and remains in full force and effect, or a title search
         or  guaranty  of  title  customary  in the  relevant  jurisdiction  was
         obtained with respect to a Mortgage Loan as to which no title insurance
         policy or binder was issued;

                  (xiii) As of the  Closing  Date with  respect  to the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent  Mortgage Loan and any Eligible  Substitute  Mortgage  Loan,
         none of the  Mortgaged  Properties  is a mobile home or a  manufactured
         housing unit that is not  considered  or classified as part of the real
         estate under the laws of the jurisdiction in which it is located;

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

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

                  (xvi)  No  selection  procedure  reasonably  believed  by  the
         Transferor to be adverse to the interests of the  Certificateholders or
         the Credit Enhancer was utilized in selecting the Mortgage Loans;

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

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

                  (xix)  Within 10 days of the Closing  Date with respect to the
         Initial  Mortgage Loans and, to the extent not already included in such
         filing,  within 10

                                       30
<PAGE>

         days of the  applicable  Transfer  Date with respect to any  Subsequent
         Mortgage Loan and any Eligible Substitute Mortgage Loan, the Transferor
         will file UCC-1  financing  statements  with  respect to such  Mortgage
         Loans;

                  (xx)  As of the  Closing  Date  with  respect  to the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent  Mortgage Loan and any Eligible  Substitute  Mortgage  Loan,
         each Loan Agreement and each Mortgage Loan is an 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;

                  (xxi) As of the  Closing  Date  with  respect  to the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent Mortgage Loan and any Eligible Substitute Mortgage Loan, the
         Transferor has not received a notice of default of any senior  mortgage
         loan related to a Mortgaged Property that has not been cured by a party
         other than the Servicer;

                  (xxii) 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 F;

                  (xxiii) The weighted average remaining term to maturity of the
         Initial 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 Mortgage Notes and applicable  law. Over the term of each
         HELOC Mortgage Loan, the Loan Rate may not exceed the related Loan Rate
         Cap, if any. With respect to the Initial HELOC Mortgage Loans, the Loan
         Rate Caps range  between  ____% and ___%.  With  respect to the Initial
         HELOC Mortgage Loans,  the Margins range between ___% and ____% and the
         weighted  average  Margin  is  approximately  ____%  as of the  related
         Cut-Off  Date.  The Loan  Rates on the  Initial  Mortgage  Loans  range
         between  ___%  and  ____%  and  the  weighted   average  Loan  Rate  is
         approximately ___%;

                  (xxiv) As of the  Closing  Date with  respect  to the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent  Mortgage Loan and any Eligible  Substitute  Mortgage  Loan,
         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;

                  (xxv)  No more  than  ____%  (by  Initial  Cut-Off  Date  Pool
         Balance) of the  Initial  Mortgage  Loans are secured by real  property
         improved by individual  condominium units,  planned  development units,
         townhouses or two-to-four  family  residences  erected thereon,  and at
         least  ____% (by  Initial  Cut-Off  Date

                                       31
<PAGE>

         Pool  Balance)  of the  Initial  Mortgage  Loans  are  secured  by real
         property with a detached one-family residence erected thereon;

                  (xxvi) The Credit Limits on the Initial HELOC  Mortgage  Loans
         range between $________ and $_________ with an average of $_______.  As
         of  the  applicable  Cut-Off  Date,  no  Initial  Mortgage  Loan  had a
         principal  balance  in excess  of  approximately  $___________  and the
         average  principal  balance of the Initial  Mortgage  Loans is equal to
         approximately $_______;

                  (xxvii)  Approximately  ____% and ___% of the Initial Mortgage
         Loans,  by aggregate  principal  balance as of the  applicable  Cut-Off
         Date, are first and second liens, respectively;

                  (xxviii)  Each  Closed-End  Mortgage  Loan is payable in equal
         monthly   installments   of  principal  and  interest  which  would  be
         sufficient,  in the absence of late  payments,  to fully  amortize such
         loan on the maturity  thereof and bears a fixed  interest  rate for the
         term of such Closed-End Mortgage Loan; and

                  (xxix) Either (A) this Agreement  constitutes a valid transfer
         and assignment to the Depositor of all right, title and interest of the
         Transferor  in and to the Cut-Off Date Asset  Balances  with respect to
         the  applicable  Mortgage  Loans,  all monies due or to become due with
         respect thereto (excluding  payments in respect of accrued interest due
         prior to the Cut-Off Date), and all proceeds of such Cut-Off Date Asset
         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 Trustee of all right,
         title and interest of the Transferor 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 or (B) this
         Agreement constitutes a grant of a security interest (as defined in the
         UCC as in effect in New York) in such property to the Trustee on behalf
         of the Trust.  If this  Agreement  constitutes  the grant of a security
         interest to the Trust in such property,  and if the Trustee obtains and
         maintains  possession of the Mortgage File for each Mortgage  Loan, the
         Trust shall have a first priority  perfected  security interest in such
         property,  subject  to the  effect  of  Section  9-306  of the UCC with
         respect to  collections on the Mortgage Loans that are deposited in the
         Collection  Account in  accordance  with the next to last  paragraph of
         Section 3.02(b).

         With respect to the  representations  and  warranties set forth in this
Section  2.04 that are made to the best of the  Transferor's  knowledge or as to
which the  Transferor has no knowledge,  if it is discovered by the  Transferor,
the  Depositor,  the Servicer or a  Responsible  Officer of the 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 Transferor's lack of knowledge with respect to

                                       32
<PAGE>

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.

         (b) It is understood and agreed that the representations and warranties
set forth in this Section 2.04 shall survive delivery of the respective Mortgage
Files to the Trustee  pursuant to Section 2.01 and the termination of the rights
and obligations of the Servicer pursuant to Section 7.04 or 8.02. Upon discovery
by the  Transferor,  the  Depositor,  the  Servicer,  the Credit  Enhancer  or a
Responsible  Officer  of the  Trustee  of a  breach  of  any  of  the  foregoing
representations  and  warranties,  without  regard to any  limitation  set forth
therein  concerning  the  knowledge  of the  Transferor  as to the facts  stated
therein,  which  materially and adversely  affects the interests of the Trust or
the Investor  Certificateholders  or the Credit Enhancer in the related Mortgage
Loan, the party  discovering such breach shall give prompt written notice to the
other  parties and the Credit  Enhancer.  Within 90 days of its discovery or its
receipt  of notice  of such  breach,  the  Transferor  shall use all  reasonable
efforts to cure such breach in all  material  respects or shall,  not later than
the Business Day next  preceding  the Payment  Date in the month  following  the
Collection Period in which any such cure period expired (or such later date that
is  acceptable  to the Trustee and the Credit  Enhancer  as  evidenced  by their
written  consents),  either (a) accept a transfer of such Mortgage Loan from the
Trust or (b) substitute an Eligible  Substitute Mortgage Loan in the same manner
and  subject  to the same  conditions  as set forth in Section  2.02;  PROVIDED,
HOWEVER,  that the cure for any breach of a representation and warranty relating
to the  characteristics  of the  Mortgage  Loans  in the  aggregate  shall  be a
repurchase of or  substitution  for only the Mortgage  Loans  necessary to cause
such  characteristics  to be in compliance with the related  representation  and
warranty.  Upon accepting such transfer and making any required deposit into the
Collection Account or substitution of an Eligible  Substitute  Mortgage Loan, as
the case may be, the  Transferor  shall be entitled to receive an  instrument of
assignment  or  transfer  from the  Trustee  to the same  extent as set forth in
Section 2.02 with respect to the transfer of Mortgage Loans under that Section.

         It is understood  and agreed that the  obligation of the  Transferor to
accept a retransfer  of a Mortgage Loan as to which a breach has occurred and is
continuing  and to make any  required  deposit in the  Collection  Account or to
substitute  an Eligible  Substitute  Mortgage  Loan,  as the case may be,  shall
constitute  the sole  remedy  against  the  Transferor  respecting  such  breach
available  to  Investor  Certificateholders,  the  Trustee on behalf of Investor
Certificateholders  and  the  Credit  Enhancer;   PROVIDED,  HOWEVER,  that  the
Transferor  shall defend and indemnify the Trustee,  the Credit Enhancer and the
Investor  Certificateholders  against all reasonable costs and expenses, and all
losses, damages, claims and liabilities,  including reasonable fees and expenses
of counsel and the amount of any settlement entered into with the consent of the
Transferor (such consent not to be unreasonably withheld), which may be asserted
against or incurred by any of them as a result of any third-party action arising
out of any breach of any such  representation and warranty.  Notwithstanding the
foregoing,  with regard to any breach of the  representation  and  warranty  set
forth in Section  2.04(a)(iv),  the sale and assignment of the affected Mortgage
Loans to the Trust  shall be  deemed  void and the  Transferor  shall pay to the
Trust the sum of (i) the  amount of the  related  Asset  Balances,  plus  unpaid

                                       33
<PAGE>

accrued  interest on each such Asset Balance at the applicable  Loan Rate to the
date of payment and (ii) the amount of any loss  suffered by  Certificateholders
or the Credit Enhancer with respect to the affected Mortgage Loans.

         Section 2.05.  COVENANTS OF THE DEPOSITOR AND THE  TRANSFEROR.  Each of
the Depositor and the Transferor hereby covenants that:

         (a) SECURITY INTERESTS. Except for the transfer hereunder,  neither the
Depositor nor the Transferor will sell, pledge,  assign or transfer to any other
Person,  or  grant,  create,  incur,  assume  or suffer to exist any Lien on any
Mortgage  Loan,  whether now  existing or  hereafter  created,  or any  interest
therein; each of the Depositor and the Transferor will notify the Trustee of the
existence of any Lien on any Mortgage Loan immediately  upon discovery  thereof;
and each of the Depositor and the  Transferor  will defend the right,  title and
interest of the Trust in, to and under the Mortgage Loans,  whether now existing
or hereafter  created,  against all claims of third parties  claiming through or
under the Depositor or the Transferor,  respectively;  PROVIDED,  HOWEVER,  that
nothing in this  Section  2.05(a)  shall  prevent or be deemed to  prohibit  the
Depositor  or the  Transferor  from  suffering to exist upon any of the Mortgage
Loans  any Liens  for  municipal  or other  local  taxes and other  governmental
charges if such taxes or  governmental  charges shall not at the time be due and
payable or if the Depositor or the Transferor  shall currently be contesting the
validity  thereof in good faith by  appropriate  proceedings  and shall have set
aside on its books adequate reserves with respect thereto.

         (b) NEGATIVE  PLEDGE.  The  Transferor  hereby  agrees not to transfer,
assign, exchange, pledge, finance, hypothecate,  grant a security interest in or
otherwise convey the Transferor  Certificates except in accordance with Sections
6.05 and 7.02.

         (c)  DOWNGRADING.  Neither the Depositor nor the Transferor will engage
in  any  activity   which  would  result  in  a  downgrading   of  the  Investor
Certificates.

         (d)  AMENDMENT  TO  CERTIFICATE  OF  INCORPORATION  OR  CERTIFICATE  OF
FORMATION.  The Servicer will not amend its certificate of incorporation without
prior  written  notice to the Rating  Agencies  and the Credit  Enhancer and the
Depositor  will not amend its  certificate  of formation  without  prior written
notice to the Rating Agencies and the Credit Enhancer.

         (e) PRINCIPAL  PLACE OF BUSINESS.  The  Depositor's  principal place of
business is in California and the Transferor's  principal  place of business  is
(        ), and neither such party will change its  principal  place of business
without prior written notice to the Rating Agencies.

         Section 2.06.  RETRANSFERS OF MORTGAGE LOANS AT ELECTION OF TRANSFEROR.
Subject to the conditions set forth below,  the Transferor may, but shall not be
obligated to,  require the  retransfer  of Mortgage  Loans from the Trust to the
Transferor  as of the close of business on a Payment Date (each,  a  "RETRANSFER
DATE").  On the fifth Business Day (the  "RETRANSFER  NOTICE DATE") prior to the
Retransfer Date designated in such notice, the Transferor shall give the Trustee
and the Servicer a notice of the proposed retransfer that

                                       34
<PAGE>

contains a list of the Mortgage Loans to be  retransferred.  Such retransfers of
Mortgage Loans shall be permitted upon satisfaction of the following conditions:

                  (i) The Rapid Amortization Period shall not have commenced;

                  (ii) On the  Transfer  Notice  Date the  Transferor  Principal
         Balance  (after  giving  effect  to the  removal  from the Trust of the
         Mortgage Loans proposed to be  retransferred)  is at least equal to the
         Minimum Transferor Interest;

                  (iii) The  transfer of any  Mortgage  Loans on any  Retransfer
         Date  during  the  Managed   Amortization  Period  shall  not,  in  the
         reasonable belief of the Transferor,  cause a Rapid  Amortization Event
         to occur or an event  which with  notice or lapse of time or both would
         constitute a Rapid Amortization Event;

                  (iv) On or before the Retransfer  Date,  the Transferor  shall
         have  delivered  to the  Trustee  a  revised  Mortgage  Loan  Schedule,
         reflecting  the proposed  transfer  and the  Retransfer  Date,  and the
         Servicer  shall  have  marked  the  Electronic  Ledger to show that the
         Mortgages Loans  retransferred to the Transferor are no longer owned by
         the Trust;

                  (v)  The  Transferor  shall  represent  and  warrant  that  no
         selection  procedures  reasonably  believed  by  the  Transferor  to be
         adverse to the  interests  of the  Investor  Certificateholders  or the
         Credit  Enhancer were  utilized in selecting  the Mortgage  Loans to be
         removed from the Trust;

                  (vi) In connection with each such retransfer of Mortgage Loans
         pursuant to this Section,  each Rating Agency shall have received on or
         prior to the related  Retransfer  Notice  Date notice of such  proposed
         retransfer of Mortgage Loans and, prior to the Retransfer  Date,  shall
         have  notified the Trustee in writing that such  retransfer of Mortgage
         Loans would not result in a reduction or withdrawal of its then current
         rating of the Investor Certificates without regard to the Policy; and

                  (vii) The  Transferor  shall have delivered to the Trustee and
         the Credit Enhancer an Officer's Certificate  certifying that the items
         set forth in  subparagraphs  (i)  through  (vi),  inclusive,  have been
         performed or are true and correct,  as the case may be. The 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.

Upon receiving the requisite information from the Transferor, the Servicer shall
perform in a timely manner those acts required of it, as specified  above.  Upon
satisfaction of the above  conditions,  on the Retransfer Date the Trustee shall
deliver, or cause to be delivered,  to the Transferor the Mortgage File for each
Mortgage Loan being so transferred, and the Trustee shall execute and deliver to
the  Transferor  such other  documents  prepared by the  Transferor  as shall be
reasonably necessary to transfer such Mortgage Loans to the Transferor. Any such
retransfer  of the Trust's  right,  title and

                                       35
<PAGE>

interest in and to Mortgage Loans shall be without  recourse,  representation or
warranty by or of the Trustee or the Trust to the Transferor.

         Section  2.07.  EXECUTION  AND  AUTHENTICATION  OF  CERTIFICATES.   The
Trustee,  on behalf of the Trust, has caused to be executed,  authenticated  and
delivered  to or upon the order of the  Depositor,  in  exchange  for the Trust,
concurrently  with the sale,  assignment  and  conveyance  to the Trustee of the
Trust,  Investor  Certificates  in authorized  denominations  and the Transferor
Certificates, together evidencing the ownership of the entire Trust.

         Section 2.08. TAX TREATMENT. It is the intention of the Depositor,  the
Transferor and the Class A Certificateholders that the Class A Certificates will
be  indebtedness  of the  Transferor  for  federal,  state and local  income and
franchise  tax purposes and for purposes of any other tax imposed on or measured
by  income.  The  Transferor,  the  Depositor,  the  Trustee  and  each  Class A
Certificateholder   (or  Certificate   Owner)  by  acceptance  of  its  Class  A
Certificate  (or,  in the  case  of a  Certificate  Owner,  by  virtue  of  such
Certificate  Owner's  acquisition of a beneficial  interest  therein)  agrees to
treat the Class A Certificates (or beneficial interest therein), for purposes of
federal,  state and local income or franchise taxes and any other tax imposed on
or measured by income,  as indebtedness of the Transferor  secured by the assets
of the Trust and to report the  transactions  contemplated  by this Agreement on
all  applicable tax returns in a manner  consistent  with such  treatment.  Each
Class A  Certificateholder  agrees  that it will  cause  any  Certificate  Owner
acquiring an interest in an Class A  Certificate  through it to comply with this
Agreement  as to  treatment  of the Class A  Certificates  as  indebtedness  for
federal,  state and local income and  franchise tax purposes and for purposes of
any other tax  imposed on or measured by income.  The Trustee  will  prepare and
file all tax reports required hereunder.

         Section 2.09.  REPRESENTATIONS  AND  WARRANTIES OF THE  DEPOSITOR.  The
Depositor   represents   and   warrants   to  the   Trustee  on  behalf  of  the
Certificateholders and the Credit Enhancer as follows:

                  (i) This  Agreement  constitutes  a legal,  valid and  binding
         obligation  of the  Depositor,  enforceable  against the  Depositor  in
         accordance with its terms,  except as enforceability  may be limited by
         applicable bankruptcy, insolvency, reorganization,  moratorium or other
         similar laws now or hereafter in effect  affecting the  enforcement  of
         creditors' rights in general and except as such  enforceability  may be
         limited  by  general  principles  of equity  (whether  considered  in a
         proceeding at law or in equity);

                  (ii)  Immediately  prior  to the sale  and  assignment  by the
         Depositor to the Trustee of each Mortgage  Loan,  the Depositor was the
         sole beneficial  owner of each Mortgage Loan (insofar as such title was
         conveyed  to it by the  Transferor)  subject to no prior  lien,  claim,
         participation interest,  mortgage, security interest, pledge, charge or
         other encumbrance or other interest of any nature;

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<PAGE>

                  (iii) As of the Closing Date,  the  Depositor has  transferred
         all right, title and interest in the Mortgage Loans to the Trustee; and

                  (iv) The Depositor has not  transferred  the Mortgage Loans to
         the  Trustee  with any  intent to hinder,  delay or defraud  any of its
         creditors.

         Section 2.10.  CONVEYANCE OF THE SUBSEQUENT MORTGAGE LOANS. (a) Subject
to the  satisfaction  of the  conditions set forth in Section 2.01 and paragraph
(b) below, in consideration of the Trustee's  delivery on a Subsequent  Transfer
Date to or upon the order of the Transferor of all or a portion of the amount in
respect of Principal Collections in the Funding Account the Transferor shall, to
the extent of the availability  thereof, on the related Subsequent Transfer Date
transfer,  assign,  set over and otherwise  convey to the Trust without recourse
(subject to Sections 2.02 and 2.04) all of its right,  title and interest in and
to the  Asset  Balances  of the  Subsequent  Mortgage  Loans  and  all  Interest
Collections  and Principal  Collections  in respect  thereof  received after the
Cut-Off  Date  for  the  Subsequent  Mortgage  Loans  or,  with  respect  to any
Additional  Balances with respect  thereto,  on or after the date of transfer to
the Trust.  Future advances made to a Mortgagor under a Loan Agreement  relating
to a Subsequent  Mortgage  Loan shall be part of the related  Asset  Balance and
transferred to the Trust pursuant to this Section 2.10, and, therefore,  part of
the Trust  property upon the sale thereof to the  Transferor  under the Purchase
Agreement.

         On each Subsequent  Transfer Date, the Trustee shall  acknowledge  that
the  Transferor  has  conveyed  its  right,  title and  interest  in and to each
Subsequent Mortgage Loan and to the corresponding  Related Documents and certain
other rights to the Trustee  pursuant to this  Agreement,  and the Trustee shall
hold such documents hereunder for the benefit of the Certificateholders.

         (b) The  obligation  of the  Trustee  to  accept  the  transfer  of the
Subsequent  Mortgage  Loans and the other  property and rights  related  thereto
described in paragraph (a) above is subject to the  satisfaction  of each of the
following conditions on or prior to the Subsequent Transfer Date:

                  (i) the Trustee  shall have been  provided  with a letter from
         the Credit  Enhancer  consenting  to such  transfer  of the  Subsequent
         Mortgage  Loans (which  consent shall not be  unreasonably  withheld or
         delayed);

                  (ii) the  Trustee  shall  have  been  provided  with a revised
         Mortgage Loan Schedule, listing the Subsequent Mortgage Loans;

                  (iii) the  Transferor  shall have  deposited in the Collection
         Account all Principal  Collections and Interest  Collections in respect
         of such  Subsequent  Mortgage Loans received after the Cut-Off Date for
         the Subsequent Mortgage Loans;

                  (iv) the  representations  and warranties of the Transferor in
         Section 2.04 hereof, to the extent such  representations and warranties
         do not pertain

                                       37
<PAGE>

         exclusively to the Initial  Mortgage  Loans,  are true and correct with
         respect to the Subsequent  Mortgage Loans as of the related  Subsequent
         Transfer Date;

                  (v) the Trustee  shall have been  provided  with a letter from
         each Rating  Agency  confirming  that the  transfer  of the  Subsequent
         Mortgage  Loans shall not result in a reduction  or  withdrawal  of its
         then-current rating of the Investor Certificates;

                  (vi) the  Servicer  shall  acknowledge  in writing that it has
         delivered the related  Mortgage  Files to the Trustee and complied with
         all other  requirements  with respect to the  assignment of the related
         Mortgages specified therein;

                  (vii)  the  Servicer  shall  represent  and  warrant  that  no
         selection procedures  reasonably believed by the Servicer to be adverse
         to the  interests  of the  Investor  Certificateholders  or the  Credit
         Enhancer were utilized in selecting the Subsequent Mortgage Loans; and

                  (viii) the  Transferor  shall have delivered to the Trustee an
         Officer's  Certificate  confirming the  satisfaction  of each condition
         precedent specified in this paragraph (b).

The  obligation  of the Trust to purchase  any  Subsequent  Mortgage  Loans on a
Subsequent Transfer Date is subject to the following requirements: (i) each such
Subsequent  Mortgage Loan is a HELOC  Mortgage  Loan and the  remaining  term to
maturity of each such Subsequent  Mortgage Loan may not exceed ___ months;  (ii)
the weighted  average  Margin of the  Subsequent  Mortgage  Loans (by  aggregate
Cut-Off Date Asset Balance with respect to such Subsequent  Mortgage Loans) plus
any Subsequent  Mortgage Loans  previously  transferred to the Trust is at least
____%; (iii) the weighted average Combined Loan-to-Value Ratio of the Subsequent
Mortgage  Loans (by  aggregate  Cut-Off Date Asset  Balance with respect to such
Subsequent  Mortgage  Loans)  plus  any  Subsequent  Mortgage  Loans  previously
transferred to the Trust is not more than ___%; (iv) no such Subsequent Mortgage
Loan will have a Cut-Off Date Asset Balance in excess of $________;  (v) no less
than ___% of the Subsequent  Mortgage  Loans plus any Subsequent  Mortgage Loans
previously  transferred  to the Trust (by  aggregate  Cut-Off Date Asset Balance
with respect to such  Subsequent  Mortgage  Loans) are in a first lien position;
(vi) at  least  ___% of such  Subsequent  Mortgage  Loans  plus  any  Subsequent
Mortgage Loans  previously  transferred to the Trust (by aggregate  Cut-Off Date
Asset Balance with respect to such Subsequent  Mortgage Loans) are not more than
30 days delinquent (on a contractual  basis) in the payment of a Minimum Monthly
Payment as of the Cut-Off Date for such Subsequent Mortgage Loans; and (vii) any
Subsequent HELOC Mortgage Loan more than 30 days delinquent that is so purchased
by the Trust shall not have had its Credit Limit  terminated or suspended  prior
to the Subsequent  Transfer Date with respect to such Mortgage Loan. On the last
Payment  Date of the Funding  Period,  the  Transferor  shall have  provided the
Trustee,  the Rating Agencies and the Credit Enhancer with an opinion of counsel
to the effect that such transfer constitutes a sale of the Trust Balances of the
Subsequent Mortgage Loans to the Transferor and a sale of or grant of a security
interest in the  Subsequent  Mortgage Loans to the Trustee;

                                       38
<PAGE>

PROVIDED,  HOWEVER,  that in the event of a change  of law  during  the  Funding
Period that materially affects the method of perfecting the security interest in
the  Subsequent  Mortgage  Loans,  the  Transferor  shall either (i) provide the
Trustee,  the Rating Agencies and the Credit Enhancer with an opinion of counsel
to the effect that such transfer constitutes a sale of the Asset Balances of the
Subsequent Mortgage Loans to the Transferor and a sale of or grant of a security
interest in the  Subsequent  Mortgage  Loans to the  Trustee,  or (ii) take such
action as is necessary to perfect the  interests of the Trust in the  Subsequent
Mortgage Loans.

                                  ARTICLE III

                 Administration and Servicing of Mortgage Loans

         Section  3.01.  THE  SERVICER.  (a)  The  Servicer  shall  service  and
administer  the  Mortgage  Loans in a manner  consistent  with the terms of this
Agreement  and with  general  industry  practice  and shall  have full power and
authority,  acting alone or through a  subservicer,  to do any and all things in
connection with such servicing and administration which it may deem necessary or
desirable,  it being understood,  however,  that the Servicer shall at all times
remain  responsible  to the  Trustee,  the  Certificateholders  and  the  Credit
Enhancer  for  the  performance  of its  duties  and  obligations  hereunder  in
accordance  with the terms hereof.  Any amounts  received by any  subservicer in
respect of a Mortgage Loan shall be deemed to have been received by the Servicer
whether or not actually  received by it. Without  limiting the generality of the
foregoing,  the Servicer shall continue,  and is hereby authorized and empowered
by  the   Trustee,   to  execute  and   deliver,   on  behalf  of  itself,   the
Certificateholders  and the Trustee,  or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other  comparable  instruments,  with  respect  to the  Mortgage  Loans and with
respect to the Mortgaged Properties. The Trustee shall, upon the written request
of a Servicing  Officer,  furnish the  Servicer  with any powers of attorney and
other documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. The Servicer in such capacity may
also  consent to the  placing of a lien  senior to that of any  Mortgage  on the
related Mortgaged Property, provided that:

                  (x) such Mortgage succeeded to a first lien position after the
         related  Mortgage  Loan was  conveyed  to the  Trust  and,  immediately
         following  the  placement  of such senior lien,  such  Mortgage is in a
         second  lien  position  and the  outstanding  principal  amount  of the
         mortgage loan secured by such subsequent senior lien is no greater than
         the outstanding principal amount of the senior mortgage loan secured by
         the  Mortgaged  Property as of the date the related  Mortgage  Loan was
         originated; or

                  (y) the  Mortgage  relating  to such  Mortgage  Loan  was in a
         second lien  position  as of the  Cut-Off  Date and the new senior lien
         secures a mortgage loan that refinances an existing first mortgage loan
         and the outstanding  principal amount of the replacement first mortgage
         loan  immediately  following  such

                                       39
<PAGE>

         refinancing  is not greater than the  outstanding  principal  amount of
         such existing  first  mortgage loan at the date of  origination of such
         Mortgage Loan;

PROVIDED,  FURTHER,  that such senior lien does not secure a note that  provides
for negative amortization.

         The Servicer may also,  without prior approval from the Rating Agencies
or the Credit  Enhancer,  increase  the Credit  Limits on HELOC  Mortgage  Loans
provided  that (i) new  appraisals  are obtained and the Combined  Loan-to-Value
Ratios of the Mortgage  Loans after giving effect to such increase are less than
or equal to the Combined  Loan-to-Value  Ratios or the Mortgage  Loans as of the
Cut-Off  Date  and (ii)  such  increases  are  consistent  with  the  Servicer's
underwriting policies.

         In  addition,  the  Servicer  may  agree to  changes  in the terms of a
Mortgage Loan at the request of the Mortgagor; PROVIDED that such changes (i) do
not materially and adversely affect the interests of  Certificateholders  or the
Credit  Enhancer and (ii) are  consistent  with prudent and  customary  business
practice as evidenced by a certificate  signed by a Servicing  Officer delivered
to the Trustee and the Credit Enhancer.

         In addition to the  foregoing,  the Servicer may solicit  Mortgagors to
change any other terms of the related Mortgage Loans, provided that such changes
(i) do not materially and adversely affect the interest of Certificateholders or
the Credit Enhancer and (ii) are consistent with prudent and customary  business
practice as evidenced by a certificate  signed by a Servicing  Officer delivered
to the Trustee and the Credit Enhancer.  Nothing herein shall limit the right of
the Servicer to solicit Mortgagors with respect to new loans (including mortgage
loans) that are not Mortgage Loans.

         The  relationship of the Servicer (and of any successor to the Servicer
as  servicer  under this  Agreement)  to the  Trustee  under this  Agreement  is
intended by the parties to be that of an independent  contractor and not that of
a joint venturer, partner or agent.

         (b) In the  event  that  the  rights,  duties  and  obligations  of the
Servicer are  terminated  hereunder,  any  successor to the Servicer in its sole
discretion  may,  to the extent  permitted  by  applicable  law,  terminate  the
existing subservicer  arrangements with any subservicer or assume the terminated
Servicer's  rights under such  subservicing  arrangements  which  termination or
assumption will not violate the terms of such arrangements.

         Section 3.02.  COLLECTION OF CERTAIN  MORTGAGE LOAN  PAYMENTS.  (a) The
Servicer shall make reasonable  efforts to collect all payments called for under
the terms and provisions of the Mortgage  Loans,  and shall,  to the extent such
procedures  shall be  consistent  with this  Agreement,  follow such  collection
procedures  as it  follows  with  respect  to  mortgage  loans in its  servicing
portfolio comparable to the Mortgage Loans.  Consistent with the foregoing,  and
without  limiting  the  generality  of the  foregoing,  the  Servicer may in its
discretion  (i) waive any late payment  charge or any  assumption  fees or other
fees which may be collected in the ordinary  course of servicing  such  Mortgage
Loan and (ii)  arrange  with a Mortgagor a schedule  for the payment of interest
due and

                                       40
<PAGE>

unpaid;  PROVIDED  that  such  arrangement  is  consistent  with the  Servicer's
policies  with  respect to the  mortgage  loans it owns or  services;  PROVIDED,
FURTHER,  that  notwithstanding  such  arrangement  such Mortgage  Loans will be
included in the information regarding delinquent Mortgage Loans set forth in the
Servicing  Certificate and monthly statement to  Certificateholders  pursuant to
Section 5.03.

         (b) The Servicer  shall  establish  and  maintain a trust  account (the
"COLLECTION ACCOUNT") titled "[Trustee], as Trustee, in trust for the registered
holders of Home Equity  Loan  Asset-Backed  Certificates,  Series  200_-_."  The
Collection  Account  shall be an Eligible  Account.  The  Servicer  shall on the
Closing Date deposit any amounts  representing  payments on, and any collections
in respect of, the Initial Mortgage Loans received after the applicable  Cut-Off
Date and prior to the Closing Date  (exclusive of payments in respect of accrued
interest due on or prior to such Cut-Off Date), and thereafter the Servicer,  or
the  Transferor,  as the case may be, shall  deposit  within two  Business  Days
following  receipt thereof the following  payments and  collections  received or
made by it (without duplication):

                  (i) all collections on and in respect of the Mortgage Loans;

                  (ii) the amounts,  if any, deposited to the Collection Account
         pursuant to Section 4.05;

                  (iii) Net Liquidation  Proceeds net of any related Foreclosure
         Profit;

                  (iv)  Insurance  Proceeds  (including,  for this purpose,  any
         amount  required to be credited  by the  Servicer  pursuant to the last
         sentence of Section 3.04 and  excluding  the portion  thereof,  if any,
         that has been  applied  to the  restoration  or repair  of the  related
         Mortgaged  Property or released to the related  Mortgagor in accordance
         with the normal servicing procedures of the Servicer); and

                  (v) any amounts  required to be deposited  therein pursuant to
         Section 10.01;

PROVIDED,  HOWEVER,  that with respect to each Collection  Period,  the Servicer
shall be  permitted  to retain  from  payments  in  respect of  interest  on the
Mortgage  Loans,  the Servicing Fee for such  Collection  Period.  The foregoing
requirements  respecting  deposits to the Collection  Account are exclusive,  it
being  understood that,  without  limiting the generality of the foregoing,  the
Servicer  need  not  deposit  in the  Collection  Account  amounts  representing
Foreclosure  Profits,  fees  (including  annual  fees) or late charge  penalties
payable by Mortgagors,  or amounts  received by the Servicer for the accounts of
Mortgagors for  application  towards the payment of taxes,  insurance  premiums,
assessments,  excess pay off amounts and similar items. The Servicer shall remit
all Foreclosure Profits to the Transferor.

         The Trustee shall hold amounts  deposited in the Collection  Account as
trustee for the Certificateholders and for the Credit Enhancer. In addition, the
Servicer  shall  notify the Trustee  and the Credit  Enhancer in writing on each
Determination  Date of the amount

                                       41
<PAGE>

of payments and  collections  in the  Collection  Account  allocable to Interest
Collections and Principal  Collections  for the related Payment Date.  Following
such  notification,  the  Servicer  shall  be  entitled  to  withdraw  from  the
Collection  Account  and  retain any  amounts  that  constitute  income and gain
realized from the investment of such payments and collections.

         All  income  and  gain  realized   from  any   investment  in  Eligible
Investments of funds in the  Collection  Account shall be for the benefit of the
Servicer and shall be subject to its withdrawal from time to time. The amount of
any losses incurred in respect of the principal  amount of any such  investments
shall be  deposited  in the  Collection  Account by the  Servicer out of its own
funds immediately as realized.

         Section 3.03.  WITHDRAWALS  FROM THE COLLECTION  ACCOUNT.  From time to
time,  withdrawals  may be made from the Collection  Account by the Servicer for
the following purposes:

                  (i) To the Servicer as payment for its  Servicing Fee pursuant
         to Section 3.08;

                  (ii)  To  pay  to  the  Servicer  amounts  on  deposit  in the
         Collection Account that are not to be included in the distributions and
         payments  pursuant to Section 5.01 to the extent provided by the second
         to the last and the last paragraph of Section 3.02(b);

                  (iii)  To  make  or  to  permit  the  Paying   Agent  to  make
         distributions and payments pursuant to Section 5.01;

                  (iv)  Prior  to the  Collection  Period  preceding  the  Rapid
         Amortization Commencement Date, to pay to the Transferor, the amount of
         any  Additional  Balances  as  and  when  created  during  the  related
         Collection Period;  PROVIDED,  that the aggregate amount so paid to the
         Transferor  in respect of  Additional  Balances  at any time during any
         Collection Period shall not exceed the amount of Principal  Collections
         theretofore  received  for such  Collection  Period  minus  the  amount
         determined  pursuant to clause (x) of the  definition  of  "ALTERNATIVE
         PRINCIPAL PAYMENT"; and

                  (v) To  make  deposits  to the  Funding  Account  pursuant  to
         Section 5.05 hereof.

         If the  Servicer  deposits  in the  Collection  Account  any amount not
required  to be  deposited  therein  or any amount in  respect  of  payments  by
Mortgagors made by checks subsequently  returned for insufficient funds or other
reason  for  non-payment  it may at any  time  withdraw  such  amount  from  the
Collection Account, and any such amounts shall not be included in the amounts to
be  deposited  in the  Collection  Account  pursuant  to  Section  3.02(b),  any
provision herein to the contrary notwithstanding.

         Section 3.04.  MAINTENANCE  OF HAZARD  INSURANCE;  PROPERTY  PROTECTION
EXPENSES.  The Servicer  shall cause to be  maintained  for each  Mortgage  Loan
hazard  insurance

                                       42
<PAGE>

naming  the  Servicer  or the  related  subservicer  as  loss  payee  thereunder
providing  extended  coverage in an amount which is at least equal to the lesser
of (i) the maximum  insurable value of the  improvements  securing such Mortgage
Loan  from time to time or (ii) the  combined  principal  balance  owing on such
Mortgage  Loan and any mortgage  loan senior to such  Mortgage Loan from time to
time. The Servicer shall also maintain on property acquired upon foreclosure, or
by deed in lieu of foreclosure,  hazard  insurance with extended  coverage in an
amount which is at least equal to the lesser of (i) the maximum  insurable value
from time to time of the improvements  which are a part of such property or (ii)
the combined principal balance owing on such Mortgage Loan and any mortgage loan
senior to such Mortgage Loan at the time of such  foreclosure or deed in lieu of
foreclosure plus accrued interest and the good-faith estimate of the Servicer of
related  Liquidation  Expenses to be incurred in connection  therewith.  Amounts
collected  by the  Servicer  under any such  policies  shall be deposited in the
Collection  Account to the extent  called for by Section 3.02. In cases in which
any  Mortgaged  Property is located in a federally  designated  flood area,  the
hazard  insurance to be maintained  for the related  Mortgage Loan shall include
flood  insurance.  All such  flood  insurance  shall be in such  amounts  as are
required  under  applicable  guidelines of the Federal Flood  Emergency Act. The
Servicer  shall be under no obligation  to require that any  Mortgagor  maintain
earthquake or other additional insurance and shall be under no obligation itself
to maintain any such additional  insurance on property  acquired in respect of a
Mortgage Loan,  other than pursuant to such  applicable  laws and regulations as
shall at any time be in force and as shall require such additional insurance. If
the Servicer shall obtain and maintain a blanket policy  consistent with prudent
industry  standards  insuring against hazard losses on all of the Mortgage Loans
in an aggregate amount prudent under industry  standards,  it shall conclusively
be deemed to have  satisfied its  obligations as set forth in the first sentence
of this  Section  3.04 and there  shall have been a loss  which  would have been
covered by such policy,  deposit in the Collection  Account, as the case may be,
the  amount not  otherwise  payable  under the  blanket  policy  because of such
deductible clause.

         Section 3.05.  ASSUMPTION AND MODIFICATION  AGREEMENTS.  In any case in
which a Mortgaged Property has been or is about to be conveyed by the Mortgagor,
the  Servicer  shall  exercise  its right to  accelerate  the  maturity  of such
Mortgage  Loan  consistent  with the then  current  practice of the Servicer and
without regard to the inclusion of such Mortgage Loan in the Trust. If it elects
not to enforce its right to  accelerate  or if it is prevented  from doing so by
applicable  law,  the  Servicer  (so  long  as such  action  conforms  with  the
underwriting  standards generally acceptable in the industry at the time for new
origination) is authorized to take or enter into an assumption and  modification
agreement from or with the Person to whom such Mortgaged Property has been or is
about to be  conveyed,  pursuant to which such Person  becomes  liable under the
Loan  Agreement  and, to the extent  permitted by applicable  law, the Mortgagor
remains  liable  thereon.  The  Servicer  shall  notify  the  Trustee  that  any
assumption  and  modification  agreement has been completed by delivering to the
Trustee an Officer's Certificate certifying that such agreement is in compliance
with this Section 3.05 and by forwarding to the applicable  Custodian,  as agent
for  the  Trustee,  the  original  copy  of  such  assumption  and  modification
agreement.  Any  such  assumption  and  modification  agreement  shall,  for all
purposes,  be considered a part of the related  Mortgage File to the same extent
as all other

                                       43
<PAGE>

documents and instruments constituting a part thereof. No change in the terms of
the related Loan  Agreement may be made by the Servicer in  connection  with any
such assumption to the extent that such change would not be permitted to be made
in respect of the original Loan  Agreement  pursuant to the fourth  paragraph of
Section  3.01(a).  Any fee  collected by the Servicer for entering into any such
agreement will be retained by the Servicer as additional servicing compensation.

         Section 3.06. REALIZATION UPON DEFAULTED MORTGAGE LOANS;  REPURCHASE OF
CERTAIN   MORTGAGE  LOANS.  The  Servicer  shall  foreclose  upon  or  otherwise
comparably  convert  to  ownership  Mortgaged  Properties  securing  such of the
Mortgage  Loans as come into and continue in default when, in the opinion of the
Servicer  based upon the practices and  procedures  referred to in the following
sentence, no satisfactory  arrangements can be made for collection of delinquent
payments  pursuant to Section  3.02;  PROVIDED  that if the  Servicer has actual
knowledge or  reasonably  believes  that any  Mortgaged  Property is affected by
hazardous  or toxic  wastes  or  substances  and that  the  acquisition  of such
Mortgaged Property would not be commercially reasonable,  then the Servicer will
not cause the Trust to acquire title to such Mortgaged Property in a foreclosure
or similar proceeding.  In connection with such foreclosure or other conversion,
the Servicer shall follow such practices (including,  in the case of any default
on a related  senior  mortgage  loan,  the  advancing  of funds to correct  such
default) and  procedures as it shall deem necessary or advisable and as shall be
normal and usual in its general mortgage servicing activities.  The foregoing is
subject to the proviso that the Servicer shall not be required to expend its own
funds in  connection  with any  foreclosure  or towards  the  correction  of any
default on a related senior  mortgage loan or restoration of any property unless
it shall determine that such expenditure will increase Net Liquidation Proceeds.

         In the event  that  title to any  Mortgaged  Property  is  acquired  in
foreclosure or by deed in lieu of  foreclosure,  the deed or certificate of sale
shall  be   issued   to  the   Trustee,   or  to  its   nominee   on  behalf  of
Certificateholders.

         The Servicer, in its sole discretion,  shall have the right to purchase
for its own account  from the Trust any  Mortgage  Loan which is 91 days or more
delinquent at a price equal to the purchase price described below. The price for
any Mortgage  Loan  purchased  hereunder  (which shall be calculated in the same
manner set forth in Section 2.02) shall be deposited in the  Collection  Account
and the Trustee,  upon receipt of a certificate from the Servicer in the form of
Exhibit L hereto,  shall  release or cause to be  released to the  Servicer  the
related Mortgage File and shall execute and deliver such instruments of transfer
or assignment prepared by the Servicer,  in each case without recourse, as shall
be necessary to vest in the  purchaser of such  Mortgage  Loan any Mortgage Loan
released  pursuant  hereto and the Servicer  shall  succeed to all the Trustee's
right,  title and  interest in and to such  Mortgage  Loan and all  security and
documents related thereto.  Such assignment shall be an assignment  outright and
not for security.  The Servicer shall  thereupon own such Mortgage Loan, and all
security and  documents,  free of any further  obligation  to the  Trustee,  the
Credit Enhancer or the Certificateholders with respect thereto.

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<PAGE>

         Section 3.07. TRUSTEE TO COOPERATE. On or before each Payment Date, the
Servicer  will notify the Trustee of the payment in full of the Asset Balance of
any Mortgage Loan during the preceding  Collection  Period,  which  notification
shall be by a certification  (which  certification  shall include a statement to
the effect that all amounts  received in connection  with such payment which are
required to be deposited in the Collection Account pursuant to Section 3.02 have
been so deposited or credited) of a Servicing Officer.  Upon any such payment in
full,  the  Servicer is  authorized  to execute,  pursuant to the  authorization
contained in Section 3.01, if the  assignments of Mortgage have been recorded as
required  hereunder,   an  instrument  of  satisfaction  regarding  the  related
Mortgage,  which instrument of satisfaction shall be recorded by the Servicer if
required by applicable law and be delivered to the Person entitled  thereto.  It
is  understood  and agreed that no expenses  incurred  in  connection  with such
instrument  of  satisfaction  or  transfer  shall  be  reimbursed  from  amounts
deposited  in the  Collection  Account.  If the Trustee is holding the  Mortgage
Files,  from time to time and as appropriate for the servicing or foreclosure of
any  Mortgage  Loan,  or in  connection  with the  payment  in full of the Asset
Balance of any Mortgage Loan,  the Trustee  shall,  upon request of the Servicer
and delivery to the Trustee of a Request for Release  substantially  in the form
attached hereto as Exhibit J signed by a Servicing Officer,  release the related
Mortgage File to the Servicer and the Trustee shall execute such  documents,  in
the forms provided by the Servicer,  as shall be necessary to the prosecution of
any such  proceedings  or the  taking of other  servicing  actions.  Such  trust
receipt  shall  obligate the Servicer to return the Mortgage File to the Trustee
when the need  therefor by the Servicer no longer unless the Mortgage Loan shall
be  liquidated,  in which case,  upon  receipt of a  certificate  of a Servicing
Officer  similar  to that  hereinabove  specified,  the trust  receipt  shall be
released by the Trustee or such Custodian to the Servicer.

         In order to facilitate  the  foreclosure  of the Mortgage  securing any
Mortgage Loan that is in default  following  recordation  of the  assignments of
Mortgage in accordance  with the provisions  hereof,  the Trustee  shall,  if so
requested in writing by the Servicer,  execute an appropriate  assignment in the
form  provided to the Trustee by the Servicer to assign such  Mortgage  Loan for
the purpose of  collection  to the Servicer or to the related  subservicer  (any
such  assignment  shall  unambiguously  indicate that the  assignment is for the
purpose of  collection  only),  and,  upon such  assignment,  the Servicer  will
thereupon bring all required  actions in its own name and otherwise  enforce the
terms of the Mortgage Loan and deposit the Net Liquidation  Proceeds,  exclusive
of Foreclosure Profits, received with respect thereto in the Collection Account.
In the event that all  delinquent  payments due under any such Mortgage Loan are
paid by the Mortgagor and any other defaults are cured,  then the Servicer shall
promptly  reassign  such  Mortgage  Loan to the  Trustee  and return the related
Mortgage File to the place where it was being maintained.

         Section 3.08.  SERVICING  COMPENSATION;  PAYMENT OF CERTAIN EXPENSES BY
SERVICER.  The Servicer  shall be entitled to receive the Servicing Fee pursuant
to Section 3.03 as  compensation  for its services in connection  with servicing
the Mortgage Loans.  Moreover,  additional servicing compensation in the form of
late  payment  charges or other  receipts  not  required to be  deposited in the
Collection  Account  (other than  Foreclosure  Profits) shall be retained by the
Servicer.  The Servicer shall be required to

                                       45
<PAGE>

pay all expenses  incurred by it in  connection  with its  activities  hereunder
(including payment of all other fees and expenses not expressly stated hereunder
to be for the  account of the  Certificateholders)  and shall not be entitled to
reimbursement  therefor  except as  specifically  provided  herein.  Liquidation
Expenses  are  reimbursable  to the  Servicer  solely from  related  Liquidation
Proceeds.

         (a) The Servicer shall deliver to the Trustee,  the Credit Enhancer and
each of the Rating Agencies,  promptly after having obtained  knowledge thereof,
but in no event later than five  Business  Days  thereafter,  written  notice by
means of an Officer's  Certificate  of any event which with the giving of notice
or the lapse of time or both, would become an Event of Servicing Termination.

         Section 3.09. ANNUAL STATEMENT AS TO COMPLIANCE.  (a) The Servicer will
deliver to the  Trustee,  the Credit  Enhancer  and the Rating  Agencies,  on or
before __________ of each year, beginning 200_, an Officer's Certificate stating
that (i) a review of the activities of the Servicer during the preceding  fiscal
year (or such shorter  period as is  applicable in the case of the first report)
and of its  performance  under this Agreement has been made under such officer's
supervision  and (ii) to the  best of such  officer's  knowledge,  based on such
review,  the Servicer has fulfilled all of its material  obligations  under this
Agreement  throughout  such fiscal year,  or, if there has been a default in the
fulfillment of any such  obligation,  specifying each such default known to such
officer and the nature and status thereof.

         Section 3.10.  ANNUAL SERVICING REPORT. On or before __________ of each
year,  beginning  200_,  the  Servicer,  at its  expense,  shall cause a firm of
nationally recognized  independent public accountants (who may also render other
services  to the  Servicer)  to  furnish a report  to the  Trustee,  the  Credit
Enhancer  and each  Rating  Agency to the  effect  that  such firm has  examined
certain documents and records relating to the servicing of mortgage loans during
the most recent fiscal year then ended under  pooling and  servicing  agreements
(substantially  similar to this  Agreement,  including this Agreement) that such
examination,  was conducted substantially in compliance with the audit guide for
audits of  non-supervised  mortgagees  approved by the Department of Housing and
Urban Development for use by independent  public accountants (to the extent that
the procedures in such audit guide are  applicable to the servicing  obligations
set forth in such  agreements) and that such  examination has disclosed no items
of noncompliance  with the provisions of this Agreement which, in the opinion of
such firm, are material,  except for such items of noncompliance as shall be set
forth in such report.

         Section 3.11.  ANNUAL  OPINION OF COUNSEL.  On or before  __________ of
each year,  beginning  200_,  each of the Transferor  and the Depositor,  at its
expense,  shall  deliver to the Trustee and the Credit  Enhancer the  applicable
Opinion of Counsel specified in Exhibit E hereto.

         Section 3.12. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE MORTGAGE  LOANS.  (a) The Servicer shall provide to the Trustee,  the Credit
Enhancer, any Investor Certificateholders that are federally insured savings and
loan associations,  the Office of Thrift  Supervision,  successor to the Federal
Home Loan Bank Board, the FDIC

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<PAGE>

and the  supervisory  agents and  examiners of the Office of Thrift  Supervision
access to the documentation  regarding the Mortgage Loans required by applicable
regulations of the Office of Thrift Supervision and the FDIC (acting as operator
of the SAIF or the BIF), such access being afforded without charge but only upon
reasonable  request  and  during  normal  business  hours at the  offices of the
Servicer. Nothing in this Section 3.12 shall derogate from the obligation of the
Servicer to observe any  applicable  law  prohibiting  disclosure of information
regarding the  Mortgagors  and the failure of the Servicer to provide  access as
provided  in  this  Section  3.12  as a  result  of such  obligation  shall  not
constitute a breach of this Section 3.12.

         (b) The Servicer  shall supply  information in such form as the Trustee
shall  reasonably  request to the Trustee and the Paying Agent, on or before the
start of the  Determination  Date  preceding  the related  Payment  Date,  as is
required in the Trustee's  reasonable judgment to enable the Paying Agent or the
Trustee,  as the case may be, to make required  distributions and to furnish the
required reports to Certificateholders and to make any claim under the Policy.

         Section 3.13.  MAINTENANCE OF CERTAIN SERVICING INSURANCE POLICIES. The
Servicer shall during the term of its service as servicer  maintain in force (i)
a  policy  or  policies  of  insurance  covering  errors  and  omissions  in the
performance of its obligations as master servicer  hereunder and (ii) a fidelity
bond in respect  of its  officers,  employees  or  agents.  Each such  policy or
policies and bond together shall comply with the requirements  from time to time
of the Federal National Mortgage  Association for persons  performing  servicing
for mortgage loans purchased by such Association.

         Section 3.14.  REPORTS TO THE SECURITIES AND EXCHANGE  COMMISSION.  The
Trustee shall, on behalf of the Trust, cause to be filed with the Securities and
Exchange  Commission  any  periodic  reports  required  to be  filed  under  the
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations  of the  Securities  and Exchange  Commission  thereunder.  Upon the
request of the Trustee,  each of the Servicer,  the Depositor and the Transferor
shall cooperate with the Trustee in the preparation of any such report and shall
provide to the Trustee in a timely manner all such  information or documentation
as the Trustee may reasonably  request in connection with the performance of its
duties and obligations under this Section.

         Section 3.15. TAX RETURNS.  In accordance with Section 2.08 hereof, the
Trustee shall prepare and file any Federal,  state or local income and franchise
tax return for the Trust as well as any other applicable  return and apply for a
taxpayer  identification  number on behalf of the Trust.  The  Transferor  shall
treat the Mortgage  Loans as its  property  for all Federal,  state or local tax
purposes and shall report all income earned thereon  (including  amounts payable
as fees to the Servicer) as its income for income tax purposes. In the event the
Trust shall be required  pursuant to an audit or  administrative  proceeding  or
change in applicable  regulations  to file Federal,  state or local tax returns,
the Trustee  shall  prepare and file or shall cause to be prepared and filed any
tax returns  required to be filed by the Trust;  the Trustee shall promptly sign
such returns and deliver such returns  after  signature to the Servicer and such
returns shall be filed by the Servicer.  The Trustee shall also prepare or shall
cause to be prepared all tax information required

                                       47
<PAGE>

by law to be distributed to Investor  Certificateholders.  In no event shall the
Trustee or the Servicer be liable for any liabilities,  costs or expenses of the
Trust, the Investor Certificateholders, the Transferor Certificateholders or the
Certificate  Owners arising under any tax law,  including,  without  limitation,
Federal,  state or local  income and  franchise or excise taxes or any other tax
imposed on or  measured  by income (or any  interest  or  penalty  with  respect
thereto or arising from a failure to comply therewith).

         Section  3.16.  INFORMATION  REQUIRED BY THE INTERNAL  REVENUE  SERVICE
GENERALLY AND REPORTS OF FORECLOSURES  AND  ABANDONMENTS OF MORTGAGED  PROPERTY.
The Servicer shall prepare and deliver all federal and state information reports
when and as required by all  applicable  state and federal  income tax laws.  In
particular,  with respect to the requirement  under Section 6050J of the Code to
the effect that the Servicer shall make reports of foreclosures and abandonments
of any mortgaged  property for each year  beginning in 200_,  the Servicer shall
file reports relating to each instance  occurring  during the previous  calendar
year in which the Servicer (i) on behalf of the Trustee  acquires an interest in
any Mortgaged  Property through  foreclosure or other  comparable  conversion in
full or partial  satisfaction of a Mortgage Loan, or (ii) knows or has reason to
know that any  Mortgaged  Property  has been  abandoned.  The  reports  from the
Servicer  shall  be in form  and  substance  sufficient  to meet  the  reporting
requirements imposed by Section 6050J.

                                   ARTICLE IV

                              Servicing Certificate

         Section 4.01. SERVICING CERTIFICATE.  Not later than each Determination
Date,  the  Servicer  shall  deliver  (a)  to  the  Trustee,  the  Statement  to
Certificateholders  required to be prepared  pursuant to Section 5.03 and (b) to
the  Trustee,  the  Transferor,  the  Depositor,  the Paying  Agent,  the Credit
Enhancer and each Rating Agency a Servicing  Certificate (in written form or the
form of  computer  readable  media or such other form as may be agreed to by the
Trustee and the Servicer),  together with an Officer's Certificate to the effect
that such Servicing  Certificate  is true and correct in all material  respects,
stating the related  Collection  Period,  Payment Date, the series number of the
Certificates, the date of this Agreement, and:

                  (i)  the  aggregate  amount  of  collections  received  on the
         Mortgage Loans on or prior to the Determination Date in respect of such
         Collection Period;

                  (ii) the aggregate amount of (a) Interest  Collections and (b)
         Principal Collections for such Collection Period;

                  (iii) the  Investor  Floating  Allocation  Percentage  and the
         Investor Fixed Allocation Percentage for such Collection Period;

                  (iv)  the  Investor   Interest   Collections   and   Principal
         Collections  allocated to the Investor Certificates for such Collection
         Period;

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<PAGE>

                  (v)  the  Transferor   Interest   Collections  and  Transferor
         Principal Collections for such Collection Period;

                  (vi) Class A  Certificate  Interest,  the Class A  Certificate
         Rate and the Class S  Certificate  Interest  for the  related  Interest
         Period;

                  (vii) the amount, if any, of such Class A Certificate Interest
         or Class S  Certificate  Interest  that is not  payable  on  account of
         insufficient Investor Interest Collections;

                  (viii) the portion of the Unpaid Class A Certificate  Interest
         Shortfall  and the portion of the Unpaid Class S  Certificate  Interest
         Shortfall,  if any,  the amount of  interest on such  shortfall  at the
         Certificate Rate applicable from time to time (separately stated) to be
         distributed on such Payment Date;

                  (ix) the Unpaid Class A Certificate Interest Shortfall and the
         Unpaid Class S Certificate Interest Shortfall,  if any, to remain after
         the distribution on such Payment Date;

                  (x) the  Accelerated  Principal  Distribution  Amount  and the
         portion   thereof  that  will  be   distributed   pursuant  to  Section
         5.01(a)(viii);

                  (xi) the Scheduled Principal Collections  Distribution Amount,
         separately stating the components thereof;

                  (xii) the amount of any  Transfer  Deposit  Amount paid by the
         Transferor or the Depositor pursuant to Section 2.02 or 2.04;

                  (xiii) any  accrued  and unpaid  Servicing  Fees for  previous
         Collection Periods and the Servicing Fee for such Collection Period;

                  (xiv) the Investor Loss Amount for such Collection Period;

                  (xv) the aggregate  amount, if any, of Investor Loss Reduction
         Amounts  for  previous  Payment  Dates  that  have not been  previously
         reimbursed to Class A Certificateholders pursuant to 5.01(a)(vi);

                  (xvi)  the  Pool  Balance  as of  the  end  of  the  preceding
         Collection Period and as of the end of the second preceding  Collection
         Period;

                  (xvii)  the  Invested  Amount  as of the end of the  preceding
         Collection Period;

                  (xviii) the Class A Certificate Principal Balance, the Class S
         Notional Amount and Pool Factor after giving effect to the distribution
         on such  Payment  Date and to any  reduction on account of the Investor
         Loss Amount;

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<PAGE>

                  (xix) the Transferor  Principal Balance after giving effect to
         the distribution on such Payment Date;

                  (xx) the  aggregate  amount  of  Additional  Balances  created
         during the previous Collection Period;

                  (xxi) the number and  aggregate  Asset  Balances  of  Mortgage
         Loans (x) as to which the Minimum  Monthly  Payment is  delinquent  for
         30-59 days,  60-89 days and 90 or more days,  respectively and (y) that
         have become REO, in each case as of the end of the preceding Collection
         Period;

                  (xxii) whether a Rapid  Amortization  Event has occurred since
         the prior Determination  Date,  specifying each such Rapid Amortization
         Event if one has occurred;

                  (xxiii) whether an Event of Servicing Termination has occurred
         since the  prior  Determination  Date,  specifying  each such  Event of
         Servicing Termination if one has occurred;

                  (xxiv) the  amount to be  distributed  to the Credit  Enhancer
         pursuant to Section  5.01(a)(vii) and Section  5.01(a)(ix)(ii),  stated
         separately;

                  (xxv)  the  amount to be  distributed  to the  Spread  Account
         pursuant to Section 5.01(a)(ix)(i);

                  (xxvi) the Guaranteed  Principal  Distribution Amount for such
         Payment Date;

                  (xxvii) the Credit  Enhancement Draw Amount,  if any, for such
         Payment Date;

                  (xxviii)  the  amount  to be  distributed  to  the  Transferor
         pursuant to Section 5.01(a)(xi);

                  (xxix)  the  amount  to be paid to the  Servicer  pursuant  to
         Section 5.01(a)(x);

                  (xxx) the Maximum Rate for the related  Collection  Period and
         the Weighted Average Net Loan Rate;

                  (xxxi)  the total  amount of funds on  deposit  in the  Spread
         Account and the applicable Spread Account Maximum;

                  (xxxii) the  Overcollateralization  Amount after giving effect
         to the distribution to be made on such Distribution;

                  (xxxiii)  the number and  principal  balances of any  Mortgage
         Loans retransferred to the Transferor pursuant to Section 2.06;

                                       50
<PAGE>

                  (xxxiv) the amount of Principal Collections to be deposited in
         the Funding Account in respect of such Payment Date;

                  (xxxv) the amount on deposit in the Funding Account as of such
         Payment Date; and

                  (xxxvi) the aggregate of the Asset  Balances of the Subsequent
         Mortgage Loans purchased on the related Subsequent Transfer Dates.

The  Trustee  shall  conclusively  rely  upon  the  information  contained  in a
Servicing  Certificate for purposes of making distributions  pursuant to Section
5.01,  shall have no duty to  inquire  into such  information  and shall have no
liability in so relying. The format and content of the Servicing Certificate may
be modified by the mutual agreement of the Servicer,  the Trustee and the Credit
Enhancer.  The  Servicer  shall  give  notice of any such  change to the  Rating
Agencies.

         Section 4.02. CLAIMS UPON THE POLICY.  (a) If, by the close of business
on the third  Business Day prior to a Payment Date, the sum of the funds then on
deposit in the Collection  Account for the related  Collection  Period which are
payable to the Investor Certificateholders pursuant to Sections 5.01(a), (b) and
(g)  (after  giving  effect  to the  distribution  of the  Trustee  Fee  and the
Premium), the amounts on deposit in the Spread Account, amounts transferred from
the Funding Account to the Collection  Account pursuant to Sections  5.05(c)(ii)
and  5.05(c)(iii)(B)  and the  amount,  if any,  deposited  into the  Collection
Account  pursuant  to  Section  4.05  are  insufficient  to pay  the  Guaranteed
Distribution  on such Payment  Date,  then the Trustee  shall give notice to the
Credit  Enhancer by  telephone  or  telecopy  of the amount  equal to the Credit
Enhancement  Draw Amount.  Such notice of such sum shall be confirmed in writing
to the Credit  Enhancer  at or before  10:00  a.m.,  New York City time,  on the
second Business Day prior to such Payment Date.  Following receipt by the Credit
Enhancer of such notice in such form,  the Credit  Enhancer  will pay any amount
payable under the Policy on the later to occur of (i) 12:00 noon,  New York City
time, on the Business Day following  such receipt and (ii) 12:00 noon,  New York
City time, on the Payment Date to which such deficiency relates.

         (b) The Trustee shall keep a complete and accurate record of the amount
of interest  and  principal  paid in respect of any  Investor  Certificate  from
moneys  received under the Policy.  The Credit  Enhancer shall have the right to
inspect such records at reasonable  times during normal  business hours upon one
Business Day's prior notice to the Trustee.

         (c) The  Trustee  shall  promptly  notify  the Credit  Enhancer  of any
proceeding or the institution of any action,  of which a Responsible  Officer of
the  Trustee  has actual  knowledge,  seeking the  avoidance  as a  preferential
transfer under applicable bankruptcy, insolvency, receivership or similar law (a
"PREFERENCE  CLAIM")  of any  distribution  made with  respect  to the  Investor
Certificates.   Each  Investor   Certificateholder   by  its  purchase  of  such
Certificates,  the  Servicer  and the  Trustee  hereby  agree  that,  the Credit
Enhancer (so long as no Credit  Enhancer  Default exists) may at any time during
the  continuation  of any proceeding  relating to a Preference  Claim direct all
matters relating to such

                                       51
<PAGE>

         Preference Claim, including,  without limitation,  (i) the direction of
any appeal of any order relating to such  Preference  Claim and (ii) the posting
of any surety,  supersedeas  or  performance  bond pending any such  appeal.  In
addition and without  limitation of the foregoing,  the Credit Enhancer shall be
subrogated  to  the  rights  of  the  Servicer,   the  Trustee,   each  Investor
Certificateholder  in the  conduct  of any  such  Preference  Claim,  including,
without  limitation,  all rights of any party to an adversary  proceeding action
with respect to any court order issued in  connection  with any such  Preference
Claim.

         Section  4.03.  SPREAD  ACCOUNT.  (a) The Trustee  shall  establish and
maintain a separate trust account (the "SPREAD ACCOUNT") titled  "[Trustee],  as
Trustee,  in trust for the  registered  holders of Home Equity Loan Asset Backed
Certificates,  Series 200_-_." The Spread Account shall be an Eligible  Account.
Amounts  on  deposit  in  the  Spread  Account  will,  at the  direction  of the
Transferor,  be invested in Eligible  Investments maturing no later than the day
before the next Payment Date.

         All income and gain realized from any investment of funds in the Spread
Account shall be for the benefit of the  Transferor  and shall be subject to its
withdrawal  from time to time.  The amount of any losses  incurred in respect of
the principal  amount of any such  investments  shall be deposited in the Spread
Account by the Transferor out of its own funds immediately as realized.

         (b) On each  Determination  Date the Trustee  shall  determine  (i) the
extent to which Investor Interest Collections and the amounts, if any, deposited
into the  Collection  Account  pursuant  to  Section  4.05  applied in the order
specified in Section 5.01(a) are insufficient to make  distributions as provided
in  clauses  (iii),  (iv) and (v) of  Section  5.01(a)  and (ii) the  Guaranteed
Principal Distribution Amount for the related Payment Date. On each Payment Date
the  Trustee  shall  withdraw  from the  Spread  Account  and  deposit  into the
Collection Account the lesser of the amount on deposit in the Spread Account and
an amount equal to the sum of the amounts, if any, determined in clauses (i) and
(ii) of the preceding sentence.

         (c) Following the termination of the Trust pursuant to Section 10.01 or
11.02  hereof,  the Trustee  shall  withdraw  all amounts then on deposit in the
Spread Account and distribute such amounts first to any amounts due and owing to
the Credit  Enhancer  and then to the  Transferor.  If on any  Payment  Date the
amount on deposit in the Spread Account exceeds the Spread Account Maximum,  the
Trustee shall withdraw such excess and distribute it to the Transferor.

         Section 4.04.  EFFECT OF PAYMENTS BY THE CREDIT ENHANCER;  SUBROGATION.
Anything  herein to the  contrary  notwithstanding,  any payment with respect to
principal of or interest on any of the Investor  Certificates which is made with
moneys  received  pursuant  to the terms of the Policy  shall not be  considered
payment of such Investor Certificates from the Trust and shall not result in the
payment of or the  provision  for the payment of the principal of or interest on
such Investor  Certificates  within the meaning of Section 5.01.  The Depositor,
the Servicer and the Trustee  acknowledge,  and each Holder by its acceptance of
an Investor  Certificate agrees, that without the need for any further action on
the part of the Credit Enhancer, the Depositor, the Servicer, the Trustee or the

                                       52
<PAGE>

Certificate  Registrar  (a) to the extent the Credit  Enhancer  makes  payments,
directly or  indirectly,  on account of principal of or interest on any Investor
Certificates  to the Holders of such  Certificates,  the Credit Enhancer will be
fully  subrogated  to the rights of such Holders to receive such  principal  and
interest from the Trust and (b) the Credit Enhancer shall be paid such principal
and interest but only from the sources and in the manner provided herein for the
payment of such principal and interest.

         The Trustee and the Servicer  shall  cooperate in all respects with any
reasonable  request by the Credit Enhancer for action to preserve or enforce the
Credit  Enhancer's rights or interests under this Agreement without limiting the
rights or affecting the interests of the Holders as otherwise set forth herein.

                                   ARTICLE V

                             Payments and Statements
               to Certificateholders; Rights of Certificateholders

         Section 5.01.  DISTRIBUTIONS.  (a)  DISTRIBUTIONS OF INVESTOR  INTEREST
COLLECTIONS  AND  INVESTMENT  PROCEEDS.  Subject  to Section  11.02(b),  on each
Payment  Date,  the  Trustee  or the  Paying  Agent,  as the case may be,  shall
distribute out of the Collection  Account to the extent of (x) Investor Interest
Collections  collected  during the related  Collection  Period,  (y) the amounts
transferred from the Funding Account pursuant to Section  5.05(c)(i) and (z) the
amounts  transferred  from the Spread Account as determined  pursuant to Section
4.03(b),  the following  amounts and in the  following  order of priority to the
following  Persons  (based  on  the  information  set  forth  in  the  Servicing
Certificate):

                  (i) the Trustee Fee for such Payment Date to the Trustee;

                  (ii) the premium  pursuant to the  Insurance  Agreement to the
         Credit Enhancer;

                  (iii) the Class A  Certificate  Interest for such Payment Date
         to the Class A  Certificateholders  and the Unpaid Class A  Certificate
         Interest  Shortfall,  if any,  for  such  Payment  Date to the  Class A
         Certificateholders  plus, to the extent legally  permissible,  interest
         thereon at the Class A Certificate Rate;

                  (iv) the Class S Certificate Interest for such Payment Date to
         the  Class S  Certificateholders  and the  Unpaid  Class S  Certificate
         Interest  Shortfall,  if any, for such Payment Date plus, to the extent
         legally permissible, interest thereon at the Class S Certificate Rate;

                  (v) the Investor Loss Amount for such Collection Period to the
         Class A  Certificateholders  as  principal  in reduction of the Class A
         Certificate Principal Balance;

                  (vi) to Class A  Certificateholders  as principal in reduction
         of the Class A Certificate  Principal  Balance the aggregate  amount of
         the Investor Loss

                                       53
<PAGE>

         Reduction  Amounts,  if any, for previous  Payment  Dates that have not
         been previously  reimbursed to Class A  Certificateholders  pursuant to
         this clause (vi);

                  (vii)  to  reimburse  the  Credit   Enhancer  for   previously
         unreimbursed  Credit  Enhancement  Draw Amounts  together with interest
         thereon at the applicable rate set forth in the Insurance Agreement;

                  (viii) the Accelerated Principal  Distribution Amount, if any,
         to the Class A Certificateholders;

                  (ix) (i) to the Trustee to deposit to the Spread Account up to
         the Spread  Account  Maximum  and (ii) to the Credit  Enhancer  for any
         amounts  owed  to  the  Credit  Enhancer   pursuant  to  the  Insurance
         Agreement;

                  (x) the  amount,  if any,  of any Unpaid  Class A  Certificate
         Carry Forward Interest Amount to the Class A Certificates;

                  (xi) any amount  required to be paid to the Servicer  pursuant
         to Section 7.03 which has not been previously paid to the Servicer; and

                  (xii) any remaining amount to the Transferor.

         (b) DISTRIBUTION OF PRINCIPAL COLLECTIONS.  On each Payment Date during
the Funding Period,  the Scheduled  Principal  Collections  Distribution  Amount
shall be deposited into the Funding  Account and shall not be distributed to the
Class A  Certificateholders.  On each Payment Date following the  termination of
the Funding Period, the Trustee shall, subject to Section 11.02(b) and except on
the Payment Date in __________ 200_, distribute out of the Collection Account to
the Class a Certificateholders the Scheduled Principal Collections  Distribution
Amount  (together with amounts  transferred  to the Collection  Account from the
Spread Account  pursuant to Section 4.03(b)  relating to principal up to but not
in excess of the Class A  Certificate  Principal  Balance.  In addition,  on the
first Payment Date  following the end of the Funding  Period,  the Trustee shall
distribute  out  of  the  Collection  Account  the  amount  required  to  be  so
distributed  pursuant  to  Section  5.05(c)(iii)(C).  On  the  Payment  Date  in
__________  200_,  the Trustee shall  distribute  to Class A  Certificateholders
Principal Collections up to the Class A Certificate Principal Balance.

         (c) APPLICATION OF TRANSFEROR  SUBORDINATED  AMOUNT. If, after applying
Class a Interest  Collections as provided in Section 5.01(a) above,  any amounts
specified in clauses (i) through (vi) remain unpaid, the Trustee shall, based on
information set forth in the Servicing  Certificate for such Payment Date, apply
Transferor Available Funds to make such payments and the Transferor Subordinated
Amount shall be reduced in accordance with clause (i) of the definition  thereof
to the extent of such application.  If Transferor Available Funds applied in the
order  specified  in Section  5.01(a) are  insufficient  to cover the  aggregate
Investor  Loss  Amount  for such  Payment  Date,  then the  remaining  aggregate
Investor  Loss  Amount  (but  only to the  extent  of the  remaining  Transferor
Subordinated  Amount) shall be reallocated to the Transferor  Principal  Balance
(after  giving effect to the  Transferor's  portion of the Investor Loss Amount)
and  shall  not

                                       54
<PAGE>

be allocated to the Class A Certificates and the Transferor  Subordinated Amount
shall be reduced,  as described in clause (ii) of the definition thereof, by the
amount so reallocated.

         (d) DISTRIBUTION OF THE CREDIT ENHANCEMENT DRAW AMOUNT. With respect to
any Payment Date, to the extent that Investor  Interest  Collections and amounts
transferred  from the Spread  Account on the related  Payment Date in respect of
the amount determined  pursuant to Section  4.03(b)(i) and any amounts,  if any,
deposited  to the  Collection  Account  pursuant to Section  4.05 applied in the
order specified in Section 5.01(a) are  insufficient  to make  distributions  as
provided in clauses (iii) and (iv) of Section  5.01(a)  above,  the Trustee will
make such  payments  (the  "DEFICIENCY  AMOUNT") from the amount drawn under the
Policy for such Payment Date pursuant to Section  4.02.  For any Payment Date as
to which there is a Guaranteed Principal  Distribution Amount, the Trustee shall
distribute the Guaranteed  Principal  Distribution Amount to  Certificateholders
from the amount drawn under the Policy for such Payment Date pursuant to Section
4.02.

         The  aggregate   amount  of  principal   distributed  to  the  Class  A
Certificateholders  under this  Agreement  shall not exceed the Original Class A
Certificate Principal Balance.

         (e) METHOD OF  DISTRIBUTION.  The Trustee shall make  distributions  in
respect of a Payment Date to each  Investor  Certificateholder  of record on the
related  Record Date (other than as  provided in Section  10.01  respecting  the
final   distribution)   by  check  or  money  order  mailed  to  such   Investor
Certificateholder at the address appearing in the Certificate  Register, or upon
written  request by an Investor  Certificateholder  delivered  to the Trustee at
least five  Business  Days prior to such Record Date, by wire transfer (but only
if such  Certificateholder is the Depository or such  Certificateholder  owns of
record  one  or  more  Investor  Certificates  having  principal   denominations
aggregating  at least  $1,000,000),  or by such  other  means of payment as such
Investor  Certificateholder  and the Trustee  shall agree.  Distributions  among
Investor  Certificateholders  shall  be made  in  proportion  to the  Percentage
Interests  evidenced  by  the  Investor   Certificates  held  by  such  Investor
Certificateholders.

         (f)  DISTRIBUTIONS ON BOOK-ENTRY  CERTIFICATES.  Each distribution with
respect to a Book-Entry Certificate shall be paid to the Depository, which shall
credit  the  amount  of such  distribution  to the  accounts  of its  Depository
Participants  in  accordance  with  its  normal   procedures.   Each  Depository
Participant  shall  be  responsible  for  disbursing  such  distribution  to the
Certificate  Owners  that  it  represents  and to  each  indirect  participating
brokerage firm (a "BROKERAGE FIRM" or "INDIRECT  PARTICIPATING  FIRM") for which
it acts as agent.  Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. All such credits and disbursements
with respect to a Book-Entry  Certificate  are to be made by the  Depository and
the Depository  Participants  in accordance  with the provisions of the Investor
Certificates.  None of the Trustee, the Paying Agent, the Certificate Registrar,
the Depositor, the Credit Enhancer or the Servicer shall have any responsibility
therefor except as otherwise provided by applicable law.

                                       55
<PAGE>

         (g)  DISTRIBUTIONS  TO  HOLDERS  OF  TRANSFEROR  CERTIFICATES.  On each
Payment Date, the Trustee  shall,  based upon the  information  set forth in the
Servicing  Certificate  for such Payment Date,  distribute to the Transferor (i)
the Transferor  Interest  Collections for the related Collection Period and (ii)
the  portion,  if any,  of  Transferor  Principal  Collections  for the  related
Collection  Period  in  excess  of  Additional   Balances  created  during  such
Collection  Period to the extent such amounts are not required to be distributed
to the Class A  Certificateholders  pursuant to Section  5.01(c);  PROVIDED that
collections allocable to the Transferor  Certificates will be distributed to the
Transferor only to the extent that such  distribution will not reduce the amount
of the  Transferor  Principal  Balance as of the related  Payment Date below the
Minimum Transferor  Interest.  Amounts not distributed to the Transferor because
of such  limitations  will be  retained  in the  Collection  Account  until  the
Transferor Principal Balance exceeds the Minimum Transferor  Interest,  at which
time such excess  shall be released to the  Transferor.  If any such amounts are
still  retained in the  Collection  Account upon the  commencement  of the Rapid
Amortization Period, such amounts will be paid to the Class A Certificateholders
as a reduction of the Class A Certificate Principal Balance.

         Section  5.02.  CALCULATION  OF THE CLASS A  CERTIFICATE  RATE.  On the
second LIBOR Business Day  immediately  preceding each Payment Date, the Trustee
shall determine  LIBOR for the Interest  Period  commencing on such Payment Date
and  inform  the  Servicer  (at the  facsimile  number  given to the  Trustee in
writing) of such rates. On each Determination  Date, the Trustee shall determine
the applicable Class A Certificate Rate for the related Payment Date.

         Section 5.03. STATEMENTS TO CERTIFICATEHOLDERS.  Concurrently with each
distribution to Investor  Certificateholders,  the Trustee shall forward to each
Investor  Certificateholder,  the  Servicer  and each Rating  Agency a statement
prepared  by the  Servicer  pursuant  to  Section  4.01  with  respect  to  such
distribution setting forth:

                  (i)  the  Investor  Floating  Allocation  Percentage  for  the
         preceding Collection Period;

                  (ii) the Class A Certificate Distribution Amount;

                  (iii)  the  amount  of Class A  Certificate  Interest  in such
         distribution,  the  related  Class A  Certificate  Rate and the Class S
         Certificate Interest;

                  (iv) the  amount,  if any, of any Unpaid  Class A  Certificate
         Interest Shortfall or any Unpaid Class S Certificate Interest Shortfall
         in such distribution;

                  (v)  the  amount,  if any,  of the  remaining  Unpaid  Class A
         Certificate   Interest   Shortfall   after   giving   effect   to  such
         distribution;

                  (vi) the amount,  if any, of principal  in such  distribution,
         separately stating the components thereof;

                  (vii) the  amount,  if any, of the  reimbursement  of previous
         Investor Loss Reduction Amounts in such distribution;

                                       56
<PAGE>

                  (viii) the amount,  if any, of the  aggregate of  unreimbursed
         Investor   Loss   Reduction   Amounts   after  giving  effect  to  such
         distribution;

                  (ix) the Servicing Fee for such Payment Date;

                  (x) the Invested  Amount,  the Class A  Certificate  Principal
         Balance  and  the  Pool  Factor,  each  after  giving  effect  to  such
         distribution;

                  (xi)  the  Pool  Balance  as  of  the  end  of  the  preceding
         Collection  Period  and the  aggregate  of the  Asset  Balances  of the
         Mortgage  Loans at the close of business on the last day of the related
         Collection Period;

                  (xii) the Credit Enhancement Draw Amount, if any;

                  (xiii) the number and  aggregate  Asset  Balances  of Mortgage
         Loans as to which the Minimum  Monthly  Payment is delinquent for 30-59
         days,  60-89 days and 90 or more days,  respectively,  as of the end of
         the preceding Collection Period;

                  (xiv) the book value (within the meaning of 12 C.F.R.  Section
         571.13 or  comparable  provision) of any real estate  acquired  through
         foreclosure or grant of a deed in lieu of foreclosure;

                  (xv)  the  Class  A   Certificate   Rate   applicable  to  the
         distribution on the following Payment Date;

                  (xvi) the number and principal  balances of any Mortgage Loans
         retransferred  to the  Transferor  pursuant to (a) Section 2.04 and (b)
         Section 2.06;

                  (xvii)  the  amount of  Transferor  Available  Funds,  if any,
         included in such distribution; and

                  (xviii) the Transferor  Subordinated  Amount for the following
         Payment Date.

         In the case of information furnished pursuant to clauses (ii), (iii) in
respect of Class A  Certificate  Interest,  (iv) and (viii)  above,  the amounts
shall be expressed as a dollar  amount per  Investor  Certificate  with a $1,000
denomination.

         Within 60 days after the end of each calendar  year, the Servicer shall
prepare or cause to be prepared and shall forward to the Trustee the information
set forth in clauses (iii) and (vi) above  aggregated  for such  calendar  year.
Such  obligation of the Servicer  shall be deemed to have been  satisfied to the
extent  that  substantially  comparable  information  shall be  provided  by the
Servicer or a Paying Agent pursuant to any requirements of the Code.

         The  Trustee  shall  prepare  or  cause  to be  prepared  (in a  manner
consistent with the treatment of the Class A Certificates as indebtedness of the
Transferor,  or as may be

                                       57
<PAGE>

otherwise  required by Section 3.15) Internal  Revenue Service Form 1099 (or any
successor  form) and any other tax forms  required to be filed or  furnished  to
Certificateholders  in respect of  distributions  by the  Trustee (or the Paying
Agent) on the Class A Certificates  and shall file and distribute  such forms as
required by law.

         Section 5.04. RIGHTS OF  CERTIFICATEHOLDERS.  The Investor Certificates
shall  represent  fractional  undivided  interests in the Trust,  including  the
benefits of the Collection  Account and the right to receive  Investor  Interest
Collections,  Principal Collections,  if any, and other amounts at the times and
in the amounts specified in this Agreement;  the Transferor  Certificates  shall
represent  the remaining  interest in the Trust (other than the Spread  Account,
the Policy and the Funding Account).

         Section 5.05.  FUNDING  ACCOUNT.  (a) The Trustee  shall  establish and
maintain with itself a separate trust account (the "FUNDING  ACCOUNT")  entitled
"[Trustee] as Trustee,  in trust for the registered  holders of Home Equity Loan
Asset Backed  Certificates,  Series 200_-_ Funding Account." The Funding Account
shall be an Eligible  Account.  On each Payment Date during the Funding  Period,
the  Trustee  shall  withdraw  from the  Collection  Account  and deposit to the
Funding Account the Scheduled Principal Collections Distribution Amount for such
Payment Date.

         (b) The  Servicer  may cause the  institution  maintaining  the Funding
Account to invest any funds in the Funding Account in Eligible Investments which
shall  mature or  otherwise  be  available  not later than the Business Day next
preceding the Payment Date or, with the approval of the Credit  Enhancer and the
Rating Agencies,  on the Payment Date next following the date of such investment
(except that any investment in an obligation of the  institution  with which the
Funding Account is maintained may mature on or before 12:00 noon, New York time,
on such  Payment  Date)  and  shall  not be sold or  disposed  of  prior  to its
maturity.  At any time when the Trustee is maintaining the Funding Account,  any
request by the Servicer to invest funds on deposit in the Funding  Account shall
be in writing,  shall be delivered  to the Trustee at or before 10:30 a.m.,  New
York time, if such  investment is to be made on such day, and shall certify that
the requested  investment is an Eligible Investment which matures at or prior to
the time required hereby. Any such investment shall be registered in the name of
the  Trustee  as trustee  hereunder  or in the name of its  nominee,  and to the
extent  such  investments  are  certificated  they  shall be  maintained  in the
possession of the Trustee in the state of its Corporate Trust Office. All income
and gain  realized  from any such  investment  shall be for the  benefit  of the
Investor  Certificateholders  and shall be subject to  withdrawal by the Trustee
for  distribution to the Investor  Certificateholders  as provided in subsection
(c)(i)  below.  The amount of any losses  incurred  in respect of the  principal
amount of any such  investment  shall be deposited in the Funding Account by the
Servicer out of its own funds immediately as realized.  Any investment  earnings
on the Funding  Account shall be treated as owned by the  Transferor for federal
and state income tax purposes.

         (c)  From  time to time  withdrawals  shall be made  from  the  Funding
Account by the Trustee as follows:

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<PAGE>

                  (i) on each Payment Date during the Funding Period, to deposit
         to the Collection Account all income realized from Eligible Investments
         during the related Interest Period on Principal  Collections on deposit
         in  the  Funding  Account  for   distribution   as  Investor   Interest
         Collections in accordance with Section 5.01(a);

                  (ii) on each  Payment  Date  prior  to the last  Payment  Date
         during  the  Funding  Period,  any  amounts  in  respect  of  Principal
         Collections  on deposit in the Funding  Account  shall be withdrawn and
         applied to purchase the Subsequent Mortgage Loans, if any,  transferred
         to the Trust pursuant to Section 2.10; and

                  (iii) on the last  Payment  Date of the  Funding  Period,  any
         amounts in respect of Principal  Collections  on deposit in the Funding
         Account shall be withdrawn and applied in the following order:

                           (A) to purchase the  Subsequent  Mortgage  Loans,  if
                  any, transferred to the Trust pursuant to Section 2.10;

                           (B) to the  Transferor,  in  payment  for  Additional
                  Balances,  in a maximum amount equal to the excess, if any, of
                  the  aggregate of Draws during the related  Collection  Period
                  over Principal  Collections  received  during such  Collection
                  Period; and

                           (C) to the Collection Account,  any remaining amounts
                  on deposit  in the  Funding  Account  in respect of  Principal
                  Collections,    for    distribution    to    the    Class    A
                  Certificateholders pursuant to Section 5.01(b).

                                   ARTICLE VI

                                The Certificates

         Section 6.01. THE CERTIFICATES.  The Class A Certificates,  Class S and
Transferor  Certificates  shall  be  substantially  in the  forms  set  forth in
Exhibits  A-1,  A-2 and B,  respectively,  and  shall,  on  original  issue,  be
executed, authenticated and delivered by the Trustee to or upon the order of the
Depositor concurrently with the sale and assignment to the Trustee of the Trust.
The  Class  A  Certificates  shall  be  initially   evidenced  by  one  or  more
certificates  representing  the entire  Original  Class A Certificate  Principal
Balance  and  shall  be held in  minimum  dollar  denominations  of  $1,000  and
multiples of one dollar in excess  thereof,  except that one Class A Certificate
may  be  in a  denomination  of  less  than  $1,000  so  that  the  sum  of  the
denominations of all outstanding  Class A Certificates  shall equal the Original
Class A  Certificate  Principal  Balance.  The  Class S  Certificates  shall  be
initially evidenced by one or more certificates representing the entire original
Class S Notional Amount and shall be held in minimum  notional amounts of $1,000
and  multiples  of one  dollar  in  excess  thereof,  except  that  one  Class S
Certificate  may be in a notional  amount of less than $1,000 so that the sum of
the denominations of all outstanding Class S Certificates  shall equal the Class
S Notional  Amount on the Closing Date.  The  Transferor  Certificates  shall be
issuable as one or more  certificates

                                       59
<PAGE>

representing  the entire  interest  in the  assets of the Trust  other than that
represented by the Investor  Certificates  and shall  initially be issued to the
Transferor.

         The Certificates shall be executed by manual or facsimile  signature on
behalf of the Trustee by an authorized officer under its seal imprinted thereon.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures  were affixed,  authorized to sign on behalf of
the Trustee shall bind the Trust,  notwithstanding  that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Transferor Certificates or did not hold such offices at the date of such
Transferor  Certificate.  No Certificate  shall be entitled to any benefit under
this Agreement,  or be valid for any purpose, unless such Certificate shall have
been manually  authenticated  by the Trustee  substantially in the form provided
for herein,  and such  authentication  upon any Certificate  shall be conclusive
evidence,   and  the  only  evidence,   that  such  Certificate  has  been  duly
authenticated and delivered hereunder.  All Certificates shall be dated the date
of their  authentication.  Subject to Section 6.02(c), the Investor Certificates
shall be  Book-Entry  Certificates.  The  Transferor  Certificates  shall not be
Book-Entry Certificates.

         Section  6.02.  REGISTRATION  OF  TRANSFER  AND  EXCHANGE  OF  INVESTOR
CERTIFICATES;  APPOINTMENT OF REGISTRAR.  (a) The  Certificate  Registrar  shall
cause to be kept at the Corporate Trust Office a Certificate  Register in which,
subject to such  reasonable  regulations  as it may prescribe,  the  Certificate
Registrar  shall provide for the  registration of Investor  Certificates  and of
transfers and exchanges of Investor Certificates as herein provided. The Trustee
shall  initially  serve as Certificate  Registrar for the purpose of registering
Investor  Certificates  and transfers and exchanges of Investor  Certificates as
herein provided.

         Upon surrender for registration of transfer of any Investor Certificate
at any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the  foregoing  paragraph,  the Trustee on behalf of the Trust shall
execute,  authenticate and deliver, in the name of the designated  transferee or
transferees,  one or  more  new  Investor  Certificates  of the  same  aggregate
Percentage Interest.

         At the option of the Investor Certificateholders, Investor Certificates
may be exchanged for other Investor Certificates in authorized denominations and
the  same  aggregate  Percentage  Interests,  upon  surrender  of  the  Investor
Certificates to be exchanged at any such office or agency. Whenever any Investor
Certificates  are so  surrendered  for  exchange,  the Trustee shall execute and
authenticate   and  deliver  the  Investor   Certificates   which  the  Investor
Certificateholder  making the  exchange is entitled to receive.  Every  Investor
Certificate  presented  or  surrendered  for  transfer or exchange  shall (if so
required by the Trustee or the Certificate Registrar) be duly endorsed by, or be
accompanied  by a written  instrument  of transfer in form  satisfactory  to the
Trustee and the  Certificate  Registrar  duly executed by, the Holder thereof or
his attorney duly authorized in writing.

         (b)  Except  as  provided  in  paragraph  (c)  below,   the  Book-Entry
Certificates  shall at all times remain registered in the name of the Depository
or its nominee and at all

                                       60
<PAGE>

times: (i)  registration of the Investor  Certificates may not be transferred by
the Trustee except to another  Depository;  (ii) the  Depository  shall maintain
book-entry  records with respect to the  Certificate  Owners and with respect to
ownership  and  transfers of such  Investor  Certificates;  (iii)  ownership and
transfers  of  registration  of the  Investor  Certificates  on the books of the
Depository shall be governed by applicable rules  established by the Depository;
(iv) the  Depository  may  collect  its usual and  customary  fees,  charges and
expenses from its Depository  Participants;  (v) the Trustee shall deal with the
Depository  as  representative  of  the  Certificate   Owners  of  the  Investor
Certificates  for  purposes  of  exercising  the  rights of  Holders  under this
Agreement,  and requests  and  directions  for and votes of such  representative
shall  not be  deemed  to be  inconsistent  if they are  made  with  respect  to
different  Certificate  Owners; and (vi) the Trustee may rely and shall be fully
protected in relying upon  information  furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect  participating  firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners.

         All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or  brokerage  firm  representing  such  Certificate   Owners.  Each  Depository
Participant shall only transfer  Book-Entry  Certificates of Certificate  Owners
that it  represents  or of  brokerage  firms  for  which  it acts  as  agent  in
accordance  with the  Depository's  normal  procedures.  The parties  hereto are
hereby authorized to execute a Letter of Representations  with the Depository or
take such other action as may be necessary or desirable to register a Book-Entry
Certificate to the Depository. In the event of any conflict between the terms of
any such Letter of Representation and this Agreement the terms of this Agreement
shall control.

         (c) If (i)(x) the  Depository or the  Depositor  advises the Trustee in
writing that the Depository is no longer  willing or able to discharge  properly
its  responsibilities  as  Depository,  and (y) the Trustee or the  Depositor is
unable to locate a qualified successor,  (ii) the Depositor, at its sole option,
with the consent of the  Trustee,  elects to  terminate  the  book-entry  system
through the  Depository  or (iii) after the  occurrence of an Event of Servicing
Termination, the Depository, at the direction of Certificate Owners representing
Percentage  Interests  aggregating  not less than 51%  advises  the  Trustee  in
writing that the  continuation of a book-entry  system through the Depository to
the  exclusion  of  definitive,  fully  registered  Investor  Certificates  (the
"DEFINITIVE  CERTIFICATES")  to  Certificate  Owners  is no  longer  in the best
interests of the Certificate Owners. Upon surrender to the Certificate Registrar
of the Investor  Certificates  by the  Depository,  accompanied by  registration
instructions from the Depository for registration, the Trustee shall execute and
authenticate the Definitive Certificates.  Neither the Depositor nor the Trustee
shall  be  liable  for  any  delay  in  delivery  of such  instructions  and may
conclusively  rely on, and shall be protected in relying on, such  instructions.
Upon  the  issuance  of  Definitive  Certificates,   all  references  herein  to
obligations imposed upon or to be performed by the Depository shall be deemed to
be imposed  upon and  performed by the Trustee,  to the extent  applicable  with
respect  to such  Definitive  Certificates,  and the  Trustee,  the  Certificate
Registrar,  the Servicer and the

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<PAGE>

Depositor  shall  recognize  the  Holders  of  the  Definitive  Certificates  as
Certificateholders hereunder.

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

         All Investor  Certificates  surrendered for registration of transfer or
exchange  shall be  cancelled  by the  Certificate  Registrar  and  disposed  of
pursuant to its standard procedures.

         Section 6.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (i)
any mutilated  Certificate is surrendered  to the  Certificate  Registrar or the
Certificate  Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any  Certificate,  and (ii) there is  delivered to the Trustee,
the Depositor and the Certificate Registrar such security or indemnity as may be
required by them to save each of them  harmless,  then, in the absence of notice
to the  Trustee or the  Certificate  Registrar  that such  Certificate  has been
acquired by a bona fide purchaser,  the Trustee shall execute,  authenticate and
deliver,  in exchange for or in lieu of any such mutilated,  destroyed,  lost or
stolen  Certificate,  a new  Certificate of like tenor and Percentage  Interest.
Upon the issuance of any new Certificate under this Section 6.03, the 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 relation thereto and
any other  expenses  (including  the fees and  expenses  of the  Trustee and the
Certificate  Registrar)  connected therewith.  Any duplicate  Certificate issued
pursuant to this  Section  6.03,  shall  constitute  complete  and  indefeasible
evidence of ownership in the Trust, as if originally issued,  whether or not the
lost, stolen or destroyed Certificate shall be found at any time.

         Section 6.04.  PERSONS DEEMED OWNERS.  Prior to due  presentation  of a
Certificate  for  registration  of transfer,  the Servicer,  the Depositor,  the
Trustee,  the  Certificate  Registrar,  any  Paying  Agent  and any agent of the
Servicer,  the  Depositor,  the  Trustee,  any Paying  Agent or the  Certificate
Registrar  may treat the  Person,  including  a  Depository,  in whose  name any
Certificate  is registered as the owner of such  Certificate  for the purpose of
receiving  distributions  pursuant  to Section  5.01 and for all other  purposes
whatsoever,   and  none  of  the  Servicer,  the  Depositor,  the  Trustee,  the
Certificate  Registrar,  any  Paying  Agent or any agent of any of them shall be
affected by notice to the contrary.

         Section 6.05. RESTRICTIONS ON TRANSFER OF TRANSFEROR CERTIFICATES.  (a)
The Transferor Certificates shall be assigned, transferred,  exchanged, pledged,
financed, hypothecated or otherwise conveyed (collectively, for purposes of this
Section 6.05 and any other  Section  referring to the  Transferor  Certificates,
"transferred" or a "transfer") only in accordance with this Section 6.05.

         (b) No transfer of a Transferor  Certificate  shall be made unless such
transfer is exempt from the  registration  requirements of the Securities Act of
1933,  as  amended,

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<PAGE>

and any applicable  state securities laws or is made in accordance with said Act
and laws.  Except for the initial issuance of the Transferor  Certificate to the
Transferor,  the  Trustee  shall  require  (i)  the  transferee  to  execute  an
investment  letter  acceptable to and in form and substance  satisfactory to the
Trustee  certifying to the Trustee the facts  surrounding  such transfer,  which
investment  letter  shall  not be an  expense  of the  Trustee  or  (ii)  if the
investment letter is not delivered,  a written Opinion of Counsel  acceptable to
and in form and substance  satisfactory  to the Trustee and the  Depositor  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 Trustee or the
Depositor.  The  Holder of a  Transferor  Certificate  desiring  to effect  such
transfer shall, and does hereby agree to,  indemnify the Transferor  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 Transferor  Certificates  and any interest therein shall not be
transferred except upon satisfaction of the following conditions precedent:  (i)
the Person that  acquires a Transferor  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 Trustee, the performance of every covenant
and obligation of the Transferor hereunder and (C) as part of its acquisition of
a Transferor Certificate, acquire all rights of the Transferor or any transferee
under  this  Section  6.05(c)  to amounts  payable  to such  Transferor  or such
transferee  under  Sections  5.01(a)(xii)  and  5.01(g);  (ii) the Holder of the
Transferor  Certificates  shall deliver to the Trustee an Officer's  Certificate
stating that such  transfer  and such  supplemental  agreement  comply with this
Section  6.05(c) and that all conditions  precedent  provided by this subsection
6.05(c)  have been  complied  with and an Opinion of  Counsel  stating  that all
conditions  precedent  provided by this  subsection  6.05(c) have been  complied
with, and the 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  Transferor
Certificates  shall  deliver to the  Trustee a letter  from each  Rating  Agency
confirming that its rating of the Investor Certificates,  after giving effect to
such  transfer,  will not be reduced or withdrawn  without regard to the Policy;
(iv) the transferee of the Transferor  Certificates shall deliver to the Trustee
an Opinion of Counsel to the effect that (a) such  transfer  will not  adversely
affect the  treatment of the Investor  Certificates  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 an Investor
Certificateholder or any Certificate Owner 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  transferee  shall  have
assumed the  obligations  of the  Transferor  pursuant to Section  7.07  hereof.
Notwithstanding the foregoing,  the requirement set forth in subclause (i)(A) of
this  Section  6.05(c)  shall  not apply in the event  the  Trustee  shall  have
received a letter  from each  Rating  Agency  confirming  that its

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rating of the Investor Certificates,  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.   Notwithstanding  the  foregoing,   the
requirements  set forth in this  paragraph  (c)  shall not apply to the  initial
issuance of the Transferor Certificates to the Transferor.

         (d) Except for the initial  issuance of the  Transferor  Certificate to
the Transferor, no transfer of a Transferor Certificate shall be made unless the
Trustee  shall  have  received  either  (i) a  representation  letter  from  the
transferee  of  such  Certificate,  acceptable  to and  in  form  and  substance
satisfactory  to the  Trustee,  to the  effect  that such  transferee  is not an
employee  benefit plan subject to Section 406 of ERISA,  nor a Person  acting on
behalf of any such plan, which representation  letter shall not be an expense of
the Trustee,  (ii) if the purchaser is an insurance  company,  a  representation
that the purchaser is an insurance company which is purchasing such Certificates
with funds contained in an "insurance  company general account" (as such term is
defined in Section V(e) of Prohibited  Transaction  Class Exemption 95-60 ("PTCE
95-60"))  and that the  purchase  and holding of such  Certificates  are covered
under PTCE 95-60, or (iii) in the case of any Transferor  Certificate  presented
for  registration in the name of an employee  benefit plan subject to ERISA, and
Section  4975  of  the  Code  (or   comparable   provisions  of  any  subsequent
enactments),  or a trustee of any such plan, an Opinion of Counsel to the effect
that the purchase or holding of such  Certificate  will not result in the assets
of the Trust being  deemed to be "plan  assets"  and  subject to the  prohibited
transaction provisions of ERISA and the Code and will not subject the Trustee to
any obligation in addition to those undertaken in this Agreement,  which Opinion
of Counsel shall not be an expense of the Trustee or the Depositor.

         Section 6.06.  APPOINTMENT OF PAYING AGENT.  (a) The Paying Agent shall
make  distributions to Investor  Certificateholders  from the Collection Account
pursuant to Section 5.01 and shall report the amounts of such  distributions  to
the Trustee.  The duties of the Paying Agent may include the  obligation  (i) to
withdraw funds from the Collection  Account pursuant to Section 3.03 and for the
purpose of making the  distributions  referred  to above and (ii) to  distribute
statements and provide information to  Certificateholders as required hereunder.
The Paying Agent hereunder shall at all times be a corporation duly incorporated
and validly existing under the laws of the United States of America or any state
thereof,  authorized  under such laws to  exercise  corporate  trust  powers and
subject to  supervision  or  examination  by federal or state  authorities.  The
Paying Agent shall initially be the Trustee. The Trustee may appoint a successor
to act as Paying Agent,  which appointment  shall be reasonably  satisfactory to
the Depositor.

         (b) The  Trustee  shall  cause the  Paying  Agent  (if  other  than the
Trustee)  to execute  and  deliver to the  Trustee an  instrument  in which such
Paying  Agent shall agree with the Trustee that such Paying Agent shall hold all
sums, if any, held by it for payment to the Investor Certificateholders in trust
for the benefit of the Investor  Certificateholders  entitled thereto until such
sums  shall be paid to such  Certificateholders  and shall  agree  that it shall
comply with all  requirements  of the Code regarding the withholding of payments
in respect of Federal  income taxes due from  Certificate  Owners and  otherwise
comply with the provisions of this Agreement applicable to it.

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         Section  6.07.  ACCEPTANCE  OF  OBLIGATIONS.  The  Transferor,  by  its
acceptance of the Transferor Certificates,  agrees to be bound by and to perform
all the duties of the Transferor set forth in this Agreement.

                                  ARTICLE VII

                 The Servicer, the Transferor and the Depositor

         Section  7.01.  LIABILITY  OF THE  TRANSFEROR,  THE  SERVICER  AND  THE
DEPOSITOR.  The  Transferor  and the  Servicer  shall be  liable  in  accordance
herewith  only to the extent of the  obligations  specifically  imposed upon and
undertaken  by the  Transferor  or  Servicer,  as the case may be,  herein.  The
Depositor  shall be  liable in  accordance  herewith  only to the  extent of the
obligations specifically imposed upon and undertaken by the Depositor.

         Section  7.02.  MERGER  OR  CONSOLIDATION  OF,  OR  ASSUMPTION  OF  THE
OBLIGATIONS OF, THE SERVICER,  THE TRANSFEROR OR THE DEPOSITOR.  Any entity into
which  the  Servicer,   the  Transferor  or  the  Depositor  may  be  merged  or
consolidated,   or  any  entity   resulting  from  any  merger,   conversion  or
consolidation to which the Servicer,  the Transferor or the Depositor shall be a
party, or any entity succeeding to the business of the Servicer,  the Transferor
or the Depositor,  shall be the successor of the Servicer, the Transferor or the
Depositor, as the case may be, hereunder, without the execution or filing of any
paper or any  further  act on the part of any of the  parties  hereto,  anything
herein to the contrary notwithstanding.

         Section  7.03.  LIMITATION  ON  LIABILITY  OF THE  SERVICER AND OTHERS.
Neither the Servicer nor any of the directors or officers or employees or agents
of  the   Servicer   shall  be  under  any   liability   to  the  Trust  or  the
Certificateholders for any action taken or for refraining from the taking of any
action by the Servicer in good faith pursuant to this  Agreement,  or for errors
in  judgment;  PROVIDED,  HOWEVER,  that this  provision  shall not  protect the
Servicer  or any such Person  against any  liability  which would  otherwise  be
imposed by reason of willful  misfeasance,  bad faith or gross negligence in the
performance  of duties of the  Servicer  or by reason of reckless  disregard  of
obligations and duties of the Servicer hereunder.  The Servicer and any director
or officer or  employee or agent of the  Servicer  may rely in good faith on any
document of any kind PRIMA FACIE  properly  executed and submitted by any Person
respecting  any matters  arising  hereunder.  The  Servicer  and any director or
officer or employee or agent of the Servicer  shall be  indemnified by the Trust
and held harmless against any loss,  liability or expense incurred in connection
with any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans  (except  as any such  loss,  liability  or  expense  shall  be  otherwise
reimbursable  pursuant to this  Agreement)  and any loss,  liability  or expense
incurred by reason of its willful misfeasance,  bad faith or gross negligence in
the  performance of duties  hereunder or by reason of its reckless  disregard of
obligations and duties hereunder. The Servicer shall not be under any obligation
to appear in,  prosecute or defend any legal action which is not  incidental  to
duties to service the Mortgage  Loans in  accordance  with this  Agreement,  and
which in its  opinion  may  involve it in any  expense or  liability;  PROVIDED,
HOWEVER,  that the Servicer may in its sole discretion undertake any

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such  action  which  it may deem  necessary  or  desirable  in  respect  of this
Agreement,  and the rights and duties of the parties hereto and the interests of
the Certificateholders  hereunder.  In such event, the reasonable legal expenses
and  costs  of such  action  and any  liability  resulting  therefrom  shall  be
expenses,  costs and  liabilities  of the Trust and the  Servicer  shall only be
entitled  to  be  reimbursed  therefor  pursuant  to  Section  5.01(a)(xi).  The
Servicer's  right to  indemnity or  reimbursement  pursuant to this Section 7.03
shall survive any resignation or termination of the Servicer pursuant to Section
7.04 or 8.01 with respect to any losses,  expenses, costs or liabilities arising
prior to such  resignation or termination  (or arising from events that occurred
prior to such resignation or termination).

         Section  7.04.  SERVICER NOT TO RESIGN.  Subject to the  provisions  of
Section  7.02,  the Servicer  shall not resign from the  obligations  and duties
hereby imposed on it except (i) upon  determination  that the performance of its
obligations or duties hereunder are no longer  permissible  under applicable law
or are in  material  conflict  by  reason  of  applicable  law  with  any  other
activities  carried  on by it or  its  subsidiaries  or  Affiliates,  the  other
activities of the Servicer so causing such a conflict being of a type and nature
carried on by the Servicer or its subsidiaries or Affiliates at the date of this
Agreement  or  (ii)  upon  satisfaction  of the  following  conditions:  (a) the
Servicer  has  proposed a successor  servicer to the Trustee in writing and such
proposed  successor servicer is reasonably  acceptable to the Trustee;  (b) each
Rating  Agency  shall  have  delivered  a  letter  to the  Trustee  prior to the
appointment of the successor  servicer stating that the proposed  appointment of
such successor  servicer as Servicer  hereunder will not result in the reduction
or withdrawal of the then current  rating of the Investor  Certificates  without
regard to the Policy;  and (c) such  proposed  successor  servicer is reasonably
acceptable  to the Credit  Enhancer,  as  evidenced  by a letter to the Trustee;
PROVIDED,  HOWEVER,  that no  such  resignation  by the  Servicer  shall  become
effective until the Trustee or successor servicer  designated by the Servicer as
provided   above  shall  have  assumed  the  Servicer's   responsibilities   and
obligations  hereunder or the Trustee shall have designated a successor servicer
in accordance  with Section  8.02.  Any such  resignation  shall not relieve the
Servicer of responsibility for any of the obligations specified in Sections 8.01
and 8.02 as  obligations  that survive the  resignation  or  termination  of the
Servicer.  Any such  determination  permitting  the  resignation of the Servicer
pursuant to clause (i) above shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee and the Credit Enhancer. The Servicer shall have
no claim  (whether by  subrogation  or  otherwise)  or other action  against any
Certificateholder for any amounts paid by the Servicer pursuant to any provision
of this Agreement.

         Section 7.05. DELEGATION OF DUTIES. In the ordinary course of business,
the Servicer at any time may delegate any of its duties hereunder to any Person,
including any of its Affiliates, or any subservicer referred to in Section 3.01,
who agrees to conduct such duties in  accordance  with  standards  comparable to
those with which the Servicer complies pursuant to Section 3.01. Such delegation
shall not relieve the  Servicer of its  liabilities  and  responsibilities  with
respect to such duties and shall not constitute a resignation within the meaning
of Section 7.04.

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         Section  7.06.  INDEMNIFICATION  OF  THE  TRUST  BY THE  SERVICER.  The
Servicer  shall  indemnify  and hold harmless the Trust and the Trustee from and
against any loss, liability,  expense, damage or injury suffered or sustained by
reason of the Servicer's  activities or omissions in servicing or  administering
the Mortgage Loans that are not in accordance  with this  Agreement,  including,
but not limited to, any judgment, award, settlement,  reasonable attorneys' fees
and other  costs or  expenses  incurred  in  connection  with the defense of any
actual or threatened action, proceeding or claim. Any such indemnification shall
not be payable from the assets of the Trust.  The  provisions of this  indemnity
shall run  directly to and be  enforceable  by an injured  party  subject to the
limitations   hereof.   The  provisions  of  this  Section  7.06  shall  survive
termination of this Agreement.

         Section  7.07.   INDEMNIFICATION   OF  THE  TRUST  BY  THE  TRANSFEROR.
Notwithstanding  anything to the contrary  contained herein,  the Transferor (i)
agrees to be liable  directly to the injured  party for the entire amount of any
losses, claims, damages, liabilities and expenses of the Trust (other than those
attributable to an Investor  Certificateholder in the capacity as an investor in
the Investor  Certificates as a result of defaults on the Mortgage Loans) to the
extent that the Transferor would be liable if the Trust were a partnership under
the Delaware Revised Uniform Limited Partnership Act in which the Transferor was
a general  partner and (ii) shall  indemnify and hold harmless the Trust and the
Trustee from and against any loss, liability,  expense,  damage, claim or injury
(other than those attributable to an Investor  Certificateholder in the capacity
as an  investor  in the  Investor  Certificates  as a result of  defaults on the
Mortgage Loans) arising out of or based on this Agreement by reason of any acts,
omissions,  or alleged acts or omissions  arising out of activities of the Trust
or the Trustee, or the actions of the Servicer,  including,  but not limited to,
amounts payable to the Servicer  pursuant to Section 7.03, any judgment,  award,
settlement,  reasonable  attorneys' fees and other costs or expenses incurred in
connection  with the defense of any actual or threatened  action,  proceeding or
claim;  PROVIDED that the Transferor  shall not indemnify the Trustee (but shall
indemnify any other injured party) if such loss, liability,  expense,  damage or
injury  is due  to  the  Trustee's  willful  malfeasance,  bad  faith  or  gross
negligence or by reason of the Trustee's  reckless  disregard of its obligations
hereunder.  The  provisions  of this  indemnity  shall  run  directly  to and be
enforceable by an injured party subject to the limitations hereof.

         Section 7.08.  LIMITATION ON LIABILITY OF THE  TRANSFEROR.  None of the
directors or officers or employees  or agents of the  Transferor  shall be under
any  liability  to the Trust,  the Trustee or the  Certificateholders,  it being
expressly understood that all such liability is expressly waived and released as
a condition of, and as  consideration  for, the execution of this  Agreement and
the issuance of the Certificates;  PROVIDED,  HOWEVER, that this provision shall
not protect  any such Person  against any  liability  which would  otherwise  be
imposed by reason of willful  misfeasance,  bad faith or gross negligence in the
performance  of the duties  hereunder.  Except as provided in Section 7.07,  the
Transferor  shall not be under any  liability  to the Trust,  the Trustee or the
Certificateholders for any action taken or for refraining from the taking of any
action in its capacity as Transferor  pursuant to this Agreement whether arising
from express or implied duties under this  Agreement;  PROVIDED,  HOWEVER,  that
this  provision  shall not protect the  Transferor  against any liability  which
would otherwise be imposed by reason of willful misfeasance,  bad

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faith or gross  negligence  in the  performance  of its  duties  or by reason of
reckless  disregard of its obligations and duties hereunder.  The Transferor and
any director or officer or employee or agent of the  Transferor may rely in good
faith on any document of any kind PRIMA FACIE properly executed and submitted by
any Person respecting any matters arising hereunder.

         Section  7.09.  LIMITATION ON LIABILITY OF THE  DEPOSITOR.  None of the
directors or officers or employees or agents of the Depositor shall be under any
liability  to the  Trust,  the  Trustee  or  the  Certificateholders,  it  being
expressly understood that all such liability is expressly waived and released as
a condition of, and as  consideration  for, the execution of this  Agreement and
the issuance of the Certificates;  PROVIDED,  HOWEVER, that this provision shall
not protect  any such Person  against any  liability  which would  otherwise  be
imposed by reason of willful  misfeasance,  bad faith or gross negligence in the
performance of the duties hereunder.  The Transferor and any director or officer
or employee or agent of the Transferor may rely in good faith on any document of
any kind PRIMA FACIE  properly  executed and submitted by any Person  respecting
any matters arising hereunder.

                                  ARTICLE VIII

                              Servicing Termination

         Section  8.01.  EVENTS  OF  SERVICING  TERMINATION.  If any  one of the
following  events  ("EVENTS  OF  SERVICING  TERMINATION")  shall  occur  and  be
continuing:

                  (i) Any failure by the  Servicer to deposit in the  Collection
         Account  any  deposit  required  to be made  under  the  terms  of this
         Agreement which continues unremedied for a period of five Business Days
         after the date upon which  written  notice of such  failure  shall have
         been given to the  Servicer by the Trustee or to the  Servicer  and the
         Trustee by the Credit  Enhancer  or  Holders of  Investor  Certificates
         evidencing Percentage Interests aggregating not less than 25%; or

                  (ii)  Failure on the part of the  Servicer  duly to observe or
         perform in any material  respect any other  covenants or  agreements of
         the Servicer set forth in the Certificates or in this Agreement,  which
         failure continues  unremedied for a period of 60 days after the date on
         which  written  notice  of  such  failure,  requiring  the  same  to be
         remedied,  and  stating  that  such  notice is a  "Notice  of  Default"
         hereunder,  shall have been given to the  Servicer by the Trustee or to
         the Servicer  and the Trustee by the Credit  Enhancer or the Holders of
         Investor  Certificates  evidencing Percentage Interests aggregating not
         less than 25%; or

                  (iii) The entry against the Servicer of a decree or order by a
         court or agency or supervisory  authority  having  jurisdiction  in the
         premises for the  appointment  of a trustee,  conservator,  receiver or
         liquidator   in   any   insolvency,   conservatorship,    receivership,
         readjustment of debt,  marshalling of assets and liabilities or similar
         proceedings,  or for the winding up or liquidation of its affairs,

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         and the  continuance of any such decree or order unstayed and in effect
         for a period of 60 consecutive days; or

                  (iv) The  consent  by the  Servicer  to the  appointment  of a
         trustee,  conservator,   receiver  or  liquidator  in  any  insolvency,
         conservatorship,  receivership,  readjustment  of debt,  marshalling of
         assets and  liabilities  or similar  proceedings  of or relating to the
         Servicer or of or relating to substantially all of its property; or the
         Servicer  shall  admit  in  writing  its  inability  to pay  its  debts
         generally as they become due, file a petition to take  advantage of any
         applicable insolvency or reorganization statute, make an assignment for
         the benefit of its  creditors,  or voluntarily  suspend  payment of its
         obligations;

then,  and in each  and  every  such  case,  so long as an  Event  of  Servicing
Termination  shall not have been  remedied by the  Servicer,  with respect to an
Event of  Servicing  Termination  specified  in (i) - (iv),  above,  either  the
Trustee, the Credit Enhancer or the Holders of Investor Certificates  evidencing
Voting Rights  aggregating not less than 51%, by notice then given in writing to
the Servicer (and to the Trustee if given by the Credit  Enhancer or the Holders
of Investor Certificates) may terminate all of the rights and obligations of the
Servicer as servicer under this Agreement. Any such notice to the Servicer shall
also be given to each  Rating  Agency and the Credit  Enhancer.  On or after the
receipt by the Servicer of such written  notice,  all authority and power of the
Servicer under this Agreement,  whether with respect to the  Certificates or the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant
to and under this Section 8.01; and , without limitation,  the Trustee is hereby
authorized and empowered to execute and deliver,  on behalf of the Servicer,  as
attorney-in-fact or otherwise, any and all documents and other instruments,  and
to do or accomplish all other acts or things  necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement  of each Mortgage  Loan and related  documents,  or  otherwise.  The
Servicer  agrees to cooperate  with the Trustee in effecting the  termination of
the  responsibilities and rights of the Servicer hereunder,  including,  without
limitation, the transfer to the Trustee for the administration by it of all cash
amounts that shall at the time be held by the Servicer and to be deposited by it
in the  Collection  Account,  or that have been deposited by the Servicer in the
Collection  Account or  thereafter  received by the Servicer with respect to the
Mortgage Loans.  All reasonable costs and expenses  (including  attorneys' fees)
incurred in connection  with  transferring  the Mortgage  Files to the successor
Servicer and amending  this  Agreement  to reflect such  succession  as Servicer
pursuant to this Section 8.01 shall be paid by the  predecessor  Servicer (or if
the predecessor Servicer is the Trustee, the initial Servicer) upon presentation
of reasonable documentation of such costs and expenses.

         Notwithstanding  the  foregoing,  a delay in or failure of  performance
under  Section  8.01(i)  for a period  of ten  Business  Days or  under  Section
8.01(ii)  for a period of 60 Business  Days,  shall not  constitute  an Event of
Servicing  Termination  if such delay or failure  could not be  prevented by the
exercise of  reasonable  diligence by the Servicer and such delay or failure was
caused by an act of God or the public enemy, acts of declared or undeclared war,
public disorder, rebellion or sabotage, epidemics, landslides,  lightning, fire,
hurricanes,  earthquakes, floods or similar causes. The preceding sentence shall
not

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relieve  the  Servicer  from using its best  efforts to perform  its  respective
obligations  in a timely manner in accordance  with the terms of this  Agreement
and the Servicer shall provide the Trustee, the Transferor,  the Credit Enhancer
and the Investor  Certificateholders with an Officers' Certificate giving prompt
notice  of such  failure  or delay by it,  together  with a  description  of its
efforts to so perform its obligations. The Servicer shall immediately notify the
Trustee in writing of any Events of Servicing Termination.

         Section 8.02.  TRUSTEE TO ACT;  APPOINTMENT  OF  SUCCESSOR.  (a) On and
after the time the Servicer receives a notice of termination pursuant to Section
8.01 or 7.04, the Trustee shall be the successor in all respects to the Servicer
in its capacity as servicer under this Agreement and the  transactions set forth
or provided for herein and shall be subject to all the responsibilities,  duties
and  liabilities  relating  thereto  placed  on the  Servicer  by the  terms and
provisions  hereof.  Notwithstanding  the  above,  if the  Trustee  becomes  the
Servicer  hereunder,  it  shall  have no  responsibility  or  obligation  (i) of
repurchase or substitution  with respect to any Mortgage Loan, (ii) with respect
to any  representation  or  warranty of the  Servicer,  and (iii) for any act or
omission of either a predecessor  or successor  Servicer other than the Trustee.
As compensation  therefor, the Trustee shall be entitled to such compensation as
the  Servicer  would  have  been  entitled  to  hereunder  if no such  notice of
termination  had been  given.  In  addition,  the  Trustee  will be  entitled to
compensation  with  respect to its expenses in  connection  with  conversion  of
certain  information,  documents  and record  keeping,  as  provided  in Section
7.04(b).  Notwithstanding  the above,  (i) if the Trustee is unwilling to act as
successor  Servicer,  or (ii) if the  Trustee is legally  unable so to act,  the
Trustee  may (in the  situation  described  in  clause  (i))  or  shall  (in the
situation  described  in clause  (ii))  appoint or petition a court of competent
jurisdiction to appoint,  any established housing and home finance  institution,
bank or other  mortgage loan or home equity loan servicer  having a net worth of
not less than  $15,000,000  as the  successor to the  Servicer  hereunder in the
assumption of all or any part of the responsibilities,  duties or liabilities of
the Servicer  hereunder;  PROVIDED  that any such  successor  Servicer  shall be
acceptable to the Credit Enhancer,  as evidenced by the Credit  Enhancer's prior
written consent, which consent shall not be unreasonably withheld; and PROVIDED,
FURTHER,  that the appointment of any such successor Servicer will not result in
the  qualification,  reduction  or  withdrawal  of the  ratings  assigned to the
Certificates  by the  Rating  Agencies  without  regard to the  Policy.  Pending
appointment  of a successor  to the  Servicer  hereunder,  unless the Trustee is
prohibited  by law from so acting,  the  Trustee  shall act in such  capacity as
hereinabove  provided.  In connection with such appointment and assumption,  the
successor shall be entitled to receive  compensation out of payments on Mortgage
Loans in an amount equal to the compensation  which the Servicer would otherwise
have  received  pursuant  to Section  3.08 (or such lesser  compensation  as the
Trustee and such successor  shall agree).  The Trustee and such successor  shall
take such  action,  consistent  with this  Agreement,  as shall be  necessary to
effectuate any such succession.

         (b) Any successor,  including the Trustee,  to the Servicer as servicer
shall  during the term of its  service as servicer  (i)  continue to service and
administer  the  Mortgage  Loans for the benefit of  Certificateholders  and the
Credit  Enhancer  and (ii)  maintain in force a policy or policies of  insurance
covering  errors and omissions in the

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performance  of its  obligations  as Servicer  hereunder  and a fidelity bond in
respect of its officers, employees and agents to the same extent as the Servicer
is so required pursuant to Section 3.12. The appointment of a successor Servicer
shall not affect any liability of the predecessor Servicer which may have arisen
under this Agreement  prior to its termination as Servicer  (including,  without
limitation,  any deductible under an insurance policy pursuant to Section 3.04),
nor shall any  successor  Servicer  be liable for any acts or  omissions  of the
predecessor  Servicer  or for  any  breach  by  such  Servicer  of any of  their
representations or warranties contained herein.

         Section 8.03. NOTIFICATION TO CERTIFICATEHOLDERS.  Upon any termination
or appointment  of a successor to the Servicer  pursuant to this Article VIII or
Section  7.04,  the Trustee  shall give  prompt  written  notice  thereof to the
Certificateholders  at their respective  addresses  appearing in the Certificate
Register, the Credit Enhancer and each Rating Agency.

                                   ARTICLE IX

                                   The Trustee

         Section 9.01. DUTIES OF TRUSTEE.  The Trustee,  prior to the occurrence
of an Event of  Servicing  Termination  and  after  the  curing or waiver of all
Events of Servicing  Termination which may have occurred,  undertakes to perform
such  duties  and  only  such  duties  as are  specifically  set  forth  in this
Agreement. If an Event of Servicing Termination has occurred (which has not been
cured or waived) of which a Responsible Officer has knowledge, the Trustee shall
exercise such of the rights and powers vested in it by this  Agreement,  and use
the same  degree of care and  skill in their  exercise,  as a prudent  man would
exercise  or use under the  circumstances  in the  conduct  of his own  affairs;
PROVIDED,  HOWEVER,  that if the  Trustee is acting as Servicer it shall use the
same  degree  of care and  skill  as is  required  of the  Servicer  under  this
Agreement.

         The Trustee, upon receipt of all resolutions, certificates, statements,
opinions,  reports,  documents,  orders or other  instruments  furnished  to the
Trustee  which  are  specifically  required  to be  furnished  pursuant  to  any
provision  of this  Agreement,  shall  examine  them to  determine  whether they
conform to the requirements of this Agreement.

         No  provision  of this  Agreement  shall be  construed  to relieve  the
Trustee from liability for its own negligent  action,  its own negligent failure
to act or its own willful misconduct; PROVIDED, HOWEVER, that:

                  (i)  prior  to  the   occurrence  of  an  Event  of  Servicing
         Termination  of  which  a  Responsible   Officer  of  the  Trustee  has
         knowledge,  and  after  the  curing  or  waiver  of all such  Events of
         Servicing   Termination  which  may  have  occurred,   the  duties  and
         obligations  of the Trustee shall be  determined  solely by the express
         provisions  of this  Agreement,  the Trustee shall not be liable except
         for the performance of such duties and obligations as are  specifically
         set forth in this Agreement,  no implied covenants or obligations shall
         be read into this Agreement  against the Trustee and, in the absence of
         bad faith on the part of the  Trustee,  the

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         Trustee may  conclusively  rely, as to the truth of the  statements and
         the   correctness  of  the  opinions   expressed   therein,   upon  any
         certificates or opinions furnished to the Trustee and conforming to the
         requirements of this Agreement;

                  (ii) the Trustee shall not be  personally  liable for an error
         of judgment made in good faith by a Responsible Officer of the Trustee,
         unless  it  shall  be  proved  that  the  Trustee  was   negligent   in
         ascertaining or investigating the facts related thereto;

                  (iii) the Trustee shall not be personally  liable with respect
         to any  action  taken,  suffered  or  omitted to be taken by it in good
         faith in  accordance  with  the  consent  or  direction  of the  Credit
         Enhancer or in accordance with the direction of the Holders of Investor
         Certificates  evidencing  Voting Rights  aggregating  not less than 51%
         relating to the time, method and place of conducting any proceeding for
         any remedy  available to the Trustee,  or exercising any trust or power
         conferred upon the Trustee, under this Agreement; and

                  (iv) the Trustee  shall not be charged  with  knowledge of any
         failure by the Servicer to comply with the  obligations of the Servicer
         referred  to in  clauses  (i)  and  (ii)  of  Section  8.01  or of  the
         occurrence of a Rapid Amortization  Event unless a Responsible  Officer
         of the Trustee at the Corporate  Trust Office obtains actual  knowledge
         of such failure or the Trustee  receives written notice of such failure
         from the  Servicer,  the Credit  Enhancer  or the  Holders of  Investor
         Certificates evidencing Voting Rights aggregating not less than 51%.

         The  Trustee  shall not be  required to expend or risk its own funds or
otherwise  incur  financial  liability in the  performance  of any of its duties
hereunder,  or in the  exercise  of any of its  rights  or  powers,  if there is
reasonable  ground for  believing  that the  repayment of such funds or adequate
indemnity  against such risk or liability is not reasonably  assured to it. None
of the  provisions  contained in this  Agreement  shall in any event require the
Trustee to perform,  or be responsible  for the manner of performance of, any of
the obligations of the Servicer under this  Agreement,  except during such time,
if any, as the Trustee shall be the successor to, and be vested with the rights,
duties,  powers and privileges of, the Servicer in accordance  with the terms of
this  Agreement  and in no event  shall it be  required  to  perform  or  accept
responsibility for the obligations of the Depositor or the Transferor.

         Section  9.02.  CERTAIN  MATTERS  AFFECTING  THE  TRUSTEE.   Except  as
otherwise provided in Section 9.01:

                  (i) the  Trustee  may  request  and rely  upon,  and  shall be
         protected in acting or  refraining  from acting upon,  any  resolution,
         Officer's   Certificate,   certificate   of   auditors   or  any  other
         certificate,  statement,  instrument, opinion, report, notice, request,
         consent, order,  appraisal,  bond or other paper or document reasonably
         believed by it to be genuine and to have been  signed or  presented  by
         the proper party or parties;

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                  (ii) the  Trustee  may  consult  with  counsel and any written
         advice of such  counsel or any  Opinion  of  Counsel  shall be full and
         complete authorization and protection in respect of any action taken or
         suffered  or omitted by it  hereunder  in good faith and in  accordance
         with such advice or Opinion of Counsel;

                  (iii) the 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  hereunder or in relation
         hereto,   at  the   request,   order  or   direction   of  any  of  the
         Certificateholders  or the Credit Enhancer,  pursuant to the provisions
         of  this  Agreement,  unless  such  Certificateholders  or  the  Credit
         Enhancer  shall have  offered to the  Trustee  reasonable  security  or
         indemnity  against the costs,  expenses  and  liabilities  which may be
         incurred  therein or  thereby;  the right of the Trustee to perform any
         discretionary  act enumerated in this Agreement  shall not be construed
         as a duty,  and the Trustee shall not be answerable  for other than its
         negligence or willful  misconduct in the  performance  of any such act;
         nothing  contained  herein shall,  however,  relieve the Trustee of the
         obligations,  upon the occurrence of an Event of Servicing  Termination
         (which has not been cured or waived) of which a Responsible Officer has
         knowledge,  to exercise  such of the rights and powers  vested in it by
         this  Agreement,  and to use the same degree of care and skill in their
         exercise as a prudent man would exercise or use under the circumstances
         in the conduct of his own affairs, unless it is acting as Servicer;

                  (iv) the Trustee shall not be personally liable for any action
         taken, suffered or omitted by it in good faith and believed by it to be
         authorized or within the discretion or rights or powers  conferred upon
         it by this Agreement;

                  (v)  prior  to  the   occurrence  of  an  Event  of  Servicing
         Termination  and after the curing or waiver of all Events of  Servicing
         Termination which may have occurred,  the Trustee shall not be bound to
         make  any  investigation  into  the  facts  or  matters  stated  in any
         resolution,   certificate,   statement,  instrument,  opinion,  report,
         notice,  request,  consent,  order,  approval,  bond or other  paper or
         documents,  unless requested in writing to do so by Holders of Investor
         Certificates  evidencing  Voting Rights  aggregating not less than 51%;
         PROVIDED,  HOWEVER, that if the payment within a reasonable time to the
         Trustee of the costs,  expenses or liabilities likely to be incurred by
         it in the  making  of such  investigation  is,  in the  opinion  of the
         Trustee, not reasonably assured to the Trustee by the security afforded
         to it  by  the  terms  of  this  Agreement,  the  Trustee  may  require
         reasonable  indemnity  against  such cost,  expense or  liability  as a
         condition  to such  proceeding.  The  reasonable  expense of every such
         examination  shall be paid by the  Servicer or, if paid by the Trustee,
         shall be reimbursed by the Servicer upon demand. Nothing in this clause
         (v) shall  derogate from the  obligation of the Servicer to observe any
         applicable  law  prohibiting  disclosure of  information  regarding the
         Mortgagors;

                  (vi) the  Trustee  shall  not be  accountable,  shall  have no
         liability  and  makes no  representation  as to any  acts or  omissions
         hereunder  of the  Servicer

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         until  such time as the  Trustee  may be  required  to act as  Servicer
         pursuant to Section 8.02; and

                  (vii) the  Trustee  may  execute  any of the  trusts or powers
         hereunder  or perform  any duties  hereunder  either  directly or by or
         through an Affiliate, agents or attorneys or a custodian.

         Section 9.03.  TRUSTEE NOT LIABLE FOR  CERTIFICATES  OR MORTGAGE LOANS.
The  recitals  contained  herein  and  in  the  Certificates   (other  than  the
authentication  of the  Trustee  on the  Certificates)  shall  be  taken  as the
statements of the Depositor,  and the Trustee assumes no responsibility  for the
correctness of the same. The Trustee makes no representations as to the validity
or  sufficiency  of  this  Agreement  or of the  Certificates  (other  than  the
signature  and  authentication  of the  Trustee on the  Certificates)  or of any
Mortgage Loan or Related Document.  The Trustee shall not be accountable for the
use or  application  by the  Depositor  of  any  of the  Certificates  or of the
proceeds of such  Certificates,  or for the use or application of any funds paid
to the  Depositor or the Servicer in respect of the Mortgage  Loans or deposited
in or withdrawn from the Collection  Account by the Servicer.  The Trustee shall
at no time have any  responsibility  or  liability  for or with  respect  to the
legality,  validity and  enforceability of any Mortgage or any Mortgage Loan, or
the  perfection  and  priority of any  Mortgage or the  maintenance  of any such
perfection and priority,  or for or with respect to the sufficiency of the Trust
or its ability to generate the payments to be distributed to  Certificateholders
under this Agreement,  including,  without limitation: the existence,  condition
and ownership of any Mortgaged Property; the existence and enforceability of any
hazard  insurance  thereon (other than if the Trustee shall assume the duties of
the Servicer  pursuant to Section  8.02);  the validity of the assignment of any
Mortgage Loan to the Trustee or of any intervening assignment;  the completeness
of any Mortgage Loan; the performance or enforcement of any Mortgage Loan (other
than if the Trustee shall assume the duties of the Servicer  pursuant to Section
8.02); the compliance by the Depositor,  the Transferor or the Servicer with any
warranty or representation  made under this Agreement or in any related document
or the accuracy of any such  warranty or  representation  prior to the Trustee's
receipt of notice or other  discovery  of any  non-compliance  therewith  or any
breach thereof;  any investment of monies by or at the direction of the Servicer
or any loss  resulting  therefrom,  it being  understood  that the Trustee shall
remain  responsible  for any Trust  property that it may hold in its  individual
capacity;  the acts or omissions of any of the  Depositor,  the Servicer  (other
than if the Trustee shall assume the duties of the Servicer  pursuant to Section
8.02), any subservicer or any Mortgagor;  any action of the Servicer (other than
if the  Trustee  shall  assume the duties of the  Servicer  pursuant  to Section
8.02), or any subservicer  taken in the name of the Trustee;  the failure of the
Servicer or any subservicer to act or perform any duties required of it as agent
of the Trustee hereunder;  or any action by the Trustee taken at the instruction
of the  Servicer  (other  than if the  Trustee  shall  assume  the duties of the
Servicer pursuant to Section 8.02); PROVIDED,  HOWEVER, that the foregoing shall
not  relieve  the Trustee of its  obligation  to perform  its duties  under this
Agreement.  The Trustee shall have no responsibility for filing any financing or
continuation  statement in any public office at any time or to otherwise perfect
or maintain  the  perfection  of any  security  interest  or lien  granted to it
hereunder  (unless the Trustee shall have become the  successor  Servicer) or to
prepare or

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file any  Securities and Exchange  Commission  filing for the Trust or to record
this Agreement.

         Section  9.04.  TRUSTEE  MAY  OWN  CERTIFICATES.  The  Trustee  in  its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not  Trustee  and may  transact
any banking and trust  business with the  Transferor,  the Servicer,  the Credit
Enhancer or the Depositor.

         Section 9.05. SERVICER TO PAY TRUSTEE'S FEES AND EXPENSES;  SERVICER TO
INDEMNIFY.  The Servicer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which shall
not be  limited  by any  provision  of law in  regard to the  compensation  of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts  hereby  created and in the  exercise and  performance  of any of the
powers  and  duties  hereunder  of the  Trustee,  and the  Servicer  will pay or
reimburse   the  Trustee   upon  its  request  for  all   reasonable   expenses,
disbursements  and advances  incurred or made by the Trustee in accordance  with
any of the provisions of this Agreement  (including the reasonable  compensation
and the  expenses  and  disbursements  of its  counsel  and of all  Persons  not
regularly in its employ) except any such expense, disbursement or advance as may
arise  from its  negligence  or bad  faith or  which  is the  responsibility  of
Certificateholders hereunder. The Servicer covenants and agrees to indemnify the
Trustee from,  and hold it harmless  against,  any and all losses,  liabilities,
damages,  claims or expenses  other than those  resulting from the negligence or
bad  faith of the  Trustee.  This  section  shall  survive  termination  of this
Agreement or the resignation or removal of any Trustee hereunder.

         Section  9.06.  ELIGIBILITY   REQUIREMENTS  FOR  TRUSTEE.  The  Trustee
hereunder  shall at all times be a  corporation  duly  incorporated  and validly
existing  under the laws of the United  States of America or any state  thereof,
authorized under such laws to exercise corporate trust powers, having a combined
capital  and  surplus  of  at  least  $50,000,000,  subject  to  supervision  or
examination by federal or state authority. If such corporation publishes reports
of condition at least  annually,  pursuant to law or to the  requirements of the
aforesaid  supervising  or  examining  authority,  then for the purposes of this
Section  9.06,  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.  The principal  office of the Trustee  (other
than the initial  Trustee)  shall be in a state with respect to which an Opinion
of  Counsel  has been  delivered  to such  Trustee  at the time such  Trustee is
appointed  Trustee  to the effect  that the Trust  will not be a taxable  entity
under the laws of such state.  In case at any time the Trustee shall cease to be
eligible in accordance  with the  provisions  of this Section 9.06,  the Trustee
shall resign  immediately in the manner and with the effect specified in Section
9.07.

         Section 9.07. RESIGNATION OR REMOVAL OF TRUSTEE. The Trustee may at any
time resign and be discharged  from the trusts hereby  created by giving written
notice  thereof to the  Transferor,  the  Depositor,  the  Servicer,  the Credit
Enhancer and each Rating Agency. Upon receiving such notice of resignation,  the
Transferor  shall promptly appoint a successor  Trustee  (approved in writing by
the Credit Enhancer,  so long as such approval is not unreasonably  withheld) by
written  instrument,  in  duplicate,  one  copy of

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which instrument shall be delivered to the resigning  Trustee (who shall deliver
a copy  to the  Servicer)  and  one  copy to the  successor  Trustee;  PROVIDED,
HOWEVER,  that any such successor  Trustee shall be subject to the prior written
approval of the Transferor. If no successor Trustee shall have been so appointed
and have accepted  appointment within 30 days after the giving of such notice of
resignation,   the  resigning  Trustee  may  petition  any  court  of  competent
jurisdiction for the appointment of a successor Trustee.

         If at any time the Trustee  shall  cease to be  eligible in  accordance
with the  provisions  of  Section  9.06 and shall fail to resign  after  written
request therefor by the Transferor or the Credit Enhancer, or if at any time the
Trustee  shall be legally  unable to act,  or shall be  adjudged  a bankrupt  or
insolvent,  or a receiver of the Trustee or of its property  shall be appointed,
or any  public  officer  shall take  charge or control of the  Trustee or of its
property  or  affairs  for  the  purpose  of  rehabilitation,   conservation  or
liquidation, or if a tax is imposed or threatened with respect to the Trust Fund
by any state in which the Trustee or the Trust Fund is located (which tax cannot
be vacated by the  appointment of a co-Trustee or separate  trustee  pursuant to
Section  9.10),  then the  Transferor  or the  Credit  Enhancer  may  remove the
Trustee.  If the Transferor or the Credit Enhancer removes the Trustee under the
authority of the immediately  preceding sentence,  the Transferor shall promptly
appoint a successor Trustee  (approved in writing by the Credit Enhancer,  which
approval  shall  not  be  unreasonably  withheld)  by  written  instrument,   in
duplicate,  one copy of which  instrument  shall be  delivered to the Trustee so
removed and one copy to the successor trustee.

         The Holders of Investor  Certificates  evidencing  Percentage Interests
aggregating  over 50% of all  Investor  Certificates  may at any time remove the
Trustee by written  instrument or  instruments  delivered to the  Servicer,  the
Transferor and the Trustee;  the Transferor shall thereupon use its best efforts
to appoint a successor trustee in accordance with this Section.

         Any  resignation  or  removal  of  the  Trustee  and  appointment  of a
successor  Trustee  pursuant to any of the provisions of this Section 9.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 9.08.

         Section 9.08.  SUCCESSOR  TRUSTEE.  Any successor  Trustee appointed as
provided  in  Section  9.07  shall  execute,  acknowledge  and  deliver  to  the
Transferor,  the  Depositor,  the  Servicer,  the  Credit  Enhancer  and  to its
predecessor  Trustee an instrument  accepting such  appointment  hereunder,  and
thereupon the  resignation  or removal of the  predecessor  Trustee shall become
effective  and  such  successor  Trustee,  without  any  further  act,  deed  or
conveyance,  shall become fully vested with all the rights,  powers,  duties and
obligations  of its  predecessor  hereunder,  with like effect as if  originally
named  as  Trustee.  The  Transferor,   the  Depositor,  the  Servicer  and  the
predecessor 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  Trustee  all  such  rights,  powers,  duties  and
obligations.

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         No  successor  Trustee  shall  accept  appointment  as provided in this
Section 9.08 unless at the time of such acceptance such successor  Trustee shall
be eligible under the provisions of Section 9.06.

         Upon  acceptance of appointment  by a successor  Trustee as provided in
this Section 9.08, the successor  Trustee shall mail notice of the succession of
such Trustee  hereunder  to all Holders of  Certificates  at their  addresses as
shown in the  Certificate  Register and to each Rating  Agency.  If the Servicer
fails to mail such notice within 30 days after  acceptance of appointment by the
successor Trustee, the successor Trustee shall cause such notice to be mailed at
the expense of the Servicer.

         Section 9.09. MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated,  or
any Person  resulting from any merger,  conversion or consolidation to which the
Trustee shall be a party, or any Person  succeeding to all or substantially  all
of the business of the Trustee, shall be the successor of the Trustee hereunder,
provided  such Person shall be eligible  under the  provisions  of Section 9.06,
without the  execution  or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.

         Section  9.10.   APPOINTMENT   OF   CO-TRUSTEE  OR  SEPARATE   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  Trust  or  any  Mortgaged  Property  may at the  time  be  located,  the
Transferor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments necessary to appoint one or more Persons approved by
the Credit  Enhancer  to act as  co-trustee  or  co-trustees,  jointly  with the
Trustee,  or separate  trustee or separate  trustees,  of all or any part of the
Trust,  and to vest in such  Person or  Persons,  in such  capacity  and for the
benefit of the Certificateholders, such title to the Trust, or any part thereof,
and, subject to the other provisions of this Section 9.10, such powers,  duties,
obligations,  rights and trusts as the  Transferor  and the Trustee may consider
necessary or desirable. Any such co-trustee or separate trustee shall be subject
to the written approval of the Servicer. If the Transferor shall not have joined
in such  appointment  within 15 days after the  receipt by it of a request so to
do, or in the case an Event of Servicing  Termination shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment.  No
co-trustee or separate trustee  hereunder shall be required to meet the terms of
eligibility  as a  successor  trustee  under  Section  9.06  and  no  notice  to
Certificateholders  of the  appointment  of any  co-trustee or separate  trustee
shall be required under Section 9.08. The Servicer shall be responsible  for the
fees of any co-trustee or separate trustee appointed hereunder.

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

                  (i) all rights,  powers,  duties and obligations  conferred or
         imposed  upon  the  Trustee  shall be  conferred  or  imposed  upon and
         exercised  or  performed  by the Trustee and such  separate  trustee or
         co-trustee  jointly (it being  understood

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         that such  separate  trustee or  co-trustee  is not  authorized  to act
         separately  without  the  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  (whether as Trustee  hereunder  or as
         successor to the Servicer hereunder),  the 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 Trustee;

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

                  (iii) the Servicer and the Trustee  acting  jointly may at any
         time  accept  the  resignation  of or remove  any  separate  trustee or
         co-trustee  except  that  following  the  occurrence  of  an  Event  of
         Servicing  Termination,   the  Trustee  acting  alone  may  accept  the
         resignation or remove any separate trustee or co-trustee.

         Any notice,  request or other  writing  given to the  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 IX. 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 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 Trustee.  Every
such instrument  shall be filed with the Trustee and a copy thereof given to the
Transferor and the Servicer.

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

         Section 9.11. LIMITATION OF LIABILITY. The Certificates are executed by
the Trustee,  not in its individual capacity but solely as Trustee of the Trust,
in the exercise of the powers and  authority  conferred  and vested in it by the
Trust Agreement. Each of the undertakings and agreements made on the part of the
Trustee in the  Certificates is made and intended not as a personal  undertaking
or  agreement by the Trustee but is made and intended for the purpose of binding
only the Trust.

         Section  9.12.   TRUSTEE  MAY  ENFORCE  CLAIMS  WITHOUT  POSSESSION  OF
CERTIFICATES.  All  rights of action  and claims  under  this  Agreement  or the
Certificates  may  be  prosecuted  and  enforced  by  the  Trustee  without  the
possession  of  any  of  the  Certificates

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or  the  production  thereof  in  any  proceeding  relating  thereto,  and  such
proceeding  instituted by the Trustee shall be brought in its own name or in its
capacity as Trustee.  Any recovery of judgment  shall,  after  provision for the
payment of the reasonable compensation,  expenses,  disbursement and advances of
the  Trustee,  its  agents  and  counsel,  be for  the  ratable  benefit  or the
Certificateholders in respect of which such judgment has been recovered.

         Section  9.13.  SUITS FOR  ENFORCEMENT.  In case an Event of  Servicing
Termination or other default by the Servicer,  the Transferor,  the Depositor or
the  Transferor  hereunder  shall occur and be continuing,  the Trustee,  in its
discretion,  may proceed to protect and enforce its rights and the rights of the
Investor Certificateholders under this Agreement by a suit, action or proceeding
in equity or at law or otherwise,  whether for the specific  performance  of any
covenant or agreement  contained in this Agreement or in aid of the execution of
any power granted in this  Agreement or for the  enforcement of any other legal,
equitable or other remedy, as the Trustee,  being advised by counsel, shall deem
most  effectual  to protect and enforce any of the rights of the Trustee and the
Certificateholders.

                                   ARTICLE X

                                   Termination

         Section  10.01.   TERMINATION.   (a)  The  respective  obligations  and
responsibilities of the Servicer, the Depositor,  the Transferor and the Trustee
created  hereby  (other  than the  obligation  of the  Trustee  to make  certain
payments to  Certificateholders  after the final Payment Date and the obligation
of the  Servicer  to send  certain  notices  as  hereinafter  set  forth)  shall
terminate upon the last action  required to be taken by the Trustee on the final
Payment Date  pursuant to this  Article X following  the later of (A) payment in
full of all amounts owing to the Credit Enhancer and (B) the earliest of (i) the
transfer,  under the conditions specified in Section 10.01(b), to the Transferor
of the  Investor  Certificateholders'  interest  in each  Mortgage  Loan and all
property  acquired in respect of any Mortgage Loan remaining in the Trust for an
amount equal to the sum of (w) the Class A Certificate  Principal  Balance,  (x)
the  sum of  accrued  and  unpaid  Class  A  Certificate  Interest  and  Class S
Certificate  Interest  through the day preceding the final Payment Date, and (y)
interest accrued on any Unpaid Class A Certificate Interest Shortfall or Class S
Certificate Interest Shortfall, to the extent legally permissible,  (ii) the day
following  the  Payment  Date  on  which  the  distribution   made  to  Class  A
Certificateholders  has reduced  the Class A  Certificate  Principal  Balance to
zero,  (iii) the final  payment or other  liquidation  of the last Mortgage Loan
remaining in the Trust (including,  without  limitation,  the disposition of the
Mortgage  Loans  pursuant to Section  10.02) or the  disposition of all property
acquired upon  foreclosure  or deed in lieu of  foreclosure of any Mortgage Loan
(iv) the Payment Date in __________ 200_;  PROVIDED,  HOWEVER,  that in no event
shall the trust created hereby  continue  beyond the expiration of 21 years from
the date of the  last  survivor  descendants  of  Joseph  P.  Kennedy,  the late
ambassador of the United  States to the Court of St.  James,  living on the date
hereof.  Upon  termination in accordance with clause (i) or (ii) of this Section
10.01,  the Trustee shall execute such  documents  and  instruments  of transfer
presented by the Transferor, in

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each case without  recourse,  representation  or  warranty,  and take such other
actions as the Transferor  may reasonably  request to effect the transfer of the
Mortgage Loans to the Transferor.

         (b) The  Transferor  shall  have the right to  exercise  the  option to
effect the transfer to the  Transferor of each Mortgage Loan pursuant to Section
10.01(a)  above on any  Payment  Date on or after the Payment  Date  immediately
prior to which  the  Class A  Certificate  Principal  Balance  is less  than ten
percent  (10%) of the Original  Class A  Certificate  Principal  Balance and all
amounts  due  and  owing  to  the  Credit   Enhancer  for  unpaid  premiums  and
unreimbursed  draws on the  Policy  and all other  amounts  due and owing to the
Credit  Enhancer  pursuant to the  Insurance  Agreement,  together with interest
thereon as provided under the Insurance Agreement, have been paid.

         (c) Notice of any termination, specifying the Payment Date (which shall
be a date that  would  otherwise  be a Payment  Date)  upon  which the  Investor
Certificateholders  may surrender their Investor Certificates to the Trustee for
payment of the final  distribution and cancellation,  shall be given promptly by
the Trustee  (upon receipt of written  directions  from the  Transferor,  if the
Transferor is exercising its right to transfer of the Mortgage Loans,  given not
later  than the  first  day of the  month  preceding  the  month  of such  final
distribution)  to the Credit  Enhancer and to the Servicer by letter to Investor
Certificateholders  mailed not earlier  than the 15th day and not later than the
25th day of the  month  next  preceding  the  month of such  final  distribution
specifying  (i) the Payment Date upon which final  distribution  of the Investor
Certificates   will  be  made  upon   presentation  and  surrender  of  Investor
Certificates at the office or agency of the Trustee therein designated, (ii) the
amount of any such final  distribution  and (iii) that the Record Date otherwise
applicable to such Payment Date is not applicable, distributions being made only
upon  presentation  and surrender of the Investor  Certificates at the office or
agency of the Trustee  therein  specified.  In the event written  directions are
delivered  by the  Transferor  to the  Trustee  as  described  in the  preceding
sentence,  the Transferor  shall deposit in the Collection  Account on or before
the Payment Date for such final  distribution in immediately  available funds an
amount which, when added to the funds on deposit in the Collection  Account that
are payable to the Investor Certificateholders,  will be equal to the retransfer
amount for the Mortgage  Loans  computed as above  provided,  together  with all
amounts  due  and  owing  to  the  Credit   Enhancer  for  unpaid  premiums  and
unreimbursed  draws on the  Policy  and all other  amounts  due and owing to the
Credit  Enhancer  pursuant to the  Insurance  Agreement,  together with interest
thereon as provided under the Insurance Agreement.

         (d) Upon presentation and surrender of the Investor  Certificates,  the
Trustee shall cause to be distributed to the Holders of Investor Certificates on
the Payment Date for such final  distribution,  in proportion to the  Percentage
Interests of their respective Investor Certificates and to the extent that funds
are  available  for  such  purpose,  an  amount  equal  to  (i)  if  such  final
distribution  is not being  made  pursuant  to the  transfer  to the  Transferor
pursuant  to Section  10.01(a)(i),  the amount  required  to be  distributed  to
Investor  Certificateholders  pursuant to Section 5.01 for such Payment Date and
(ii) if such final  distribution is being made pursuant to such retransfer,  the
amount specified in Section 10.01(a)(i).  The distribution on such final Payment
Date pursuant to a retransfer

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pursuant to Section  10.01(a)(i) shall be in lieu of the distribution  otherwise
required to be made on such Payment Date in respect of the Certificates.  On the
final Payment Date prior to having made the distributions  called for above, the
Trustee shall, based upon the information set forth in the Servicing Certificate
for such Payment  Date,  withdraw from the  Collection  Account and remit to the
Credit Enhancer the lesser of (x) the amount  available for distribution on such
final  Payment  Date,  net of any portion  thereof  necessary to pay the amounts
described  in clauses  (d)(i) and (ii) above and (y) the unpaid  amounts due and
owing to the Credit Enhancer for unpaid premiums and  unreimbursed  draws on the
Policy and all other  amounts due and owing to the Credit  Enhancer  pursuant to
the Insurance  Agreement,  together with interest  thereon as provided under the
Insurance Agreement.

         (e) In the event that all of the Investor  Certificateholders shall not
surrender their Investor  Certificates  for final payment and cancellation on or
before such final Payment  Date,  the Trustee shall on such date cause all funds
in the  Collection  Account not  distributed in final  distribution  to Investor
Certificateholders  to be  withdrawn  therefrom  and  credited to the  remaining
Investor  Certificateholders  by  depositing  such  funds in a  separate  escrow
account for the benefit of such Investor  Certificateholders  and the Transferor
(if the  Transferor  has exercised its right to transfer the Mortgage  Loans) or
the  Trustee  (in any other  case)  shall  give a second  written  notice to the
remaining Investor  Certificateholders  to surrender their Investor Certificates
for cancellation  and receive the final  distribution  with respect thereto.  If
within one year after the second notice all the Investor  Certificates shall not
have been surrendered for cancellation,  the Trustee may take appropriate steps,
or may appoint an agent to take  appropriate  steps,  to contact  the  remaining
Investor Certificateholders concerning surrender of their Investor Certificates,
and the cost  thereof  shall be paid out of the funds on deposit in such  escrow
account.

                                   ARTICLE XI

                            Rapid Amortization Events

         Section 11.01. RAPID  AMORTIZATION  EVENTS. If any one of the following
events shall occur during the Managed Amortization Period:

         (a)  failure on the part of the  Transferor  (i) to make any payment or
deposit required by the terms of this Agreement, on or before the date occurring
three  Business  Days after the date such  payment or deposit is  required to be
made  herein,  or (ii) duly to observe or perform in any  material  respect  the
covenants  of the  Transferor  set forth in  Section  2.04(a)  or (iii)  duly to
observe or perform in any material  respect any other covenants or agreements of
the  Transferor  set  forth in this  Agreement,  which  failure,  in each  case,
materially and adversely affects the interests of the  Certificateholders or the
Credit Enhancer and which, in the case of clause (iii), continues unremedied and
continues   to  affect   materially   and   adversely   the   interests  of  the
Certificateholders  for a period  of 60 days  after  the  date on which  written
notice of such failure, requiring the same to be remedied, shall have been given
to the  Transferor by the Trustee, or to the

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<PAGE>

Transferor  and the Trustee by the Holders of Investor  Certificates  evidencing
Voting Rights aggregating not less than 51%;

         (b)  any  representation  or  warranty  made by the  Transferor  or the
Depositor in this  Agreement  shall prove to have been incorrect in any material
respect  when  made,  as a  result  of  which  the  interests  of  the  Investor
Certificateholders  or the Credit Enhancer are materially and adversely affected
and which  continues to be incorrect  in any material  respect and  continues to
affect materially and adversely the interests of the  Certificateholders  or the
Credit  Enhancer for a period of 60 days after the date on which written  notice
of such failure, requiring the same to be remedied, shall have been given to the
Transferor  or the  Depositor,  as the case may be,  by the  Trustee,  or to the
Transferor,  the Depositor and the Trustee by either the Credit  Enhancer or the
Holders of Investor  Certificates  evidencing Voting Rights aggregating not less
than 51%;  PROVIDED,  HOWEVER,  that a Rapid Amortization Event pursuant to this
subparagraph  (b)  shall  not  be  deemed  to  have  occurred  hereunder  if the
Transferor  has accepted  retransfer  of the related  Mortgage  Loan or Mortgage
Loans during such period (or such longer  period (not to exceed an additional 60
days) as the Trustee may specify) in accordance with the provisions hereof;

         (c)  the  Transferor  or  the  Depositor  shall   voluntarily  go  into
liquidation,  consent  to  the  appointment  of a  conservator  or  receiver  or
liquidator  or  similar  person  in  any   insolvency,   readjustment  of  debt,
marshalling of assets and  liabilities or similar  proceedings of or relating to
the Transferor or the Depositor,  or of or relating to all or substantially  all
of such  Person's  property,  or a  decree  or order  of a court  or  agency  or
supervisory authority having jurisdiction in the premises for the appointment of
a  conservator,  receiver,  liquidator  or  similar  person  in any  insolvency,
readjustment  of  debt,   marshalling  of  assets  and  liabilities  or  similar
proceedings,  or for the winding-up or  liquidation  of its affairs,  shall have
been entered  against the  Transferor  or the Depositor and such decree or order
shall have remained in force  undischarged  or unstayed for a period of 30 days;
or the  Transferor or the Depositor  shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any
applicable  insolvency or  reorganization  statute,  make an assignment  for the
benefit of its creditors or voluntarily suspend payment of its obligations;

         (d) the Trust shall become  subject to  registration  as an "investment
company" under the Investment Company Act of 1940, as amended; or

         (e) the  aggregate  of all draws  under the Policy  exceeds  __% of the
Initial Cut-Off Date Pool Balance;

then, in the case of any event  described in  subparagraph  (a) or (b) after the
applicable  grace period,  if any, set forth in such  subparagraphs,  either the
Trustee, the Credit Enhancer or the Holders of Investor Certificates  evidencing
Voting  Rights  aggregating  more than 51%,  by notice  given in  writing to the
Transferor,  the  Depositor  and the  Servicer  (and to the  Trustee if given by
either the Credit Enhancer or the Investor  Certificateholders) may declare that
an early  amortization event (a "RAPID  AMORTIZATION  EVENT") has occurred as of
the date of such notice,  and in the case of any event described in subparagraph
(c), (d) or (e), a Rapid  Amortization  Event shall occur without any notice

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or other action on the part of the Trustee,  the Credit Enhancer or the Investor
Certificateholders, immediately upon the occurrence of such event.

         Section 11.02. ADDITIONAL RIGHTS UPON THE OCCURRENCE OF CERTAIN EVENTS.
(a) If the  Transferor  voluntarily  goes into  liquidation  or  consents to the
appointment  of a conservator or receiver or liquidator or similar person in any
insolvency,  readjustment  of debt,  marshalling  of assets and  liabilities  or
similar proceedings of or relating to the Transferor or of or relating to all or
substantially  all its  property,  or a decree  or order of a court or agency or
supervisory authority having jurisdiction in the premises for the appointment of
a conservator  or receiver or liquidator  or similar  person in any  insolvency,
readjustment  of  debt,   marshalling  of  assets  and  liabilities  or  similar
proceedings,  or for the winding-up or  liquidation  of its affairs,  shall have
been entered against the Transferor and such decree shall have remained in force
undischarged or unstayed for a period of 30 days; or the Transferor  shall admit
in writing its  inability to pay its debts  generally as they become due, file a
petition  to take  advantage  of any  applicable  insolvency  or  reorganization
statute,  make an  assignment  for the benefit of its  creditors or  voluntarily
suspend payment of its obligations  (such  voluntary  liquidation,  appointment,
entering of such decree,  admission,  filing, making, suspension or violation or
other event described above, an "INSOLVENCY EVENT"), the Transferor shall on the
day of  such  appointment,  voluntary  liquidation,  entering  of  such  decree,
admission,  filing,  making,  suspension or  inability,  as the case may be (the
"APPOINTMENT  DAY"),  promptly give notice to the Trustee,  the Servicer and the
Credit Enhancer of such Insolvency  Event.  Within 15 days of the receipt by the
Trustee of the Transferor's notice of an Insolvency Event, the Trustee shall (i)
publish a notice in Authorized  Newspapers that an Insolvency Event has occurred
and that the  Trustee  intends to direct  the  Servicer  to sell,  dispose of or
otherwise  liquidate the Mortgage Loans in a commercially  reasonable manner and
(ii) send  written  notice to the  Investor  Certificateholders  describing  the
provisions  of  this  Section   11.02,   which  notice  shall  inform   Investor
Certificateholders  that unless  (Holders of  Investor  Certificates  evidencing
Voting Rights  aggregating not less than 51%) advise the Trustee in writing that
they wish the  Trustee  to  instruct  the  Servicer  not to sell,  dispose of or
otherwise  liquidate  the  Mortgage  Loans  within 90 days  from the day  notice
pursuant to clause (i) above is first published (the  "PUBLICATION  DATE"),  the
Trustee shall instruct the Servicer to proceed to sell, dispose of, or otherwise
liquidate  the  Mortgage  Loans  in a  commercially  reasonable  manner  and  on
commercially   reasonable  terms,   which  shall  include  the  solicitation  of
competitive  bids,  and shall proceed to  consummate  the sale,  liquidation  or
disposition  of the Mortgage Loans as provided above with the highest bidder for
the Mortgage  Loans.  The Transferor  shall be permitted to bid for the Mortgage
Loans.  The Trustee may obtain a prior  determination  from such  conservator or
receiver  that the  terms  and  manner  of any  proposed  sale,  disposition  or
liquidation are  commercially  reasonable.  The provisions of Sections 11.01 and
11.02 shall not be deemed to be mutually exclusive.

         (b) The  proceeds  from the sale,  disposition  or  liquidation  of the
Mortgage  Loans  pursuant  to  Section   11.02(a)  above  shall  be  treated  as
collections on the Mortgage Loans received during the Rapid Amortization Period;
PROVIDED,  HOWEVER,  that such  proceeds  will,  based on amounts  specified  in
writing by the Servicer to the Trustee,  first be paid to the Credit Enhancer to
reimburse the Credit  Enhancer for previously

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<PAGE>

unreimbursed  Credit  Enhancement Draw Amounts and other amounts owing under the
Insurance Agreement;  and PROVIDED,  FURTHER, that the Investor Fixed Allocation
Percentage   of  such   remaining   proceeds   shall   be   paid   to   Investor
Certificateholders in the following amounts and order of priority:

                  (i) all accrued and unpaid interest on the Class A Certificate
         Principal Balance through the Interest Period immediately preceding the
         Payment  Date on which such  proceeds are  distributed  to the Investor
         Certificateholders;

                  (ii) all accrued  and unpaid  interest on the Class S Notional
         Amount through the Interest  Period  immediately  preceding the Payment
         Date  on  which  such   proceeds  are   distributed   to  the  Investor
         Certificateholders; and

                  (iii) an amount  of  principal  up to the Class A  Certificate
         Principal Balance.

The Policy shall cover any shortfall in the event such proceeds are insufficient
to make the  distributions  to Investor  Certificateholders  pursuant to Section
11.02(b).  On the day  following  the Payment  Date on which such  proceeds  are
distributed to the Investor Certificateholders, the Trust shall terminate.

                                  ARTICLE XII

                            Miscellaneous Provisions

         Section  12.01.  AMENDMENT.  This Agreement may be amended from time to
time by the  Transferor,  the Servicer,  the Depositor and the Trustee,  in each
case  without  the consent of any of the  Certificateholders,  but only with the
consent  of the  Credit  Enhancer  (which  consent  shall  not  be  unreasonably
withheld),  (i) to cure any ambiguity,  (ii) to correct any defective provisions
or to correct or supplement any provisions  herein that may be inconsistent with
any other provisions herein, (iii) to add to the duties of the Transferor or the
Servicer,  (iv) to add any other provisions with respect to matters or questions
arising under this Agreement or the Policy,  as the case may be, which shall not
be inconsistent  with the provisions of this Agreement,  (v) to add or amend any
provisions  of this  Agreement  as  required  by any Rating  Agency or any other
nationally  recognized  statistical rating  organization in order to maintain or
improve any rating of the Investor Certificates (it being understood that, after
obtaining  the ratings in effect on the Closing Date,  neither the Trustee,  the
Transferor,  the Depositor nor the Servicer is obligated to obtain,  maintain or
improve any such rating),  (vi) to add or amend any provisions of this Agreement
to  correct  or cure any  defective  provision  or  ambiguity  as a result  of a
transfer of the  Transferor  Certificates  pursuant to Section  6.05 or (vii) to
comply with any requirement imposed by the Code;  PROVIDED,  HOWEVER,  that such
action  shall  not,  as  evidenced  by an  Opinion of  Counsel,  materially  and
adversely affect the interests of any  Certificateholder or the Credit Enhancer;
and  PROVIDED,  FURTHER,  that the  amendment  shall not be deemed to  adversely
affect in any material  respect the interests of the  Certificateholders  and no
opinion  referred to in the preceding  proviso shall be required to be delivered
if the Person  requesting the amendment obtains a letter from each Rating

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Agency  stating  that the  amendment  would  not  result in the  downgrading  or
withdrawal of the respective ratings then assigned to the Investor  Certificates
without  regard to the Policy.  Notwithstanding  the  foregoing,  any  amendment
pursuant to clause  (viii)  above shall be  permissible  only upon  receipt of a
letter from each Rating Agency  stating that the  amendment  would not result in
the  downgrading  or withdrawal of the  respective  ratings then assigned to the
Investor Certificateholders without regard to the Policy.

         This  Agreement  also may be amended from time to time by the Servicer,
the Transferor,  the Depositor and the Trustee,  and the Servicer and the Credit
Enhancer,  may from time to time consent to the amendment of the Policy with the
consent of the Holders of the Investor  Certificates  evidencing  Voting  Rights
aggregating  not  less  than  51%,  and in the  case  of an  amendment  to  this
Agreement, with the consent of the Credit Enhancer for the purpose of adding any
provisions 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
Certificateholders;  PROVIDED,  HOWEVER, that no such amendment shall (i) reduce
in  any  manner  the  amount  of,  or  delay  the  timing  of,  payments  on the
Certificates or distributions or payments under the Policy which are required to
be made on any Certificate without the consent of the Holder of such Certificate
or (ii)  reduce  the  aforesaid  percentage  required  to  consent  to any  such
amendment,  without  the  consent  of  the  Holders  of  all  Certificates  then
outstanding or (iii) adversely  effect in any material  respect the interests of
the Credit Enhancer.

         Notwithstanding the foregoing, the Agreement may not be amended unless,
in  connection  with such  amendment,  an Opinion of Counsel is furnished to the
Trustee  that such  amendment  will not (i)  adversely  affect the status of the
Investor  Certificates  as debt;  (ii) result in the Trust being  taxable at the
entity  level;  or (iii)  result  in the  Trust  being  classified  as a taxable
mortgage pool (as defined in Section 7701(i) of the Code).

         Following the execution and delivery of any such amendment hereto or to
the Policy to which the Credit  Enhancer  was  required to  consent,  either the
Transferor,  if the Transferor requested the amendment,  or the Servicer, if the
Servicer  requested the amendment,  shall  reimburse the Credit Enhancer for the
reasonable  out-of-pocket  costs and expenses incurred by the Credit Enhancer in
connection with such amendment.

         Prior  to the  execution  of  any  such  amendment,  the  party  hereto
requesting  any  such  amendment  shall  furnish  written  notification  of  the
substance of such amendment to each Rating Agency.  In addition,  promptly after
the  execution  of any such  amendment  made with the  consent  of the  Investor
Certificateholders,  the  Trustee  shall  furnish  written  notification  of the
substance  of  such  amendment  to each  Investor  Certificateholder  and  fully
executed  original  counterparts of the instruments  effecting such amendment to
the Credit Enhancer.

         It   shall   not   be   necessary   for   the   consent   of   Investor
Certificateholders  under this Section 12.01 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
of evidencing the authorization of the execution  thereof by

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<PAGE>

Certificateholders  shall be  subject  to such  reasonable  requirements  as the
Trustee may prescribe.

         In executing any amendment permitted by this Section 12.01, the Trustee
shall be entitled to receive,  and shall be fully  protected in relying upon, an
Opinion of Counsel stating that such amendment is authorized or permitted hereby
and  that  all  conditions  precedent  to the  execution  and  delivery  of such
amendment have been  satisfied.  The Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Trustee's own rights,  duties or
immunities under this Agreement or otherwise.

         Section 12.02.  RECORDATION OF AGREEMENT.  This Agreement is subject to
recordation in all appropriate  public offices for real property  records in all
the  counties  or other  comparable  jurisdictions  in  which  any or all of the
properties  subject to the Mortgages are situated,  and in any other appropriate
public  recording  office or elsewhere,  such  recordation to be effected by the
Trustee, but only upon direction of Investor  Certificateholders  accompanied by
an  Opinion  of  Counsel to the  effect  that such  recordation  materially  and
beneficially affects the interests of Investor Certificateholders.  The Investor
Certificateholders requesting such recordation shall bear all costs and expenses
of such  recordation.  The Trustee shall have no obligation to ascertain whether
such recordation so affects the interests of the Certificateholders.

         For the purpose of  facilitating  the  recordation of this Agreement as
herein  provided  and  for  other  purposes,  this  Agreement  may  be  executed
simultaneously in any number of counterparts,  each of which  counterparts shall
be deemed to be an original,  and such counterparts shall constitute but one and
the same instrument.

         Section 12.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The death or
incapacity of any Investor Certificateholder shall not operate to terminate this
Agreement or the Trust,  nor entitle  such  Investor  Certificateholder's  legal
representatives  or  heirs  to claim an  accounting  or to take  any  action  or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise  affect the rights,  obligations  and  liabilities  of the parties
hereto or any of them.

         No  Certificateholder  shall have any right to vote (except as provided
in  Sections  8.01,  9.01,  9.02,  11.01 and 12.01) or in any  manner  otherwise
control the operation and  management of the Trust,  or the  obligations  of the
parties  hereto,  nor shall anything herein set forth, or contained in the terms
of the  Certificates,  be construed so as to constitute  the  Certificateholders
from  time to time as  partners  or  members  of an  association;  nor shall any
Investor  Certificateholder be under any liability to any third person by reason
of any action taken by the parties to this  Agreement  pursuant to any provision
hereof.

         No  Certificateholder  shall  have any right by  virtue or by  availing
itself of any  provisions  of this  Agreement to institute  any suit,  action or
proceeding in equity or at law upon or under or with respect to this  Agreement,
unless such Holder  previously  shall have given to the Trustee a written notice
of default and of the continuance thereof, as hereinbefore  provided, and unless
also the Holders of Investor  Certificates  evidencing

                                       86
<PAGE>

Voting Rights aggregating not less than 51% shall have made written request upon
the Trustee to institute  such  action,  suit or  proceeding  in its own name as
Trustee  hereunder  and  shall  have  offered  to the  Trustee  such  reasonable
indemnity as it may require  against the costs,  expenses and  liabilities to be
incurred therein or thereby,  and the Trustee,  for 60 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; it being understood and intended,
and being  expressly  covenanted  by each  Certificateholder  with  every  other
Certificateholder  and the Trustee,  that no one or more Holders of 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 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 herein provided and for the
equal, ratable and common benefit of all Certificateholders.  For the protection
and  enforcement  of the  provisions  of this  Section  12.03,  each  and  every
Certificateholder  and the  Trustee  shall be  entitled to such relief as can be
given either at law or in equity.

         By accepting its Investor Certificate,  each Investor Certificateholder
agrees that unless a Credit Enhancer  Default exists,  the Credit Enhancer shall
have the right to exercise all rights of the Investor  Certificateholders  under
this Agreement without any further consent of the Investor Certificateholders.

         Section  12.04.  GOVERNING  LAW. THIS  AGREEMENT  SHALL BE CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK AND THE  OBLIGATIONS,  RIGHTS
AND REMEDIES OF THE PARTIES  HEREUNDER  SHALL BE DETERMINED  IN ACCORDANCE  WITH
SUCH LAWS.

         Section  12.05.  NOTICES.  All  demands,   notices  and  communications
hereunder  shall be in  writing  and shall be deemed to have been duly  given if
personally  delivered at or mailed by certified mail, return receipt  requested,
to  (a)  in the  case  of  the  Depositor  or  Transferor,  GreenPoint  Mortgage
Securities LLC, 1100 Larkspur  Circle,  Larkspur,  California  94939, (b) in the
case of the Servicer,  GreenPoint Mortgage Funding,  Inc., 1100 Larkspur Circle,
Larkspur,  California  94939,  (c) in the case of the Trustee,  at the Corporate
Trust  Office,  (d) in the  case  of the  Credit  Enhancer,  [Credit  Enhancer],
[Address], (e) in the case of Moody's, [Address of First Rating Agency], and (f)
in the case of Standard & Poor's,  [Address of Second Rating Agency],  or, as to
each  party,  at such other  address as shall be  designated  by such party in a
written  notice to each other  party.  Any notice  required or  permitted  to be
mailed  to a  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
Certificateholder receives such notice. Any notice or other document required to
be delivered  or mailed by the Trustee to any Rating  Agency shall be given on a
best efforts  basis and only as a matter of courtesy and  accommodation  and the
Trustee  shall have no liability  for failure to deliver such notice or document
to any Rating Agency.

                                       87
<PAGE>

         Section 12.06.  SEVERABILITY  OF PROVISIONS.  If any one or more of the
covenants,  agreements,  provisions or terms of this Agreement  shall be for any
reason whatsoever held invalid, then such covenants,  agreements,  provisions or
terms  shall be  deemed  severable  from the  remaining  covenants,  agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability  of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.

         Section  12.07.  ASSIGNMENT.  Notwithstanding  anything to the contrary
contained  herein,  except as  provided in Sections  6.05,  7.02 and 7.04,  this
Agreement may not be assigned by the Depositor or the Servicer without the prior
written consent of the Credit Enhancer and Holders of the Investor  Certificates
evidencing Percentage Interests aggregating not less than 66%.

         Section 12.08.  CERTIFICATES  NONASSESSABLE AND FULLY PAID. The parties
agree that the Investor  Certificateholders  shall not be personally  liable for
obligations of the Trust, that the beneficial ownership interests represented by
the Certificates  shall be nonassessable for any losses or expenses of the Trust
or for  any  reason  whatsoever,  and  that  the  Certificates  upon  execution,
authentication  and delivery  thereof by the Trustee pursuant to Section 2.08 or
6.02 are and shall be deemed fully paid.

         Section 12.09. THIRD-PARTY BENEFICIARIES.  This Agreement will inure to
the benefit of and be binding upon the parties hereto,  the  Certificateholders,
the Certificate Owners, the Credit Enhancer and their respective  successors and
permitted  assigns.  Except as otherwise  provided in this  Agreement,  no other
Person will have any right or obligation hereunder.

         Section  12.10.  COUNTERPARTS.  This  instrument may be executed in any
number  of  counterparts,  each of which so  executed  shall be  deemed to be an
original,  but all such counterparts  shall together  constitute but one and the
same instrument.

         Section  12.11.  EFFECT OF HEADINGS AND TABLE OF CONTENTS.  The Article
and Section  headings herein and the Table of Contents are for convenience  only
and shall not affect the construction hereof.

         Section  12.12.  INSURANCE  AGREEMENT.  The Trustee is  authorized  and
directed  to execute  and deliver  the  Insurance  Agreement  and to perform the
obligations of the Trustee thereunder.

                                       88
<PAGE>

         IN WITNESS  WHEREOF,  the Depositor,  the Transferor,  the Seller,  the
Servicer and the Trustee have caused this Agreement to be duly executed by their
respective officers all as of the day and year first above written.

                                            GREENPOINT MORTGAGE SECURITIES LLC,
                                             as Depositor and Transferor

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

                                            GREENPOINT MORTGAGE FUNDING, INC.,
                                             as Seller and Servicer

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

                                            [Trustee], as Trustee

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

                                       89
<PAGE>

State of                            )
         ---------------------------
                                    )  ss.:
County of                           )
          --------------------------

         On the ____ day of ________, 200_ before me, a notary public in and for
the State of ________,  personally appeared _________________,  known to me who,
being   by  me  duly   sworn,   did   depose   and  say  that  he   resides   at
______________________;  that  he is  the  _____________________  of  GreenPoint
Mortgage  Securities  LLC,  a Delaware  limited  liability  company,  one of the
parties that executed the foregoing  instrument;  that he knows the seal of said
company;  that the seal affixed to said  instrument is such seal; that it was so
affixed  by order of the  members of said  company;  and that he signed his name
thereto by like order.

                                  ----------------------------------------------
                                  Notary Public

(Notarial Seal)

State of                            )
         ---------------------------
                                    )  ss.:
County of                           )
          --------------------------

         On the ____ day of  __________,  200_ before me, a notary public in and
for the State of ________, personally appeared  _____________________,  known to
me  who,  being  by me duly  sworn,  did  depose  and say  that  he  resides  at
_________________,  ____________,  ________ _____; that he is the ______________
of GreenPoint Mortgage Funding, Inc., a New York corporation, one of the parties
that  executed  the  foregoing  instrument;  that  he  knows  the  seal  of said
corporation;  that the seal affixed to said  instrument is such corporate  seal;
that it was so affixed by order of the Board of Directors  of said  corporation;
and that he signed his name thereto by like order.

                                  ----------------------------------------------
                                  Notary Public

(Notarial Seal)

                                       90
<PAGE>

State of                            )
         ---------------------------
                                    )  ss.:
County of                           )
          --------------------------

         On the ____ day of  ______________,  200_ before me, a notary public in
and for the State of ________,  personally appeared _________________,  known to
me  who,  being  by me duly  sworn,  did  depose  and say  that  he  resides  at
_______________,   _______________  _____;  that  he  is  the  _____________  of
[Trustee],  a  __________,  one of  the  parties  that  executed  the  foregoing
instrument;  and that he  signed  his  name  thereto  by  order of the  Board of
Directors of said corporation.

                                  ----------------------------------------------
                                  Notary Public

(Notarial Seal)

                                       91
<PAGE>

                                                                       EXHIBIT A

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

SOLELY FOR U.S.  FEDERAL  INCOME TAX PURPOSES,  THIS  CERTIFICATE  IS A "REGULAR
INTEREST" IN A "REAL  ESTATE  MORTGAGE  INVESTMENT  CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

Certificate No.                         :

Cut-Off Date                            :

First Payment Date                      :

Initial Class Principal Balance
of this Certificate
("DENOMINATION")                        :   $
  ------------

Initial Class Principal
Balance                                 :   $

Pass-Through Rate                       :   %

CUSIP                                   :

Class                                   :   [A-_]/[S]

                                      A-1
<PAGE>

                    GREENPOINT HOME EQUITY LOAN TRUST 200_-_
            Home Equity Loan Asset-Backed Certificates, Series 200_-_
                                 Class [A-_]/[S]

         evidencing a percentage interest in the distributions  allocable to the
         Certificates of the above-referenced Class with respect to a trust (the
         "TRUST")  consisting of (closed-end  fixed) and (adjustable  rate) home
         equity loans (the "MORTGAGE LOANS")

                GREENPOINT MORTGAGE SECURITIES LLC, as Depositor

         Principal in respect of this  Certificate is  distributable  monthly as
set  forth  herein.  Accordingly,  the Class  Principal  Balance  of this  Class
[A-_]/[S]Certificate  at any time may be less than the Initial  Class  Principal
Balance set forth on the face hereof, as described herein.  This Class [A-_]/[S]
Certificate  does not evidence an  obligation  of, or an interest in, and is not
guaranteed  by the  Seller  or the  Trustee  referred  to  below or any of their
respective affiliates.  Neither this Class [A-_]/[S]Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.

         This  certifies  that  ____________  is  the  registered  owner  of the
Percentage  Interest evidenced by this Class (A-_) (S) Certificate  (obtained by
dividing  the  Denomination  of this Class  (A-_) (S)  Certificate  by the Class
Principal  Balance) in certain  monthly  distributions  with  respect to a Trust
consisting  primarily  of the  Mortgage  Loans  sold to the Trust by  GreenPoint
Mortgage  Funding,  Inc.  (the  "SELLER").  The Trust was created  pursuant to a
Pooling and Servicing  Agreement  dated as of the Cut-Off Date  specified  above
(the "AGREEMENT") between the Depositor,  GreenPoint Mortgage Funding,  Inc., as
seller  and  servicer  (in such  capacities,  the  "Seller"  or the  "SERVICER,"
respectively),   GreenPoint   Mortgage   Securities   LLC,  as  transferor  (the
"TRANSFEROR")  and  [Trustee],  as trustee  (the  "TRUSTEE").  To the extent not
defined herein,  the capitalized terms used herein have the meanings assigned in
the Agreement. This Class [A-_]/[S]Certificate is issued under and is subject to
the terms,  provisions and conditions of the Agreement,  to which  Agreement the
Holder of this Class  [A-_]/[S]  Certificate by virtue of the acceptance  hereof
assents and by which such Holder is bound.

         Reference  is  hereby  made to the  further  provisions  of this  Class
[A-_]/[S]  Certificate set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.

         This Class [A-_]/[S]  Certificate  shall not be entitled to any benefit
under the Agreement or be valid for any purpose unless manually countersigned by
an authorized signatory of the Trustee.

                                      * * *

                                      A-2
<PAGE>

         IN WITNESS WHEREOF,  the Trustee has caused this Certificate to be duly
executed.

         Dated:  __________, 200_

                                              [Trustee], as Trustee

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

This is one of the Class [A-_]/[S] Certificates
referenced in the within-mentioned Agreement

By:
     --------------------------------------
       Authorized Signatory

                                      A-3
<PAGE>

                    GREENPOINT HOME EQUITY LOAN TRUST 200_-_
                   Home Equity Loan Asset-Backed Certificates,
                                  Series 200_-_

         This  Certificate  is one of a duly  authorized  issue of  Certificates
designated  as  GreenPoint  Home  Equity  Loan Trust  200_-_,  Home  Equity Loan
Asset-Backed  Certificates,   Series  200_-_  (herein  collectively  called  the
"CERTIFICATES"),  and representing a beneficial  ownership interest in the Trust
created by the Agreement.

         The  Certificateholder,  by its acceptance of this Certificate,  agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment  hereunder and that the Trustee is not liable to the  Certificateholders
for any amount  payable  under this  Certificate  or the Agreement or, except as
expressly  provided  in the  Agreement,  subject  to  any  liability  under  the
Agreement.

         This   Certificate   will  have  the  benefit  of  an  irrevocable  and
unconditional  certificate guaranty insurance policy issued by [Credit Enhancer]
(the "CREDIT ENHANCER").

         This  Certificate  does not  purport to  summarize  the  Agreement  and
reference is made to the Agreement for the interests,  rights and limitations of
rights,  benefits,  obligations and duties  evidenced  thereby,  and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement,  a distribution will be made on
the __th day of each month or, if such __th day is not a  Business  Day then the
first Business Day following such Payment Date (the "PAYMENT DATE"),  commencing
on the first Payment Date  specified on the face hereof,  to the Person in whose
name this  Certificate  is registered at the close of business on the applicable
Record  Date in an  amount  equal  to the  product  of the  Percentage  Interest
evidenced  by this  Certificate  and the amount  required to be  distributed  to
Holders of Certificates of the Class to which this  Certificate  belongs on such
Payment  Date  pursuant to the  Agreement.  The Record Date  applicable  to each
Payment Date is the last  Business Day of the month  preceding the month of such
Payment Date.

         Distributions on this Certificate shall be made by check or money order
mailed to the  address  of the  person  entitled  thereto  as it  appears on the
Certificate  Register  or,  upon  the  request  of  a  Certificateholder  owning
Certificates  having  the  requisite   aggregate   denominations  or  Percentage
Interests  specified in the  Agreement,  by wire transfer or  otherwise,  as set
forth in the Agreement.  The final distribution on each Certificate will be made
in like manner,  but only upon  presentment and surrender of such Certificate at
the   office  or   agency   of  the   Trustee   specified   in  the   notice  to
Certificateholders of such final distribution.

         The Agreement permits,  with certain  exceptions therein provided,  the
amendment  thereof and the  modification  of the rights and  obligations  of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Seller and the  Trustee  with the consent of the Credit  Enhancer  and of
Holders of the requisite percentage of the

                                      A-4
<PAGE>

Percentage  Interests of each Class of Certificates  affected by such amendment,
as  specified  in the  Agreement.  Any  such  consent  by  the  Holder  of  this
Certificate  shall be conclusive  and binding on such Holder and upon all future
Holders of this  Certificate  and of any  Certificate  issued upon the  transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate.  The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth,  the transfer of this  Certificate is registrable in the  Certificate
Register of the Trustee upon surrender of this  Certificate for  registration of
transfer  at the office or agency  maintained  by the  Trustee in New York,  New
York,  accompanied by a written  instrument of transfer in form  satisfactory to
the 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
Certificates  of the same Class in authorized  denominations  and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.

         The Certificates are issuable only as registered  Certificates  without
coupons  in  denominations  specified  in  the  Agreement.  As  provided  in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized  denominations
and  evidencing  the same  aggregate  Percentage  Interest,  as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange,  but the Trustee may require  payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Seller and the  Trustee  and any agent of the Seller or the Trustee
may treat the Person in whose name this  Certificate  is registered as the owner
hereof for all purposes,  and neither the Seller, the Trustee nor any such agent
shall be affected by any notice to the contrary.

         On any Payment Date on which the Pool Principal  Balance is less than (
)% of the Cut-Off Date Pool Principal  Balance,  the Seller will have the option
to repurchase,  in whole,  from the Trust the Mortgage Loans at a purchase price
determined  as provided  in the  Agreement.  In the event that no such  optional
termination  occurs,  the  obligations  and  responsibilities   created  by  the
Agreement  will  terminate  upon the later of (A) payment in full of all amounts
owing to the Credit Enhancer unless the Credit Enhancer shall otherwise  consent
and (B) the  earliest of (i) the day  following  the  Payment  Date on which the
Aggregate  Class A Principal  Balance has been  reduced to zero,  (ii) the final
payment or other  liquidation  of the last  Mortgage Loan in the Trust and (iii)
the  Payment  Date in  __________  200_.  In no event,  however,  will the trust
created by the  Agreement  continue  beyond the  expiration of 21 years from the
death  of the  last  survivor  of the  descendants  living  at the  date  of the
Agreement of a certain person named in the Agreement.

                                      A-5
<PAGE>

         Capitalized  terms used herein that are defined in the Agreement  shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.

                                      A-6
<PAGE>

                                   ASSIGNMENT

         FOR VALUE  RECEIVED,  the  undersigned  hereby  sell(s),  assign(s) and
transfer(s) unto
                 ---------------------------------------------------------------

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

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

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

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

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

the  Percentage   Interest  evidenced  by  the  within  Certificate  and  hereby
authorizes the transfer of registration of such Percentage  Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new  Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
                          ------------------------------------------------------
Dated:

                                     -------------------------------------------
                                     Signature by or on behalf of assignor

                                      A-7
<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions  shall  be  made,  by  wire  transfer  or  otherwise,  in
immediately available funds to
                               -------------------------------------------------

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

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

--------------------------------------------------------------------------------
for the account of
                   ------------------------------------------------------------,
account number
               -------------------------------------, or, if mailed by check, to

-------------------------------------------------------------------.  Applicable

statements should be mailed to
                               -------------------------------------------------

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

-------------------------------------------------------------------------------.

         This information is provided by
                                         --------------------------------------,
the assignee named above, or
                             --------------------------------------------------,
as its agent.

                                      A-8
<PAGE>

                        EXHIBITS B THROUGH L ARE RESERVED

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