Document:

<PAGE>

EXHIBIT 4.7

                       CITIGROUP MBN TRUST SERIES 20__-__
                                     Issuer

                                       and

                           [NAME OF INDENTURE TRUSTEE]

                                INDENTURE TRUSTEE

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

                                    INDENTURE

                           Dated as of _____ __, 20__

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

                              MORTGAGE-BACKED NOTES

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                                <C>
ARTICLE I               DEFINITIONS.............................................................................    1

   SECTION 1.01.           Definitions..........................................................................    1
   SECTION 1.02.           Incorporation by Reference of Trust Indenture Act....................................    2
   SECTION 1.03.           Rules of Construction................................................................    2

ARTICLE II              ORIGINAL ISSUANCE OF NOTES..............................................................    3

   SECTION 2.01.           Form.................................................................................    3
   SECTION 2.02.           Execution, Authentication and Delivery...............................................    3

ARTICLE III             COVENANTS...............................................................................    4

   SECTION 3.01.           Collection of Payments with Respect to the Mortgage Loans............................    4
   SECTION 3.02.           Maintenance of Office or Agency......................................................    4
   SECTION 3.03.           Money for Payments to be Held in Trust; Paying Agent.................................    4
   SECTION 3.04.           Existence............................................................................    6
   SECTION 3.05.           Payment of Principal and Interest; Defaulted Interest................................    6
   SECTION 3.06.           Protection of Trust Estate...........................................................    8
   SECTION 3.07.           Opinions as to Trust Estate..........................................................    9
   SECTION 3.08.           Performance of Obligations; Servicing Agreement......................................    9
   SECTION 3.09.           Negative Covenants....................................................................  10
   SECTION 3.10.           Annual Statement as to Compliance.....................................................  11
   SECTION 3.11.           Recording of Assignments..............................................................  11
   SECTION 3.12.           Representations and Warranties Concerning the Mortgage Loans..........................  11
   SECTION 3.13.           Amendments to Servicing Agreement.....................................................  11
   SECTION 3.14.           Master Servicer as Agent and Bailee of the Mortgage Loans Holder......................  11
   SECTION 3.15.           Investment Company Act................................................................  12
   SECTION 3.16.           Issuer May Consolidate, Etc...........................................................  12
   SECTION 3.17.           Successor or Transferee...............................................................  14
   SECTION 3.18.           No Other Business.....................................................................  14
   SECTION 3.19.           No Borrowing..........................................................................  14
   SECTION 3.20.           Guarantees, Loans, Advances and other Liabilities.....................................  14
   SECTION 3.21.           Capital Expenditures..................................................................  15
   SECTION 3.22.           [Reserved]............................................................................  15
   SECTION 3.23.           Restricted Payments...................................................................  15
   SECTION 3.24.           Notice of Events of Default...........................................................  15
   SECTION 3.25.           Further Instruments and Acts..........................................................  15
   SECTION 3.26.           Statements to Noteholders.............................................................  15
   SECTION 3.27.           Determination of Note Interest Rate...................................................  15
   SECTION 3.28.           Payments Under the Credit Enhancement Instrument......................................  16
   SECTION 3.29.           Replacement Credit Enhancement Instrument.............................................  16

ARTICLE IV              THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE.......................................  17
</TABLE>

                                       i

<PAGE>

<TABLE>
<S>                                                                                                                <C>
   SECTION 4.01.           The Notes.............................................................................  17
   SECTION 4.02.           Registration of and Limitations on Transfer and Exchange of Notes; Appointment of
                           Certificate Registrar.................................................................  18
   SECTION 4.03.           Mutilated, Destroyed, Lost or Stolen Notes............................................  19
   SECTION 4.04.           Persons Deemed Owners.................................................................  20
   SECTION 4.05.           Cancellation..........................................................................  20
   SECTION 4.06.           Book-Entry Notes......................................................................  20
   SECTION 4.07.           Notices to Depository.................................................................  21
   SECTION 4.08.           Definitive Notes......................................................................  21
   SECTION 4.09.           Tax Treatment.........................................................................  22
   SECTION 4.10.           Satisfaction and Discharge of Indenture...............................................  22
   SECTION 4.11.           Application of Trust Money............................................................  23
   SECTION 4.12.           Subrogation and Cooperation...........................................................  23
   SECTION 4.13.           Repayment of Monies Held by Paying Agent..............................................  24
   SECTION 4.14.           Temporary Notes.......................................................................  24

ARTICLE V               DEFAULT AND REMEDIES.....................................................................  25

   SECTION 5.01.           Events of Default.....................................................................  25
   SECTION 5.02.           Acceleration of Maturity; Rescission and Annulment....................................  25
   SECTION 5.03.           Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.............  26
   SECTION 5.04.           Remedies; Priorities..................................................................  28
   SECTION 5.05.           Optional Preservation of the Trust Estate.............................................  30
   SECTION 5.06.           Limitation of Suits...................................................................  30
   SECTION 5.07.           Unconditional Rights of Noteholders to Receive Principal and Interest.................  31
   SECTION 5.08.           Restoration of Rights and Remedies....................................................  31
   SECTION 5.09.           Rights and Remedies Cumulative........................................................  31
   SECTION 5.10.           Delay or Omission not a Waiver........................................................  31
   SECTION 5.11.           Control by Noteholders................................................................  32
   SECTION 5.12.           Waiver of Past Defaults...............................................................  32
   SECTION 5.13.           Undertaking for Costs.................................................................  33
   SECTION 5.14.           Waiver of Stay or Extension Laws......................................................  33
   SECTION 5.15.           Sale of Trust Estate..................................................................  33
   SECTION 5.16.           Action on Notes.......................................................................  35
   SECTION 5.17.           Performance and Enforcement of Certain Obligations....................................  35

ARTICLE VI              THE INDENTURE TRUSTEE....................................................................  36

   SECTION 6.01.           Duties of Indenture Trustee...........................................................  36
   SECTION 6.02.           Rights of Indenture Trustee...........................................................  37
   SECTION 6.03.           Individual Rights of Indenture Trustee................................................  38
   SECTION 6.04.           Indenture Trustee's Disclaimer........................................................  38
   SECTION 6.05.           Notice of Event of Default............................................................  38
   SECTION 6.06.           Reports by Indenture Trustee to Holders...............................................  38
   SECTION 6.07.           Compensation and Indemnity............................................................  39
   SECTION 6.08.           Replacement of Indenture Trustee......................................................  39
   SECTION 6.09.           Successor Indenture Trustee by Merger.................................................  40
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                                <C>
   SECTION 6.10.           Appointment of Co-Indenture Trustee or Separate Indenture Trustee.....................  41
   SECTION 6.11.           Eligibility; Disqualification.........................................................  42
   SECTION 6.12.           Preferential Collection o Claims Against Issuer.......................................  42
   SECTION 6.13.           Representation and Warranty...........................................................  42
   SECTION 6.14.           Directions To Indenture Trustee.......................................................  43
   SECTION 6.15.           [ No Consent To Certain Acts Of Depositor.............................................  43
   SECTION 6.16.           Indenture Trustee May Own Securities..................................................  43

ARTICLE VII             NOTEHOLDERS' LISTS AND REPORTS...........................................................  43

   SECTION 7.01.           Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders................  43
   SECTION 7.02.           Preservation of Information; Communications to Noteholders............................  44
   SECTION 7.03.           Reports by Issuer.....................................................................  44
   SECTION 7.04.           Reports by Indenture Trustee..........................................................  45

ARTICLE VIII            ACCOUNTS, DISBURSEMENTS AND RELEASES.....................................................  45

   SECTION 8.01.           Collection of Money...................................................................  45
   SECTION 8.02.           Trust Accounts........................................................................  45
   SECTION 8.03.           Officer's Certificate.................................................................  47
   SECTION 8.04.           Termination Upon Distribution to Noteholders..........................................  47
   SECTION 8.05.           Release of Trust Estate...............................................................  47
   SECTION 8.06.           Surrender of Notes Upon Final Payment.................................................  47

ARTICLE IX              SUPPLEMENTAL INDENTURES..................................................................  48

   SECTION 9.01.           Supplemental Indentures Without Consent Of Noteholders................................  48
   SECTION 9.02.           Supplemental Indentures with Consent of Noteholders...................................  49
   SECTION 9.03.           Execution of Supplemental Indentures..................................................  51
   SECTION 9.04.           Effect of Supplemental Indenture......................................................  51
   SECTION 9.05.           Conformity with Trust Indenture Act...................................................  51
   SECTION 9.06.           Reference in Notes to Supplemental Indentures.........................................  51

ARTICLE X               MISCELLANEOUS............................................................................  52

   SECTION 10.01.          Compliance Certificates and Opinions, etc.............................................  52
   SECTION 10.02.          Form of Documents Delivered to Indenture Trustee......................................  54
   SECTION 10.03.          Acts of Noteholders...................................................................  54
   SECTION 10.04.          Notices, etc., to Indenture Trustee, Issuer, Credit Enhancer and Rating Agencies......  55
   SECTION 10.05.          Notices to Noteholders; Waiver........................................................  56
   SECTION 10.06.          Alternate Payment and Notice Provisions...............................................  56
   SECTION 10.07.          Conflict with Trust Indenture Act.....................................................  57
   SECTION 10.08.          Effect of Headings....................................................................  57
   SECTION 10.09.          Successors and Assigns................................................................  57
   SECTION 10.10.          Separability..........................................................................  57
   SECTION 10.11.          Benefits of Indenture.................................................................  57
   SECTION 10.12.          Legal Holidays........................................................................  57
   SECTION 10.13.          Governing Law.........................................................................  58
</TABLE>

                                      iii

<PAGE>

<TABLE>
<S>                                                                                                                <C>
   SECTION 10.14.          Counterparts..........................................................................  58
   SECTION 10.15.          Recording of Indenture................................................................  58
   SECTION 10.16.          Issuer Obligation.....................................................................  58
   SECTION 10.17.          No Petition...........................................................................  59
   SECTION 10.18.          Inspection............................................................................  59
   SECTION 10.19.          Authority of the Administrator........................................................  59
</TABLE>

EXHIBITS

Exhibit A - Form of Notes

Appendix A Definitions

                                       iv

<PAGE>

                  This Indenture, dated as of _______________, between Citigroup
MBN Trust Series 20__ -__, a Delaware business trust, as Issuer (the "Issuer"),
and ____________________________, a ____________________________, as Indenture
Trustee (the "Indenture Trustee"),

                                WITNESSETH THAT:

                  Each party hereto agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the Issuer's
Series 20__-_ Mortgage-Backed Notes (the "Notes").

                                 GRANTING CLAUSE

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

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

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

                                   ARTICLE I

                                  DEFINITIONS

                  SECTION 1.01. Definitions.

                  For All purposes of this Indenture, except as otherwise
expressly provided herein or unless the context otherwise requires, capitalized
terms not otherwise defined

<PAGE>

herein shall have the meanings assigned to such terms in the Definitions
attached hereto as Appendix A which is incorporated by reference herein. All
other capitalized terms used herein shall have the meanings specified herein.

                  SECTION 1.02. Incorporation by Reference of Trust Indenture
         Act.

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

                  "Commission" means the Securities and Exchange Commission.

                  "indenture securities" means the Notes.

                  "indenture security holder" means a Noteholder.

                  "indenture to be qualified" means this Indenture.

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

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

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

                  SECTION 1.03. Rules of Construction.

                  Unless the context otherwise requires:

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

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

                  (iii)    "or" is not exclusive;

                  (iv)     "including" means including without limitation;

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

                  (vi)     any agreement, instrument or statute defined or
         referred to herein or in any instrument or certificate delivered in
         connection herewith means such agreement, instrument or statute as from
         time to time amended, modified or supplemented and includes (in the
         case of agreements or instruments) references

                                      - 2 -

<PAGE>

         to all attachments thereto and instruments incorporated therein;
         references to a Person are also to its permitted successors and
         assigns.

                                   ARTICLE II

                           ORIGINAL ISSUANCE OF NOTES

                  SECTION 2.01. Form.

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

                  The Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the Authorized Officers executing such
Notes, as evidenced by their execution of such Notes.

                  The terms of the Notes set forth in Exhibit A are part of the
terms of this Indenture.

                  SECTION 2.02. Execution, Authentication and Delivery.

                  The Notes shall be executed on behalf of the Issuer by any of
its Authorized Officers. The signature of any such Authorized Officer on the
Notes may be manual or facsimile.

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

                  The Indenture Trustee shall upon Issuer Request authenticate
and deliver Notes for original issue in an aggregate initial principal amount of
$___________.

                  Each Note shall be dated the date of its authentication. The
Notes shall be issuable as registered Notes and the Notes shall be issuable in
the minimum initial Security Balances of $100,000 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 on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture

                                      - 3 -

<PAGE>

Trustee by the manual signature of one of its authorized signatories, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder.

                                  ARTICLE III

                                    COVENANTS

                  SECTION 3.01. Collection of Payments with Respect to the
         Mortgage Loans.

                  The Indenture Trustee shall establish and maintain with itself
a trust account (the "Payment Account") in which the Indenture Trustee shall,
subject to the terms of this paragraph, deposit, on the same day as it is
received from the Master Servicer, each remittance received by the Indenture
Trustee with respect to the Mortgage Loans. The Indenture Trustee shall make all
payments of principal of and interest on the Notes, subject to Section 3.03 as
provided in Section 3.05 herein from monies on deposit in the Payment Account.

                  SECTION 3.02. Maintenance of Office or Agency.

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

                  SECTION 3.03. Money for Payments to be Held in Trust; Paying
         Agent.

                  (a)      As provided in Section 3.01, all payments of amounts
due and payable with respect to any Notes that are to be made from amounts
withdrawn from the Payment Account pursuant to Section 3.01 shall be made on
behalf of the Issuer by the Indenture Trustee or by the Paying Agent, and no
amounts so withdrawn from the Payment Account for payments of Notes shall be
paid over to the Issuer except as provided in this Section 3.03.

                  The Issuer will cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Paying Agent it hereby so agrees), subject to the
provisions of this Section 3.03, that such Paying Agent will:

                                      - 4 -

<PAGE>

                  (b)      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;

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

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

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

                  (f)      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
Request direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.

                  Subject to applicable laws with respect to escheat of funds,
any money held by the Indenture Trustee or any Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
one year after such amount has become due and payable shall be discharged from
such trust and be paid to the Issuer on Issuer Request; and the Holder of such
Note shall thereafter, as an unsecured general creditor, look only to the Issuer
for payment thereof (but only to the extent of the amounts so paid to the
Issuer), and all liability of the Indenture Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided, however, that the
Indenture Trustee or such Paying Agent, before being required to make any such
repayment, shall at the expense and direction of the Issuer cause to be
published once, in an Authorized Newspaper published in the English language,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
The Indenture Trustee may also adopt and employ, at the expense and direction of
the Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to

                                      - 5 -

<PAGE>

Holders whose Notes have been called but have not been surrendered for
redemption or whose right to or interest in monies due and payable but not
claimed is determinable from the records of the Indenture Trustee or of any
Paying Agent, at the last address of record for each such Holder).

                  SECTION 3.04. Existence.

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

                  SECTION 3.05. Payment of Principal and Interest; Defaulted
Interest.

                  (a)      On each Payment Date from amounts on deposit in the
Payment Account after making (x) any deposit to the Funding Account pursuant to
Section 8.02(b) and (y) any deposits to the Payment Account pursuant to Section
8.02(c)(ii) and Section 8.02(c)(i)(2), the Indenture Trustee shall pay to the
Noteholders, the Certificate Paying Agent, on behalf of the Certificateholders,
and to other Persons the amounts to which they are entitled as set forth below:

                  (b)      To the Noteholders the sum of (a) one month's
interest at the Note Interest Rate on the Security Balances of Notes immediately
prior to such Payment Date and (b) any previously accrued and unpaid interest
for prior Payment Dates;

                  (c)      if such Payment Date is after the Funding Period, to
the Noteholders, as principal on the Notes, the applicable Security Percentage
of the Principal Collection Distribution Amount and if such Payment Date is the
first Payment Date following the end of the Funding Period (if ending due to an
Amortization Event) or the Payment Date on which the Funding Period ends, to the
Noteholders as principal on the Notes the applicable Security Percentage of the
amount deposited from the Funding Account in respect of Security Principal
Collections;

                  (d)      to the Noteholders, as principal on the Notes, from
the amount remaining on deposit in the Payment Account, up to the applicable
Security Percentage of Liquidation Loss Amounts for the related Collection
Period;

                  (e)      to the Noteholders, as principal on the Notes, from
the amount remaining on deposit in the Payment Account, up to the applicable
Security Percentage of Carryover Loss Amounts;

                  (f)      to the Credit Enhancer, in the amount of the premium
for the Credit Enhancement Instrument and for any Additional Credit Enhancement
Instrument;

                                      - 6 -

<PAGE>

                  (g)      to the Credit Enhancer, to reimburse it for prior
draws made on the Credit Enhancement Instrument and on any Additional Credit
Enhancement Instrument (with interest thereon as provided in the Insurance
Agreement);

                  (h)      to the Noteholders, as principal on the Notes based
on the Security Balances from Security Interest Collections, up to the Special
Capital Distribution Amount for such Payment Date;

                  (i)      to the Credit Enhancer, any other amounts owed to the
Credit Enhancer pursuant to the Insurance Agreement;

                  (j)      [Reserved];

                  (k)      to reimburse the Administrator for expenditures made
on behalf of the Issuer with respect to the performance of its duties under the
Indenture; and

                  (l)      any remaining amount, to the Certificate Paying
Agent, on behalf of the Certificates.

provided, however, in the event that on a Payment Date a Credit Enhancer Default
shall have occurred and be continuing then the priorities of distributions
described above will be adjusted such that payments of the Certificate
Distribution Amount and all other amounts to be paid to the Certificate Paying
Agent will not be paid until the full amount of interest and principal in
accordance with clauses (i), (x) and (ii) through (iv) above that are due on the
Notes on such Payment Date have been paid and provided, further, that on the
Final Scheduled Payment Date or other final Payment Date, the amount to be paid
pursuant to clause (ii) above shall be equal to the Security Balances of the
Securities immediately prior to such Payment Date.

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

                  The amounts paid to Noteholders shall be paid to each Class in
accordance with the Class Percentage as set forth in paragraph (b) below.
Interest will accrue on the Notes during an Interest Period on the basis of the
actual number of days in such Interest Period and a year assumed to consist of
360 days.

                  [Any installment of interest or principal, if any, payable on
any Note or Certificate that is punctually paid or duly provided for by the
Issuer on the applicable Payment Date shall, if such Holder holds Notes or
Certificates of an aggregate initial Principal Balance of at least $1,000,000,
be paid to each Holder of record on the preceding Record Date, by wire transfer
to an account specified in writing by such Holder reasonably satisfactory to the
Indenture Trustee as of the preceding Record Date or in all other cases or if no
such instructions have been delivered to the Indenture Trustee, by check to such
Noteholder mailed to such Holder's address as it appears in the Note Register
the amount required to be distributed to such Holder on such Payment Date
pursuant to such Holder's Securities; provided, however, that the Indenture
Trustee shall

                                      - 7 -

<PAGE>

not pay to such Holders any amount required to be withheld from a payment to
such Holder by the Code.]

                  (b) The principal of each Note shall be due and payable in
full on the Final Scheduled Payment Date for such Note as provided in the form
of Note set forth in Exhibit A. All principal payments on each Class of Notes
shall be made to the Noteholders of such Class entitled thereto in accordance
with the Percentage Interests represented by such Notes. Upon notice to the
Indenture Trustee by 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 Final Scheduled Payment Date or other final Payment Date. Such
notice shall be mailed no later than five Business Days prior to such Final
Scheduled Payment Date or other final Payment Date and shall specify that
payment of the principal amount and any interest due with respect to such Note
at the Final Scheduled Payment Date or other final Payment Date will be payable
only upon presentation and surrender of such Note and shall specify the place
where such Note may be presented and surrendered for such final payment.

                  SECTION 3.06. Protection of Trust Estate.

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

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

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

                  (d)      cause the Issuer to enforce any of the Mortgage
Loans; or

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

                  (i)      Except as otherwise provided in this Indenture, the
         Indenture Trustee shall not remove any portion of the Trust Estate that
         consists of money or is evidenced by an instrument, certificate or
         other writing from the jurisdiction in which it was held at the date of
         the most recent Opinion of Counsel delivered pursuant to Section 3.07
         (or from the jurisdiction in which it was held as described in the
         Opinion of Counsel delivered at the Closing Date pursuant to Section
         3.07(a), if no Opinion of Counsel has yet been delivered pursuant to
         Section 3.07(b) unless the Trustee shall have first received an Opinion
         of Counsel to the effect that the lien and security interest created by
         this Indenture with respect to such property will continue to be
         maintained after giving effect to such action or actions.

                                      - 8 -

<PAGE>

                  The Issuer hereby designates the Indenture Trustee its agent
and attorney-in-fact to execute any financing statement, continuation statement
or other instrument required to be executed pursuant to this Section 3.06.

                  SECTION 3.07. Opinions as to Trust Estate.

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

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

                  SECTION 3.08. Performance of Obligations; Servicing Agreement.

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

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

                  (c)      The Issuer will not take any action or permit any
action to be taken by others which would release any Person from any of such
Person's covenants or obligations under any of the documents relating to the
Mortgage Loans or under any instrument included in the Trust Estate, or which
would result in the amendment,

                                      - 9 -

<PAGE>

hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the documents relating to the Mortgage
Loans or any such instrument, except such actions as the Master Servicer is
expressly permitted to take in the Servicing Agreement. The Indenture Trustee,
as pledgee of the Mortgage Loans, shall be able to exercise the rights Issuer
and the Mortgage Loans holder, to direct the actions of the Master Servicer.

                  (i)      The Issuer shall at all times retain an Administrator
         (approved by the Credit Enhancer under the Administration Agreement)
         and may enter into contracts with other Persons for the performance of
         the Issuer's obligations hereunder, and performance of such obligations
         by such Persons shall be deemed to be performance of such obligations
         by the Issuer.

                  SECTION 3.09. Negative Covenants.

                  So long as any Notes are Outstanding, the Issuer shall not:

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

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

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

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

                                     - 10 -

<PAGE>

                  SECTION 3.10. Annual Statement as to Compliance.

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

                  (i)      a review of the activities of the Issuer during such
         year and of its performance under this Indenture 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 its compliance with any such condition or covenant,
         specifying each such default known to such Authorized Officer and the
         nature and status thereof.

                  SECTION 3.11. Recording of Assignments.

                  The Company shall cause the to exercise its right under the
Mortgage Loan Purchase Agreement with respect to the obligation of the Seller to
submit or cause to be submitted for recording all Assignments of Mortgages on or
prior to ______________ with respect to the Initial Loans and within 60 days
following the related Deposit Date with respect to any Additional Loans.

                  SECTION 3.12. Representations and Warranties Concerning the
         Mortgage Loans.

                  The Indenture Trustee, as pledgee of the Mortgage Loans, has
the benefit of the representations and warranties made by the Seller in Section
[____] and Section [____] of the Mortgage Loan Purchase Agreement concerning the
Mortgage Loans and the right to enforce the remedies against the Seller provided
in such Section [____] or Section [____] to the same extent as though such
representations and warranties were made directly to the Indenture Trustee.

                  SECTION 3.13. Amendments to Servicing Agreement.

                  The Issuer covenants with the Indenture Trustee that it will
not enter into any amendment or supplement to the Servicing Agreement in
accordance with Section 8.01 of the Servicing Agreement without the prior
written consent of the Indenture Trustee. The Indenture Trustee, as pledgee of
the Mortgage Loans, may, in its discretion, decline to enter into or consent to
any such supplement or amendment if its own rights, duties or immunities shall
be adversely affected.

                  SECTION 3.14. Master Servicer as Agent and Bailee of the
         Mortgage Loans Holder.

                  Solely for purposes of perfection under Section 9-305 of the
Uniform Commercial Code or other similar applicable law, rule or regulation of
the state in which

                                     - 11 -

<PAGE>

such property is held by the Master Servicer, the Indenture Trustee hereby
acknowledges that the Master Servicer is acting as agent and bailee of the
Mortgage Loans holder in holding amounts on deposit in the Collection Account
pursuant to Section 3.02 of the Servicing Agreement, as well as its agent and
bailee in holding any Related Documents released to the Master Servicer pursuant
to Section 3.06(c) of the Servicing Agreement, and any other items constituting
a part of the Trust Estate which from time to time come into the possession of
the Master Servicer. It is intended that, by the Master Servicer's acceptance of
such agency pursuant to Section 3.02 of the Servicing Agreement, the Trustee, as
a secured party of the Mortgage Loans, will be deemed to have possession of such
Related Documents, such monies and such other items for purposes of Section
9-305 of the Uniform Commercial Code of the state in which such property is held
by the Master Servicer.

                  SECTION 3.15. Investment Company Act.

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

                  SECTION 3.16. Issuer May Consolidate, Etc.

                  (a)      The Issuer shall not consolidate or merge with or
into any other Person, unless:

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

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

                  (d)      the Rating Agencies shall have notified the Issuer
that such transaction shall not cause the rating of the Notes [or the
Certificates] to be reduced, suspended or withdrawn or to be considered by
either Rating Agency to be below investment grade without taking into account
the Credit Enhancement Instrument;

                                     - 12 -

<PAGE>

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

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

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

                  (h)      The Issuer shall not convey or transfer any of its
properties or assets, including those included in the Trust Estate, to any
Person, unless:

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

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

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

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

                                     - 13 -

<PAGE>

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

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

                  SECTION 3.17. Successor or Transferee.

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

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

                  SECTION 3.18. No Other Business.

                  The Issuer shall not engage in any business other than
financing, purchasing, owning and selling and managing the Mortgage Loans and
the issuance of the Notes and Certificates in the manner contemplated by this
Indenture and the Basic Documents and all activities incidental thereto.

                  SECTION 3.19. No Borrowing.

                  The Issuer shall not issue, incur, assume, guarantee or
otherwise become liable, directly or indirectly, for any indebtedness except for
the Notes.

                  SECTION 3.20. Guarantees, Loans, Advances and other
         Liabilities.

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

                                     - 14 -

<PAGE>

                  SECTION 3.21. Capital Expenditures.

                  The Issuer shall not make any expenditure (by long-term or
operating lease or otherwise) for capital assets (either realty or personally).

                  SECTION 3.22. [Reserved]

                  SECTION 3.23. Restricted Payments.

                  The Issuer shall not, directly or indirectly, (i) pay any
dividend or make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, to the Owner
Trustee or any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer,
(ii) redeem, purchase, retire or otherwise acquire for value any such ownership
or equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose; provided, however, that the Issuer may make, or
cause to be made, (x) distributions to the Owner Trustee and the
Certificateholders as contemplated by, and to the extent funds are available for
such purpose under the Trust Agreement, (y) payments to the Master Servicer
pursuant to the terms of the Servicing Agreement and (z) payments to the
Indenture Trustee pursuant to Section 1(a)(ii) of the Administration 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 3.24. Notice of Events of Default.

                  The Issuer shall give the Indenture Trustee the Credit
Enhancer and the Rating Agencies prompt written notice of each Event of Default
hereunder and under the Trust Agreement.

                  SECTION 3.25. Further Instruments and Acts.

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

                  SECTION 3.26. Statements to Noteholders.

                  The Indenture Trustee and the Certificate Registrar shall
forward by mail to each Noteholder and Certificateholder, respectively, the
Statement delivered to it pursuant to Section 4.01 of the Servicing Agreement.

                  SECTION 3.27. Determination of Note Interest Rate.

                  On the second LIBOR Business Day immediately preceding (i) the
Closing Date in the case of the first Interest Period and (ii) the first day of
each succeeding Interest Period, the Indenture Trustee shall determine LIBOR and
the Note Interest Rate for such Interest Period and shall inform the Issuer, the
Master Servicer and

                                     - 15 -

<PAGE>

the Depositor at their respective facsimile numbers given to the Indenture
Trustee in writing thereof.

                  SECTION 3.28. Payments Under the Credit Enhancement
         Instrument.

                  (a)      On any Payment Date, other than a Dissolution Payment
Date, the Indenture Trustee on behalf of the Noteholders, and in its capacity as
Certificate Paying Agent on behalf of the Certificateholders shall make a draw
on the Credit Enhancement Instrument in an amount if any equal to the sum of (x)
the amount by which the interest accrued at the Note Interest Rate on the
Security Balance of the Notes exceeds the amount on deposit in the Payment
Account available to be distributed therefor on such Payment Date and (y) the
Guaranteed Principal Payment Amount (the "Credit Enhancement Draw Amount").

                  (b)      The Indenture Trustee shall submit, if a Credit
Enhancement Draw Amount is specified in any Statement to Holders prepared by the
Master Servicer pursuant to Section 4.01 of the Servicing Agreement, the Notice
for Payment (as defined in the Credit Enhancement Instrument) in the amount of
the Credit Enhancement Draw Amount to the Credit Enhancer no later than 2:00
P.M., New York City time, on the second Business Day prior to the applicable
Payment Date. Upon receipt of such Credit Enhancement Draw Amount in accordance
with the terms of the Credit Enhancement Instrument, the Indenture Trustee shall
deposit such Credit Enhancement Draw Amount in the Payment Account for
distribution to Holders (and the Certificate Paying Agent on behalf of the
Certificates) pursuant to Section 3.05.

In addition, a draw may be made under the Credit Enhancement Instrument in
respect of any Avoided Payment (as defined in and pursuant to the terms and
conditions of the Credit Enhancement Instrument) and the Indenture Trustee shall
submit a Notice for Payment with respect thereto together with the other
documents required to be delivered to the Credit Enhancer pursuant to the Credit
Enhancement Instrument in connection with a draw in respect of any Avoided
Payment.

                  (c)      In the event that any Additional Credit Enhancement
Instruments are issued pursuant to Section 4.01 and Section 2.02(B) of the
Insurance Agreement, the Indenture Trustee shall be authorized to make draws
thereon subject to the terms and conditions therein.

                  SECTION 3.29. Replacement Credit Enhancement Instrument.

                  In the event of a Credit Enhancer Default or if the claims
paying ability rating of the Credit Enhancer is downgraded and such downgrade
results in a downgrading of the then current rating of the Securities (in each
case, a "Replacement Event"), the Issuer, at its expense, in accordance with and
upon satisfaction of the conditions set forth in the Credit Enhancement
Instrument, including, without limitation, payment in full of all amounts owed
to the Credit Enhancer, may, but shall not be required to, substitute a new
surety bond or surety bonds for the existing Credit Enhancement Instrument or
may arrange for any other form of credit enhancement;

                                     - 16 -

<PAGE>

provided, however, that in each case the Notes shall be rated no lower than the
rating assigned by each Rating Agency to the Notes immediately prior to such
Replacement Event and the timing and mechanism for drawing on such new credit
enhancement shall be reasonably acceptable to the Indenture Trustee and provided
further that the premiums under the proposed credit enhancement shall not exceed
such premiums under the existing Credit Enhancement Instrument. It shall be a
condition to substitution of any new credit enhancement that there be delivered
to the Indenture Trustee (i) an Opinion of Counsel, acceptable in form to the
Indenture Trustee, from counsel to the provider of such new credit enhancement
with respect to the enforceability thereof and such other matters as the
Indenture Trustee may require and (ii) an Opinion of Counsel to the effect that
such substitution would not (a) adversely affect in any material respect the tax
status of the Notes or (b) cause the Issuer to be subject to a tax at the entity
level. Upon receipt of the items referred to above and payment of all amounts
owing to the Credit Enhancer and the taking of physical possession of the new
credit enhancement, the Indenture Trustee shall, within five Business Days
following receipt of such items and such taking of physical possession, deliver
the replaced Credit Enhancement Instrument to the Credit Enhancer. In the event
of any such replacement the Issuer shall give written notice thereof to the
Rating Agencies.

                                   ARTICLE IV

               THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE

                  SECTION 4.01. The Notes.

                  The Notes shall be registered in the name of a nominee
designated by the Depository. Beneficial Owners will hold interests in the Notes
through the book-entry facilities of the Depository in minimum initial Principal
Balances of $1,000 and integral multiples of $1,000 in excess thereof.

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

                                     - 17 -

<PAGE>

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

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

                  SECTION 4.02. Registration of and Limitations on Transfer and
         Exchange of Notes; Appointment of Certificate Registrar.

                  The Issuer shall cause to be kept at its Corporate Trust
Office a Note Register in which, subject to such reasonable regulations as it
may prescribe, the Note Registrar shall provide for the registration of Notes
and of transfers and exchanges of Notes as herein provided. Subject to the
restrictions and limitations set forth below, upon surrender for registration of
transfer of any Note at the Corporate Trust Office, the Indenture Trustee shall
execute and the Note Registrar shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Notes in authorized
initial Security Balances evidencing the same aggregate Percentage Interests.

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

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

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

                                     - 18 -

<PAGE>

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

                  SECTION 4.03. Mutilated, Destroyed, Lost or Stolen Notes.

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

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

                  Every replacement Note issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

                                     - 19 -

<PAGE>

                  The provisions of this Section 4.03 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.

                  SECTION 4.04. Persons Deemed Owners.

                  Prior to due presentment for registration of transfer of any
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name any Note is registered (as
of the day of determination) as the owner of such Note for the purpose of
receiving payments of principal of and interest, if any, on such Note and for
all other purposes whatsoever, whether or not such Note be overdue, and neither
the Issuer, the Indenture Trustee nor any agent of the Issuer or the Indenture
Trustee shall be affected by notice to the contrary.

                  SECTION 4.05. Cancellation.

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

                  SECTION 4.06. Book-Entry Notes.

                  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, the initial Depository, 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 Depository, and no Beneficial
Owner will receive a Definitive Note representing such Beneficial Owner's
interest in such Note, except as provided in Section 4.08. Unless and until
definitive, fully registered Notes (the "Definitive Notes") have been issued to
Beneficial Owners pursuant to Section 4.08:

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

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

                                     - 20 -

<PAGE>

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

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

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

                  SECTION 4.07. Notices to Depository.

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

                  SECTION 4.08. Definitive Notes.

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

                                     - 21 -

<PAGE>

Definitive Notes, the Indenture Trustee shall recognize the Holders of the
Definitive Notes as Noteholders.

                  SECTION 4.09. Tax Treatment.

                  The Issuer has entered into this Indenture, and the Notes will
be issued, with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. The Issuer, by entering into this Indenture, and each Noteholder, by
its acceptance of its Note (and each Beneficial Owner by its acceptance of an
interest in the applicable Book-Entry Note), agree to treat the Notes for
federal, state and local income, single business and franchise tax purposes as
indebtedness of the Issuer.

                  SECTION 4.10. Satisfaction and Discharge of Indenture.

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

(A) either

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

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

         a. have become due and payable,

         b. will become due and payable at the Final Scheduled Payment Date
within one year, or

         c. have been called for early redemption pursuant to Section 5.02.

and the Issuer, in the case of a. or b. above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or

                                     - 22 -

<PAGE>

obligations guaranteed by the United States of America (which will mature prior
to the date such amounts are payable), in trust for such purpose, in an amount
sufficient to pay and discharge the entire indebtedness on such Notes and
Certificates then outstanding not theretofore delivered to the Indenture Trustee
for cancellation when due on the Final Scheduled Payment Date;

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

(C) the Issuer has delivered to the Indenture Trustee and the Credit Enhancer an
Officer's Certificate, an Opinion of Counsel and each meeting the applicable
requirements of Section 10.01 each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with and, if the Opinion of Counsel relates to a deposit made in
connection with Section 4.10(A)(2)b. above, such opinion shall further be to the
effect that such deposit will not have any material adverse tax consequences to
the Issuer, any Noteholders or any Certificateholders.

                  SECTION 4.11. Application of Trust Money.

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

                  SECTION 4.12. Subrogation and Cooperation.

                  (a)      The Issuer and the Indenture Trustee acknowledge that
(i) to the extent the Credit Enhancer makes payments under the Credit
Enhancement Instrument on account of principal of or interest on the Notes, the
Credit Enhancer will be fully subrogated to the rights of such Holders to
receive such principal and interest from the Issuer, and (ii) the Credit
Enhancer shall be paid such principal and interest but only from the sources and
in the manner provided herein and in the Insurance Agreement for the payment of
such principal and interest.

                  The Indenture Trustee 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 interest under this Indenture or the Insurance
Agreement without limiting the rights of the Noteholders as otherwise set forth
in the Indenture, including, without limitation, upon the occurrence and
continuance of a default under the Insurance Agreement, a request to take any
one or more of the following actions:

                  (i)      institute Proceedings for the collection of all
         amounts then payable on the Notes, or under this Indenture in respect
         to the Notes and all amounts payable under the Insurance Agreement
         enforce any judgment obtained and collect from the Issuer monies
         adjudged due;

                                     - 23 -

<PAGE>

                  (ii)     sell the Trust Estate or any portion thereof or
         rights or interest therein, at one or more public or private Sales
         called and conducted in any manner permitted by law;

                  (iii)    file or record all Assignments that have not
         previously been recorded;

                  (iv)     institute Proceedings from time to time for the
         complete or partial foreclosure of this Indenture; and

                  (v)      exercise any remedies of a secured party under the
         Uniform Commercial Code and take any other appropriate action to
         protect and enforce the rights and remedies of the Credit Enhancer
         hereunder.

                  SECTION 4.13. Repayment of Monies Held by Paying Agent.

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

                  SECTION 4.14. Temporary Notes.

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

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

                                     - 24 -
<PAGE>

                                   ARTICLE V

                              DEFAULT AND REMEDIES

                  SECTION 5.01. Events of Default.

                  "Event of Default," wherever used herein, shall have the
meaning provided in Article I; provided, however, that no Event of Default will
occur under clause (i) or clause (ii) of the definition of "Event of Default" if
the Issuer fails to make payments of principal of and interest on the Notes so
long as the Credit Enhancer makes payments sufficient therefore under the Credit
Enhancement Instrument.

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

                  SECTION 5.02. Acceleration of Maturity; Rescission and
Annulment.

                  If an Event of Default should occur and be continuing or if
the Master Servicer shall purchase all of the Mortgage Loans pursuant to Section
8.08 of the Servicing Agreement, then and in every such case the Indenture
Trustee or the Holders of Notes representing not less than a majority of the
Security Balances of all Notes may declare the Notes to be immediately due and
payable, by a notice in writing to the Issuer (and to the Indenture Trustee if
given by Noteholders), and upon any such declaration the unpaid principal amount
of such Class of Notes, together with accrued and unpaid interest thereon
through the date of acceleration, shall become immediately due and payable.
Unless the prior written consent of the Credit Enhancer shall have been obtained
by the Indenture Trustee, the Payment Date upon which such accelerated payment
is due and payable shall not be a Payment Date under the Credit Enhancement
Instrument and the Indenture Trustee shall not be authorized under Section 3.29
to make a draw therefor.

                  At any time after such declaration of acceleration of maturity
with respect to an Event of Default has been made and before a judgment or
decree for payment of the money due has been obtained by the Indenture Trustee
as hereinafter in this Article V provided, the Holders of Notes representing a
majority of the Security Balances of all Notes, by written notice to the Issuer
and the Indenture Trustee, may waive the related Event of Default and rescind
and annul such declaration and its consequences if:

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

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

                                     - 25 -

<PAGE>

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

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

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

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

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

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

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

                  (d)      In case there shall be pending, relative to the
Issuer or any other obligor upon the Notes or any Person having or claiming an
ownership interest in the Trust Estate, Proceedings under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency or
other similar law, or in case a

                                     - 26 -

<PAGE>

receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Issuer or its property or such other obligor or Person, or in
case of any other comparable judicial Proceedings relative to the Issuer or
other obligor upon the Notes, or to the creditors or property of the Issuer or
such other obligor, the Indenture Trustee, irrespective of whether the principal
of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:

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

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

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

                  (iv)     to file such proofs of claim and other papers or
         documents as may be necessary or advisable in order to have the claims
         of the Indenture Trustee or the Holders of Notes allowed in any
         judicial proceedings relative to the Issuer, its creditors and its
         property;

and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence or bad faith.

                  (e)      Nothing herein contained shall be deemed to authorize
the Indenture Trustee to authorize or consent to or vote for or accept or adopt
on behalf of any Noteholder any plan of reorganization, arrangement, adjustment
or composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture

                                     - 27 -

<PAGE>

Trustee to vote in respect of the claim of any Note holder in any such
proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar Person.

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

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

                  SECTION 5.04. Remedies; Priorities.

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

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

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

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

                  (iv)     sell the Trust Estate or any portion thereof or
         rights or interest therein, at one or more public or private sales
         called and conducted in any manner permitted by law;

provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee obtains the consent of the Holders of 100% of the aggregate
Principal Balances of the Notes and the Credit Enhancer, which consent will not
be unreasonably withheld, (B) the proceeds of such sale or liquidation
distributable to Holders are sufficient to discharge in full all amounts then
due and unpaid upon the Notes for principal and interest and to reimburse

                                     - 28 -

<PAGE>

the Credit Enhancer for any amounts drawn under the Credit Enhancement
Instrument and any other amounts due the Credit Enhancer under the Insurance
Agreement or (C) the Indenture Trustee determines that the Mortgage Loans will
not continue to provide sufficient funds for the payment of principal of and
interest on the Notes as they would have become due if the Notes had not been
declared due and payable, and the Indenture Trustee obtains the consent of the
Credit Enhancer, which consent will not be unreasonably withheld, and of the
Holders of a majority of the aggregate Principal Balances of the Notes. In
determining such sufficiency or insufficiency with respect to clause (B) and
(C), the Indenture Trustee may, but need not, obtain and rely upon an opinion of
an Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose. Notwithstanding the fore going, so long as an
Event of Servicer Termination has not occurred, any Sale of the Trust Estate
shall be made subject to the continued Servicing of the Mortgage Loans by the
Master Servicer as provided in the Servicing Agreement.

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

                  FIRST: to the Indenture Trustee for amounts due under Section
6.07;

                  SECOND: to each Class of Noteholders for amounts due and
unpaid on the related Class Notes for interest and to each Noteholder of such
Class in each case, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Class of Notes for interest
from amounts available in the Trust Estate for such Noteholders;

                  THIRD: to Holders of each Class of Notes for amounts due and
unpaid on the related Class of Notes for principal, from amounts available in
the Trust Estate for such Noteholders, and to each Noteholder of such Class in
each case ratably, without preference or priority of any kind, according to the
amounts due and payable on such Class of Notes for principal, until the Security
Balances of each Class of Notes is reduced to zero;

                  FOURTH: to the Issuer for amounts required to be distributed
to the Certificateholders in respect of interest and principal pursuant to the
Trust Agreement;

                  FIFTH: To the payment of all amounts due and owing to the
Credit Enhancer under the Insurance Agreement;

                  SIXTH: to the Issuer for amounts due under Article VIII of the
Trust Agreement; and

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

                  The Indenture Trustee may fix a record date and payment date
for any payment to Noteholders pursuant to this Section 5.04. At least 15 days
before such record

                                     - 29 -

<PAGE>

date, the Indenture Trustee shall mail to each Noteholder a notice that states
the record date, the payment date and the amount to be paid.

                  SECTION 5.05. Optional Preservation of the Trust Estate.

                  If the Notes have been declared to be due and payable under
Section 5.02 following an Event of Default and such declaration and its
consequences have not been rescinded and annulled, the Indenture Trustee may,
but need not, elect to take and maintain possession of the Trust Estate. It is
the desire of the parties hereto and the Noteholders that there be at all times
sufficient funds for the payment of principal of and interest on the Notes and
other obligations of the Issuer including payment to the Credit Enhancer, and
the Indenture Trustee shall take such desire into account when determining
whether or not to take and maintain possession of the Trust Estate. In
determining whether to take and maintain possession of the Trust Estate, the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.

                  SECTION 5.06. Limitation of Suits.

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

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

                  (ii)     the Holders of not less than 25% of the Security
         Balances of the Notes have made written request to the Indenture
         Trustee to institute such Proceeding in respect of such Event of
         Default in its own name as Indenture Trustee hereunder;

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

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

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

                  It is understood and intended that no one or more Holders of
Notes shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the rights
of any other Holders of Notes or to

                                     - 30 -

<PAGE>

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 Security Balances 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 5.07. 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 and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.

                  SECTION 5.08. Restoration of Rights and Remedies.

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

                  SECTION 5.09. Rights and Remedies Cumulative.

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

                  SECTION 5.10. Delay or Omission not a Waiver.

                  No delay or omission of the Indenture Trustee or any Holder of
any Note to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article V or by law to the Indenture Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Noteholders, as the case may be.

                                     - 31 -

<PAGE>

                  SECTION 5.11. Control by Noteholders.

                  The Holders of a majority of the Security Balances of Notes
shall have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee with respect to the
Notes or exercising any trust or power conferred on the Indenture Trustee;
provided that:

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

                  (ii)     subject to the express terms of Section 5.04, any
         direction to the Indenture Trustee to sell or liquidate the Trust
         Estate shall be by Holders of Notes representing not less than 100% of
         the Security Balances of Notes;

                  (iii)    if the conditions set forth in Section 5.05 have been
         satisfied and the Indenture Trustee elects to retain the Trust Estate
         pursuant to such Section, then any direction to the Indenture Trustee
         by Holders of Notes representing less than 100% of the Security
         Balances of Notes to sell or liquidate the Trust Estate shall be of no
         force and effect; and

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

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

                  SECTION 5.12. Waiver of Past Defaults.

                  Prior to the declaration of the acceleration of the maturity
of the Notes as provided in Section 5.02, the Holders of Notes of not less than
a majority of the Security Balances of the Notes may waive any past Event of
Default and its consequences except an Event of Default (a) with respect to
payment of principal of or interest on any of the Notes or (b) in respect of a
covenant or provision hereof which cannot be modified or amended without the
consent of the Holder of each Note or (c) the waiver of which would materially
and adversely affect the interests of the Credit Enhancer or modify its
obligation under the Credit Enhancement Instrument. In the case of any such
waiver, the Issuer, the Indenture Trustee and the Holders of the Notes shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Event of Default or impair
any right consequent thereto.

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

                                     - 32 -

<PAGE>

                  SECTION 5.13. Undertaking for Costs.

                  All parties to this Indenture agree, and each Holder of any
Note by such Holder's acceptance thereof shall be deemed to have agreed, that
any court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Indenture
Trustee for any action taken, suffered or omitted by it as Indenture Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 5.13 shall not apply to
(a) any suit instituted by the Indenture Trustee, (b) any suit instituted by any
Noteholder, or group of Noteholders, in each case holding in the aggregate more
than 10% of the Security Balances 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.

                  SECTION 5.14. Waiver of Stay or Extension Laws.

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

                  SECTION 5.15. Sale of Trust Estate.

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

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

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

                                     - 33 -

<PAGE>

                                    (2)      the proceeds of such Sale would be
                           not less than the entire amount which would be
                           payable to the Noteholders under the Notes and the
                           Credit Enhancer in respect of amounts drawn under the
                           Credit Enhancement Instrument and any other amounts
                           due the Credit Enhancer under the Insurance
                           Agreement, in full payment thereof in accordance with
                           Section 5.02, on the Payment Date next succeeding the
                           date of such Sale, or

                                    (3)      The Indenture Trustee determines,
                           in its sole discretion, that the conditions for
                           retention of the Trust Estate set forth in Section
                           5.05 cannot be satisfied (in making any such
                           determination, the Indenture Trustee may rely upon an
                           opinion of an Independent investment banking firm
                           obtained and delivered as provided in Section 5.05),
                           and the Credit Enhancer consents to such Sale, which
                           consent will not be unreasonably withheld and the
                           Holders representing at least 66-2/3% of the Security
                           Balances of the Notes consent to such Sale.

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

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

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

                                    (1)      any Holder or Holders of Notes may
                           bid for and with the consent of the Credit Enhancer
                           purchase the property offered for sale, and upon
                           compliance with the terms of sale may hold, retain
                           and possess and dispose of such property, without
                           further accountability, and may, in paying the
                           purchase money therefor, deliver any Notes or claims
                           for interest thereon in lieu of cash up to the amount
                           which shall, upon distribution of the net proceeds of
                           such sale, be payable thereon, and such Notes, in
                           case the amounts so payable thereon shall be less
                           than the amount due thereon, shall be returned to the
                           Holders thereof after being appropriately stamped to
                           show such partial payment;

                                    (2)      the Indenture Trustee may bid for
                           and acquire the property offered for Sale in
                           connection with any Sale thereof, and, subject to any
                           requirements of, and to the extent permitted by,

                                     - 34 -

<PAGE>

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

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

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

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

                  SECTION 5.16. Action on Notes.

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

                  SECTION 5.17. Performance and Enforcement of Certain
Obligations.

                  (a)      Promptly following a request from the Indenture
Trustee to do so and at the Administrator's expense, the Issuer in its capacity
as holder of the Mortgage Loans, shall take all such lawful action as the
Indenture Trustee may request to cause the Issuer to compel or secure the
performance and observance by the Seller and the Master

                                     - 35 -

<PAGE>

Servicer, as applicable, of each of their obligations to the Issuer under or in
connection with the Mortgage Loan Purchase Agreement and the Servicing
Agreement, and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Mortgage Loan
Purchase Agreement and the Servicing Agreement to the extent and in the manner
directed by the Indenture Trustee, as pledgee of the Mortgage Loans, including
the transmission of notices of default on the part of the Seller or the Master
Servicer thereunder and the institution of legal or administrative actions or
proceedings to compel or secure performance by the Seller or the Master Servicer
of each of their obligations under the Mortgage Loan Purchase Agreement and the
Servicing Agreement.

                  (b)      If an Event of Default has occurred and is
continuing, the Indenture Trustee, as pledgee of the Mortgage Loans, subject to
the rights of the Credit Enhancer under the Servicing Agreement may, and at the
direction (which direction shall be in writing or by telephone (confirmed in
writing promptly thereafter)) of the Holders of 66-2/3% of the Security Balances
of the Notes shall, exercise all rights, remedies, powers, privileges and claims
of the Issuer against the Seller or the Master Servicer under or in connection
with the Mortgage Loan Purchase Agreement and the Servicing Agreement, including
the right or power to take any action to compel or secure performance or
observance by the Seller or the Master Servicer, as the case may be, of each of
their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Mortgage Loan
Purchase Agreement and the Servicing Agreement, as the case may be, and any
right of the Issuer to take such action shall not be suspended.

                                   ARTICLE VI

                              THE INDENTURE TRUSTEE

                  SECTION 6.01. Duties of Indenture Trustee.

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

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

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

                  (ii)     in the absence of bad faith on its part, the
         Indenture Trustee may conclusively rely, as to the truth of the
         statements and the correctness of the opinions expressed therein, upon
         certificates or opinions furnished to the Indenture Trustee and
         conforming to the requirements of this Indenture; however,

                                     - 36 -

<PAGE>

         the Indenture Trustee shall examine the certificates and opinions to
         determine whether or not they conform to the requirements of this
         Indenture.

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

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

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

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

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

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

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

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

                  SECTION 6.02. Rights of Indenture Trustee.

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

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

                                     - 37 -

<PAGE>

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

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

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

                  SECTION 6.03. Individual Rights of Indenture Trustee.

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

                  SECTION 6.04. Indenture Trustee's Disclaimer.

                  The Indenture Trustee shall not be responsible for and makes
no representation as to the validity or adequacy of this Indenture 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 6.05. Notice of Event of Default.

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

                  SECTION 6.06. Reports by Indenture Trustee to Holders.

                  The Indenture Trustee shall deliver to each Noteholder such
information as may be required to enable such holder to prepare its federal and
state income tax

                                     - 38 -

<PAGE>

returns. In addition, upon the Issuer's written request, the Indenture Trustee
shall promptly furnish information reasonably requested by the Issuer that is
reasonably available to the Indenture Trustee to enable the Issuer to perform
its federal and state income tax reporting obligations.

                  SECTION 6.07. Compensation and Indemnity.

                  The Issuer shall or shall cause the Administrator to pay to
the Indenture Trustee on each Payment Date reasonable compensation 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 Administrator 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 Administrator to indemnify the Indenture Trustee against any
and all loss, liability or expense (including attorneys' fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder. The Indenture Trustee shall notify the Issuer and the
Administrator promptly of any claim for which it may seek indemnity. Failure by
the Indenture Trustee to so notify the Issuer and the Administrator shall not
relieve the Issuer or the Administrator of its obligations hereunder. The Issuer
shall or shall cause the Administrator to defend any such claim, and the
Indenture Trustee may have separate counsel and the Issuer shall or shall cause
the Administrator to pay the fees and expenses of such counsel. Neither the
Issuer nor the Administrator 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.

                  The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section 6.07 shall survive the discharge of this Indenture.
When the Indenture Trustee incurs expenses after the occurrence of an Event of
Default specified in Section 5.01(iv) or (v) with respect to the Issuer, the
expenses are intended to constitute expenses of administration under Title 11 of
the United States Code or any other applicable federal or state bankruptcy,
insolvency or similar law.

                  SECTION 6.08. Replacement of Indenture Trustee.

                  No resignation or removal of the Indenture Trustee and no
appointment of a successor Indenture Trustee shall become effective until the
acceptance of appointment by the successor Indenture Trustee pursuant to this
Section 6.08. The Indenture Trustee may resign at any time by so notifying the
Issuer and the Credit Enhancer. The Holders of a majority of Security Balances
of the Notes may remove the Indenture Trustee by so notifying the Indenture
Trustee and the Credit Enhancer and may appoint a successor Indenture Trustee.
The Issuer shall remove the Indenture Trustee if:

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

                                     - 39 -

<PAGE>

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

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

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

                  If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of 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.

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

                  If a successor Indenture Trustee does not take office within
60 days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority of Security Balances
of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.

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

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

                  SECTION 6.09. Successor Indenture Trustee by Merger.

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

                                     - 40 -

<PAGE>

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 provided that the certificate of the Indenture
Trustee shall have.

                  SECTION 6.10. Appointment of Co-Indenture Trustee or Separate
   Indenture Trustee.

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

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

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

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

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

                  (c)      Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall refer to
this Agreement and the conditions of this Article VI.

                                     - 41 -

<PAGE>

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 Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Indenture Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.

                  SECTION 6.11. Eligibility; Disqualification.

                  The Indenture Trustee shall at all times satisfy the
requirements of TIA Section. 310(a). The Indenture Trustee shall have a combined
capital and surplus of at least [$50,000,000] as set forth in its most recent
published annual report of condition and it or its parent shall have a long-term
debt rating of [Baa3] or better by [Moody's]. The Indenture Trustee shall comply
with TIA Section. 310(b), including the optional provision permitted by the
second sentence of TIA Section. 310(b)(9); provided, however, that there shall
be excluded from the operation of TIA Section. 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 Section. 310(b)(1) are met.

                  SECTION 6.12. Preferential Collection of Claims Against
   Issuer.

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

                  SECTION 6.13. Representation and Warranty.

                  The Indenture Trustee hereby represents that:

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

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

                                     - 42 -

<PAGE>

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

                  (iv)     To the Indenture Trustee's best knowledge, there are
         no proceedings or investigations pending or threatened before any
         court, regulatory body, administrative agency or other governmental
         instrumentality having jurisdiction over the Indenture Trustee or its
         properties: (A) asserting the invalidity of this Indenture (B) seeking
         to prevent the consummation of any of the transactions contemplated by
         this Indenture or (C) seeking any determination or ruling that might
         materially and adversely affect the performance by the Indenture
         Trustee of its obligations under, or the validity or enforceability of,
         this Indenture.

                  SECTION 6.14. Directions to Indenture Trustee.

                  The Indenture Trustee is hereby directed:

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

                  (b)      to issue, execute and deliver the Notes substantially
in the form prescribed by Exhibit A in accordance with the terms of this
Indenture; and

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

                  SECTION 6.15. No Consent to Certain Acts of Depositor.

                  The Indenture Trustee shall not consent to any action proposed
to be taken by the Depositor pursuant to Article [_______] of the Depositor's
Restated Certificate of Incorporation.

                  SECTION 6.16. Indenture Trustee May Own Securities.

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

                                  ARTICLE VII

                         NOTEHOLDERS' LISTS AND REPORTS

                  SECTION 7.01. Issuer to Furnish Indenture Trustee Names and
   Addresses of Noteholders.

                                     - 43 -

<PAGE>

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

                  SECTION 7.02. Preservation of Information; Communications to
   Noteholders.

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

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

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

                  SECTION 7.03. Reports by Issuer.

                  (a)      The Issuer shall:

                  (i)      file with the Indenture Trustee, within 15 days after
         the Issuer is required to file the same with the Commission, copies of
         the annual reports and 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 and regulations prescribe) that the
         Issuer may be required to file with the Commission pursuant to Section
         13 or 15(d) of the Exchange Act;

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

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

                                     - 44 -

<PAGE>

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

                  SECTION 7.04. Reports by Indenture Trustee.

                  If required by TIA Section. 313(a), within 60 days after each
January 1 beginning with January 1, 20__, the Indenture Trustee shall mail to
each Noteholder as required by TIA Section. 313(c) and to the Credit Enhancer a
brief report dated as of such date that complies with TIA Section. 313(a). The
Indenture Trustee also shall comply with TIA Section. 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.

                                  ARTICLE VIII

                      ACCOUNTS, DISBURSEMENTS AND RELEASES

                  SECTION 8.01. Collection of Money.

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

                  SECTION 8.02. Trust Accounts.

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

                  (b)      All monies deposited from time to time in the Payment
Account pursuant to the Servicing Agreement and all deposits therein pursuant to
this Indenture are for the benefit of the Noteholders and the Certificate Paying
Agent, on behalf of the Certificateholders and all investments made with such
monies including all income or

                                     - 45 -

<PAGE>

other gain from such investments are for the benefit of the Master Servicer as
provided by the Servicing Agreement.

                  On each Payment Date during the Funding Period the Indenture
Trustee shall withdraw Net Principal Collections from the Payment Account and
deposit Net Principal Collections to the Funding Account.

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

                  The Master Servicer may direct the Indenture Trustee to invest
any funds in the Payment Account in Eligible Investments maturing no later than
the Business Day preceding each Payment Date and shall not be sold or disposed
of prior to the maturity. Unless otherwise instructed by the Master Servicer,
the Indenture Trustee shall invest all funds in the Payment Account in Eligible
Investments.

                  (c)      On or before the Closing Date the Issuer shall open,
at the Corporate Trust Office, an account which shall be the "Funding Account".
The Master Servicer may direct the Indenture Trustee to invest any funds in the
Funding Account in Eligible Investments maturing no later than the Business Day
preceding each Payment Date and shall not be sold or disposed of prior to the
maturity. Unless otherwise instructed by the Master Servicer, the Indenture
Trustee shall invest all funds in the Payment Account in its Corporate Trust
Short Term Investment Fund so long as it is an Eligible Investment. During the
Funding Period, any amounts received by the Indenture Trustee in respect of Net
Principal Collections for deposit in the Funding Account, together with any
Eligible Investments in which such monies are or will be invested or reinvested
during the term of the Notes, shall be held by the Indenture Trustee in the
Funding Account as part of the Trust Estate, subject to disbursement and
withdrawal as herein provided: Amounts on deposit in the Funding Account in
respect of Net Principal Collections may be withdrawn on each Deposit Date and
(1) paid to the Issuer in payment for Additional Loans by the deposit of such
amount to the Collection Account and (2) at the end of the Funding Period any
amounts remaining in the Funding Account after the withdrawal called for by
clause (1) shall be deposited in the Payment Account to be included in the
payment of principal on the Payment Date that is the last day of the Funding
Period.

                  (d)      (i) Any investment in the institution with which the
Funding Account is maintained may mature on such Payment Date and (ii) any other
investment may mature on such Payment Date if the Indenture Trustee shall
advance funds on such Payment Date to the Funding Account in the amount payable
on such investment on such Payment Date, pending receipt thereof to the extent
necessary to make distributions on the Notes and the Certificates) and shall not
be sold or disposed of prior to maturity.

                                     - 46 -

<PAGE>

                  SECTION 8.03. Officer's Certificate.

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

                  SECTION 8.04. Termination Upon Distribution to Noteholders.

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

                  SECTION 8.05. Release of Trust Estate.

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

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

                  (c)      [The Indenture Trustee shall release property from
the lien of this Indenture pursuant to this Section 8.05 only upon receipt of an
request from the Issuer accompanied by an [Officers' Certificate], [an Opinion
of Counsel,] and a letter from the Credit Enhancer, stating that the Credit
Enhancer has no objection to such request from the Issuer.]

                  SECTION 8.06. Surrender of Notes Upon Final Payment.

                                     - 47 -

<PAGE>

                  By acceptance of any Note, the Holder thereof agrees to
surrender such Note to the Indenture Trustee promptly, prior to such
Noteholder's receipt of the final payment thereon.

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

                  SECTION 9.01. Supplemental Indentures Without Consent of
   Noteholders.

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

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

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

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

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

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

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

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

                                     - 48 -

<PAGE>

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

provided, however, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel that
entering into such indenture supplement will not have any material adverse tax
consequences to the Noteholders.

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

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

                  SECTION 9.02. Supplemental Indentures with Consent of
   Noteholders.

                  The Issuer and the Indenture Trustee, when authorized by an
Issuer Request, also may, with prior notice to the Rating Agencies and, with the
written consent of the Credit Enhancer and with the consent of the Holders of
not less than a majority of the Security Balances of each Class of Notes
affected thereby, by Act of such Holders delivered to the Issuer and the
Indenture Trustee, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Note affected thereby:

                  (i)      change the date of payment of any installment of
         principal of or interest on any Note, or reduce the principal amount
         thereof or the interest rate thereon, change the provisions of this
         Indenture relating to the application of collections on, or the
         proceeds of the sale of, the Trust Estate to payment of principal of or
         interest on the Notes, or change any place of payment where, or the
         coin or currency in which, any Note or the interest thereon is payable,
         or impair the right to institute suit for the enforcement of the
         provisions of this Indenture requiring the application of funds
         available therefor, as provided in Article V, to the payment of any
         such amount due on the Notes on or after the respective due dates
         thereof;

                                     - 49 -

<PAGE>

                  (ii)     reduce the percentage of the Security Balances 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;

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

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

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

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

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

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

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

                  Promptly after the execution by the Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section 9.02, the
Indenture Trustee shall mail to the Holders of the Notes 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.

                                     - 50 -

<PAGE>

                  SECTION 9.03. Execution of Supplemental Indentures.

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

                  SECTION 9.04. Effect of Supplemental Indenture.

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

                  SECTION 9.05. Conformity with Trust Indenture Act.

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

                  SECTION 9.06. Reference in Notes to Supplemental Indentures.

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

                                     - 51 -

<PAGE>

                                    ARTICLE X

                                  MISCELLANEOUS

                  SECTION 10.01. Compliance Certificates and Opinions, etc.

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

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

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

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

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

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

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

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

                                     - 52 -

<PAGE>

                  (ii)     Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (i) above, the Issuer
shall also deliver to the Indenture Trustee an Independent Certificate as to the
same matters, if the fair value to the Issuer of the securities to be so
deposited and of all other such securities made the basis of any such withdrawal
or release since the commencement of the then-current fiscal year of the Issuer,
as set forth in the certificates delivered pursuant to clause (i) above and this
clause (ii), is 10% or more of the Security Balances of the Notes, but such a
certificate need not be furnished with respect to any securities so deposited,
if the fair value thereof to the Issuer as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the Security
Balances of the Notes.

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

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

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

                                     - 53 -

<PAGE>

                  SECTION 10.02. Form of Documents Delivered to Indenture
   Trustee.

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

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

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

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

                  SECTION 10.03. Acts of Noteholders.

                  (a)      Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be given
or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person
or by agents duly appointed in writing; and except as herein otherwise expressly
provided such action shall become effective when such instrument or instruments
are delivered to the Indenture Trustee, and, where it is

                                     - 54 -

<PAGE>

hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section 10.03.

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

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

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

                  SECTION 10.04. Notices, etc., to Indenture Trustee, Issuer,
   Credit Enhancer and Rating Agencies.

                  Any request, demand, authorization, direction, notice,
consent, waiver or Act of Note holders or other documents provided or permitted
by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or act of Noteholders is to be
made upon, given or furnished to or filed with:

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

                  (ii)     the Issuer by the Indenture Trustee or by any
         Noteholder shall be sufficient for every purpose hereunder if in
         writing and mailed first-class, postage prepaid to the Issuer addressed
         to: Citigroup MBN Trust Series 20__-_____, in care of [Name of Owner
         Trustee] ___________________________, ___________________,
         ________________________________, Attention of
         _________________________________________ with a copy to the
         Administrator at _______________________ Attention: __________________,
         or at any other address previously furnished in writing to the
         Indenture Trustee by the Issuer or the Administrator. The Issuer shall
         promptly transmit any notice received by it from the Noteholders to the
         Indenture Trustee, or

                  (iii)    the Credit Enhancer by the Issuer, the Indenture
         Trustee or by any Noteholders shall be sufficient for every purpose
         hereunder to in writing and mailed, first-class postage pre-paid, or
         personally delivered or telecopied to: [Name of Credit Enhancer],
         ________________, ________, _______________,

                                     - 55 -

<PAGE>

         Attention: _________________, ___________________________, Telephone
         ______________. Telecopier ______________. The Credit Enhancer shall
         promptly transmit any notice received by it from the Issuer, the
         Indenture Trustee or the Noteholders to the Issuer or Indenture
         Trustee, as the case may be.

                  Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered or mailed by certified mail, return receipt requested, to
(i) in the case of [Moody's], at the following address: [Moody's Investors
Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York
10007] and (ii) in the case of [Standard & Poor's], at the following address:
[Standard & Poor's Ratings Group, 26 Broadway (15th Floor), New York, New York
10004, Attention of Asset Backed Surveillance Department]; or as to each of the
foregoing, at such other address as shall be designated by written notice to the
other parties.

                  SECTION 10.05. Notices to Noteholders; Waiver.

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

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

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

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

                  SECTION 10.06. Alternate Payment and Notice Provisions.

                  Notwithstanding any provision of this Indenture or any of the
Notes to the contrary, the Issuer may enter into any agreement with any Holder
of a Note providing

                                     - 56 -

<PAGE>

for a method of payment, or notice by the Indenture Trustee or any Administrator
to such Holder, that is different from the methods provided for in this
Indenture for such payments or notices. The Issuer shall furnish to the
Indenture Trustee a copy of each such agreement and the Indenture Trustee shall
cause payments to be made and notices to be given in accordance with such
agreements.

                  SECTION 10.07. Conflict with Trust Indenture Act.

                  If any provision hereof limits, qualifies or conflicts with
another provision hereof that is required to be included in this Indenture by
any of the provisions of the Trust Indenture Act, such required provision shall
control.

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

                  SECTION 10.08. Effect of Headings.

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

                  SECTION 10.09. Successors and Assigns.

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

                  SECTION 10.10. Separability.

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

                  SECTION 10.11. Benefits of Indenture.

                  The Credit Enhancer and its successors and assigns shall be a
third-party beneficiary to the 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 their successors hereunder, and the Noteholders, and
any other party secured hereunder, and any other Person with an ownership
interest in any part of the Trust Estate, any benefit or any legal or equitable
right, remedy or claim under this Indenture.

                  SECTION 10.12. Legal Holidays.

                  In any case where the date on which any payment is due shall
not be a Business Day, then (notwithstanding any other provision of the Notes or
this Indenture) payment need not be made on such date, but may be made on the
next succeeding

                                     - 57 -

<PAGE>

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 10.13. Governing Law.

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

                  SECTION 10.14. Counterparts.

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

                  SECTION 10.15. Recording of Indenture.

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

                  SECTION 10.16. Issuer Obligation.

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

                                     - 58 -

<PAGE>

                  SECTION 10.17. No Petition.

                  The Indenture Trustee, by entering into this Indenture, and
each Noteholder, by accepting a Note, hereby covenant and agree that they will
not at any time institute against the Depositor or the Issuer, or join in any
institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Basic Documents.

                  SECTION 10.18. Inspection.

                  The Issuer agrees that, on reasonable prior notice, it shall
permit any representative of the Indenture Trustee, during the Issuer's normal
business hours, to examine all the books of account, records, reports and other
papers of the Issuer, to make copies and extracts therefrom, to cause such books
to be audited by Independent certified public accountants, and to discuss the
Issuer's affairs, finances and accounts with the Issuer's officers, employees,
and Independent certified public accountants, all at such reasonable times and
as often as may be 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 10.19. Authority of the Administrator.

                  Each of the parties to this Indenture acknowledges that the
Issuer and the Owner Trustee have each appointed the Administrator to act as its
agent to perform the duties and obligations of the Issuer hereunder. Unless
otherwise instructed by the Issuer or the Owner Trustee, copies of all notices,
requests, demands and other documents to be delivered to the Issuer or the Owner
Trustee pursuant to the terms hereof shall be delivered to the Administrator.
Unless otherwise instructed by the Issuer or the Owner Trustee, all notices,
requests, demands and other documents to be executed or delivered, and any
action to be taken, by the Issuer or the Owner Trustee pursuant to the terms
hereof may be executed, delivered and/or taken by the Administrator pursuant to
the Administration Agreement.

                                     - 59 -

<PAGE>

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

                                Citigroup MBN Trust Series 20__-_____, as Issuer

                                By:_________________________________________
                                not in its individual capacity but solely as
                                Owner Trustee

                                By:_________________________________________
                                Name:
                                Title:

                                ____________________________________________
                                as Indenture Trustee, as Certificate
                                Paying Agent and as Note Registrar

                                By:_________________________________________
                                Name: ______________________________________
                                Title: _____________________________________

                                ____________________________________________
                                hereby accepts the appointment as
                                Certificate Paying Agent pursuant to Section
                                3.03 hereof and as Certificate Registrar
                                pursuant to Section 4.02 hereof.

                                ____________________________________________
                                By:_________________________________________
                                Title: _____________________________________

<PAGE>

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

                  On this ____ day of __________, before me personally appeared
______________, to me known, who being by me duly sworn, did depose and say,
that he resides at __________________, _______________________, that he is the
of the Owner Trustee, one of the corporations described in and which executed
the above 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]

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

                  On this ____ day of __________, before me personally appeared,
to me known, who being by me duly sworn, did depose and say, that he resides
at ______________, that he is the ______________ of ________________, as
Indenture Trustee, one of the corporations described in and which executed the
above 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]

<PAGE>

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

                  On this ____ day of __________, before me personally appeared
, to me known, who being by me duly sworn, did depose and say, that he resides
at ______________, that he is an ________________ of _______________, as
Indenture Trustee, one of the corporations described in and which executed the
above 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]
<PAGE>

                                   APPENDIX A

                                   DEFINITIONS

                  Adjustable Rate Mortgage Loan: A Mortgage Loan with a Mortgage
Rate that is subject to periodic adjustment calculated on the basis of the
Index, plus an applicable Gross Margin. Each Adjustable Rate Mortgage Loan is
secured by a first lien on the related Mortgaged Property.

                  Adjustment Date: As to each Adjustable Rate Mortgage Loan,
each date set forth in the related Mortgage Note on which an adjustment to the
interest rate on such Mortgage Loan becomes effective.

                  Administrative Fee: The amount of the fee payable to the Owner
Trustee together with the amount of the premium payable to the Note Insurer,
which will accrue at ______% per annum based on the Note Principal Balance of
the Notes.

                  Advance: As to any Mortgage Loan, any advance made by the
Master Servicer, pursuant to Section 4.04 of the Servicing Agreement.

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

                  Appraised Value: The appraised value of a Mortgaged Property
based upon the lesser of (i) the appraisal made at the time of the origination
of the related Mortgage Loan, or (ii) the sales price of such Mortgaged Property
at such time of origination. With respect to a Mortgage Loan the proceeds of
which were used to refinance an existing mortgage loan, the appraised value of
the Mortgaged Property based upon the appraisal (as reviewed and approved by the
Seller) obtained at the time of refinancing.

                  Assignment of Mortgage: An assignment of Mortgage, notice of
transfer or equivalent instrument, in recordable form, which is sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property is located
to reflect of record the sale of the Mortgage, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county, if permitted by 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 or holidays.

                                      A-1

<PAGE>

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

                  Available Funds: As to any Payment Date, an amount equal to
the amount on deposit in the Payment Account on such Payment Date and available
for distribution to the Noteholders (minus, if the Notes have been declared due
and payable following an Event of Default on such Payment Date, any amounts owed
to the Indenture Trustee by the Issuer pursuant to Section 6.07 of the
Indenture).

                  Available Funds Cap Carry-Forward Amount: With respect to the
Notes and any Payment Date, an amount equal to the sum of (x) the amount, if
any, by which (a) the lesser of (1) the amount payable if clause (i) of the
definition of Note Interest Rate is used to calculate interest and (2) the
amount payable if the Maximum Note Interest Rate is used to calculate interest
exceeds (b) the amount payable if clause (ii) of the definition of Note Interest
Rate is used to calculate interest and (y) the interest accrued during the prior
Interest Period on the amount of any Available Funds Cap Carry-Forward Amount
immediately prior to such Payment Date, calculated on the basis of a 360-day
year and the actual number of days elapsed and using the Note Interest Rate
applicable to such Payment Date minus (z) the aggregate of all amounts
distributed to the Noteholders on all prior Payment Dates pursuant to Section
3.05(v) of the Indenture.

                  Available Funds Interest Rate: As to any Payment Date, a per
annum rate equal to the lesser of (x) the fraction, expressed as a percentage,
the numerator of which is (i) an amount equal to (A) 1/12 of the aggregate
Principal Balance of the then outstanding Mortgage Loans times the weighted
average of the Expense Adjusted Mortgage Rates on the then outstanding Mortgage
Loans minus (B) the Administrative Fee for such Payment Date, and the
denominator of which is (ii) an amount equal to (A) the then outstanding
aggregate Note Principal Balance of the Notes multiplied by (B) the actual
number of days elapsed in the related Interest Period divided by 360 and (y) the
Maximum Note Interest Rate.

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

                  Basic Documents: The Trust Agreement, the Certificate of
Trust, the Indenture, the Mortgage Loan Purchase Agreement, the Insurance
Agreement, the Servicing Agreement, and the other documents and certificates
delivered in connection with any of the above.

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

                                      A-2

<PAGE>

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

                  Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the City of New York, Delaware or
California or in the city in which the corporate trust offices of the Indenture
Trustee or the Note Insurer are located, are required or authorized by law to be
closed.

                  Business Trust Statute: Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Sections. 3801 et seq., as the same may be amended from time
to time.

                  Cash Liquidation: As to any defaulted Mortgage Loan other than
a Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Master Servicer that it has received all Insurance Proceeds, Liquidation
Proceeds and other payments or cash recoveries which the Master Servicer
reasonably and in good faith expects to be finally recoverable with respect to
such Mortgage Loan.

                  Certificate Distribution Account: The account or accounts
created and maintained pursuant to Section 3.10(d) of the Trust Agreement. The
Certificate Distribution Account shall be an Eligible Account.

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

                  Certificate Percentage Interest: With respect to each
Certificate, the Certificate Percentage Interest on the face thereof.

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

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

                  Certificate of Trust: The Certificate of Trust filed for the
Trust pursuant to Section 3810(a) of the Business Trust Statute.

                  Certificates: The Southern Pacific Secured Assets Corp.,
Mortgage-Backed Certificates, Series 20__-_, evidencing the beneficial ownership
interest in the Issuer and executed by the Owner Trustee in substantially the
form set forth in Exhibit A to the Trust Agreement.

                  Certificateholder: The Person in whose name a Certificate is
registered in the Certificate Register. Owners of Certificates that have been
pledged in good faith may be regarded as Holders if the pledgee establishes to
the satisfaction of the Indenture Trustee or the Owner Trustee, as the case may
be, the pledgee's right so to act with

                                      A-3

<PAGE>

respect to such Certificates and that the pledgee is not the Issuer, any other
obligor upon the Certificates or any Affiliate of any of the foregoing Persons.

                  Closing Date: ______ __, 20__.

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

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

                  Collection Account: The account or accounts created and
maintained pursuant to Section 3.06(d) of the Servicing Agreement. The
Collection Account shall be an Eligible Account.

                  Combined Loan-To-Value Ratio: With respect to any Mortgage
Loan and any date, the percentage equivalent of a fraction, the numerator of
which is the Cut-Off Date Principal Balance of such Mortgage Loan and the
denominator of which is the outstanding principal balance as of the date of the
origination of such Mortgage Loan of any mortgage loan or mortgage loans that
are secured by liens on the Mortgaged Property that are senior or subordinate to
the Mortgage and the denominator of which is the Appraised Value of the related
Mortgaged Property.

                  Compensating Interest: With respect to any Determination Date,
an amount equal to the lesser of (i) the aggregate amount of Prepayment Interest
Shortfall for the related Prepayment Period and (ii) the Servicing Fee for such
Determination Date.

                  Converted Mortgage Loan: Any Convertible Mortgage Loan with
respect to which the interest rate borne by such Mortgage Loan has been
converted from an adjustable interest rate to a fixed interest rate.

                  Convertible Mortgage Loan: Any Adjustable Rate Mortgage Loan
which by its terms grants to the related Mortgagor the option to convert the
interest rate borne by such Mortgage Loan from an adjustable interest rate to a
fixed interest rate.

                  Converting Mortgage Loan: Any Convertible Mortgage Loan with
respect to which the related Mortgagor has given notice of his intent to convert
from an adjustable interest rate to a fixed interest rate and prior to the
conversion of such Mortgage Loan.

                  Corporate Trust Office: With respect to the Indenture Trustee,
Certificate Registrar, Certificate Paying Agent and Paying Agent, the principal
corporate trust office of the Indenture Trustee and Note Registrar at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this instrument is located at
____________, __________, ______, __________ _____, Attention: ________ ___
______, except that for purposes of Section 4.02 of the Indenture and Section
3.09 of the Trust Agreement, such term shall include the Indenture Trustee's
office or agency at _______________, ________, ________ _____, Attention:
___________ _________. With respect to the Owner Trustee, the principal
corporate

                                      A-4

<PAGE>

trust office of the Owner Trustee at which at any particular time its corporate
trust business shall be administered, which office at the date of the execution
of this Trust Agreement is located at ________________________, ______
____________, ________________________, __________, ________ _____, Attention:
________________________________.

                  Cut-Off Date: With respect to the Mortgage Loans, ______ 1,
20__.

                  Cut-Off Date Principal Balance: With respect to any Mortgage
Loan, the unpaid principal balance thereof as of the opening of business on the
last day of the related Due Period immediately prior to the Cut-Off Date.

                  Debt Service Reduction: With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction constituting a Deficient Valuation or any reduction that results in a
permanent forgiveness of principal.

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

                  Deficiency Amount: The meaning provided in the Note Insurance
Policy.

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

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

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

                  Depositor: Southern Pacific Secured Assets Corp., a California
corporation, or its successor in interest.

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

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

                                      A-5

<PAGE>

                  Determination Date: With respect to any Payment Date, the 15th
of the related month, or if the 15th day of such month is not a Business Day,
the immediately preceding Business Day.

                  Due Date: The first day of the month of the related Payment
Date.

                  Due Period: With respect to any Mortgage Loan and Due Date,
the period commencing on the second day of the month preceding the month of such
Payment Date (or, with respect to the first Due Period, the day following the
Cut-Off Date) and ending on the related Due Date.

                  Eligible Account: An account that is any of the following: (i)
maintained with a depository institution the short term deposits of which have
been rated by each Rating Agency in its highest rating available, or (ii) an
account or accounts in a depository institution in which such accounts are fully
insured to the limits established by the FDIC, provided that any deposits not so
insured shall, to the extent acceptable to the Note Insurer and each Rating
Agency, as evidenced in writing, be maintained such that (as evidenced by an
Opinion of Counsel delivered to the Indenture Trustee, the Note Insurer and each
Rating Agency) the Indenture Trustee have a claim with respect to the funds in
such account or a perfected first security interest against any collateral
(which shall be limited to Eligible Investments) securing such funds that is
superior to claims of any other depositors or creditors of the depository
institution with which such account is maintained, or (iii) in the case of the
Collection Account, either (A) a trust account or accounts maintained at the
Corporate Trust Department of the Indenture Trustee or (B) an account or
accounts maintained at the Corporate Trust Department of the Indenture Trustee,
as long as its short term debt obligations are rated P-1 by Moody's and A-1 by
Standard & Poor's or better and its long term debt obligations are rated A2 by
Moody's and A by Standard & Poor's or better, or (iv) in the case of the
Collection Account and the Payment Account, a trust account or accounts
maintained in the corporate trust division of the Indenture Trustee, or (v) an
account or accounts of a depository institution acceptable to each Rating Agency
as evidenced in writing by each Rating Agency that use of any such account as
the Collection Account or the Payment Account will not reduce the rating
assigned to any of the Securities by such Rating Agency below investment grade
without taking into account the Note Insurance Policy and acceptable to the Note
Insurer as evidenced in writing.

                  Eligible Investments: One or more of the following:

                  (i)      direct obligations of, and obligations fully
         guaranteed by, the United States of America, the Federal Home Mortgage
         Corporation, the Federal National Mortgage Association, the Federal
         Home Loan Banks or any agency or instrumentality of the United States
         of America the obligations of which are backed by the full faith and
         credit of the United States of America;

                  (ii)     (A) demand and time deposits in, certificates of
         deposit of, banker's acceptances issued by or federal funds sold by any
         depository institution or trust company (including the Indenture
         Trustee or its agent acting in their

                                      A-6

<PAGE>

         respective commercial capacities) incorporated under the laws of the
         United States of America or any State thereof and subject to
         supervision and examination by federal and/or state authorities, so
         long as at the time of such investment or contractual commitment
         providing for such investment, such depository institution or trust
         company has a short term unsecured debt rating in the highest available
         rating category of each of the Rating Agencies and provided that each
         such investment has an original maturity of no more than 365 days, and
         (B) any other demand or time deposit or deposit which is fully insured
         by the Federal Deposit Insurance Corporation;

                  (iii)    repurchase obligations with a term not to exceed 30
         days with respect to any security described in clause (i) above and
         entered into with a depository institution or trust company (acting as
         a principal) rated "A" or higher by S&P and A2 or higher by Moody's;
         provided, however, that collateral transferred pursuant to such
         repurchase obligation must (A) be valued weekly at current market price
         plus accrued interest, (B) pursuant to such valuation, equal, at all
         times, 105% of the cash transferred by the Indenture Trustee in
         exchange for such collateral and (C) be delivered to the Indenture
         Trustee or, if the Indenture Trustee is supplying the collateral, an
         agent for the Indenture Trustee, in such a manner as to accomplish
         perfection of a security interest in the collateral by possession of
         certificated securities;

                  (iv)     securities bearing interest or sold at a discount
         issued by any corporation incorporated under the laws of the United
         States of America or any State thereof which has a long term unsecured
         debt rating in the highest available rating category of each of the
         Rating Agencies at the time of such investment;

                  (v)      commercial paper having an original maturity of less
         than 365 days and issued by an institution having a short term
         unsecured debt rating in the highest available rating category of each
         of the Rating Agencies at the time of such investment;

                  (vi)     a guaranteed investment contract approved by each of
         the Rating Agencies and the Note Insurer and issued by an insurance
         company or other corporation having a long term unsecured debt rating
         in the highest available rating category of each of the Rating Agencies
         at the time of such investment;

                  (vii)    money market funds having ratings in the highest
         available long-term rating category of each of the Rating Agencies at
         the time of such investment; any such money market funds which provide
         for demand withdrawals being conclusively deemed to satisfy any
         maturity requirement for Eligible Investments set forth in the
         Indenture; and

                  (viii)   any investment approved in writing by each of the
         Rating Agencies and the Note Insurer.

                                      A-7

<PAGE>

                  The Indenture Trustee may purchase from or sell to itself or
an affiliate, as principal or agent, the Eligible Investments listed above.

                  provided, however, that each such instrument shall be acquired
in an arm's length transaction and no such instrument shall be an Eligible
Investment if it represents, either (1) the right to receive only interest
payments with respect to the underlying debt instrument or (2) the right to
receive both principal and interest payments derived from obligations underlying
such instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity greater than 120% of the yield to
maturity at par of such underlying obligations; provided further, however, that
each such instrument acquired shall not be acquired at a price in excess of par.

                  Eligible Substitute Mortgage Loan: A Mortgage Loan substituted
by the Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in an Officer's Certificate delivered to the
Indenture Trustee, (i) have an outstanding principal balance, after deduction of
the principal portion of the monthly payment due in the month of substitution
(or in the case of a substitution of more than one Mortgage Loan for a Deleted
Mortgage Loan, an aggregate outstanding principal balance, after such
deduction), not in excess of the outstanding principal balance of the Deleted
Mortgage Loan (the amount of any shortfall to be deposited by the Seller in the
Collection Account in the month of substitution); (ii) comply with each
representation and warranty set forth in clauses (ii) through (lxxvii) of
Section 3.1(b) of the Mortgage Loan Purchase Agreement other than clauses (ii),
(iii), (v)-(xi), (xiii)-(xiv), (l), (lxvi), (lxviii), (lxxi)- (lxxiii); (iii)
have a Mortgage Rate and Gross Margin no lower than and not more than 1% per
annum higher than the Mortgage Rate and Gross Margin, respectively, of the
Deleted Mortgage Loan as of the date of substitution; (iv) have a Combined
Loan-to-Value Ratio at the time of substitution no higher than that of the
Deleted Mortgage Loan at the time of substitution; (v) have a remaining term to
stated maturity not greater than (and not more than one year less than) that of
the Deleted Mortgage Loan and (vi) not be 30 days or more delinquent.

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

                  Event of Default: With respect to the Indenture, any one of
the following events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

                  (i)      a default in (a) the payment of the Interest Payment
         Amount or the Principal Payment Amount with respect to a Payment Date
         on such Payment Date or (b) the Subordination Increase Amount or the
         Available Funds Cap Carry-Forward Amount, but only, with respect to
         clause (b), to the extent funds are available to make such payment as
         provided in the Indenture; or

                                      A-8

<PAGE>

                  (ii)     the failure by the Issuer on the Final Scheduled
         Payment Date to reduce the Note Principal Balance to zero; or

                  (iii)    there occurs a default in the observance or
         performance of any covenant or agreement of the Issuer made in the
         Indenture, or any representation or warranty of the Issuer made in the
         Indenture or in any certificate or other writing delivered pursuant
         hereto or in connection herewith proving to have been incorrect in any
         material respect as of the time when the same shall have been made, and
         such default shall continue or not be cured, or the circumstance or
         condition in respect of which such representation or warranty was
         incorrect shall not have been eliminated or otherwise cured, for a
         period of 30 days after there shall have been given, by registered or
         certified mail, to the Issuer by the Indenture Trustee or to the Issuer
         and the Indenture Trustee by the Note Insurer, or if a Note Insurer
         Default exists the Holders of at least 25% of the Outstanding Amount of
         the Notes, a written notice specifying such default or incorrect
         representation or warranty and requiring it to be remedied and stating
         that such notice is a notice of default hereunder; or

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

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

                  Event of Servicer Termination: With respect to the Servicing
Agreement, a Servicing Default as defined in Section 6.01 of the Servicing
Agreement.

                  Excess Subordination Amount: With respect to any Payment Date,
the excess, if any, of (a) the Subordination Amount that would apply on such
Payment Date after taking into account all distributions to be made on such
Payment Date (exclusive of any reductions thereto attributable to Subordination
Reduction Amounts on such Payment Date) over (b) the Required Subordination
Amount for such Payment Date.

                                      A-9

<PAGE>

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

                  Expense Adjusted Mortgage Rate: For any Mortgage Loan, the
rate equal to the then applicable Mortgage Rate thereon minus the sum of (i) the
Minimum Spread and (ii) the Servicing Fee Rate and (iii) the Indenture Trustee
Fee Rate.

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

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

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

                  Final Scheduled Payment Date: The Payment Date occurring in
_________ 202_.

                  Fixed Rate Mortgage Loan: Any Mortgage Loan with a fixed rate
of interest.

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

                  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 Mortgage Rate from the date interest was last
paid through the date of receipt of the final Liquidation Proceeds) of such
Liquidated Mortgage Loan immediately prior to the final recovery of its
Liquidation Proceeds.

                  Grant: Pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of such collateral or other agreement or
instrument and all other moneys payable thereunder, to give and receive notices
and other 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: With respect to any Adjustable Rate Mortgage
Loan, the percentage set forth as the "Gross Margin" for such Mortgage Loan on
the Mortgage Loan Schedule, as adjusted from time to time in accordance with the
terms of the Servicing Agreement.

                                      A-10

<PAGE>

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

                  Indenture: The indenture dated as of ______ 1, 20__, between
the Issuer, as debtor, and the Indenture Trustee, as Indenture Trustee.

                  Indenture Trustee: ____________________________________, a
national banking association, and its successors and assigns or any successor
indenture trustee appointed pursuant to the terms of the Indenture.

                  Indenture Trustee Fee: With respect to each Mortgage Loan and
any Payment Date the product of (i) the Indenture Trustee Fee Rate divided by 12
and (ii) the Principal Balance of such Mortgage Loans as of such date.

                  Indenture Trustee Fee Rate: _____% per annum.

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

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

                  Index: With respect to any Adjustable Rate Mortgage Loan,
index for the adjustment of the Mortgage Rate set forth as such on the related
Mortgage Note.

                  Initial Note Principal Balance: With respect to the Notes,
$______________.

                  Initial Subservicer: _____________, a __________ corporation.

                  Insolvency Event: With respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or

                                      A-11

<PAGE>

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

                  Insurance Agreement: The insurance and reimbursement agreement
dated as of _____ 1, 20__, among the Master Servicer, the Seller, the Depositor,
the Issuer, Indenture Trustee and the Note Insurer, including any amendments and
supplements thereto.

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

                  Insured Payment: Shall have the meaning set forth in the Note
Insurance Policy.

                  Interest Determination Date: With respect to any Interest
Period, the second London Business Day preceding the commencement of such
Interest Period.

                  Interest Payment Amount: With respect to any Payment Date, an
amount equal to interest accrued during the related Interest Period on the Note
Principal Balance thereof at the then-applicable Note Interest Rate, minus any
Prepayment Interest Shortfalls and Relief Act Shortfalls to the extent not
covered by the Master Servicer by Compensating Interest for such Payment Date.

                  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.

                                      A-12

<PAGE>

                  Interest Rate Adjustment Date: With respect to each Mortgage
Loan, the date or dates on which the Mortgage Rate is adjusted in accordance
with the related Mortgage Note.

                  Issuer: The Southern Pacific MBN Trust Series 20__-1, a
Delaware business trust, or its successor in interest.

                  Issuer Request: A written order or request signed in the name
of the Issuer by any one of its Authorized Officers and approved in writing by
the Note Insurer, so long as no Note Insurer Default exists and delivered to the
Indenture Trustee.

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

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

                  Lifetime Rate Cap: With respect to each Mortgage Loan with
respect to which the related Mortgage Note provides for a lifetime rate cap, the
maximum Mortgage Rate permitted over the life of such Mortgage Loan under the
terms of such Mortgage Note, as set forth on the Mortgage Loan Schedule and
initially as set forth on Exhibit A to the Servicing Agreement.

                  Liquidated Mortgage Loan: With respect to any Payment Date,
any Mortgage Loan in respect of which the Master Servicer has determined, in
accordance with the servicing procedures specified in the Servicing Agreement,
as of the end of the related Prepayment Period that substantially all
Liquidation Proceeds which it reasonably expects to recover with respect to the
disposition of the related REO Property have been recovered.

                  Liquidation Expenses: Out-of-pocket expenses (exclusive of
overhead) which are incurred by or on behalf of the Master Servicer in
connection with the liquidation of any Mortgage Loan and not recovered under any
insurance policy, such expenses including, without limitation, legal fees and
expenses, any unreimbursed amount expended (including, without limitation,
amounts advanced to correct defaults on any 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 for real estate

                                      A-13

<PAGE>

property taxes or for property restoration, preservation or insurance against
casualty loss or damage.

                  Liquidation Proceeds: Proceeds (including Insurance Proceeds
but not including amounts drawn under the Note Insurance Policy) received in
connection with the liquidation of any Mortgage Loan or related REO Property,
whether through trustee's sale, foreclosure sale or otherwise.

                  Loan Year: With respect to any Mortgage Loan, the one year
period commencing on the day succeeding the origination of such Mortgage Loan
and ending on the anniversary date of such Mortgage Loan, and each annual period
thereafter.

                  London Business Day: Any day on which banks in the City of
London, England are open and conducting transactions in United States dollars.

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

                  Master Servicer: _______________________, a __________
corporation, and its successors and assigns.

                  Master Servicing Fee: With respect to each Mortgage Loan and
any Payment Date the product of (i) the Master Servicing Fee Rate divided by 12
and (ii) the Principal Balance of such Mortgage Loans as of such date.

                  Master Servicing Fee Rate: With respect to each Mortgage Loan,
____% per annum.

                  Maximum Note Interest Rate: With respect to any Payment Date,
the per annum rate equal to the fraction, expressed as a percentage, the
numerator of which is (i) an amount equal to (A) 1/12 of the aggregate Principal
Balance of the then outstanding Mortgage Loans times the weighted average of the
Expense Adjusted Maximum Mortgage Rates on the then outstanding Mortgage Loans
minus (B) the Administrative Fee for such Payment Date, and the denominator of
which is (ii) an amount equal to (A) the aggregate Note Principal Balance of the
Notes multiplied by (B) the actual number of days elapsed in the related
Interest Period divided by 360.

                  Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the maximum Mortgage Rate.

                  Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the minimum Mortgage Rate.

                  Minimum Spread: ____% per annum.

                                      A-14

<PAGE>

                  Monthly Payment: With respect to any Mortgage Loan (including
any REO Property) and any Due Date, the payment of principal and interest due
thereon in accordance with the amortization schedule at the time applicable
thereto (after adjustment, if any, for partial Prepayments and for Deficient
Valuations occurring prior to such Due Date but before any adjustment to such
amortization schedule by reason of any bankruptcy, other than a Deficient
Valuation, or similar proceeding or any moratorium or similar waiver or grace
period).

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

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

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

                  Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
Agreement, dated as of the Cut-Off Date, between the Seller, as seller, and the
Purchaser, as purchaser, with respect to the Mortgage Loans, dated as of ______
1, 20__.

                  Mortgage Loan Schedule: With respect to any date, the schedule
of Mortgage Loans held by the Issuer on such date. The initial schedule of
Mortgage Loans as of the Cut-Off Date is the schedule set forth in Exhibit A of
the Servicing Agreement, which schedule sets forth as to each Mortgage Loan

                  (i)      the loan number and name of the Mortgagor;

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

                  (iii)    the Mortgage Rate;

                  (iv)     the Maximum Rate;

                  (v)      the maturity date;

                  (vi)     the original principal balance;

                  (vii)    the first payment date;

                  (viii)   the type of Mortgaged Property;

                  (ix)     the Monthly Payment in effect as of the Cut-Off Date;

                  (x)      the Cut-off Date Principal Balance;

                                      A-15

<PAGE>

                  (xi)     the occupancy status;

                  (xii)    the purpose of the Mortgage Loan;

                  (xiii)   the Appraised Value of the Mortgaged Property;

                  (xiv)    the original term to maturity;

                  (xv)     the paid-through date of the Mortgage Loan;

                  (xvi)    the Loan-to-Value Ratio; and

                  (xvii)   whether or not the Mortgage Loan was underwritten
         pursuant to a limited documentation program.

                  The Mortgage Loan Schedule shall also set forth the total of
the amounts described under (ix) above for all of the Mortgage Loans.

                  Mortgage Loans: At any time, collectively, all Mortgage Loans
that have been sold to the Depositor under the Mortgage Loan Purchase Agreement
or substituted for pursuant to Section 2.1 and 3.1 of the Mortgage Loan Purchase
Agreement and transferred and conveyed to the Issuer, in each case together with
the Related Documents, and that remain subject to the terms thereof.

                  Mortgage Note: The note or other evidence of the indebtedness
of a Mortgagor under a Mortgage Loan.

                  Mortgage Rate: With respect to any Mortgage Loan, the annual
rate at which interest accrues on such Mortgage Loan.

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

                  Mortgagor: The obligor or obligors under a Mortgage Note.

                  Net Liquidation Proceeds: With respect to any Liquidated
Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses.

                  Net Monthly Excess Cashflow: For any Payment Date, the amount
of Available Funds and any Insured Payment remaining after distributions
pursuant to clauses (i) through (iii) of Section 3.05 of the Indenture (minus
any Insured Payment and any Subordination Reduction Amount).

                  Net Mortgage Rate: With respect to any Mortgage Loan and any
day, the related Mortgage Rate less the sum of the related Servicing Fee Rate,
the Administrative Fee Rate and the Indenture Trustee Fee Rate.

                  Nonrecoverable Advance: Any advance (i) which was previously
made or is proposed to be made by the Master Servicer; and (ii) which, in the
good faith judgment

                                      A-16

<PAGE>

of the Master Servicer, will not or, in the case of a proposed advance, would
not, be ultimately recoverable by the Master Servicer from Liquidation Proceeds,
Insurance Proceeds or future payments on any Mortgage Loan.

                  Note Insurance Policy: The bond guaranty insurance policy
number 21885, issued by the Note Insurer to the Indenture Trustee for the
benefit of the Noteholders.

                  Note Insurer: MBIA Insurance Corporation, a New York insurance
company, any successor thereto or any replacement bond insurer substituted
pursuant to Section 3.29 of the Indenture.

                  Note Insurer Default: The existence and continuance of any of
the following: (a) a failure by the Note Insurer to make a payment required
under the Note Insurance Policy in accordance with its terms; or (b)(i) the Note
Insurer (A) files any petition or commences any case or proceeding under any
provision or chapter of the Bankruptcy Code or any other similar federal or
state law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (B) makes a general assignment for the benefit of its creditors,
or (C) has an order for relief entered against it under the Bankruptcy Code or
any other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization which is final and nonappealable;
or (ii) a court of competent jurisdiction, the New York Department of Insurance
or other competent regulatory authority enters a final and nonappealable order,
judgment or decree (A) appointing a custodian, trustee, agent or receiver for
the Note Insurer or for all or any material portion of its property or (B)
authorizing the taking of possession by a custodian, trustee, agent or receiver
of the Note Insurer (or the taking of possession of all or any material portion
of the property of the Note Insurer).

                  Note Interest Rate: With respect to each Payment Date after
the first Payment Date, a floating rate equal to the lesser of (i) with respect
to each Payment Date up to and including the Payment Date in _________ 200_,
One-Month LIBOR plus ____%, and with respect to each Payment Date thereafter,
One-Month LIBOR plus ____% and (ii) the Available Funds Interest Rate with
respect to such Payment Date. The Note Interest Rate for the first Payment Date
will equal ____% per annum.

                  Note Owner: The Beneficial Owner of a Note.

                  Note Percentage: With respect to any Payment Date and any
Note, the ratio expressed as a percentage of the Note Principal Balance of such
Note to the aggregate Note Principal Balance of all Notes immediately prior to
such Payment Date.

                  Note Principal Balance: With respect to any Note, the initial
Note Principal Balance thereof minus all amounts distributed in respect of
principal with respect to such Note.

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

                                      A-17

<PAGE>

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

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

                  Notes: The Notes designated as the "Notes" in the Indenture.

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

                  One-Month LIBOR: With respect to any Interest Period, the rate
determined by the Indenture Trustee on the related Interest Determination Date
on the basis of the offered rates of the Reference Banks for one-month United
States dollar deposits, as such rates appear on the Reuters Screen LIBO Page, as
of 11:00 a.m. (London time) on such Interest Determination Date. On each
Interest Determination Date, One-Month LIBOR for the related Interest Period
will be established by the Indenture Trustee as follows:

                  (i)      If on such Interest Determination Date two or more
         Reference Banks provide such offered quotations, One-Month LIBOR for
         the related Interest Period shall be the arithmetic mean of such
         offered quotations (rounded upwards if necessary to the nearest whole
         multiple of 1/16%).

                  (ii)     If on such Interest Determination Date fewer than two
         Reference Banks provide such offered quotations, One-Month LIBOR for
         the related Interest Period shall be the higher of (i) One-Month LIBOR
         as determined on the previous Interest Determination Date and (ii) the
         Reserve Interest Rate.

                                      A-18

<PAGE>

                  Opinion of Counsel: A written opinion of counsel acceptable to
Note Insurer who may be in-house counsel for the Master Servicer if acceptable
to the Indenture Trustee, the Note Insurer and the Rating Agencies or counsel
for the Depositor, as the case may be.

                  Original Specified Subordination Amount: An amount equal to
____% of the aggregate Principal Balance of the Mortgage Loans as of the Cut-Off
Date.

                  Original Value: Except in the case of a refinance Mortgage
Loan, the lesser of the Appraised Value or sales price of Mortgaged Property at
the time a Mortgage Loan is closed, and for a refinance Mortgage Loan, the
Original Value is the value of such property set forth in an appraisal
acceptable to the Master Servicer.

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

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

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

all Notes that have been paid with funds provided under the Note Insurance
Policy shall be deemed to be Outstanding until the Note Insurer has been
reimbursed with respect thereto.

                  Owner Trust: The Southern Pacific MBN Trust Series 20__-1 to
be created pursuant to the Trust Agreement.

                  Owner Trust Estate: The corpus of the Issuer created by the
Trust Agreement which consists of items in Section 2.01 of the Trust Agreement.

                  Owner Trustee: ________________________ and its successors and
assigns or any successor owner trustee appointed pursuant to the terms of the
Trust Agreement.

                  Owner Trustee Fee:

                  Owner Trustee Fee Rate: ______% per annum.

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

                  Payment Account: The account established by the Indenture
Trustee pursuant to Section 8.02 of the Indenture and Section 4.03 of the
Servicing Agreement. The Payment Account shall be an Eligible Account.

                                      A-19

<PAGE>

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

                  Percentage Interest: With respect to any Note, the percentage
obtained by dividing the Note Principal Balance of such Note by the aggregate of
the Note Principal Balances of all Notes. With respect to any Certificate, the
percentage on the face thereof.

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

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

                  Preference Amount: Any amount previously distributed to an
Owner on the Notes that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.

                  Premium Amount: The amount of premium due to the Note Insurer
in accordance with the terms of the Insurance Agreement.

                  Prepayment Interest Shortfall: As to any Payment Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in full during the related Prepayment
Period, an amount equal to the excess of interest accrued during the related
Prepayment Period at the Net Mortgage Rate on the Principal Balance of such
Mortgage Loan over the amount of interest (adjusted to the Net Mortgage Rate)
paid by the Mortgagor for such Prepayment Period to the date of such Principal
Prepayment in full or (b) a partial Prepayment during the prior calendar month,
an amount equal to interest accrued during the related Prepayment Period at the
Net Mortgage Rate on the amount of such partial Prepayment.

                  Prepayment Period: As to any Payment Date, the calendar month
preceding the month of distribution.

                  Primary Insurance Policy: Each primary policy of mortgage
guaranty insurance issued by a Qualified Insurer or any replacement policy
therefor.

                  Principal Balance: With respect to any Mortgage Loan or
related REO Property, at any given time, (i) the Cut-off Date Principal Balance
of the Mortgage Loan, minus (ii) the sum of (a) the principal portion of the
Monthly Payments due with respect to such Mortgage Loan or REO Property during
each Due Period ending prior to the most recent Payment Date which were received
or with respect to which an Advance was made, and (b) all Principal Prepayments
with respect to such Mortgage Loan or REO Property, and all Insurance Proceeds,
Liquidation Proceeds and REO Proceeds, to the extent applied by the Master
Servicer as recoveries of principal in accordance with the

                                      A-20

<PAGE>

Servicing Agreement with respect to such Mortgage Loan or REO Property, and (c)
any Realized Loss with respect thereto for any previous Payment Date.

                  Principal Payment Amount: With respect to any Payment Date (a)
other than the Final Scheduled Payment Date, and the first Payment Date
following any acceleration of the Notes following an Event of Default, the
lesser of (a) the sum of the Available Funds remaining after distributions
pursuant to clause (i) of Section 3.05 of the Indenture and any portion of any
Insured Payment for such Payment Date representing a Subordination Deficit and
(b) the sum of:

                  (1)      the principal portion of all Monthly Payments
                           received during the related Due Period or advanced on
                           each Mortgage Loan;

                  (2)      the Principal Balance of any Mortgage Loan
                           repurchased during the related Prepayment Period (or
                           deemed to have been so repurchased) pursuant to the
                           Mortgage Loan Purchase Agreement or Section 3.18 of
                           the Servicing Agreement and the amount of any
                           Substitution Adjustment Amounts during the related
                           Prepayment Period;

                  (3)      the principal portion of all other unscheduled
                           collections (including, without limitation, Principal
                           Prepayments in full, partial Prepayments, Insurance
                           Proceeds, Liquidation Proceeds and REO Proceeds)
                           received during the related Prepayment Period to the
                           extent applied by the Master Servicer as payments or
                           recoveries of principal of the related Mortgage Loan;

                  (4)      any Insured Payment made with respect to any
                           Subordination Deficit; and

                  minus

                  (5)      the amount of any Subordination Reduction Amount for
                           such Payment Date;

and (b) with respect to the Final Scheduled Payment Date, and the first Payment
Date following any acceleration of the Notes following an Event of Default, the
amount necessary to reduce the Note Principal Balance to zero.

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

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

                                      A-21

<PAGE>

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

                  Purchaser: Southern Pacific Secured Assets Corp., a California
corporation, and its successors and assigns.

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

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

                  Realized Loss: With respect to each Mortgage Loan (or REO
Property) as to which a Cash Liquidation or REO Disposition has occurred, an
amount (not less than zero) equal to (i) the Principal Balance of the Mortgage
Loan (or REO Property) as of the date of Cash Liquidation or REO Disposition,
plus (ii) interest (and REO Imputed Interest, if any) at the Net Mortgage Rate
from the Due Date as to which interest was last paid or advanced to Noteholders
up to the last day of the month in which the Cash Liquidation (or REO
Disposition) occurred on the Principal Balance of such Mortgage Loan (or REO
Property) outstanding during each Due Period that such interest was not paid or
advanced, minus (iii) the proceeds, if any, received during the month in which
such Cash Liquidation (or REO Disposition) occurred, to the extent applied as
recoveries of interest at the Net Mortgage Rate and to principal of the Mortgage
Loan, net of the portion thereof reimbursable to the Master Servicer or any
Subservicer with respect to related Advances or expenses as to which the Master
Servicer or Subservicer is entitled to reimbursement thereunder but which have
not been previously reimbursed. With respect to each Mortgage Loan which has
become the subject of a Deficient Valuation, the difference between the
principal balance of the Mortgage Loan outstanding immediately prior to such
Deficient Valuation and the principal balance of the Mortgage Loan as reduced by
the Deficient Valuation. With respect to each Mortgage Loan which has

                                      A-22

<PAGE>

become the object of a Debt Service Reduction, the amount of such Debt Service
Reduction.

                  Record Date: With respect to the Notes and any Payment Date,
the last day of the calendar month preceding such Payment Date.

                  Reference Banks: Bankers Trust Company, Barclay's Bank PLC,
The Bank of Tokyo and National Westminster Bank PLC and their successors in
interest; provided that if any of the foregoing banks are not suitable to serve
as a Reference Bank, then any leading banks selected by the Indenture Trustee
which are engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London, (ii)
not controlling, under the control of or under common control with the Company
or any Affiliate thereof, (iii) whose quotations appear on the Reuters Screen
LIBO Page on the relevant Interest Determination Date and (iv) which have been
designated as such by the Indenture Trustee.

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

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

                  Relief Act: The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.

                  Relief Act Shortfall: For any Payment Date, as to any Payment
Date and any Mortgage Loan (other than a Mortgage Loan relating to an REO
Property) any shortfalls relating to the Relief Act or similar legislation or
regulations.

                  REO Acquisition: The acquisition by the Master Servicer on
behalf of the Indenture Trustee for the benefit of the Noteholders of any REO
Property pursuant to Section 3.13 of the Servicing Agreement.

                  REO Disposition: As to any REO Property, a determination by
the Master Servicer that it has received substantially all Insurance Proceeds,
Liquidation Proceeds, REO Proceeds and other payments and recoveries (including
proceeds of a final sale) which the Master Servicer expects to be finally
recoverable from the sale or other disposition of the REO Property.

                  REO Imputed Interest: As to any REO Property, for any period,
an amount equivalent to interest (at the Net Mortgage Rate that would have been
applicable to the related Mortgage Loan had it been outstanding) on the unpaid
principal balance of the Mortgage Loan as of the date of acquisition thereof for
such period.

                  REO Proceeds: Proceeds, net of expenses, received in respect
of any REO Property (including, without limitation, proceeds from the rental of
the related Mortgaged

                                      A-23<PAGE>
                                                                     EXHIBIT 4.5

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

                               Vornado Realty L.P.

                                       To

                              The Bank of New York
                                                    Trustee

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

                                FORM OF INDENTURE
                                  ------------

                                  Dated as of _________

                             SENIOR DEBT SECURITIES

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

<PAGE>

    CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310 THROUGH 318,
                 INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:

<TABLE>
<CAPTION>
       TRUST INDENTURE
         ACT SECTION                                                              INDENTURE SECTION

<S>                                                                                <C>
Section 310(a)(1)                                                                       609
           (a)(2)                                                                       609
           (a)(3)          .....................................................        Not Applicable
           (a)(4)          .....................................................        Not Applicable
           (b)             .....................................................        608
                           .....................................................        610
Section 311(a)             .....................................................        613
           (b)             .....................................................        613
Section 312(a)             .....................................................        701
                           .....................................................        702
           (b)             .....................................................        702
           (c)             .....................................................        702
Section 313(a)             .....................................................        703
           (b)             .....................................................        703
           (c)             .....................................................        703
           (d)             .....................................................        703
Section 314(a)             .....................................................        704
           (a)(4)          .....................................................        101
                           .....................................................        1004
           (b)             .....................................................        Not Applicable
           (c)(1)          .....................................................        102
           (c)(2)          .....................................................        102
           (c)(3)          .....................................................        Not Applicable
           (d)             .....................................................        Not Applicable
           (e)             .....................................................        102
Section 315(a)             .....................................................        601
           (b)             .....................................................        602
           (c)             .....................................................        601
           (d)             .....................................................        601
           (e)             .....................................................        514
Section 316(a)             .....................................................        101
           (a)(1)(A)       .....................................................        502
                           .....................................................        512
           (a)(1)(B)       .....................................................        513
           (a)(2)          .....................................................        Not Applicable
           (b)             .....................................................        508
           (c)             .....................................................        104
Section 317(a)(1)          .....................................................        503
           (a)(2)          .....................................................        504
           (b)             .....................................................        1003
Section 318(a)             .....................................................        107
</TABLE>

NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
      part of the Indenture.

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                       PAGE

<S>                                                                                                    <C>
PARTIES................................................................................................. 1
RECITALS OF THE OPERATING PARTNERSHIP................................................................... 1

                                                ARTICLE ONE

                           DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 101.         Definitions.........................................................................1
                     Act.................................................................................2
                     Affiliate...........................................................................2
                     Applicable Procedures...............................................................2
                     Authenticating Agent................................................................2
                     Board of Trustees...................................................................2
                     Board Resolution....................................................................2
                     Business Day........................................................................2
                     Commission..........................................................................2
                     Corporate Trust Office..............................................................2
                     corporation.........................................................................2
                     Covenant Defeasance.................................................................2
                     Defaulted Interest..................................................................2
                     Defeasance..........................................................................3
                     Depositary..........................................................................3
                     Event of Default....................................................................3
                     Exchange Act........................................................................3
                     Expiration Date.....................................................................3
                     Global Security.....................................................................3
                     Holder..............................................................................3
                     Indenture...........................................................................3
                     interest............................................................................3
                     Interest Payment Date...............................................................3
                     Investment Company Act..............................................................3
                     Maturity............................................................................3
                     Notice of Default...................................................................3
                     Officers' Certificate...............................................................3
                     Operating Partnership...............................................................4
                     Operating Partnership Request.......................................................4
                     Opinion of Counsel..................................................................4
                     Original Issue Discount Security....................................................4
                     Outstanding.........................................................................4
                     Paying Agent........................................................................5
                     Person..............................................................................5
                     Place of Payment....................................................................5
                     Predecessor Security................................................................5
                     Redemption Date.....................................................................5
                     Redemption Price....................................................................5
</TABLE>

NOTE: This table of contents shall not, for any purpose, be deemed to be a part
      of the Indenture.

<PAGE>

<TABLE>
<CAPTION>
                                                                                                       PAGE

<S>                                                                                                    <C>
                     Regular Record Date.................................................................5
                     Responsible Officer.................................................................5
                     Securities..........................................................................6
                     Securities Act......................................................................6
                     Security Register...................................................................6
                     Special Record Date.................................................................6
                     Stated Maturity.....................................................................6
                     Subsidiary..........................................................................6
                     Trust Indenture Act.................................................................6
                     Trustee.............................................................................6
                     U.S. Government Obligation..........................................................6
                     Vice President......................................................................6
Section 102.         Compliance Certificates and Opinions................................................7
Section 103.         Form of Documents Delivered to Trustee..............................................7
Section 104.         Acts of Holders; Record Dates.......................................................8
Section 105.         Notices, Etc., to Trustee and Operating Partnership................................10
Section 106.         Notice to Holders; Waiver..........................................................10
Section 107.         Conflict with Trust Indenture Act..................................................10
Section 108.         Effect of Headings and Table of Contents...........................................11
Section 109.         Successors and Assigns.............................................................11
Section 110.         Separability Clause................................................................11
Section 111.         Benefits of Indenture..............................................................11
Section 112.         Governing Law......................................................................11
Section 113.         Legal Holidays.....................................................................11
Section 114.         Limited Liability; Immunity of Shareholders, Partners, Trustees, Officers and
                     Agents of the Operating Partnership and Vornado Realty Trust.......................11

                                                     ARTICLE TWO

                                                   SECURITY FORMS

Section 201.         Forms Generally....................................................................12
Section 202.         Form of Face of Security...........................................................12
Section 203.         Form of Reverse of Security........................................................14
Section 204.         Form of Legend for Global Securities...............................................17
Section 205.         Form of Trustee's Certificate of Authentication....................................17

                                                    ARTICLE THREE

                                                   THE SECURITIES

Section 301.         Amount Unlimited; Issuable in Series...............................................18
Section 302.         Denominations......................................................................21
Section 303.         Execution, Authentication, Delivery and Dating.....................................21
Section 304.         Temporary Securities...............................................................22
Section 305.         Registration, Registration of Transfer and Exchange................................23
Section 306.         Mutilated, Destroyed, Lost and Stolen Securities...................................24
Section 307.         Payment of Interest; Interest Rights Preserved.....................................25
Section 308.         Persons Deemed Owners..............................................................26
</TABLE>

                                       -ii-
<PAGE>

<TABLE>
<CAPTION>
                                                                                                       PAGE

<S>                                                                                                    <C>
Section 309.         Cancellation.......................................................................26
Section 310.         Computation of Interest............................................................27
Section 311.         CUSIP Numbers......................................................................27

                                                  ARTICLE FOUR

                                           SATISFACTION AND DISCHARGE

Section 401.         Satisfaction and Discharge of Indenture............................................27
Section 402.         Application of Trust Money.........................................................28

                                                  ARTICLE FIVE

                                                    REMEDIES

Section 501.         Events of Default..................................................................28
Section 502.         Acceleration of Maturity; Rescission and Annulment.................................30
Section 503.         Collection of Indebtedness and Suits for Enforcement by Trustee....................31
Section 504.         Trustee May File Proofs of Claim...................................................32
Section 505.         Trustee May Enforce Claims Without Possession of Securities........................32
Section 506.         Application of Money Collected.....................................................32
Section 507.         Limitation on Suits................................................................33
Section 508.         Unconditional Right of Holders to Receive Principal, Premium and Interest..........33
Section 509.         Restoration of Rights and Remedies.................................................34
Section 510.         Rights and Remedies Cumulative.....................................................34
Section 511.         Delay or Omission Not Waiver.......................................................34
Section 512.         Control by Holders.................................................................34
Section 513.         Waiver of Past Defaults............................................................34
Section 514.         Undertaking for Costs..............................................................35
Section 515.         Waiver of Usury, Stay or Extension Laws............................................35

                                                   ARTICLE SIX

                                                   THE TRUSTEE

Section 601.         Certain Duties and Responsibilities................................................35
Section 602.         Notice of Defaults.................................................................36
Section 603.         Certain Rights of Trustee..........................................................36
Section 604.         Not Responsible for Recitals or Issuance of Securities.............................37
Section 605.         May Hold Securities................................................................37
Section 606.         Money Held in Trust................................................................38
Section 607.         Compensation and Reimbursement.....................................................38
Section 608.         Disqualification; Conflicting Interests............................................38
Section 609.         Corporate Trustee Required; Eligibility............................................39
Section 610.         Resignation and Removal; Appointment of Successor..................................39
Section 611.         Acceptance of Appointment by Successor.............................................40
Section 612.         Merger, Conversion, Consolidation or Succession to Business........................41
Section 613.         Preferential Collection of Claims Against Operating Partnership....................41
Section 614.         Appointment of Authenticating Agent................................................42
</TABLE>

                                      -iii-
<PAGE>

                                  ARTICLE SEVEN

         HOLDERS' LISTS AND REPORTS BY TRUSTEE AND OPERATING PARTNERSHIP

<TABLE>
<CAPTION>
                                                                                                       PAGE

<S>                                                                                                    <C>
Section 701.         Operating Partnership to Furnish Trustee Names and Addresses of Holders............43
Section 702.         Preservation of Information; Communications to Holders.............................43
Section 703.         Reports by Trustee.................................................................44
Section 704.         Reports by Operating Partnership...................................................44

                                                     ARTICLE EIGHT

                                 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 801.         Operating Partnership May Consolidate, Etc., Only on Certain Terms.................44
Section 802.         Successor Substituted..............................................................45

                                                     ARTICLE NINE

                                                SUPPLEMENTAL INDENTURES

Section 901.         Supplemental Indentures Without Consent of Holders.................................46
Section 902.         Supplemental Indentures With Consent of Holders....................................47
Section 903.         Execution of Supplemental Indentures...............................................48
Section 904.         Effect of Supplemental Indentures..................................................48
Section 905.         Conformity with Trust Indenture Act................................................48
Section 906.         Reference in Securities to Supplemental Indentures.................................48

                                                      ARTICLE TEN

                                                       COVENANTS

Section 1001.        Payment of Principal, Premium and Interest.........................................49
Section 1002.        Maintenance of Office or Agency....................................................49
Section 1003.        Money for Securities Payments to Be Held in Trust..................................49
Section 1004.        Statement by Officers as to Default................................................50
Section 1005.        Existence..........................................................................51
Section 1006.        Maintenance of Properties..........................................................51
Section 1007.        Payment of Taxes and Other Claims..................................................51
Section 1008.        Insurance..........................................................................51
Section 1009.        Provision of Financial Information.................................................52
Section 1010.        Waiver of Certain Covenants........................................................52
Section 1011.        Calculation of Original Issue Discount.............................................52

                                                     ARTICLE ELEVEN

                                                REDEMPTION OF SECURITIES

Section 1101.        Applicability of Article...........................................................53
Section 1102.        Election to Redeem; Notice to Trustee..............................................53
</TABLE>

                                      -iv-
<PAGE>

<TABLE>
<CAPTION>
                                                                                                       PAGE

<S>                                                                                                    <C>
Section 1103.        Selection by Trustee of Securities to Be Redeemed..................................53
Section 1104.        Notice of Redemption...............................................................54
Section 1105.        Deposit of Redemption Price........................................................54
Section 1106.        Securities Payable on Redemption Date..............................................55
Section 1107.        Securities Redeemed in Part........................................................55

                                                     ARTICLE TWELVE

                                                      SINKING FUNDS

Section 1201.        Applicability of Article...........................................................55
Section 1202.        Satisfaction of Sinking Fund Payments with Securities..............................56
Section 1203.        Redemption of Securities for Sinking Fund..........................................56

                                                    ARTICLE THIRTEEN

                                           DEFEASANCE AND COVENANT DEFEASANCE

Section 1301.        Operating Partnership's Option to Effect Defeasance or Covenant Defeasance.........56
Section 1302.        Defeasance and Discharge...........................................................56
Section 1303.        Covenant Defeasance................................................................57
Section 1304.        Conditions to Defeasance or Covenant Defeasance....................................57
Section 1305.        Deposited Money and U.S. Government Obligations to Be Held in Trust;
                     Miscellaneous Provisions...........................................................59
Section 1306.        Reinstatement......................................................................60
</TABLE>

                                       -v-
<PAGE>

         INDENTURE, dated as of         , between Vornado Realty L.P., a limited
partnership duly organized and existing under the laws of the State of Delaware
(herein called the "Operating Partnership") and managed by Vornado Realty Trust
as its general partner, having its principal office at 888 Seventh Avenue, New
York, New York 10019, and The Bank of New York, a New York banking corporation,
as Trustee (herein called the "Trustee").

                      RECITALS OF THE OPERATING PARTNERSHIP

         The Operating Partnership, through Vornado Realty Trust, has duly
authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of its unsecured debentures, notes or other evidences
of indebtedness (herein called the "Securities") to be issued in one or more
series as in this Indenture provided.

         All things necessary to make this Indenture a valid agreement of the
Operating Partnership, in accordance with its terms, have been done.

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:

                                  ARTICLE ONE

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

SECTION 101.      Definitions.

         For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

                  (1) the terms defined in this Article have the meanings
         assigned to them in this Article and include the plural as well as the
         singular;

                  (2) all other terms used herein which are defined in the Trust
         Indenture Act, either directly or by reference therein, have the
         meanings assigned to them therein;

                  (3) all accounting terms not otherwise defined herein have the
         meanings assigned to them in accordance with generally accepted
         accounting principles, and, except as otherwise herein expressly
         provided, the term "generally accepted accounting principles" with
         respect to any computation required or permitted hereunder shall mean
         such accounting principles as are generally accepted in the United
         States of America at the date of such computation;

                  (4) unless the context otherwise requires, any reference to an
         "Article" or a "Section" refers to an Article or a Section, as the case
         may be, of this Indenture; and

<PAGE>

                  (5) the words "herein", "hereof" and "hereunder" and other
         words of similar import refer to this Indenture as a whole and not to
         any particular Article, Section or other subdivision.

         "Act", when used with respect to any Holder, has the meaning specified
in Section 104.

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

         "Applicable Procedures" of a Depositary means, with respect to any
matter at any time, the policies and procedures of such Depositary, if any, that
are applicable to such matter at such time.

         "Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.

         "Board of Trustees" means either the board of trustees of Vornado
Realty Trust or any duly authorized committee of that board.

         "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of Vornado Realty Trust to have been duly
adopted by the Board of Trustees and to be in full force and effect on the date
of such certification, and delivered to the Trustee.

         "Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.

         "Commission" means the Securities and Exchange Commission, from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.

         "Common Shares" means the common shares of beneficial interest of
Vornado Realty Trust.

         "Corporate Trust Office" means the principal office of the Trustee in
The City of New York at which at any particular time its corporate trust
business shall be administered, which office at the date hereof is located at
101 Barclay Street, New York, New York 10286, Attention: Corporate Trust
Administration.

         "corporation" means a corporation, association, company, limited
liability company, joint-stock company or business trust.

         "Covenant Defeasance" has the meaning specified in Section 1303.

         "Defaulted Interest" has the meaning specified in Section 307.

                                      -2-
<PAGE>

         "Defeasance" has the meaning specified in Section 1302.

         "Depositary" means, with respect to Securities of any series issuable
in whole or in part in the form of one or more Global Securities, any Person
that is designated to act as Depositary for such Securities as contemplated by
Section 301.

         "Event of Default" has the meaning specified in Section 501.

         "Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.

         "Expiration Date" has the meaning specified in Section 104.

         "Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or such
legend as may be specified as contemplated by Section 301 for such Securities).

         "Holder" means a Person in whose name a Security is registered in the
Security Register.

         "Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.

         "interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.

         "Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an instalment of interest on such Security.

         "Investment Company Act" means the Investment Company Act of 1940 and
any statute successor thereto, in each case as amended from time to time.

         "Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an instalment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.

         "Notice of Default" means a written notice of the kind specified in
Section 501(4) or 501(5).

         "Officer" means the Chairman of the Board, a Vice Chairman of the
Board, the President or any Vice President, the Treasurer or the Secretary, of
Vornado Realty Trust.

         "Officers' Certificate" means a certificate signed by any two Officers
or by any Officer and an Assistant Treasurer or an Assistant Secretary of
Vornado Realty Trust, and delivered to

                                      -3-
<PAGE>

the Trustee. One of the Officers signing an Officers' Certificate given pursuant
to Section 1004 shall be the principal executive, financial or accounting
officer of Vornado Realty Trust.

         "Operating Partnership" means the Person named as the "Operating
Partnership" in the first paragraph of this instrument until a successor Person
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Operating Partnership" shall mean such successor Person.

         "Operating Partnership Request" or "Operating Partnership Order" means
a written request or order signed in the name of the Operating Partnership by
the Chairman of the Board, the Vice Chairman of the Board, the President or a
Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary of Vornado Realty Trust, as general partner of the
Operating Partnership, and delivered to the Trustee.

         "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Operating Partnership.

         "Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.

         "Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:

                  (1) Securities theretofore cancelled by the Trustee or
         delivered to the Trustee for cancellation;

                  (2) Securities for whose payment or redemption money in the
         necessary amount has been theretofore deposited with the Trustee or any
         Paying Agent (other than the Operating Partnership) in trust or set
         aside and segregated in trust by the Operating Partnership (if the
         Operating Partnership shall act as its own Paying Agent) for the
         Holders of such Securities; provided that, if such Securities are to be
         redeemed, notice of such redemption has been duly given pursuant to
         this Indenture or provision therefor satisfactory to the Trustee has
         been made;

                  (3) Securities as to which Defeasance has been effected
         pursuant to Section 1302; and

                  (4) Securities which have been paid pursuant to Section 306 or
         in exchange for or in lieu of which other Securities have been
         authenticated and delivered pursuant to this Indenture, other than any
         such Securities in respect of which there shall have been presented to
         the Trustee proof satisfactory to it that such Securities are held by a
         bona fide purchaser in whose hands such Securities are valid
         obligations of the Operating Partnership;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be

                                      -4-
<PAGE>

the amount of the principal thereof which would be due and payable as of such
date upon acceleration of the Maturity thereof to such date pursuant to Section
502, (B) if, as of such date, the principal amount payable at the Stated
Maturity of a Security is not determinable, the principal amount of such
Security which shall be deemed to be Outstanding shall be the amount as
specified or determined as contemplated by Section 301, (C) the principal amount
of a Security denominated in one or more foreign currencies or currency units
which shall be deemed to be Outstanding shall be the U.S. dollar equivalent,
determined as of such date in the manner provided as contemplated by Section
301, of the principal amount of such Security (or, in the case of a Security
described in Clause (A) or (B) above, of the amount determined as provided in
such Clause), and (D) Securities owned by the Operating Partnership or any other
obligor upon the Securities or any Affiliate of the Operating Partnership or of
such other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent, waiver or other
action, only Securities which a Responsible Officer of the Trustee knows to be
so owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Operating Partnership or any other
obligor upon the Securities or any Affiliate of the Operating Partnership or of
such other obligor.

         "Paying Agent" means any Person authorized by the Operating Partnership
to pay the principal of or any premium or interest on any Securities on behalf
of the Operating Partnership.

         "Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

         "Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.

         "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

         "Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

         "Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

         "Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.

         "Responsible Officer", when used with respect to the Trustee, means any
vice president, any assistant treasurer, any trust officer or assistant trust
officer or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to

                                      -5-
<PAGE>

whom such matter is referred because of his knowledge of and familiarity with
the particular subject.

         "Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.

         "Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.

         "Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.

         "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.

         "Stated Maturity", when used with respect to any Security or any
instalment of principal thereof or interest thereon, means the date specified in
such Security as the fixed date on which the principal of such Security or such
instalment of principal or interest is due and payable.

         "Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Operating
Partnership or by one or more other Subsidiaries, or by the Operating
Partnership and one or more other Subsidiaries. For the purposes of this
definition, "voting stock" means stock which ordinarily has voting power for the
election of directors or trustees, whether at all times or only so long as no
senior class of stock has such voting power by reason of any contingency.

         "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.

         "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.

         "U.S. Government Obligation" has the meaning specified in Section 1304.

         "Vice President", when used with respect to Vornado Realty Trust or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".

         "Vornado Realty Trust" means Vornado Realty Trust, a Maryland real
estate investment trust and the general partner of the Operating Partnership,
and its successors or any successor general partner of the Operating Partnership
that serves as the manager thereof.

                                      -6-
<PAGE>

SECTION 102.      Compliance Certificates and Opinions.

         Upon any application or request by the Operating Partnership to the
Trustee to take any action under any provision of this Indenture, the Operating
Partnership shall furnish to the Trustee such certificates and opinions as may
be required under the Trust Indenture Act. Each such certificate or opinion
shall be given in the form of an Officers' Certificate, if to be given by an
officer of Vornado Realty Trust on behalf of the Operating Partnership, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

         Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (except for certificates
provided for in Section 1004) shall include,

                  (1) a statement that each individual signing such certificate
         or opinion has read such covenant or condition and the definitions
         herein relating thereto;

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

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

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

SECTION 103.      Form of Documents Delivered to 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 officer of Vornado Realty Trust on
behalf of the Operating Partnership may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous. Any such
certificate 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 Vornado Realty Trust stating that the information with respect to
such factual matters is in the possession of Vornado Realty Trust, 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.

                                      -7-
<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.

SECTION 104.      Acts of Holders; Record Dates.

         Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given, made or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent 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 Trustee and, where it is hereby expressly required, to the Operating
Partnership. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
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 601) conclusive in favor of
the Trustee and the Operating Partnership, if made in the manner provided in
this Section.

         The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.

         The ownership of Securities shall be proved by the Security Register.

         Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Operating
Partnership in reliance thereon, whether or not notation of such action is made
upon such Security.

         The Operating Partnership may, in the circumstances permitted by the
Trust Indenture Act, set any day as a record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders of Securities of such series, provided that the Operating Partnership
may not set a record date for, and the provisions of this paragraph shall not
apply with respect to, the giving or making of any notice, declaration, request
or direction referred to in the next paragraph. If any record date is set
pursuant to this paragraph, the Holders of Outstanding Securities of the
relevant series on such record date, and no other Holders, shall be entitled to
take the relevant action, whether or not such Holders remain Holders after such
record date; provided that no such action shall be effective hereunder unless
taken on or prior to the applicable Expiration Date by Holders of the requisite
principal amount of Outstanding Securities of such series on such record date.
Nothing in this paragraph shall be construed to prevent the Operating

                                      -8-
<PAGE>

Partnership from setting a new record date for any action for which a record
date has previously been set pursuant to this paragraph (whereupon the record
date previously set shall automatically and with no action by any Person be
cancelled and of no effect), and nothing in this paragraph shall be construed to
render ineffective any action taken by Holders of the requisite principal amount
of Outstanding Securities of the relevant series on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Operating Partnership, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Trustee in writing and to each Holder of Securities of the relevant
series in the manner set forth in Section 106.

         The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Operating Partnership's expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Operating Partnership in writing
and to each Holder of Securities of the relevant series in the manner set forth
in Section 106.

         With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 106, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.

         Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.

                                      -9-
<PAGE>

SECTION 105.      Notices, Etc., to Trustee and Operating Partnership.

         Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,

                  (1) the Trustee by any Holder or by the Operating Partnership
         shall be sufficient for every purpose hereunder if made, given,
         furnished or filed in writing to or with the Trustee at its Corporate
         Trust Office, Attention: Corporate Trust Administration, or

                  (2) the Operating Partnership by the Trustee or by any Holder
         shall be sufficient for every purpose hereunder (unless otherwise
         herein expressly provided) if in writing and mailed, first-class
         postage prepaid, to the Operating Partnership addressed to it at the
         address of its principal office specified in the first paragraph of
         this instrument, Attention: Joseph Macnow, Executive Vice
         President--Finance and Administration, Chief Financial Officer, or at
         any other address previously furnished in writing to the Trustee by the
         Operating Partnership.

SECTION 106.      Notice to Holders; Waiver.

         Where this Indenture provides for notice to Holders 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 Holder affected
by such event, at his or her address as it appears in the Security Register, not
later than the latest date (if any), and not earlier than the earliest date (if
any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
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 Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.

         In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

         Where this Indenture provides for notice of any event to a Holder of a
Global Security, such notice shall be sufficiently given if given to the
Depositary for such Security (or its designee), pursuant to its Applicable
Procedures, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice.

SECTION 107.      Conflict with Trust Indenture Act.

         If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of

                                      -10-
<PAGE>

the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.

SECTION 108.      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 109.      Successors and Assigns.

         All covenants and agreements in this Indenture by the Operating
Partnership shall bind its successors and assigns, whether so expressed or not.

Section 110.      Separability Clause.

         In case any provision in this Indenture or in the Securities 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 111.      Benefits of Indenture.

         Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.

SECTION 112.      Governing Law.

         This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York.

SECTION 113.      Legal Holidays.

         In any case where any Interest Payment Date, Redemption Date or
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security which specifically states that such
provision shall apply in lieu of this Section)) payment of interest or principal
(and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment
with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Maturity, provided that no interest shall accrue with
respect to such payment for the period from and after such Interest Payment
Date, Redemption Date or Maturity, as the case may be to the date of such
payment.

SECTION 114.      Limited Liability; Immunity of Shareholders, Partners,
                  Trustees, Officers and Agents of the Operating Partnership and
                  Vornado Realty Trust.

                  Notwithstanding any other provision of this Indenture or of
the Securities of any series to the contrary, no recourse shall be had, whether
by levy or execution or otherwise, for the payment of any sums due under any
Security, including, without limitation, the principal of, premium, if any, or
interest payable under any Security, or for the payment or performance of any

                                      -11-
<PAGE>

obligation, covenant or agreement under, or for any claim based on, this
Indenture or any Security or otherwise in respect of this Indenture or any
Security, against any partner of the Operating Partnership, whether limited or
general, including Vornado Realty Trust, as general partner, or any successor of
any such partner or any such partner's or successor's assets or against any
principal, shareholder, member, officer, director, trustee or employee of any
such partner or successor, under any rule of law, statute or constitution, or by
the enforcement of any assessment or penalty or by any legal or equitable
proceeding or otherwise, nor shall any of such parties be personally liable for
any such amounts, obligations or claims, or liable for any deficiency judgment
based thereon or with respect thereto, it being expressly understood that the
sole remedies hereunder or under any other document with respect to the
Securities against such parties with respect to such amounts, obligations or
claims shall be against the Operating Partnership and that all such liability of
such parties is and is to be, by the acceptance hereof, expressly waived and
released as a condition of, and as consideration for, the execution of this
Indenture and by the acceptance of the Securities by the Holders and as part of
the consideration for the issue of the Securities.

                                  ARTICLE TWO

                                 SECURITY FORMS

SECTION 201.      Forms Generally.

         The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case 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 be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of
Vornado Realty Trust and delivered to the Trustee at or prior to the delivery of
the Operating Partnership Order contemplated by Section 303 for the
authentication and delivery of such Securities.

         The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.

SECTION 202.      Form of Face of Security.

         [Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]

                                      -12-
<PAGE>

                               Vornado Realty L.P.

                                 ..............

No......                                                                  $.....

                                                           CUSIP No. ________

         VORNADO REALTY L.P., a limited partnership duly organized and existing
under the laws of the State of Delaware (herein called the "Operating
Partnership", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
............., or registered assigns, the principal sum of ....... Dollars on
....................... [if this Security is to bear interest prior to Maturity,
insert -- , and to pay interest thereon from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually on
......... and ........ in each year, commencing ........ and at the Maturity
thereof, at the rate of [__%] per annum, until the principal hereof is paid or
made available for payment, [if applicable, insert -- provided that any
principal and premium, and any such instalment of interest, which is overdue
shall bear interest at the rate of [____%] per annum (to the extent that the
payment of such interest shall be legally enforceable), from the dates such
amounts are due until they are paid or made available for payment, and such
interest shall be payable on demand]. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the ........ or ........
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest so payable, but not punctually paid or
duly provided for, on any Interest Payment Date will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.]

[If the Security is not to bear interest prior to Maturity, insert - The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of _____% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment.]

         Payment of the principal of (and premium, if any) and [if applicable,
insert - any such] interest on this Security will be made at the office or
agency of the Operating Partnership maintained for that purpose in New York, New
York, 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, against
surrender of this Security in the case of any payment due at the Maturity of the
principal hereof (other than any payment of interest that first becomes payable
on a day other than an Interest Payment Date); provided, however, that at the
option of the Operating Partnership

                                      -13-
<PAGE>

payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register; and
provided, further, that if this Security is a Global Security, payment may be
made pursuant to the Applicable Procedures of the Depositary as permitted in
said Indenture.

         Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

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

         IN WITNESS WHEREOF, Vornado Realty Trust, the general partner of the
Operating Partnership, has caused this instrument to be duly executed under its
trust seal.

                                                  VORNADO REALTY L.P.

                                                   By:  Vornado Realty Trust,
                                                             its general partner

                                                   By___________________________

Attest:

..........................

SECTION 203.      Form of Reverse of Security.

         This Security is one of a duly authorized issue of securities of the
Operating Partnership (herein called the "Securities"), issued and to be issued
in one or more series under an Indenture, dated as of       , (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Operating Partnership and The Bank of New York, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), and reference is hereby made to the Indenture for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Operating Partnership, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof [if applicable, insert - [initially] limited in aggregate
principal amount to $________] [, provided that the Operating Partnership may,
without the consent of any Holder, at any time and from time to time increase
the initial principal amount].

         [If applicable, insert - The Securities of this series are subject to
redemption upon not less than 30 days' nor more than 60 days' notice by mail,
[if applicable, insert - (1) on ........ in any year commencing with the year
________ and ending with the year _________ through operation of the sinking
fund for this series at a Redemption Price equal to 100% of the principal
amount, and (2)] at any time [if applicable, insert - on or after ....., 20 ],
as a whole or in part,

                                      -14-
<PAGE>

at the election of the Operating Partnership, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed during the
12-month period beginning ........ of the years indicated,

<TABLE>
<CAPTION>
                                   Redemption                                          Redemption
           Year                      Price                   Year                        Price
           ----                    ----------                ----                      ----------
<S>                                <C>                       <C>                        <C>

</TABLE>

and thereafter at a Redemption Price equal to ......% of the principal amount,
together in the case of any such redemption [(whether through operation of the
sinking fund or otherwise)] with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]

         [If applicable, insert -- The sinking fund for this series provides for
the redemption on .......... in each year beginning with the year ........ and
ending with the year ....... of [if applicable, insert - not less than
$............ ("mandatory sinking fund") and not more than] $. aggregate
principal amount of Securities of this series. Securities of this series
acquired or redeemed by the Operating Partnership otherwise than through [if
applicable, insert - mandatory] sinking fund payments may be credited against
subsequent [if applicable, insert - mandatory] sinking fund payments otherwise
required to be made [if applicable, insert - , in the inverse order in which
they become due].]

         [If the Security is subject to redemption of any kind, insert -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]

         [If applicable, insert -- The Indenture contains provisions for
defeasance at any time of the entire indebtedness of this Security or certain
restrictive covenants and Events of Default with respect to this Security, in
each case upon compliance with certain conditions set forth in the Indenture.]

         [If the Security is not an Original Issue Discount Security, insert --
If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]

         [If the Security is an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Operating Partnership's obligations in respect of the
payment of the principal of and premium and interest, if any, on the Securities
of this series shall terminate.]

                                      -15-
<PAGE>

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Operating Partnership and the rights of the Holders of the Securities of each
series to be affected under the Indenture at any time by the Operating
Partnership and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding of each series to be
affected. The Indenture also contains provisions (i) permitting the Holders of
not less than a majority in principal amount of the Securities of any series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Operating Partnership with certain provisions of the
Indenture with respect to such series and (ii) permitting the Holders of a
majority in principal amount of the Securities at the time Outstanding of any
series to be affected under the Indenture (with each such series considered
separately for this purpose), on behalf of the Holders of all Securities of such
series, to waive certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.

         As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture, or for the appointment of a receiver or trustee,
or for any other remedy thereunder, unless such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with respect
to the Securities of this series, the Holders of not less than 25% in principal
amount of the Securities of this series at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable indemnity, and the
Trustee shall not have received from the Holders of a majority in principal
amount of Securities of this series at the time Outstanding a direction
inconsistent with such request, and shall have failed to institute any such
proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed
herein.

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

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Operating Partnership in any place where the principal
of and any premium and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Operating Partnership and the Security Registrar duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized denominations and for
the same aggregate principal amount, will be issued to the designated transferee
or transferees.

         The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like

                                      -16-
<PAGE>

aggregate principal amount of Securities of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.

         No service charge shall be made for any such registration of transfer
or exchange, but the Operating Partnership may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.

         Prior to due presentment of this Security for registration of transfer,
the Operating Partnership, the Trustee and any agent of the Operating
Partnership or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Operating Partnership, the Trustee nor any such agent
shall be affected by notice to the contrary.

         [If applicable, insert -- This Security is a Global Security and is
subject to the provisions of the Indenture relating to Global Securities,
including the limitations in Section 305 thereof on transfers and exchanges of
Global Securities.]

         [If applicable, insert -- Interest on the principal balance of this
Security shall be calculated on the basis of a [365- or 366-day year, as
appropriate, for the actual number of days elapsed] [360-day year of twelve
30-day months]]

         THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

         All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

SECTION 204.      Form of Legend for Global Securities.

         Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

SECTION 205.      Form of Trustee's Certificate of Authentication.

         The Trustee's certificates of authentication shall be in substantially
the following form:

                                      -17-
<PAGE>

         This is one of the Securities of the series designated herein and
referred to in the within-mentioned Indenture.

                  Dated:

                                                           THE BANK OF NEW YORK,
                                                                      As Trustee

                                                           By...................
                                                            Authorized Signatory

                                 ARTICLE THREE

                                 THE SECURITIES

SECTION 301.      Amount Unlimited; Issuable in Series.

         The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.

         The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,

                  (1) the title of the Securities of the series (which shall
         distinguish the Securities of the series from Securities of any other
         series);

                  (2) any limit upon the aggregate principal amount of the
         Securities of the series which may be authenticated and delivered under
         this Indenture (except for Securities authenticated and delivered upon
         registration of transfer of, or in exchange for, or in lieu of, other
         Securities of the series pursuant to Section 304, 305, 306, 906 or 1107
         and except for any Securities which, pursuant to Section 303, are
         deemed never to have been authenticated and delivered hereunder);

                  (3) the Person to whom any interest on a Security of the
         series shall be payable, if other than the Person in whose name that
         Security (or one or more Predecessor Securities) is registered at the
         close of business on the Regular Record Date for such interest;

                  (4) the date or dates on which the principal of any Securities
         of the series is payable;

                  (5) the rate or rates at which any Securities of the series
         shall bear interest, if any, the date or dates from which any such
         interest shall accrue, the Interest Payment Dates on which any such
         interest shall be payable and the Regular Record Date for any such
         interest payable on any Interest Payment Date;

                                      -18-
<PAGE>

                  (6) the place or places where the principal of and any premium
         and interest on any Securities of the series shall be payable and the
         manner in which any payment may be made;

                  (7) the period or periods within which, the price or prices at
         which and the terms and conditions upon which any Securities of the
         series may be redeemed, in whole or in part, at the option of the
         Operating Partnership and, if other than by a Board Resolution, the
         manner in which any election by the Operating Partnership to redeem the
         Securities shall be evidenced;

                  (8) the obligation, if any, of the Operating Partnership to
         redeem or purchase any Securities of the series pursuant to any sinking
         fund or analogous provisions or at the option of the Holder thereof and
         the period or periods within which, the price or prices at which and
         the terms and conditions upon which any Securities of the series shall
         be redeemed or purchased, in whole or in part, pursuant to such
         obligation;

                  (9) if other than denominations of $1,000 and any integral
         multiple thereof, the denominations in which any Securities of the
         series shall be issuable;

                  (10) if the amount of principal of or any premium or interest
         on any Securities of the series may be determined with reference to a
         financial or economic measure or pursuant to a formula, the manner in
         which such amounts shall be determined;

                  (11) if other than the currency of the United States of
         America, the currency, currencies or currency units in which the
         principal of or any premium or interest on any Securities of the series
         shall be payable and the manner of determining the equivalent thereof
         in the currency of the United States of America for any purpose,
         including for the purposes of making payment in the currency of the
         United States of America and applying the definition of "Outstanding"
         in Section 101;

                  (12) if the principal of or any premium or interest on any
         Securities of the series is to be payable, at the election of the
         Operating Partnership or the Holder thereof, in one or more currencies
         or currency units other than that or those in which such Securities are
         stated to be payable, the currency, currencies or currency units in
         which the principal of or any premium or interest on such Securities as
         to which such election is made shall be payable, the periods within
         which and the terms and conditions upon which such election is to be
         made and the amount so payable (or the manner in which such amount
         shall be determined);

                  (13) if other than the entire principal amount thereof, the
         portion of the principal amount of any Securities of the series which
         shall be payable upon declaration of acceleration of the Maturity
         thereof pursuant to Section 502;

                  (14) if the principal amount payable at the Stated Maturity of
         any Securities of the series will not be determinable as of any one or
         more dates prior to the Stated Maturity, the amount which shall be
         deemed to be the principal amount of such Securities as of any such
         date for any purpose thereunder or hereunder, including the principal
         amount thereof which shall be due and payable upon any Maturity other
         than the Stated Maturity or which shall be deemed to be Outstanding as
         of any date prior to the Stated

                                      -19-
<PAGE>

         Maturity (or, in any such case, the manner in which such amount deemed
         to be the principal amount shall be determined);

                  (15) if applicable, that the Securities of the series, shall
         be subject to either or both of Defeasance or Covenant Defeasance as
         provided in Article Thirteen; provided that no series of Securities
         that is exchangeable for Common Shares or other securities pursuant to
         Section 301(19) shall be subject to Defeasance pursuant to Section
         1302.

                  (16) if applicable, that any Securities of the series shall be
         issuable in whole or in part in the form of one or more Global
         Securities and, in such case, the respective Depositaries for such
         Global Securities, the form of any legend or legends which shall be
         borne by any such Global Security in addition to or in lieu of that set
         forth in Section 204 and any addition to, elimination of or other
         changes in the circumstances set forth in Clause (2) of the last
         paragraph of Section 305 in which any such Global Security may be
         exchanged in whole or in part for Securities registered, and any
         transfer of such Global Security in whole or in part may be registered,
         in the name or names of Persons other than the Depositary for such
         Global Security or a nominee thereof;

                  (17) any addition to, elimination of or other change in the
         Events of Default which applies to any Securities of the series and any
         change in the right of the Trustee or the requisite Holders of such
         Securities to declare the principal amount thereof due and payable
         pursuant to Section 502;

                  (18) any addition to, elimination of or other change in the
         covenants set forth in Article Ten which applies to Securities of the
         series;

                  (19) the terms and conditions, if any, pursuant to which the
         Securities are exchangeable for Common Shares or other securities; and

                  (20) any other terms of the series (which terms shall not be
         inconsistent with the provisions of this Indenture, except as permitted
         by Section 901(5)).

         All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto. All Securities
of any one series need not be issued at one time and, unless otherwise provided
or contemplated by this Section 301 with respect to a series of Securities,
additional Securities of a series may be issued at the option of the Operating
Partnership, without the consent of any Holder, at any time and from time to
time.

         If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of Vornado Realty
Trust on behalf of the Operating Partnership and delivered to the Trustee at or
prior to the delivery of the Officers' Certificate setting forth the terms of
the series.

                                      -20-
<PAGE>

SECTION 302.      Denominations.

         The Securities of each series shall be issuable only in registered form
without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.

SECTION 303.      Execution, Authentication, Delivery and Dating.

         The Securities shall be executed on behalf of the Operating Partnership
by Vornado Realty Trust, as general partner, by the Chairman of the Board, the
Vice Chairman of the Board, the President or one of the Vice Presidents, under
the trust seal reproduced thereon attested by the Secretary or one of the
Assistant Secretaries of Vornado Realty Trust. The signature of any of these
officers on the Securities may be manual or facsimile.

         Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of Vornado Realty Trust shall bind the
Operating Partnership, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.

         At any time and from time to time after the execution and delivery of
this Indenture, the Operating Partnership may deliver Securities of any series
executed by the Operating Partnership to the Trustee for authentication,
together with an Operating Partnership Order for the authentication and delivery
of such Securities, and the Trustee in accordance with the Operating Partnership
Order shall authenticate and deliver such Securities. If the form or terms of
the Securities of the series have been established by or pursuant to one or more
Board Resolutions as permitted by Sections 201 and 301, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating,

                  (1) if the form of such Securities has been established by or
         pursuant to Board Resolution as permitted by Section 201, that such
         form has been established in conformity with the provisions of this
         Indenture;

                  (2) if the terms of such Securities have been established by
         or pursuant to Board Resolution as permitted by Section 301, that such
         terms have been established in conformity with the provisions of this
         Indenture; and

                  (3) that such Securities, when authenticated and delivered by
         the Trustee and issued by the Operating Partnership in the manner and
         subject to any conditions specified in such Opinion of Counsel, will
         constitute valid and legally binding obligations of the Operating
         Partnership enforceable in accordance with their terms, subject to
         bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
         and similar laws of general applicability relating to or affecting
         creditors' rights and to general equity principles.

                  If such form or terms have been so established, the Trustee
         shall not be required to authenticate such Securities if the issue of
         such Securities pursuant to this Indenture

                                      -21-
<PAGE>

         will affect the Trustee's own rights, duties or immunities under the
         Securities and this Indenture or otherwise in a manner which is not
         reasonably acceptable to the Trustee.

         Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, including where the size of an Outstanding series of Securities is
increased as contemplated by Section 301, it shall not be necessary to deliver
the Officers' Certificate otherwise required pursuant to Section 301 or the
Operating Partnership Order and Opinion of Counsel otherwise required pursuant
to such preceding paragraph at or prior to the authentication of each Security
of such series if such documents are delivered at or prior to the authentication
upon original issuance of the first Security of such series to be issued.

         Each Security shall be dated the date of its authentication.

         No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Operating Partnership, and the Operating
Partnership shall deliver such Security to the Trustee for cancellation as
provided in Section 309, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.

SECTION 304.      Temporary Securities.

         Pending the preparation of definitive Securities of any series, the
Operating Partnership may execute, and upon Operating Partnership Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.

         If temporary Securities of any series are issued, the Operating
Partnership will cause definitive Securities of that series to be prepared
without unreasonable delay. After the preparation of definitive Securities of
such series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities
of such series at the office or agency of the Operating Partnership in a Place
of Payment for that series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any series, the
Operating Partnership shall execute and the Trustee shall authenticate and
deliver in exchange therefor one or more definitive Securities of the same
series, of any authorized denominations and of like tenor and aggregate
principal amount. Until so exchanged, the temporary Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series and tenor.

                                      -22-
<PAGE>

SECTION 305.      Registration, Registration of Transfer and Exchange.

         The Operating Partnership shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Operating Partnership in a Place of Payment
being herein sometimes collectively referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Operating
Partnership shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security Registrar" for the purpose
of registering Securities and transfers of Securities as herein provided.

         Upon surrender for registration of transfer of any Security of a series
at the office or agency of the Operating Partnership in a Place of Payment for
that series, the Operating Partnership shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series, of any authorized
denominations and of like tenor and aggregate principal amount.

         At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
like tenor and aggregate principal amount, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Operating Partnership shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.

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

         Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Operating Partnership or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Operating Partnership and the Security Registrar duly
executed, by the Holder thereof or his attorney duly authorized in writing.

         No service charge shall be made for any registration of transfer or
exchange of Securities, but the Operating Partnership 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 Securities, other
than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.

         If the Securities of any series (or of any series and specified tenor)
are to be redeemed in part, the Operating Partnership shall not be required (A)
to issue, register the transfer of or exchange any Securities of that series (or
of that series and specified tenor, as the case may be) during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of any such Securities selected for redemption under
Section 1103 and ending at the close of business on the day of such mailing, or
(B) to register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.

                                      -23-
<PAGE>

         The provisions of Clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:

                  (1) Each Global Security authenticated under this Indenture
         shall be registered in the name of the Depositary designated for such
         Global Security or a nominee thereof and delivered to such Depositary
         or a nominee thereof or custodian therefor, and each such Global
         Security shall constitute a single Security for all purposes of this
         Indenture.

                  (2) Notwithstanding any other provision in this Indenture, and
         subject to such applicable provisions, if any, as may be specified as
         contemplated by Section 301, no Global Security may be exchanged in
         whole or in part for Securities registered, and no transfer of a Global
         Security in whole or in part may be registered, in the name of any
         Person other than the Depositary for such Global Security or a nominee
         thereof unless (A) such Depositary has notified the Operating
         Partnership that it is unwilling or unable or no longer permitted under
         applicable law to continue as Depositary for such Global Security or
         (B) there shall have occurred and be continuing an Event of Default
         with respect to such Global Security or (C) the Operating Partnership
         so directs the Trustee by Company Order or (D) there shall exist such
         circumstances, if any, in addition to or in lieu of the foregoing as
         have been specified for this purpose as contemplated by Section 301.

                  (3) Subject to Clause (2) above and to such applicable
         provisions, if any, as may be specified as contemplated by Section 301,
         any exchange of a Global Security for other Securities may be made in
         whole or in part, and all Securities issued in exchange for a Global
         Security or any portion thereof shall be registered in such names as
         the Depositary for such Global Security shall direct.

                  (4) Every Security authenticated and delivered upon
         registration of transfer of, or in exchange for or in lieu of, a Global
         Security or any portion thereof, whether pursuant to this Section,
         Section 304, 306, 906 or 1107 or otherwise, shall be authenticated and
         delivered in the form of, and shall be, a Global Security, unless such
         Security is registered in the name of a Person other than the
         Depositary for such Global Security or a nominee thereof.

SECTION 306.      Mutilated, Destroyed, Lost and Stolen Securities.

         If any mutilated Security is surrendered to the Trustee, the Operating
Partnership shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.

         If there shall be delivered to the Operating Partnership and the
Trustee (i) evidence to their satisfaction of the destruction, loss or theft of
any Security and (ii) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the absence
of notice to the Operating Partnership or the Trustee that such Security has
been acquired by a bona fide purchaser, the Operating Partnership shall execute
and the Trustee shall authenticate and deliver, in lieu of any such destroyed,
lost or stolen Security, a

                                      -24-
<PAGE>

new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.

         In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Operating Partnership in its
discretion may, instead of issuing a new Security, pay such Security.

         Upon the issuance of any new Security under this Section, the Operating
Partnership 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) connected therewith.

         Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Operating Partnership, whether or not
the destroyed, lost or stolen Security 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 Securities of that series duly issued
hereunder.

         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 Securities.

Section 307.      Payment of Interest; Interest Rights Preserved.

         Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest or, if no business is conducted by the Trustee at its
Corporate Trust Office on such date, at 5:00 P.M., New York City time, on such
date.

         Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Operating Partnership, at its
election in each case, as provided in Clause (1) or (2) below:

                  (1) The Operating Partnership may elect to make payment of any
         Defaulted Interest to the Persons in whose names the Securities of such
         series (or their respective Predecessor Securities) are registered at
         the close of business on a Special Record Date for the payment of such
         Defaulted Interest, which shall be fixed in the following manner. The
         Operating Partnership shall notify the Trustee in writing of the amount
         of Defaulted Interest proposed to be paid on each Security of such
         series and the date of the proposed payment, and at the same time the
         Operating Partnership shall deposit with the Trustee an amount of money
         equal to the aggregate amount proposed to be paid in respect of such
         Defaulted Interest or shall make arrangements satisfactory to the
         Trustee for such deposit prior to the date of the proposed payment,
         such money when deposited to be held in trust for the benefit of the
         Persons entitled to such Defaulted Interest as in this Clause provided.
         Thereupon the Trustee shall fix a Special Record Date for the payment
         of such

                                      -25-
<PAGE>

         Defaulted Interest which shall be not more than 15 days and not less
         than 10 days prior to the date of the proposed payment and not less
         than 10 days after the receipt by the Trustee of the notice of the
         proposed payment. The Trustee shall promptly notify the Operating
         Partnership of such Special Record Date and, in the name and at the
         expense of the Operating Partnership, shall cause notice of the
         proposed payment of such Defaulted Interest and the Special Record Date
         therefor to be given to each Holder of Securities of such series in the
         manner set forth in Section 106, not less than 10 days prior to such
         Special Record Date. Notice of the proposed payment of such Defaulted
         Interest and the Special Record Date therefor having been so mailed,
         such Defaulted Interest shall be paid to the Persons in whose names the
         Securities of such series (or their respective Predecessor Securities)
         are registered at the close of business on such Special Record Date and
         shall no longer be payable pursuant to the following Clause (2).

                  (2) The Operating Partnership may make payment of any
         Defaulted Interest on the Securities of any series in any other lawful
         manner not inconsistent with the requirements of any securities
         exchange on which such Securities may be listed, and upon such notice
         as may be required by such exchange, if, after notice given by the
         Operating Partnership to the Trustee of the proposed payment pursuant
         to this Clause, such manner of payment shall be deemed practicable by
         the Trustee.

         Except as may be provided in this Section 307 or as contemplated in
Section 301 with respect to any Securities of a series, the Person to whom
interest shall be payable on any Security that first becomes payable on a day
that is not an Interest Payment Date shall be the Holder of such Security on the
day such interest is paid.

         Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.

SECTION 308.      Persons Deemed Owners.

         Prior to due presentment of a Security for registration of transfer,
the Operating Partnership, the Trustee and any agent of the Operating
Partnership or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of and any premium and (subject to Section 307) any interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Operating Partnership, the Trustee nor any agent of the
Operating Partnership or the Trustee shall be affected by notice to the
contrary.

SECTION 309.      Cancellation.

         All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Operating Partnership may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Operating Partnership may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Operating

                                      -26-
<PAGE>

Partnership has not issued and sold, and all Securities so delivered shall be
promptly cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities held
by the Trustee shall be disposed of as directed by an Operating Partnership
Order; provided, however, that the Trustee shall not be required to destroy such
cancelled Securities.

SECTION 310.      Computation of Interest.

         Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.

SECTION 311.      CUSIP Numbers.

The Operating Partnership in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders, provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of redemption
and that reliance may be placed only on the other identification numbers printed
on the Securities. Any such redemption shall not be affected by any defect in or
omission of such numbers.

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

SECTION 401.      Satisfaction and Discharge of Indenture.

         This Indenture shall upon Operating Partnership Request cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange of any Security expressly provided for herein or in the terms of such
Security), and the Trustee, at the expense of the Operating Partnership, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when

         (1) either

                  (A) all Securities theretofore authenticated and delivered
         (other than (i) Securities which have been destroyed, lost or stolen
         and which have been replaced or paid as provided in Section 306 and
         (ii) Securities for whose payment money has theretofore been deposited
         in trust or segregated and held in trust by the Operating Partnership
         and thereafter repaid to the Operating Partnership or discharged from
         such trust, as provided in Section 1003) have been delivered to the
         Trustee for cancellation; or

                  (B) all such Securities not theretofore delivered to the
         Trustee for cancellation

                                      -27-
<PAGE>

                           (i) have become due and payable, or

                           (ii) will become due and payable at their Stated
                  Maturity within one year, or

                           (iii) are to be called for redemption within one year
                  under arrangements satisfactory to the Trustee for the giving
                  of notice of redemption by the Trustee in the name, and at the
                  expense, of the Operating Partnership,

         and the Operating Partnership, in the case of (i), (ii) or (iii) above,
         has deposited or caused to be deposited with the Trustee as trust funds
         in trust for the purpose money in an amount sufficient to pay and
         discharge the entire indebtedness on such Securities not theretofore
         delivered to the Trustee for cancellation, for principal and any
         premium and interest to the date of such deposit (in the case of
         Securities which have become due and payable) or to the Stated Maturity
         or Redemption Date, as the case may be;

                  (2) the Operating Partnership has paid or caused to be paid
         all other sums payable hereunder by the Operating Partnership; and

                  (3) the Operating Partnership has delivered to the Trustee an
         Officers' Certificate and an Opinion of Counsel, each stating that all
         conditions precedent herein provided for relating to the satisfaction
         and discharge of this Indenture have been complied with.

         Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Operating Partnership to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 614 and, if
money shall have been deposited with the Trustee pursuant to subclause (B) of
Clause (1) of this Section, the obligations of the Trustee under Section 402 and
the last paragraph of Section 1003 shall survive.

SECTION 402.      Application of Trust Money.

         Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Operating Partnership acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and any
premium and interest for whose payment such money has been deposited with the
Trustee.

                                  ARTICLE FIVE

                                    REMEDIES

SECTION 501.      Events of Default.

         "Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment,

                                      -28-
<PAGE>

decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

                  (1) default in the payment of any interest upon any Security
         of that series when it becomes due and payable, and continuance of such
         default for a period of 30 days; or

                  (2) default in the payment of the principal of or any premium,
         if any, on any Security of that series at its Maturity; or

                  (3) default in the deposit of any sinking fund payment, when
         and as due by the terms of a Security of that series; or

                  (4) default in the performance, or breach, of any covenant or
         warranty of the Operating Partnership in this Indenture (other than a
         covenant or warranty a default in whose performance or whose breach is
         elsewhere in this Section specifically dealt with or which has
         expressly been included in this Indenture solely for the benefit of
         series of Securities other than that series), and continuance of such
         default or breach for a period of 60 days after there has been given,
         by registered or certified mail, to the Operating Partnership by the
         Trustee or to the Operating Partnership and the Trustee by the Holders
         of at least 10% in principal amount of the Outstanding Securities of
         that series a written notice specifying such default or breach and
         requiring it to be remedied and stating that such notice is a "Notice
         of Default" hereunder; or

                  (5) a default under any bond, debenture, note or other
         evidence of indebtedness for money borrowed by the Operating
         Partnership (including a default with respect to Securities of any
         series other than that series) having an aggregate principal amount
         outstanding of at least $50,000,000, or under any mortgage, indenture
         or instrument (including this Indenture) under which there may be
         issued or by which there may be secured or evidenced any indebtedness
         for money borrowed by the Operating Partnership having an aggregate
         principal amount outstanding of at least $50,000,000, whether such
         indebtedness now exists or shall hereafter be created, which default
         (A) shall constitute a failure to pay any portion of the principal of
         such indebtedness when due and payable after the expiration of any
         applicable grace period with respect thereto or (B) shall have resulted
         in such indebtedness becoming or being declared due and payable prior
         to the date on which it would otherwise have become due and payable,
         without, in the case of Clause (A), such indebtedness having been
         discharged or without, in the case of Clause (B), such indebtedness
         having been discharged or such acceleration having been rescinded or
         annulled, in each such case within a period of 10 days after there
         shall have been given, by registered or certified mail, to the
         Operating Partnership by the Trustee or to the Operating Partnership
         and the Trustee by the Holders of at least 10% in principal amount of
         the Outstanding Securities of that series a written notice specifying
         such default and requiring the Operating Partnership to cause such
         indebtedness to be discharged or cause such acceleration to be
         rescinded or annulled, as the case may be, and stating that such notice
         is a "Notice of Default" hereunder; provided, however, that, subject to
         the provisions of Sections 601 and 602, the Trustee shall not be deemed
         to have knowledge of such default unless either (A) a Responsible
         Officer of the Trustee shall have knowledge of such default or (B) the
         Trustee shall have received written notice thereof from the Operating
         Partnership, from any Holder, from the holder of any such

                                      -29-
<PAGE>

         indebtedness or from the trustee under any such mortgage, indenture or
         other instrument; or

                  (6) the entry by a court having jurisdiction in the premises
         of (A) a decree or order for relief in respect of the Operating
         Partnership in an involuntary case or proceeding under any applicable
         Federal or State bankruptcy, insolvency, reorganization or other
         similar law or (B) a decree or order adjudging the Operating
         Partnership a bankrupt or insolvent, or approving as properly filed a
         petition seeking reorganization, arrangement, adjustment or composition
         of or in respect of the Operating Partnership under any applicable
         Federal or State law, or appointing a custodian, receiver, liquidator,
         assignee, trustee, sequestrator or other similar official of the
         Operating Partnership or of any substantial part of its property, or
         ordering the winding up or liquidation of its affairs, and the
         continuance of any such decree or order for relief or any such other
         decree or order unstayed and in effect for a period of 60 consecutive
         days; or

                  (7) the commencement by the Operating Partnership of a
         voluntary case or proceeding under any applicable Federal or State
         bankruptcy, insolvency, reorganization or other similar law or of any
         other case or proceeding to be adjudicated a bankrupt or insolvent, or
         the consent by it to the entry of a decree or order for relief in
         respect of the Operating Partnership in an involuntary case or
         proceeding under any applicable Federal or State bankruptcy,
         insolvency, reorganization or other similar law or to the commencement
         of any bankruptcy or insolvency case or proceeding against it, or the
         filing by it of a petition or answer or consent seeking reorganization
         or relief under any applicable Federal or State law, or the consent by
         it to the filing of such petition or to the appointment of or taking
         possession by a custodian, receiver, liquidator, assignee, trustee,
         sequestrator or other similar official of the Operating Partnership or
         of any substantial part of its property, or the making by it of an
         assignment for the benefit of creditors, or the admission by it in
         writing of its inability to pay its debts generally as they become due,
         or the taking of corporate action by the Operating Partnership in
         furtherance of any such action; or

                  (8) any other Event of Default provided with respect to
         Securities of that series.

SECTION 502.      Acceleration of Maturity; Rescission and Annulment.

         If an Event of Default (other than an Event of Default specified in
Section 501(6) or 501(7)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee, upon
receipt of a request from the Holders of not less than 25% in principal amount
of the Outstanding Securities of that series, shall, or the Holders of not less
than 25% in principal amount of the Outstanding Securities of that series may,
declare the principal amount of all the Securities of that series (or, if any
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified by the terms
thereof) to be due and payable immediately, by a notice in writing to the
Operating Partnership (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable. If an Event of Default specified in Section 501(6)
or 501 (7) with respect to Securities of any series at the time Outstanding
occurs, the principal amount of all the Securities of that series (or, if any
Securities of that series are Original Issue Discount Securities, such portion
of the principal

                                      -30-
<PAGE>

amount of such Securities as may be specified by the terms thereof) shall
automatically, and without any declaration or other action on the part of the
Trustee or any Holder, become immediately due and payable.

         At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Operating
Partnership and the Trustee, may rescind and annul such declaration and its
consequences if

                  (1) the Operating Partnership has paid or deposited with the
         Trustee a sum sufficient to pay

                           (A) all overdue interest on all Securities of that
                  series,

                           (B) the principal of (and premium, if any, on) any
                  Securities of that series which have become due otherwise than
                  by such declaration of acceleration and any interest thereon
                  at the rate or rates prescribed therefor in such Securities,

                           (C) to the extent that payment of such interest is
                  lawful, interest upon overdue interest at the rate or rates
                  prescribed therefor in such Securities, and

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

                  (2) all Events of Default with respect to Securities of that
         series, other than the non-payment of the principal of Securities of
         that series which have become due solely by such declaration of
         acceleration, have been cured or waived as provided in Section 513.

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

SECTION 503.      Collection of Indebtedness and Suits for Enforcement by
                  Trustee.

         The Operating Partnership covenants that if

                  (1) default is made in the payment of any interest on any
         Security when such interest becomes due and payable and such default
         continues for a period of 30 days, or

                  (2) default is made in the payment of the principal of (or
         premium, if any, on) any Security at the Maturity thereof,

the Operating Partnership will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal and any premium and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the

                                      -31-
<PAGE>

reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

         If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.

SECTION 504.      Trustee May File Proofs of Claim.

         In case of any judicial proceeding relative to the Operating
Partnership (or any other obligor upon the Securities), its property or its
creditors, the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions authorized under the Trust
Indenture Act in order to have claims of the Holders and the Trustee allowed in
any such proceeding. In particular, the Trustee shall be authorized to collect
and receive any moneys or other property payable or deliverable on any such
claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.

         No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.

SECTION 505.      Trustee May Enforce Claims Without Possession of Securities.

         All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.

SECTION 506.      Application of Money Collected.

         Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:

                                      -32-
<PAGE>

                  FIRST: To the payment of all amounts due the Trustee under
         Section 607; and

                  SECOND: To the payment of the amounts then due and unpaid for
         principal of and any premium and interest on the Securities in respect
         of which or for the benefit of which such money has been collected,
         ratably, without preference or priority of any kind, according to the
         amounts due and payable on such Securities for principal and any
         premium and interest, respectively.

SECTION 507.      Limitation on Suits.

         No Holder of any Security of any series 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

                  (1) such Holder has previously given written notice to the
         Trustee of a continuing Event of Default with respect to the Securities
         of that series;

                  (2) the Holders of not less than 25% in principal amount of
         the Outstanding Securities of that series shall have made written
         request to the Trustee to institute proceedings in respect of such
         Event of Default in its own name as Trustee hereunder;

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

                  (4) the Trustee for 60 days after its receipt of such notice,
         request and offer of indemnity has failed to institute any such
         proceeding; and

                  (5) no direction inconsistent with such written request has
         been given to the Trustee during such 60-day period by the Holders of a
         majority in principal amount of the Outstanding Securities of that
         series;

                  it being understood and intended that no one or more of such
         Holders shall have any right in any manner whatever by virtue of, or by
         availing of, any provision of this Indenture to affect, disturb or
         prejudice the rights of any other of such Holders, or to obtain or to
         seek to obtain priority or preference over any other of such Holders or
         to enforce any right under this Indenture, except in the manner herein
         provided and for the equal and ratable benefit of all of such Holders.

SECTION 508.      Unconditional Right of Holders to Receive Principal, Premium
                  and Interest.

         Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 307)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.

                                      -33-
<PAGE>

SECTION 509.      Restoration of Rights and Remedies.

         If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Operating Partnership, the Trustee and the
Holders shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.

SECTION 510.      Rights and Remedies Cumulative.

         Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders 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 511.      Delay or Omission Not Waiver.

         No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.

SECTION 512.      Control by Holders.

         The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that

                  (1) such direction shall not be in conflict with any rule of
         law or with this Indenture, and

                  (2) the Trustee may take any other action deemed proper by the
         Trustee which is not inconsistent with such direction.

SECTION 513.      Waiver of Past Defaults.

         The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default

                                      -34-
<PAGE>

                  (1) in the payment of the principal of or any premium or
         interest on any Security of such series, or

                  (2) in respect of a covenant or provision hereof which under
         Article Nine cannot be modified or amended without the consent of the
         Holder of each Outstanding Security of such series affected.

         Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.

SECTION 514.      Undertaking for Costs.

         In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act, provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Trustee or the Operating
Partnership.

SECTION 515.      Waiver of Usury, Stay or Extension Laws.

         The Operating Partnership 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 usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Operating
Partnership (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 Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.

                                  ARTICLE SIX

                                   THE TRUSTEE

SECTION 601.      Certain Duties and Responsibilities.

         The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any 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 for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

                                      -35-
<PAGE>

SECTION 602.      Notice of Defaults.

         If a default occurs hereunder with respect to Securities of any series,
the Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
501(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.

SECTION 603.      Certain Rights of Trustee.

         Subject to the provisions of Section 601:

                  (1) the Trustee may rely and shall be protected in acting or
         refraining from acting upon any resolution, certificate, statement,
         instrument, opinion, report, notice, request, direction, consent,
         order, bond, debenture, note, other evidence of indebtedness or other
         paper or document believed by it to be genuine and to have been signed
         or presented by the proper party or parties;

                  (2) any request or direction of the Operating Partnership
         mentioned herein shall be sufficiently evidenced by an Operating
         Partnership Request or Operating Partnership Order, and any resolution
         of the Board of Trustees shall be sufficiently evidenced by a Board
         Resolution;

                  (3) whenever in the administration of this Indenture the
         Trustee shall deem it desirable that a matter be proved or established
         prior to taking, suffering or omitting any action hereunder, the
         Trustee (unless other evidence be herein specifically prescribed) may,
         in the absence of bad faith on its part, rely upon an Officers'
         Certificate;

                  (4) the Trustee may consult with counsel of its selection and
         the advice of such counsel (to be confirmed in writing) or any Opinion
         of Counsel shall be full and complete authorization and protection in
         respect of any action taken, suffered or omitted by it hereunder in
         good faith and in reliance thereon;

                  (5) the Trustee shall be under no obligation to exercise any
         of the rights or powers vested in it by this Indenture at the request
         or direction of any of the Holders pursuant to this Indenture, unless
         such Holders shall have offered to the Trustee reasonable security or
         indemnity reasonably satisfactory to the Trustee against the costs,
         expenses and liabilities which might be incurred by it in compliance
         with such request or direction;

                  (6) 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, direction,
         consent, order, bond, debenture, note, other evidence of indebtedness
         or other paper or document, but the Trustee, in its discretion, may
         make such further inquiry or investigation into such facts or matters
         as it may see fit, and, if the Trustee shall determine to make such
         further inquiry or investigation, it shall be entitled to

                                      -36-
<PAGE>

         examine the books, records and premises of the Operating Partnership,
         personally or by agent or attorney;

                  (7) the Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys and the Trustee shall not be responsible
         for any misconduct or negligence on the part of any agent or attorney
         appointed with due care by it hereunder;

                  (8) the Trustee shall not be liable for any action taken,
         suffered, or omitted to be taken by it in good faith and reasonably
         believed by it to be authorized or within the discretion or rights or
         powers conferred upon it by this Indenture;

                  (9) the Trustee shall not be deemed to have notice of any
         default or Event of Default unless a Responsible Officer of the Trustee
         has actual knowledge thereof or unless written notice of any event
         which is in fact such a default is received by the Trustee at the
         Corporate Trust Office of the Trustee, and such notice references the
         Securities and this Indenture;

                  (10) the rights, privileges, protections, immunities and
         benefits given to the Trustee, including, without limitation, its right
         to be indemnified, are extended to, and shall be enforceable by, the
         Trustee in each of its capacities hereunder; and

                  (11) The Trustee may request that the Company deliver an
         Officers' Certificate setting forth the names of individuals and or
         titles of officers authorized at such time to take specified actions
         pursuant to this Indenture, which Officers' Certificate may be signed
         by any person authorized to sign an Officers' Certificate, including
         any person specified as so authorized in any such certificate
         previously delivered and not superseded.

SECTION 604.      Not Responsible for Recitals or Issuance of Securities.

         The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Operating Partnership, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Operating Partnership of
Securities or the proceeds thereof.

SECTION 605.      May Hold Securities.

         The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Operating Partnership, in its individual or
any other capacity, may become the owner or pledgee of Securities and, subject
to Sections 608 and 613, may otherwise deal with the Operating Partnership with
the same rights it would have if it were not Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent.

                                      -37-
<PAGE>

SECTION 606.      Money Held in Trust.

         Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Operating Partnership.

SECTION 607.      Compensation and Reimbursement.

         The Operating Partnership agrees

                  (1) to pay to the Trustee from time to time such compensation
         as the Operating Partnership and the Trustee shall from time to time
         agree in writing for all services rendered by it hereunder (which
         compensation shall not be limited by any provision of law in regard to
         the compensation of a trustee of an express trust);

                  (2) except as otherwise expressly provided herein, to
         reimburse the Trustee upon its request for all reasonable expenses,
         disbursements and advances incurred or made by the Trustee in
         accordance with any provision of this Indenture (including the
         reasonable compensation and the expenses and disbursements of its
         agents and counsel), except any such expense, disbursement or advance
         as may be attributable to its negligence or bad faith; and

                  (3) to indemnify the Trustee and any predecessor Trustee for,
         and to hold it harmless against, any and all loss, liability or expense
         including taxes (other than taxes imposed on the income of the Trustee)
         incurred without negligence or bad faith on its part, arising out of or
         in connection with the acceptance or administration of the trust or
         trusts hereunder, including the costs and expenses of defending itself
         against any claim or liability in connection with the exercise or
         performance of any of its powers or duties hereunder.

         The Trustee shall have a lien prior to the Securities as to all
property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 607 except with respect to funds
held in trust for the benefit of the Holders of particular Securities. When the
Trustee incurs expenses or renders services in connection with an Event of
Default specified in Section 501(6) or Section 501(7), the expenses (including
the reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
applicable Federal or State bankruptcy, insolvency or other similar law.

         The provisions of this Section shall survive the termination of this
Indenture.

SECTION 608.      Disqualification; Conflicting Interests.

         If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.

                                      -38-
<PAGE>

SECTION 609.      Corporate Trustee Required; Eligibility.

         There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee with respect to the Securities of any series shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.

SECTION 610.      Resignation and Removal; Appointment of Successor.

         No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.

         The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Operating
Partnership.

         The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Operating Partnership.

         If at any time:

                  (1) the Trustee shall fail to comply with Section 608 after
         written request therefor by the Operating Partnership or by any Holder
         who has been a bona fide Holder of a Security for at least six months,
         or

                  (2) the Trustee shall cease to be eligible under Section 609
         and shall fail to resign after written request therefor by the
         Operating Partnership or by any such Holder, or

                  (3) the Trustee shall become incapable of acting 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,

then, in any such case, (A) the Operating Partnership by a Board Resolution may
remove the Trustee with respect to all Securities, or (B) subject to Section
514, any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee with respect to
all Securities and the appointment of a successor Trustee or Trustees.

                                      -39-
<PAGE>

         If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation or removal, the Trustee resigning or
being removed may petition, at the expense of the Operating Partnership, any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.

         If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Operating Partnership, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Operating Partnership and
the retiring Trustee, the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment in accordance with the applicable
requirements of Section 611, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor Trustee
appointed by the Operating Partnership. If no successor Trustee with respect to
the Securities of any series shall have been so appointed by the Operating
Partnership or the Holders and accepted appointment in the manner required by
Section 611, any Holder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.

         The Operating Partnership shall give notice of each resignation and
each removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities of any
series to all Holders of Securities of such series in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with
respect to the Securities of such series and the address of its Corporate Trust
Office.

SECTION 611.      Acceptance of Appointment by Successor.

         In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Operating Partnership and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Operating Partnership or the successor Trustee, such
retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.

         In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Operating
Partnership, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an

                                      -40-
<PAGE>

indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring shall continue to be vested in
the retiring Trustee, and (3) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Operating Partnership or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee relates.

         Upon request of any such successor Trustee, the Operating Partnership
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.

         No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.

SECTION 612.      Merger, Conversion, Consolidation or Succession to Business.

         Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.

SECTION 613.      Preferential Collection of Claims Against Operating
                  Partnership.

         If and when the Trustee shall be or become a creditor of the Operating
Partnership (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust

                                      -41-
<PAGE>

Indenture Act regarding the collection of claims against the Operating
Partnership (or any such other obligor).

SECTION 614.      Appointment of Authenticating Agent.

         The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer, or partial redemption thereof
or pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Operating Partnership and shall at all times be a corporation
organized and doing business under the laws of the United States of America, any
State thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.

         Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

         An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Operating Partnership. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Operating Partnership. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time such Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Operating Partnership and
shall give notice of such appointment in the manner provided in Section 106 to
all Holders of Securities of the series with respect to which such
Authenticating Agent will serve. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.

                                      -42-
<PAGE>

         The Operating Partnership agrees to pay to each Authenticating Agent
from time to time such compensation for its services under this Section as the
Operating Partnership and the Authenticating Agent shall from time to time agree
in writing.

         If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

                                                  THE BANK OF NEW YORK,
                                                       As Trustee

                                                  By ..........................,
                                                      As Authenticating Agent

                                                  By............................
                                                       Authorized Signatory

                                 ARTICLE SEVEN

         HOLDERS' LISTS AND REPORTS BY TRUSTEE AND OPERATING PARTNERSHIP

Section 701.      Operating Partnership to Furnish Trustee Names and Addresses
                  of Holders.

         The Operating Partnership will furnish or cause to be furnished to the
Trustee

                  (1) semi-annually, not later than March 15 and September 15 in
         each year, a list, in such form as the Trustee may reasonably require,
         of the names and addresses of the Holders of Securities of each series
         as of the preceding March 1 or September 1, as the case may be, and

                  (2) at such other times as the Trustee may request in writing,
         within 30 days after the receipt by the Operating Partnership of any
         such request, a list of similar form and content as of a date not more
         than 15 days prior to the time such list is furnished,

excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.

SECTION 702.      Preservation of Information; Communications to Holders.

         The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.

                                      -43-
<PAGE>

         The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.

         Every Holder of Securities, by receiving and holding the same, agrees
with the Operating Partnership and the Trustee that none of the Operating
Partnership, Vornado Realty Trust or the Trustee or any agent of any of them
shall be held accountable by reason of any disclosure of information as to names
and addresses of Holders made pursuant to the Trust Indenture Act.

SECTION 703.      Reports by Trustee.

         The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
Reports so required to be transmitted at stated intervals of not more than 12
months shall be transmitted within 60 days after the first date of issuance of
Securities and on each anniversary of such date.

         A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Operating Partnership.
The Operating Partnership will promptly notify the Trustee when any Securities
are listed on any stock exchange.

SECTION 704.      Reports by Operating Partnership.

         The Operating Partnership shall file with the Trustee and the
Commission, and transmit to Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant to such Act;
provided that any such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.

         Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Operating
Partnership's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).

                                 ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 801.      Operating Partnership May Consolidate, Etc., Only on Certain
                  Terms.

         The Operating Partnership shall not consolidate with or merge into any
other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and the Operating Partnership shall
not permit any Person to consolidate with or merge into the Operating
Partnership or convey, transfer or lease its properties and assets substantially
as an entirety to the Operating Partnership, unless:

                                      -44-
<PAGE>

                  (1) in case the Operating Partnership shall consolidate with
         or merge into another Person or convey, transfer or lease its
         properties and assets substantially as an entirety to any Person, the
         Person formed by such consolidation or into which the Operating
         Partnership is merged or the Person which acquires by conveyance or
         transfer, or which leases, the properties and assets of the Operating
         Partnership substantially as an entirety shall be a corporation,
         partnership or trust, shall be organized and validly existing under the
         laws of the United States of America, any State thereof or the District
         of Columbia and shall expressly assume, by an indenture supplemental
         hereto, executed and delivered to the Trustee, in form satisfactory to
         the Trustee, the due and punctual payment of the principal of and any
         premium and interest on all the Securities and the performance or
         observance of every covenant of this Indenture on the part of the
         Operating Partnership to be performed or observed;

                  (2) immediately after giving effect to such transaction and
         treating any indebtedness which becomes an obligation of the Operating
         Partnership or any Subsidiary as a result of such transaction as having
         been incurred by the Operating Partnership or such Subsidiary at the
         time of such transaction, no Event of Default, and no event which,
         after notice or lapse of time or both, would become an Event of
         Default, shall have happened and be continuing;

                  (3) if, as a result of any such consolidation or merger or
         such conveyance, transfer or lease, properties or assets of the
         Operating Partnership would become subject to a mortgage, pledge, lien,
         security interest or other encumbrance which would not be permitted by
         this Indenture, the Operating Partnership or such successor Person, as
         the case may be, shall take such steps as shall be necessary
         effectively to secure the Securities equally and ratably with (or prior
         to) all indebtedness secured thereby; and

                  (4) the Operating Partnership has delivered to the Trustee an
         Officers' Certificate and an Opinion of Counsel, each stating that such
         consolidation, merger, conveyance, transfer or lease and, if a
         supplemental indenture is required in connection with such transaction,
         such supplemental indenture comply with this Article and that all
         conditions precedent herein provided for relating to such transaction
         have been complied with.

SECTION 802.      Successor Substituted.

         Upon any consolidation of the Operating Partnership with, or merger of
the Operating Partnership into, any other Person or any conveyance, transfer or
lease of the properties and assets of the Operating Partnership substantially as
an entirety in accordance with Section 801, the successor Person formed by such
consolidation or into which the Operating Partnership is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Operating Partnership under this
Indenture with the same effect as if such successor Person had been named as the
Operating Partnership herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.

                                      -45-
<PAGE>

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

SECTION 901.      Supplemental Indentures Without Consent of Holders.

         Without the consent of any Holders, the Operating Partnership, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:

                  (1) to evidence the succession of another Person to the
         Operating Partnership and the assumption by any such successor of the
         covenants of the Operating Partnership herein and in the Securities; or

                  (2) to add to the covenants of the Operating Partnership for
         the benefit of the Holders of all or any series of Securities (and if
         such covenants are to be for the benefit of less than all series of
         Securities, stating that such covenants are expressly being included
         solely for the benefit of such series) or to surrender any right or
         power herein conferred upon the Operating Partnership; or

                  (3) to add any additional Events of Default for the benefit of
         the Holders of all or any series of Securities (and if such additional
         Events of Default are to be for the benefit of less than all series of
         Securities, stating that such additional Events of Default are
         expressly being included solely for the benefit of such series); or

                  (4) to add to or change any of the provisions of this
         Indenture to such extent as shall be necessary to permit or facilitate
         the issuance of Securities in bearer form, registrable or not
         registrable as to principal, and with or without interest coupons, or
         to permit or facilitate the issuance of Securities in uncertificated
         form; or

                  (5) to add to, change or eliminate any of the provisions of
         this Indenture in respect of one or more series of Securities, provided
         that any such addition, change or elimination (A) shall neither (i)
         apply to any Security of any series created prior to the execution of
         such supplemental indenture and entitled to the benefit of such
         provision nor (ii) modify the rights of the Holder of any such Security
         with respect to such provision or (B) shall become effective only when
         there is no such Security Outstanding; or

                  (6) to secure the Securities pursuant to the provisions of
         Section 801(3) or otherwise; or

                  (7) to establish the form or terms of Securities of any series
         as permitted by Sections 201 and 301; or

                  (8) to evidence and provide for the acceptance of appointment
         hereunder by a successor Trustee with respect to the Securities of one
         or more series and to add to or change any of the provisions of this
         Indenture as shall be necessary to provide for or facilitate the
         administration of the trusts hereunder by more than one Trustee,
         pursuant to the requirements of Section 611; or

                                      -46-
<PAGE>

                  (9) to cure any ambiguity, to correct or supplement any
         provision herein which may be defective or inconsistent with any other
         provision herein, or to make any other provisions with respect to
         matters or questions arising under this Indenture, provided that such
         action pursuant to this Clause (9) shall not adversely affect the
         interests of the Holders of Securities of any series in any material
         respect.

SECTION 902.      Supplemental Indentures With Consent of Holders.

         With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Operating
Partnership and the Trustee, the Operating Partnership, when authorized by a
Board Resolution, and the Trustee may 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 Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security affected
thereby,

                  (1) change the Stated Maturity of the principal of, or any
         installment of principal of or interest on, any Security, or reduce the
         principal amount thereof or the rate of interest thereon or any premium
         payable upon the redemption thereof, or reduce the amount of the
         principal of an Original Issue Discount Security or any other Security
         which would be due and payable upon a declaration of acceleration of
         the Maturity thereof pursuant to Section 502, or change any Place of
         Payment where, or the coin or currency in which, any Security or any
         premium or interest thereon is payable, or impair the right to
         institute suit for the enforcement of any such payment on or after the
         Stated Maturity thereof (or, in the case of redemption, on or after the
         Redemption Date), or

                  (2) reduce the percentage in principal amount of the
         Outstanding Securities of any series, the consent of whose Holders is
         required for any such supplemental indenture, or the consent of whose
         Holders 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, or

                  (3) modify any of the provisions of this Section, Section 513
         or Section 1008, except to increase any such percentage or to provide
         that certain other provisions of this Indenture cannot be modified or
         waived without the consent of the Holder of each Outstanding Security
         affected thereby; provided, however, that this clause shall not be
         deemed to require the consent of any Holder with respect to changes in
         the references to "the Trustee" and concomitant changes in this Section
         and Section 1008, or the deletion of this proviso, in accordance with
         the requirements of Sections 611 and 901(8).

                  A supplemental indenture which changes or eliminates any
         covenant or other provision of this Indenture which has expressly been
         included solely for the benefit of one or more particular series of
         Securities, or which modifies the rights of the Holders of Securities
         of such series with respect to such covenant or other provision, shall
         be deemed not to affect the rights under this Indenture of the Holders
         of Securities of any other series.

                                      -47-
<PAGE>

         It shall not be necessary for any Act of Holders 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.

         The Operating Partnership may, but shall not be obligated to, fix a
record date for the purpose of determining the Persons entitled to consent to
any indenture supplemental hereto. If a record date is fixed, the Holders on
such record date, or their duly designated proxies, and only such Persons, shall
be entitled to consent to such supplemental indenture, whether or not such
Holders remain Holders after such record date; provided, that unless such
consent shall have become effective by virtue of the requisite percentage having
been obtained prior to the date which is 90 days after such record date, any
such consent previously given shall automatically and without further action by
any Holder be cancelled and of no further effect.

SECTION 903.      Execution of Supplemental Indentures.

         In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

SECTION 904.      Effect of Supplemental Indentures.

         Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

SECTION 905.      Conformity with Trust Indenture Act.

         Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

SECTION 906.      Reference in Securities to Supplemental Indentures.

         Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Operating
Partnership shall so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Operating Partnership, to any
such supplemental indenture may be prepared and executed by the Operating
Partnership and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.

                                      -48-
<PAGE>

                                   ARTICLE TEN

                                    COVENANTS

SECTION 1001.     Payment of Principal, Premium and Interest.

         The Operating Partnership covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of and
any premium and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.

SECTION 1002.     Maintenance of Office or Agency.

         The Operating Partnership will maintain in each Place of Payment for
any series of Securities an office or agency where Securities of that series may
be presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Operating Partnership in respect of the Securities of
that series and this Indenture may be served. The Operating Partnership will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Operating Partnership
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Operating Partnership hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.

         The Operating Partnership may also from time to time designate one or
more other offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Operating Partnership of its
obligation to maintain an office or agency in each Place of Payment for
Securities of any series for such purposes. The Operating Partnership will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.

         With respect to any Global Security, and except as otherwise may be
specified for such Global Security as contemplated by Section 301, the Corporate
Trust Office of the Trustee shall be the Place of Payment where such Global
Security may be presented or surrendered for payment or for registration of
transfer or exchange, or where Successor Securities may be delivered in exchange
therefore, provided, however, that any such payment, presentation, surrender or
delivery effected pursuant to the Applicable Procedures of the Depositary for
such Global Security shall be deemed to have been effected at the Place of
Payment for such Global Security in accordance with the provisions of this
Indenture.

SECTION 1003.     Money for Securities Payments to Be Held in Trust.

         If the Operating Partnership shall at any time act as its own Paying
Agent with respect to any series of Securities, it will, on or before each due
date of the principal of or any premium or interest on any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium and interest so

                                      -49-
<PAGE>

becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and will promptly notify the Trustee of its action or
failure so to act.

         Whenever the Operating Partnership shall have one or more Paying Agents
for any series of Securities, it will, prior to each due date of the principal
of or any premium or interest on any Securities of that series, deposit (or, if
the Operating Partnership has deposited any trust funds with a trustee pursuant
to Section 1304(1), cause such trustee to deposit) with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Operating
Partnership will promptly notify the Trustee of its action or failure so to act.

         The Operating Partnership will cause each Paying Agent for any series
of Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will (1) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2)
during the continuance of any default by the Operating Partnership (or any other
obligor upon the Securities of that series) in the making of any payment in
respect of the Securities of that series, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent for payment in respect of the Securities of that series.

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

         Any money deposited with the Trustee or any Paying Agent, or then held
by the Operating Partnership, in trust for the payment of the principal of or
any premium or interest on any Security of any series and remaining unclaimed
for two years after such principal, premium or interest has become due and
payable shall be paid to the Operating Partnership on Operating Partnership
Request, or (if then held by the Operating Partnership) shall be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Operating Partnership for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Operating Partnership as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Operating Partnership cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in New York, New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Operating Partnership.

SECTION 1004.     Statement by Officers as to Default.

         The Operating Partnership will deliver to the Trustee, within 120 days
after the end of each fiscal year of the Operating Partnership ending after the
date hereof, an Officers' Certificate, stating whether or not to the best
knowledge of the signers thereof the Operating Partnership is in

                                      -50-
<PAGE>

default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Operating Partnership
shall be in default, specifying all such defaults and the nature and status
thereof of which they may have knowledge.

SECTION 1005.     Existence.

         Subject to Article Eight, the Operating Partnership will do or cause to
be done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Operating Partnership shall not be required to preserve any such right
or franchise if the Board of Trustees shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Operating
Partnership and that the loss thereof is not disadvantageous in any material
respect to the Holders of Outstanding Securities.

SECTION 1006.     Maintenance of Properties.

         The Operating Partnership will cause all properties used or useful in
the conduct of its business or the business of any Subsidiary to be maintained
and kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Operating Partnership may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Operating
Partnership from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Operating
Partnership, desirable in the conduct of its business or the business of any
Subsidiary and not disadvantageous in any material respect to the Holders of
Outstanding Securities.

SECTION 1007.     Payment of Taxes and Other Claims.

         The Operating Partnership will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Operating Partnership or any
Subsidiary or upon the income, profits or property of the Operating Partnership
or any Subsidiary, and (2) all lawful claims for labor, materials and supplies
which, if unpaid, might by law become a lien upon the property of the Operating
Partnership or any Subsidiary; provided, however, that the Operating Partnership
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.

SECTION 1008.     Insurance.

         The Operating Partnership will cause each of its properties and each of
the properties of its Subsidiaries which are of an insurable nature to be
insured against loss of damage with insurers of recognized responsibility, in
commercially reasonable amounts and types.

                                      -51-
<PAGE>

SECTION 1009.     Provision of Financial Information.

         Whether or not the Operating Partnership is subject to Section 13 or
Section 15(d) of the Exchange Act, the Operating Partnership will, to the extent
permitted under the Exchange Act, file with the Commission the annual reports,
quarterly reports and other documents that the Operating Partnership would have
been required to file with the Commission pursuant to Section 13 or Section
15(d) of the Exchange Act (the "Financial Statements") if the Operating
Partnership were so subject, such documents to be filed with the Commission on
or prior to the respective dates (the "Required Filing Dates") by which the
Operating Partnership would have been required so to file such documents if the
Operating Partnership were so subject.

         The Operating Partnership will also in any event (x) within 15 days of
each Required Filing Date (i) transmit by mail to all Holders, as their names
and addresses appear in the Security Register, without cost to such Holders,
copies of the annual reports and quarterly reports that the Operating
Partnership would have been required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act if the Operating Partnership
were subject to such Sections, and (ii) file with the Trustee copies of the
annual reports, quarterly reports and other documents that the Operating
Partnership would have been required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act if the Operating Partnership
were subject to such Sections and (y) if filing such documents by the Operating
Partnership with the Commission is not permitted under the Exchange Act,
promptly upon written request and payment of the reasonable cost of duplication
and delivery, supply copies of such documents to any prospective Holder.

SECTION 1010.     Waiver of Certain Covenants.

         Except as otherwise specified as contemplated by Section 301 for
Securities of a specific series, the Operating Partnership may, with respect to
the Securities of any series, omit in any particular instance to comply with any
term, provision or condition set forth in any covenant provided pursuant to
Section 301(18), 901(2) or 901(7) for the benefit of the Holders of such series,
in Article Eight, or in any of Sections 1005 through 1009, inclusive, if before
the time for such compliance the Holders of at least a majority in principal
amount of the Outstanding Securities of such series shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Operating Partnership and the duties of the Trustee in respect of any
such term, provision or condition shall remain in full force and effect.

SECTION 1011.     Calculation of Original Issue Discount.

         The Operating Partnership shall file with the Trustee promptly at the
end of each calendar year a written notice specifying the amount of original
issue discount (including daily rates and accrual periods) accrued on
Outstanding Securities as of the end of such year, but only if as of the end of
such year Securities issued at an original issue discount are then Outstanding.

                                      -52-
<PAGE>

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

SECTION 1101.     Applicability of Article.

         Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for such Securities) in
accordance with this Article.

SECTION 1102.     Election to Redeem; Notice to Trustee.

         The election of the Operating Partnership to redeem any Securities
shall be evidenced by a Board Resolution or in another manner specified as
contemplated by Section 301 for such Securities. In case of any redemption at
the election of the Operating Partnership of less than all the Securities of any
series (including any such redemption affecting only a single Security), the
Operating Partnership shall, at least 60 days prior to the Redemption Date fixed
by the Operating Partnership (unless a shorter notice shall be satisfactory to
the Trustee), notify the Trustee of such Redemption Date, of the principal
amount of Securities of such series to be redeemed and, if applicable, of the
tenor of the Securities to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Operating Partnership shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.

SECTION 1103.     Selection by Trustee of Securities to Be Redeemed.

         If less than all the Securities of any series are to be redeemed
(unless all the Securities of such series and of a specified tenor are to be
redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.

         The Trustee shall promptly notify the Operating Partnership in writing
of the Securities selected for redemption as aforesaid and, in case of any
Securities selected for partial redemption as aforesaid, the principal amount
thereof to be redeemed.

         The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.

                                      -53-
<PAGE>

         For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.

SECTION 1104.     Notice of Redemption.

         Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register, with a copy to the Trustee and any Paying Agent.

         All notices of redemption shall identify the Securities to be redeemed,
including CUSIP number, if any, and shall state:

                  (1) the Redemption Date,

                  (2) the Redemption Price,

                  (3) if less than all the Outstanding Securities of any series
         consisting of more than a single Security are to be redeemed, the
         identification (and, in the case of partial redemption of any such
         Securities, the principal amounts) of the particular Securities to be
         redeemed and, if less than all the Outstanding Securities of any series
         consisting of a single Security are to be redeemed, the principal
         amount of the particular Security to be redeemed,

                  (4) that on the Redemption Date the Redemption Price will
         become due and payable upon each such Security to be redeemed and, if
         applicable, that interest thereon will cease to accrue on and after
         said date,

                  (5) the place or places where each such Security is to be
         surrendered for payment of the Redemption Price, and

                  (6) that the redemption is for a sinking fund, if such is the
         case.

         Notice of redemption of Securities to be redeemed at the election of
the Operating Partnership shall be given by the Operating Partnership or, at the
Operating Partnership's request made to the Trustee at least 35 days prior to
the Redemption Date, by the Trustee in the name and at the expense of the
Operating Partnership and shall be irrevocable.

SECTION 1105.     Deposit of Redemption Price.

         Prior to any Redemption Date, the Operating Partnership shall deposit
with the Trustee or with a Paying Agent (or, if the Operating Partnership is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date or the
Securities of the series provide otherwise) accrued interest on, all the
Securities which are to be redeemed on that date.

                                      -54-
<PAGE>

SECTION 1106.     Securities Payable on Redemption Date.

         Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Operating Partnership shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Operating Partnership at the Redemption Price,
together, if applicable, with accrued interest to the Redemption Date; provided,
however, that, unless otherwise specified as contemplated by Section 301,
installments of interest whose Stated Maturity is on or prior to the Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.

         If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.

SECTION 1107.     Securities Redeemed in Part.

         Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Operating Partnership or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Operating Partnership and the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing), and the
Operating Partnership shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new Security or
Securities of the same series and of like tenor, of any authorized denomination
as requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered.

                                 ARTICLE TWELVE

                                  SINKING FUNDS

SECTION 1201.     Applicability of Article.

         The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise specified as
contemplated by Section 301 for such Securities.

         The minimum amount of any sinking fund payment provided for by the
terms of any Securities is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of such Securities is herein referred to as an "optional sinking fund
payment". If provided for by the terms of any Securities, the cash amount of any
sinking fund payment may be subject to reduction as provided in Section 1202.
Each sinking fund payment shall be applied to the redemption of Securities as
provided for by the terms of such Securities.

                                      -55-
<PAGE>

SECTION 1202.     Satisfaction of Sinking Fund Payments with Securities.

         The Operating Partnership (1) may deliver Outstanding Securities of a
series (other than any previously called for redemption) and (2) may apply as a
credit Securities of a series which have been redeemed either at the election of
the Operating Partnership pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part of any
sinking fund payment with respect to any Securities of such series required to
be made pursuant to the terms of such Securities as and to the extent provided
for by the terms of such Securities; provided that the Securities to be so
credited have not been previously so credited. The Securities to be so credited
shall be received and credited for such purpose by the Trustee at the Redemption
Price, as specified in the Securities so to be redeemed, for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.

SECTION 1203.     Redemption of Securities for Sinking Fund.

         Not less than 60 days prior to each sinking fund payment date for any
Securities, the Operating Partnership will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 nor more than 45 days prior to each such sinking
fund payment date, the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Operating Partnership in the manner provided in Section 1104. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Sections 1106 and 1107.

                                ARTICLE THIRTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1301.     Operating Partnership's Option to Effect Defeasance or
                  Covenant Defeasance.

         If applicable to a particular series of Securities, the Operating
Partnership may elect, at its option at any time, to have Section 1302 or
Section 1303 applied to any such series of Securities or any Securities of such
series, as the case may be, designated pursuant to Section 301 as being
defeasible pursuant to such Section 1302 or 1303, in accordance with any
applicable requirements provided pursuant to Section 301 and upon compliance
with the conditions set forth below in this Article. Any such election shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities.

SECTION 1302.     Defeasance and Discharge.

         Upon the Operating Partnership's exercise of its option (if any) to
have this Section applied to any applicable series of Securities or any
Securities of such series, as the case may be, the Operating Partnership shall
be deemed to have been discharged from its obligations with respect to such
Securities as provided in this Section on and after the date the conditions set
forth

                                      -56-
<PAGE>

in Section 1304 are satisfied (hereinafter called "Defeasance"). For this
purpose, such Defeasance means that the Operating Partnership shall be deemed to
have paid and discharged the entire indebtedness represented by such Securities
and to have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Operating Partnership, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until
otherwise terminated or discharged hereunder: (1) the rights of Holders of such
Securities to receive, solely from the trust fund described in Section 1304 and
as more fully set forth in such Section, payments in respect of the principal of
and any premium and interest on such Securities when payments are due, (2) the
Operating Partnership's obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (4) this Article. Subject to
compliance with this Article, the Operating Partnership may exercise its option
(if any) to have this Section applied to any applicable Securities
notwithstanding the prior exercise of its option (if any) to have Section 1303
applied to such Securities.

SECTION 1303.     Covenant Defeasance.

         Upon the Operating Partnership's exercise of its option (if any) to
have this Section applied to any applicable series of Securities or any
Securities of such series, as the case may be, (1) the Operating Partnership
shall be released from its obligations under Section 801(3), Sections 1005
through 1009, inclusive, and any covenants provided pursuant to Section 301(18),
901(2) or 901(7) for the benefit of the Holders of such Securities and (2) the
occurrence of any event specified in Sections 501(4) (with respect to any of
Section 801(3), Sections 1005 through 1009, inclusive, and any such covenants
provided pursuant to Section 301(18), 901(2) or 901(7)), 501(5) and 501(8) shall
be deemed not to be or result in an Event of Default, in each case with respect
to such Securities as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to such Securities, the Operating Partnership may omit to comply with
and shall have no liability in respect of any term, condition or limitation set
forth in any such specified Section (to the extent so specified in the case of
Section 501(4)), whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or by reason of any reference in any such
Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.

SECTION 1304.     Conditions to Defeasance or Covenant Defeasance.

         The following shall be the conditions to the application of Section
1302 or Section 1303 to any applicable series of Securities or any Securities of
such series, as the case may be:

                  (1) The Operating Partnership shall irrevocably have deposited
         or caused to be deposited with the Trustee (or another trustee which
         satisfies the requirements contemplated by Section 609 and agrees to
         comply with the provisions of this Article applicable to it) as trust
         funds in trust for the purpose of making the following payments,
         specifically pledged as security for, and dedicated solely to, the
         benefits of the Holders of such Securities, (A) money in an amount, or
         (B) U.S. Government Obligations which through the scheduled payment of
         principal and interest in respect thereof in accordance with their
         terms will provide, not later than one day before the due date of any
         payment, money in an amount, or (C) a combination thereof, in each case
         sufficient, in the opinion of a nationally recognized firm of
         independent public accountants expressed in a written

                                      -57-
<PAGE>

         certification thereof delivered to the Trustee, to pay and discharge,
         and which shall be applied by the Trustee (or any such other qualifying
         trustee) to pay and discharge, the principal of and any premium and
         interest on such Securities on the respective Stated Maturities, in
         accordance with the terms of this Indenture and such Securities. As
         used herein, "U.S. Government Obligation" means (x) any security which
         is (i) a direct obligation of the United States of America for the
         payment of which the full faith and credit of the United States of
         America is pledged or (ii) an obligation of a Person controlled or
         supervised by and acting as an agency or instrumentality of the United
         States of America the payment of which is unconditionally guaranteed as
         a full faith and credit obligation by the United States of America,
         which, in either case (i) or (ii), is not callable or redeemable at the
         option of the issuer thereof, and (y) any depositary receipt issued by
         a bank (as defined in Section 3(a)(2) of the Securities Act) as
         custodian with respect to any U.S. Government Obligation which is
         specified in Clause (x) above and held by such bank for the account of
         the holder of such depositary receipt, or with respect to any specific
         payment of principal of or interest on any U.S. Government Obligation
         which is so specified and held, provided that (except as required by
         law) such custodian is not authorized to make any deduction from the
         amount payable to the holder of such depositary receipt from any amount
         received by the custodian in respect of the U.S. Government Obligation
         or the specific payment of principal or interest evidenced by such
         depositary receipt.

                  (2) In the event of an election to have Section 1302 apply to
         any applicable series of Securities or any Securities of such series,
         as the case may be, the Operating Partnership shall have delivered to
         the Trustee an Opinion of Counsel stating that (A) the Operating
         Partnership has received from, or there has been published by, the
         Internal Revenue Service a ruling or (B) since the date of this
         instrument, there has been a change in the applicable Federal income
         tax law, in either case (A) or (B) to the effect that, and based
         thereon such opinion shall confirm that, the Holders of such Securities
         will not recognize gain or loss for Federal income tax purposes as a
         result of the deposit, Defeasance and discharge to be effected with
         respect to such Securities and will be subject to Federal income tax on
         the same amount, in the same manner and at the same times as would be
         the case if such deposit, Defeasance and discharge were not to occur.

                  (3) In the event of an election to have Section 1303 apply to
         any applicable series of Securities or any Securities of such series,
         as the case may be, the Operating Partnership shall have delivered to
         the Trustee an Opinion of Counsel to the effect that the Holders of
         such Securities will not recognize gain or loss for Federal income tax
         purposes as a result of the deposit and Covenant Defeasance to be
         effected with respect to such Securities and will be subject to Federal
         income tax on the same amount, in the same manner and at the same times
         as would be the case if such deposit and Covenant Defeasance were not
         to occur.

                  (4) The Operating Partnership shall have delivered to the
         Trustee an Officers' Certificate to the effect that neither such
         Securities nor any other Securities of the same series, if then listed
         on any securities exchange, will be delisted as a result of such
         deposit.

                  (5) No event which is, or after notice or lapse of time or
         both would become, an Event of Default with respect to such Securities
         or any other Securities shall have

                                      -58-
<PAGE>

         occurred and be continuing at the time of such deposit or, with regard
         to any such event specified in Sections 501(6) and (7), at any time on
         or prior to the 90th day after the date of such deposit (it being
         understood that this condition shall not be deemed satisfied until
         after such 90th day).

                  (6) Such Defeasance or Covenant Defeasance shall not cause the
         Trustee to have a conflicting interest within the meaning of the Trust
         Indenture Act (assuming all Securities are in default within the
         meaning of such Act).

                  (7) Such Defeasance or Covenant Defeasance shall not result in
         a breach or violation of, or constitute a default under, any other
         agreement or instrument to which the Operating Partnership is a party
         or by which it is bound.

                  (8) Such Defeasance or Covenant Defeasance shall not result in
         the trust arising from such deposit constituting an investment company
         within the meaning of the Investment Company Act unless such trust
         shall be registered under such Act or exempt from registration
         thereunder.

                  (9) The Operating Partnership shall have delivered to the
         Trustee an Officers' Certificate and an Opinion of Counsel, each
         stating that all conditions precedent with respect to such Defeasance
         or Covenant Defeasance have been complied with.

SECTION 1305.     Deposited Money and U.S. Government Obligations to Be Held in
                  Trust; Miscellaneous Provisions.

         Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee or other qualifying trustee (solely for purposes of this
Section and Section 1306, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 1304 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Operating Partnership
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal and any premium and interest, but money so held in trust need not be
segregated from other funds except to the extent required by law.

         The Operating Partnership shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1304 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of Outstanding Securities.

         Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Operating Partnership from time to time upon
Operating Partnership Request any money or U.S. Government Obligations held by
it as provided in Section 1304 with respect to any Securities which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect the Defeasance or Covenant Defeasance, as the case may be, with respect
to such Securities.

                                      -59-
<PAGE>

SECTION 1306.     Reinstatement.

         If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Operating Partnership has been
discharged or released pursuant to Section 1302 or 1303 shall be revived and
reinstated as though no deposit had occurred pursuant to this Article with
respect to such Securities, until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust pursuant to Section 1305 with respect
to such Securities in accordance with this Article; provided, however, that if
the Operating Partnership makes any payment of principal of or any premium or
interest on any such Security following such reinstatement of its obligations,
the Operating Partnership shall be subrogated to the rights (if any) of the
Holders of such Securities to receive such payment from the money so held in
trust.

                                      -60-
<PAGE>

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

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective seals to be hereunto affixed and attested,
all as of the day and year first above written.

                                                     VORNADO REALTY L.P.

                                                     By: VORNADO REALTY TRUST,
                                                     its general partner

                                                     By: _____________

[seal]

Attest:

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

                                                     THE BANK OF NEW YORK
                                                          Trustee:

                                                     By: ______________

[seal]

Attest:

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

                                      -61-
<PAGE>

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

         On the day of , before me personally came to me known, who, being by me
duly sworn, did depose and say that he is of Vornado Realty Trust, a Maryland
real estate investment trust described in and which executed the foregoing
instrument; that he knows the seal of said trust; that the seal affixed to said
instrument is such seal; that it was so affixed by authority of the Board of
Trustees of said trust; and that he signed his name thereto by like authority.

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

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

         On the day of before me personally came , to me known, who, being by me
duly sworn, did depose and say that he is of , a corporation described in and
which 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 authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.

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

                                      -62-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}]]