Document:

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                                                                     Exhibit 4.7

                          NETSCREEN TECHNOLOGIES, INC.

                             2002 STOCK OPTION PLAN

                           As Adopted November 1, 2002

      1. PURPOSE. The purpose of this Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company, its Parent and Subsidiaries, by
offering them an opportunity to participate in the Company's future performance
through awards of Options. Capitalized terms not defined in the text are defined
in Section 20.

      2. SHARES SUBJECT TO THE PLAN.

            2.1 Number of Shares Available. Subject to Sections 2.2 and 15, the
total number of Shares reserved and available for grant and issuance pursuant to
this Plan will be 125,000 Shares plus Shares that are subject to issuance upon
exercise of an Option but cease to be subject to such Option for any reason
other than exercise of such Option. At all times the Company shall reserve and
keep available a sufficient number of Shares as shall be required to satisfy the
requirements of all outstanding Options granted under this Plan and all other
outstanding but unvested Awards granted under this Plan.

            2.2 Adjustment of Shares. In the event that the number of
outstanding shares is changed by a stock dividend, recapitalization, stock
split, reverse stock split, subdivision, combination, reclassification, similar
change in the capital structure of the Company without consideration or other
change in the corporate structure or capitalization affecting the Company's
present Common Stock, then (a) the number and the type of Shares reserved for
issuance under this Plan, (b) the number and the type of Shares that may be
granted pursuant to Section 3 below, (c) the Exercise Prices of and the number
of Shares subject to outstanding Options, may, upon approval of the Board in its
discretion, be proportionately adjusted in compliance with applicable securities
laws; provided, however, that fractions of a Share will not be issued but will
either be replaced by a cash payment equal to the Fair Market Value of such
fraction of a Share or will be rounded up to the nearest whole Share, as
determined by the Committee.

      3. ELIGIBILITY. Options may be granted to employees, officers,
consultants, independent contractors and advisors of the Company or any Parent
or Subsidiary of the Company; provided such consultants, contractors and
advisors render bona fide services not in connection with the offer and sale of
securities in a capital-raising transaction; and, provided further, that Options
granted to Insiders may not exceed in the aggregate fifty percent (50%) of all
Shares that are reserved for grant under this Plan. A person may be granted more
than one Option under this Plan.

      4. ADMINISTRATION.

            4.1 Committee Authority. This Plan will be administered by the
Committee or by the Board acting as the Committee. Subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan and
shall have the authority to:

            (a)   construe and interpret this Plan, any Award Agreement and any
                  other agreement or document executed pursuant to this Plan;

            (b)   prescribe, amend and rescind rules and regulations relating to
                  this Plan or any Award;

            (c)   select persons to receive Awards;

            (d)   determine the form and terms of Awards;

            (e)   determine the number of Shares or other consideration subject
                  to Awards;
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                                                    Netscreen Technologies, Inc.
                                                          2002 Stock Option Plan

            (f)   determine whether Awards will be granted singly, in
                  combination with, in tandem with, in replacement of, or as
                  alternatives to, other Awards under this Plan or any other
                  incentive or compensation plan of the Company or any Parent or
                  Subsidiary of the Company;

            (g)   grant waivers of Plan or Award conditions;

            (h)   determine the vesting, exercisability and payment of Awards;

            (i)   correct any defect, supply any omission or reconcile any
                  inconsistency in this Plan, any Award or any Award Agreement;

            (j)   determine whether an Award has been earned; and

            (k)   make all other determinations necessary or advisable for the
                  administration of this Plan.

            4.2 Committee Discretion. Any determination made by the Committee
with respect to any Award will be made in its sole discretion at the time of
grant of the Award or, unless in contravention of any express term of this Plan
or Award, at any later time, and such determination will be final and binding on
the Company and on all persons having an interest in any Award under this Plan.
The Committee may delegate to one or more officers of the Company the authority
to grant an Award under this Plan to Participants who are not Insiders of the
Company.

      5. OPTIONS. The Committee may grant Options to eligible persons and will
determine the number of Shares subject to the Option, the Exercise Price of the
Option, the period during which the Option may be exercised, and all other terms
and conditions of the Option, subject to the following:

            5.1 Form of Option Grant. Each Option granted under this Plan will
be evidenced by an Award Agreement ("STOCK OPTION AGREEMENT") which will
expressly identify the Option as a nonqualified stock option ("NQSO"), and will
be in such form and contain such provisions (which need not be the same for each
Participant) as the Committee may from time to time approve, and which will
comply with and be subject to the terms and conditions of this Plan.

            5.2 Date of Grant. The date of grant of an Option will be the date
on which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy of
this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.

            5.3 Exercise Period. Options may be exercisable within the times or
upon the events determined by the Committee as set forth in the Stock Option
Agreement governing such Option; provided, however, that no Option will be
exercisable after the expiration of ten (10) years from the date the Option is
granted. The Committee also may provide for Options to become exercisable at one
time or from time to time, periodically or otherwise, in such number of Shares
or percentage of Shares as the Committee determines.

            5.4 Exercise Price. The Exercise Price of an Option will be
determined by the Committee when the Option is granted; provided that the
Exercise Price of an Option will be not less than the Fair Market Value of the
Shares on the date of grant. Payment for the Shares purchased may be made in
accordance with Section 6 of this Plan.

            5.5 Method of Exercise. Options may be exercised only by delivery to
the Company of a written stock option exercise agreement (the "EXERCISE
AGREEMENT") in a form approved by the Committee (which need not be the same for
each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement, if
any, and such representations and agreements regarding Participant's investment
intent and access to information and other matters, if any, as may be required
or desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price for the number of Shares being
purchased.

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                                                    Netscreen Technologies, Inc.
                                                          2002 Stock Option Plan

            5.6 Termination. Notwithstanding the exercise periods set forth in
the Stock Option Agreement, exercise of an Option will always be subject to the
following:

            (a)   If the Participant is Terminated for any reason except death,
                  Disability or Cause, then the Participant may exercise such
                  Participant's Options only to the extent that such Options
                  would have been exercisable upon the Termination Date no later
                  than three (3) months after the Termination Date (or such
                  shorter or longer time period not exceeding five (5) years as
                  may be determined by the Committee), but in any event, no
                  later than the expiration date of the Options.

            (b)   If the Participant is Terminated because of Participant's
                  death or Disability (or the Participant dies within three (3)
                  months after a Termination other than for Cause or because of
                  Participant's Disability), then Participant's Options may be
                  exercised only to the extent that such Options would have been
                  exercisable by Participant on the Termination Date and must be
                  exercised by Participant (or Participant's legal
                  representative or authorized assignee) no later than twelve
                  (12) months after the Termination Date (or such shorter or
                  longer time period not exceeding five (5) years as may be
                  determined by the Committee), but in any event no later than
                  the expiration date of the Options.

            (c)   If the Participant is Terminated for Cause, then Participant's
                  Options shall expire on such Participant's Termination Date,
                  or at such later time and on such conditions as are determined
                  by the Committee, but in any event no later than the
                  expiration date of the Options.

            5.7 Limitations on Exercise. The Committee may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from exercising
the Option for the full number of Shares for which it is then exercisable.

            5.8 Modification, Extension or Renewal. The Committee may modify,
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant's rights under
any Option previously granted. The Committee may reduce the Exercise Price of
outstanding Options without the consent of Participants affected by a written
notice to them; provided, however, that the Exercise Price may not be reduced
below the minimum Exercise Price that would be permitted under Section 5.4 of
this Plan for Options granted on the date the action is taken to reduce the
Exercise Price.

      6.    PAYMENT FOR SHARE PURCHASES.

            6.1 Payment. Payment for Shares purchased pursuant to this Plan may
be made in cash (by check) or, where expressly approved for the Participant by
the Committee and where permitted by law:

            (a)   by cancellation of indebtedness of the Company to the
                  Participant;

            (b)   by surrender of shares that either: (1) have been owned by
                  Participant for more than six (6) months and have been paid
                  for within the meaning of SEC Rule 144 (and, if such shares
                  were purchased from the Company by use of a promissory note,
                  such note has been fully paid with respect to such shares); or
                  (2) were obtained by Participant in the public market;

            (c)   by waiver of compensation due or accrued to the Participant
                  for services rendered;

            (d)   with respect only to purchases upon exercise of an Option, and
                  provided that a public market for the Company's stock exists
                  and, provided further, that payment by such method is in
                  compliance with applicable law:

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                                                    Netscreen Technologies, Inc.
                                                          2002 Stock Option Plan

                  (1)   through a "same day sale" commitment from the
                        Participant and a broker-dealer that is a member of the
                        National Association of Securities Dealers (an "NASD
                        DEALER") whereby the Participant irrevocably elects to
                        exercise the Option and to sell a portion of the Shares
                        so purchased to pay for the Exercise Price, and whereby
                        the NASD Dealer irrevocably commits upon receipt of such
                        Shares to forward the Exercise Price directly to the
                        Company; or

                  (2)   through a "margin" commitment from the Participant and a
                        NASD Dealer whereby the Participant irrevocably elects
                        to exercise the Option and to pledge the Shares so
                        purchased to the NASD Dealer in a margin account as
                        security for a loan from the NASD Dealer in the amount
                        of the Exercise Price, and whereby the NASD Dealer
                        irrevocably commits upon receipt of such Shares to
                        forward the Exercise Price directly to the Company; or

            (e)   by any combination of the foregoing.

      7. WITHHOLDING TAXES.

            7.1 Withholding Generally. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax
requirements.

            7.2 Stock Withholding. When, under applicable tax laws, a
Participant incurs tax liability in connection with the exercise or vesting of
any Award that is subject to tax withholding and the Participant is obligated to
pay the Company the amount required to be withheld, the Committee may in its
sole discretion allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be issued
that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld, determined on the date that the amount of tax to be
withheld is to be determined. All elections by a Participant to have Shares
withheld for this purpose will be made in accordance with the requirements
established by the Committee and be in writing in a form acceptable to the
Committee.

      8. TRANSFERABILITY.

            Except as otherwise provided in this Section 8, Awards granted under
this Plan, and any interest therein, will not be transferable or assignable by
Participant, and may not be made subject to execution, attachment or similar
process, otherwise than by will or by the laws of descent and distribution or as
determined by the Committee and set forth in the Award Agreement. Unless
otherwise restricted by the Committee, an Option shall be exercisable: (i)
during the Participant's lifetime only by (A) the Participant, (B) the
Participant's guardian or legal representative, (C) a Family Member of the
Participant who has acquired the Option by "permitted transfer;" and (ii) after
Participant's death, by the legal representative of the Participant's heirs or
legatees. "Permitted transfer" means, as authorized by this Plan and the
Committee in an Option, any transfer effected by the Participant during the
Participant's lifetime of an interest in such Option but only such transfers
which are by gift or domestic relations order. A permitted transfer does not
include any transfer for value and neither of the following are transfers for
value: (a) a transfer of under a domestic relations order in settlement of
marital property rights or (b) a transfer to an entity in which more than fifty
percent of the voting interests are owned by Family Members or the Participant
in exchange for an interest in that entity.

      9. PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.

            9.1 Voting and Dividends. No Participant will have any of the rights
of a stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be
a stockholder and have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that

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                                                    Netscreen Technologies, Inc.
                                                          2002 Stock Option Plan

the Participant will have no right to retain such stock dividends or stock
distributions with respect to Shares that are repurchased at the Participant's
Purchase Price or Exercise Price pursuant to Section 9.

            9.2 Financial Statements. The Company will provide financial
statements to each Participant prior to such Participant's purchase of Shares
under this Plan, and to each Participant annually during the period such
Participant has Awards outstanding; provided, however, the Company will not be
required to provide such financial statements to Participants whose services in
connection with the Company assure them access to equivalent information.

            9.3 Restrictions on Shares. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right to repurchase a portion of or all Unvested Shares held by a Participant
following such Participant's Termination at any time within ninety (90) days
after the later of Participant's Termination Date and the date Participant
purchases Shares under this Plan, for cash and/or cancellation of purchase money
indebtedness, at the Participant's Exercise Price or Purchase Price, as the case
may be.

      10. CERTIFICATES. All certificates for Shares or other securities
delivered under this Plan will be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable federal, state or foreign securities
law, or any rules, regulations and other requirements of the SEC or any stock
exchange or automated quotation system upon which the Shares may be listed or
quoted.

      11. ESCROW. To enforce any restrictions on a Participant's Shares, the
Committee may require the Participant to deposit all certificates representing
Shares, together with stock powers or other instruments of transfer approved by
the Committee, appropriately endorsed in blank, with the Company or an agent
designated by the Company to hold in escrow until such restrictions have lapsed
or terminated, and the Committee may cause a legend or legends referencing such
restrictions to be placed on the certificates.

      12. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from
time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards. The Committee may at any time buy from a
Participant an Award previously granted with payment in cash, Shares or other
consideration, based on such terms and conditions as the Committee and the
Participant may agree.

      13. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be
effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding
any other provision in this Plan, the Company will have no obligation to issue
or deliver certificates for Shares under this Plan prior to: (a) obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable; and/or (b) completion of any registration or other qualification
of such Shares under any state or federal law or ruling of any governmental body
that the Company determines to be necessary or advisable. The Company will be
under no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the Company
will have no liability for any inability or failure to do so.

      14. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary of the Company or limit in any way the right
of the Company or any Parent or Subsidiary of the Company to terminate
Participant's employment or other relationship at any time, with or without
cause.

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                                                    Netscreen Technologies, Inc.
                                                          2002 Stock Option Plan

      15. CORPORATE TRANSACTIONS.

            15.1 Assumption or Replacement of Awards by Successor. In the event
of (a) a dissolution or liquidation of the Company, (b) a merger or
consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation with a wholly-owned subsidiary, a reincorporation of
the Company in a different jurisdiction, or other transaction in which there is
no substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction (each, a "CORPORATE TRANSACTION"), any or all outstanding
Awards may be assumed, converted or replaced by the successor corporation (if
any), which assumption, conversion or replacement will be binding on all
Participants. In the alternative, the successor corporation may substitute
equivalent Awards or provide substantially similar consideration to Participants
as was provided to stockholders (after taking into account the existing
provisions of the Awards). The successor corporation may also issue, in place of
outstanding Shares of the Company held by the Participants, substantially
similar shares or other property subject to repurchase restrictions no less
favorable to the Participant. In the event such successor corporation (if any)
does not assume or substitute Awards, as provided above, pursuant to a
transaction described in this Subsection 15.1, the vesting with respect to such
Awards will fully and immediately accelerate. Notwithstanding anything in this
Plan to the contrary, the Committee may, in its sole discretion, provide that
the vesting of any or all Awards granted pursuant to this Plan will accelerate
upon a transaction described in this Section 15. If the Committee exercises such
discretion with respect to Options, such Options will become exercisable in full
prior to the consummation of such event at such time and on such conditions as
the Committee determines, and if such Options are not exercised prior to the
consummation of the corporate transaction, they shall terminate at such time as
determined by the Committee.

            15.2 Other Treatment of Awards. Subject to any greater rights
granted to Participants under the foregoing provisions of this Section 15, in
the event of the occurrence of any Corporate Transaction described in Section
15.1, any outstanding Awards will be treated as provided in the applicable
agreement or plan of merger, consolidation, dissolution, liquidation, or sale of
assets.

            15.3 Assumption of Awards by the Company. The Company, from time to
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either; (a) granting an Award under this Plan in substitution of
such other company's award; or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award
granted under this Plan. Such substitution or assumption will be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the exercise price and the number and nature of Shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.

      16. ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become effective on
the date on which the Plan is adopted by the Board (the "EFFECTIVE DATE"). Upon
the Effective Date, the Committee may grant Awards pursuant to this Plan.

      17. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided
herein, this Plan will terminate ten (10) years from the date this Plan is
adopted by the Board. This Plan and all agreements thereunder shall be governed
by and construed in accordance with the laws of the State of California.

      18. AMENDMENT OR TERMINATION OF PLAN. To the extent permitted by law, the
Board may at any time terminate or amend this Plan in any respect, including
without limitation amendment of any form of Award Agreement or instrument to be
executed pursuant to this Plan.

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                                                    Netscreen Technologies, Inc.
                                                          2002 Stock Option Plan

      19. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the
Board nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.

      20. DEFINITIONS. As used in this Plan, the following terms will have the
following meanings:

            "AWARD" means any grant of Options under this Plan.

            "AWARD AGREEMENT" means, with respect to each Award, the signed
written agreement between the Company and the Participant setting forth the
terms and conditions of the Award.

            "BOARD" means the Board of Directors of the Company.

            "CAUSE" means (i) the commission of an act of theft, embezzlement,
fraud, dishonesty, (b) a breach of fiduciary duty to the Company or a Parent or
Subsidiary of the Company or (c) a failure to materially perform the customary
duties of employee's employment.

            "CODE" means the Internal Revenue Code of 1986, as amended.

            "COMMITTEE" means the Compensation Committee of the Board.

            "COMPANY" means Netscreen Technologies, Inc. or any successor
corporation.

            "DISABILITY" total and permanent disability as defined in Section
22(e)(3) of the Code.

            "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

            "EXERCISE PRICE" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.

            "FAIR MARKET VALUE" means, as of any date, the value of a share of
the Company's Common Stock determined as follows:

            (a)   if such Common Stock is then quoted on the Nasdaq National
                  Market, its closing price on the Nasdaq National Market on the
                  date of determination as reported in The Wall Street Journal;

            (b)   if such Common Stock is publicly traded and is then listed on
                  a national securities exchange, its closing price on the date
                  of determination on the principal national securities exchange
                  on which the Common Stock is listed or admitted to trading as
                  reported in The Wall Street Journal;

            (c)   if such Common Stock is publicly traded but is not quoted on
                  the Nasdaq National Market nor listed or admitted to trading
                  on a national securities exchange, the average of the closing
                  bid and asked prices on the date of determination as reported
                  in The Wall Street Journal;

            (d)   in the case of an Award made on the Effective Date, the price
                  per share at which shares of the Company's Common Stock are
                  initially offered for sale to the public by the Company's
                  underwriters in the initial public offering of the Company's
                  Common Stock pursuant to a registration statement filed with
                  the SEC under the Securities Act; or

            (e)   if none of the foregoing is applicable, by the Committee in
                  good faith.

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                                                    Netscreen Technologies, Inc.
                                                          2002 Stock Option Plan

            "FAMILY MEMBER" includes any of the following:

            (a)   child, stepchild, grandchild, parent, stepparent, grandparent,
                  spouse, former spouse, sibling, niece, nephew, mother-in-law,
                  father-in-law, son-in-law, daughter-in-law, brother-in-law, or
                  sister-in-law of the Participant, including any such person
                  with such relationship to the Participant by adoption;

            (b)   any person (other than a tenant or employee) sharing the
                  Participant's household;

            (c)   a trust in which the persons in (a) and (b) have more
                  than fifty percent of the beneficial interest;

            (d)   a foundation in which the persons in (a) and (b) or the
                  Participant control the management of assets; or

            (e)   any other entity in which the persons in (a) and (b) or the
                  Participant own more than fifty percent of the voting
                  interest.

            "INSIDER" means an officer or director of the Company or any other
person whose transactions in the Company's Common Stock are subject to Section
16 of the Exchange Act.

            "OPTION" means an award of an option to purchase Shares pursuant to
Section 5.

            "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if each of such
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

            "PARTICIPANT" means a person who receives an Award under this Plan.

            "PLAN" means this Netscreen Technologies, Inc. 2002 Stock
Option Plan, as amended from time to time.

            "SEC" means the Securities and Exchange Commission.

            "SECURITIES ACT" means the Securities Act of 1933, as amended.

            "SHARES" means shares of the Company's Common Stock reserved for
issuance under this Plan, as adjusted pursuant to Sections 2 and 15, and any
successor security.

            "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

            "TERMINATION" or "TERMINATED" means, for purposes of this Plan with
respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, director, consultant, independent
contractor, or advisor to the Company or a Parent or Subsidiary of the Company.
An employee will not be deemed to have ceased to provide services in the case of
(i) sick leave, (ii) military leave, or (iii) any other leave of absence
approved by the Committee, provided, that such leave is for a period of not more
than 90 days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute or unless provided otherwise pursuant to
formal policy adopted from time to time by the Company and issued and
promulgated to employees in writing. In the case of any employee on an approved
leave of absence, the Committee may make such provisions respecting suspension
of vesting of the Award while on leave from the employ of the Company or a
Subsidiary as it may deem appropriate, except that in no event may an Option be
exercised after the expiration of the term set forth in the Option agreement.
The Committee will have sole discretion to determine whether a Participant has
ceased to

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                                                    Netscreen Technologies, Inc.
                                                          2002 Stock Option Plan

provide services and the effective date on which the Participant ceased to
provide services (the "TERMINATION DATE").

            "UNVESTED SHARES" means "Unvested Shares" as defined in the
Award Agreement.

            "VESTED SHARES" means "Vested Shares" as defined in the Award
Agreement.

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                                                                      NO. ______

                          NETSCREEN TECHNOLOGIES, INC.

                             2002 STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT

            This Stock Option Agreement (this "AGREEMENT") is made and entered
into as of the Date of Grant set forth below (the "DATE OF GRANT") by and
between Netscreen Technologies, Inc., a Delaware corporation (the "COMPANY"),
and the Optionee named below ("OPTIONEE"). Capitalized terms not defined herein
shall have the meanings ascribed to them in the Company's 2002 Stock Option Plan
(the "PLAN").

OPTIONEE:
                              --------------------------------------------------
SOCIAL SECURITY NUMBER:
                              --------------------------------------------------
OPTIONEE'S ADDRESS:
                              --------------------------------------------------
TOTAL OPTION SHARES:
                              --------------------------------------------------
EXERCISE PRICE PER SHARE:
                              --------------------------------------------------
DATE OF GRANT:
                              --------------------------------------------------
EXPIRATION DATE:
                              --------------------------------------------------
                              (unless earlier terminated under Section 3 hereof)

            1. GRANT OF OPTION. The Company hereby grants to Optionee a
nonqualified option (this "OPTION") to purchase up to the total number of shares
of Common Stock of the Company set forth above as Total Option Shares
(collectively, the "SHARES") at the Exercise Price Per Share set forth above
(the "EXERCISE PRICE"), subject to all of the terms and conditions of this
Agreement and the Plan.

            2. VESTING; EXERCISE PERIOD.

                  2.1   Vesting of Shares.

                        (a)   This Option shall be exercisable as it vests.
Subject to the terms and conditions of the Plan and this Agreement, this Option
shall vest and become exercisable as to portions of the Shares as follows: (a)
this Option shall not be exercisable with respect to any of the Shares until
                         (the "FIRST VESTING DATE"); (b) if Optionee has
continuously provided services to the Company, or any Parent or Subsidiary of
the Company, then on the First Vesting Date, this Option shall become
exercisable as to 25% of the Shares; and (c) thereafter this Option shall become
exercisable as to an additional 2.0833% of the Shares on each monthly
anniversary of the First Vesting Date, provided that Optionee has continuously
provided services to the Company, or any Parent or Subsidiary of the Company, at
all times during the relevant month. This Option shall cease to vest upon
Optionee's Termination and
<PAGE>
                                                    Netscreen Technologies, Inc.
                                                          Stock Option Agreement
                                                          2002 Stock Option Plan

Optionee shall in no event be entitled under this Option to purchase a number of
shares of the Company's Common Stock greater than the "Total Option Shares."

                        (b)   If there is a Sale of the Company and
Participant's employment is terminated by the Company or its successor without
Cause in connection with the Sale of the Company, then upon such termination the
Option will become bested as to an additional number of Unvested Shares equal to
fifty percent (50%) of the Shares that were unvested Shares at the closing of
the Sale of the Company.

                        (c)   For purposes of the vesting acceleration
provisions of paragraph (b), "Cause" means (i) willfully engaging in gross
misconduct that is materially and demonstrably injurious to the Company; (ii)
willful act or acts of dishonesty undertaken by Participant and intended to
result in substantial gain or personal enrichment for Participant at the expense
of the Company; or (iii) willful and continued failure to substantially perform
Participant's duties with the Company or its successor (other than incapacity
due to physical or mental illness); provided that the action or conduct
described in clause (iii) above will constitute "Cause" only if such failure
continues after the Board of Directors has provided Participant with a written
demand for substantial performance setting forth in detail the specific respects
in which it believes Participant has willfully and not substantially performed
his duties thereof and a termination by the Company without Cause includes a
termination of employment by Participant within 30 days following any of the
following events: (x) the assignment of any duties to Participant inconsistent
with, or reflecting a materially adverse change in, Participant's position,
duties or responsibilities with the Company (or any successor) without
Participant's concurrence; or (y) the relocation of the Company's principal
executive offices, or relocating Participant's principal place of business, in
excess of fifty (50) miles from the Company's current executive offices located
in Santa Clara County, California. For purposes of the vesting acceleration
provisions of paragraph (b), the term "Sale of the Company" means (i) the sale
or other disposition of all or substantially all of the assets of the Company,
or (ii) the acquisition of the Company by another entity by means of
consolidation, corporate reorganization or merger, or other transaction or
series of related transactions in which more than fifty percent (50%) of the
outstanding voting power of the Company is transferred.

                  2.2 Vesting of Options. Shares that are vested pursuant to the
schedule set forth in Section 2.1 hereof are "Vested Shares." Shares that are
not vested pursuant to the schedule set forth in Section 2.1 hereof are
"Unvested Shares."

                  2.3 Expiration. This Option shall expire on the Expiration
Date set forth above and must be exercised, if at all, on or before the earlier
of the Expiration Date or the date on which this Option is earlier terminated in
accordance with the provisions of Section 3 hereof.

            3. TERMINATION.

                  3.1 Termination for Any Reason Except Death, Disability or
Cause. If Optionee is Terminated for any reason except Optionee's death,
Disability or Cause, then this

                                        2
<PAGE>
                                                    Netscreen Technologies, Inc.
                                                          Stock Option Agreement
                                                          2002 Stock Option Plan

Option, to the extent (and only to the extent) that it is vested in accordance
with the schedule set forth in Section 2.1 hereof on the Termination Date, may
be exercised by Optionee no later than three (3) months after the Termination
Date, but in any event no later than the Expiration Date.

                  3.2 Termination Because of Death or Disability. If Optionee is
Terminated because of death or Disability of Optionee (or if Optionee dies
within three (3) months after Termination other than for Cause or because of
Disability), then this Option, to the extent that it is vested in accordance
with the schedule set forth in Section 2.1 hereof on the Termination Date, may
be exercised by Optionee (or Optionee's legal representative or authorized
assignee) no later than twelve (12) months after the Termination Date, but in
any event no later than the Expiration Date.

                  3.3 Termination for Cause. If Optionee is Terminated for
Cause, this Option will expire on the Termination Date.

                  3.4 No Obligation to Employ. Nothing in the Plan or this
Agreement shall confer on Optionee any right to continue in the employ of, or
other relationship with, the Company or any Parent or Subsidiary of the Company,
or limit in any way the right of the Company or any Parent or Subsidiary of the
Company to terminate Optionee's employment or other relationship at any time,
with or without Cause.

            4. MANNER OF EXERCISE.

                  4.1 Stock Option Exercise Agreement. To exercise this Option,
Optionee (or in the case of exercise after Optionee's death, Optionee's
executor, administrator, heir or legatee, as the case may be) must deliver to
the Company an executed stock option exercise agreement in the form attached
hereto as Exhibit A, or in such other form as may be approved by the Company
from time to time (the "EXERCISE AGREEMENT"), which shall set forth, inter alia,
Optionee's election to exercise this Option, the number of shares being
purchased, any restrictions imposed on the Shares and any representations,
warranties and agreements regarding Optionee's investment intent and access to
information as may be required by the Company to comply with applicable
securities laws. If someone other than Optionee exercises this Option, then such
person must submit documentation reasonably acceptable to the Company that such
person has the right to exercise this Option.

                  4.2 Limitations on Exercise. This Option may not be exercised
unless such exercise is in compliance with all applicable federal and state
securities laws, as they are in effect on the date of exercise. This Option may
not be exercised as to fewer than 100 Shares unless it is exercised as to all
Shares as to which this Option is then exercisable.

                  4.3 Payment. The Exercise Agreement shall be accompanied by
full payment of the Exercise Price for the Shares being purchased in cash (by
check), or where permitted by law:

     (a)   by cancellation of indebtedness of the Company to the Optionee;

                                        3
<PAGE>
                                                    Netscreen Technologies, Inc.
                                                          Stock Option Agreement
                                                          2002 Stock Option Plan

      (b)   by surrender of shares of the Company's Common Stock that either:
            (1) have been owned by Optionee for more than six (6) months and
            have been paid for within the meaning of SEC Rule 144 (and, if such
            shares were purchased from the Company by use of a promissory note,
            such note has been fully paid with respect to such shares); or (2)
            were obtained by Optionee in the open public market; and (3) are
            clear of all liens, claims, encumbrances or security interests;

      (c)   by waiver of compensation due or accrued to Optionee for services
            rendered;

      (d)   provided that a public market for the Company's stock exists: (1)
            through a "same day sale" commitment from Optionee and a
            broker-dealer that is a member of the National Association of
            Securities Dealers (an "NASD DEALER") whereby Optionee irrevocably
            elects to exercise this Option and to sell a portion of the Shares
            so purchased to pay for the Exercise Price and whereby the NASD
            Dealer irrevocably commits upon receipt of such Shares to forward
            the exercise price directly to the Company; or (2) through a
            "margin" commitment from Optionee and an NASD Dealer whereby
            Optionee irrevocably elects to exercise this Option and to pledge
            the Shares so purchased to the NASD Dealer in a margin account as
            security for a loan from the NASD Dealer in the amount of the
            Exercise Price, and whereby the NASD Dealer irrevocably commits upon
            receipt of such Shares to forward the Exercise Price directly to the
            Company; or

      (e)   by any combination of the foregoing.

                  4.4 Tax Withholding. Prior to the issuance of the Shares upon
exercise of this Option, Optionee must pay or provide for any applicable federal
or state withholding obligations of the Company. If the Committee permits,
Optionee may provide for payment of withholding taxes upon exercise of this
Option by requesting that the Company retain Shares with a Fair Market Value
equal to the minimum amount of taxes required to be withheld. In such case, the
Company shall issue the net number of Shares to the Optionee by deducting the
Shares retained from the Shares issuable upon exercise.

                  4.5 Issuance of Shares. Provided that the Exercise Agreement
and payment are in form and substance satisfactory to counsel for the Company,
the Company shall issue the Shares registered in the name of Optionee,
Optionee's authorized assignee, or Optionee's legal representative, and shall
deliver certificates representing the Shares with the appropriate legends
affixed thereto.

            5. [INTENTIONALLY OMITTED]

            6. [INTENTIONALLY OMITTED]

            7. NONTRANSFERABILITY OF OPTION. This Option may not be transferred
in any manner other than under the terms and conditions of the Plan or by will
or by the laws of descent

                                        4
<PAGE>
                                                    Netscreen Technologies, Inc.
                                                          Stock Option Agreement
                                                          2002 Stock Option Plan

and distribution and may be exercised during the lifetime of Optionee only by
Optionee. The terms of this Option shall be binding upon the executors,
administrators, successors and assigns of Optionee.

            8. TAX CONSEQUENCES. Set forth below is a brief summary as of the
date the Board adopted the Plan of some of the federal tax consequences of
exercise of this Option and disposition of the Shares. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
OPTIONEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE SHARES.

                  8.1 Exercise of Option. To the extent this Option does not
qualify as an ISO, there may be a regular federal income tax liability upon the
exercise of this Option. Optionee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the fair market value of the Shares on the date of exercise over the
Exercise Price. The Company may be required to withhold from Optionee's
compensation or collect from Optionee and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at the
time of exercise.

                  8.2 Disposition of Shares. The following tax consequences may
apply upon disposition of the Shares: If the Shares are held for more than
twelve (12) months after the date of the transfer of the Shares pursuant to the
exercise of an NQSO, any gain realized on disposition of the Shares will be
treated as long-term capital gain. The Company may be required to withhold from
Optionee's compensation or collect from the Optionee and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income.

            9. PRIVILEGES OF STOCK OWNERSHIP. Optionee shall not have any of the
rights of a stockholder with respect to any Shares until the Shares are issued
to Optionee.

            10. INTERPRETATION. Any dispute regarding the interpretation of this
Agreement shall be submitted by Optionee or the Company to the Committee for
review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and Optionee.

            11. ENTIRE AGREEMENT. The Plan is incorporated herein by reference.
This Agreement and the Plan and the Exercise Agreement constitute the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersede all prior understandings and agreements with respect
to such subject matter.

            12. NOTICES. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated above or to such other address as
such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon: personal delivery;
three (3) days

                                        5
<PAGE>
                                                    Netscreen Technologies, Inc.
                                                          Stock Option Agreement
                                                          2002 Stock Option Plan

after deposit in the United States mail by certified or registered mail (return
receipt requested); one (1) business day after deposit with any return receipt
express courier (prepaid); or one (1) business day after transmission by
facsimile.

            13. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Agreement. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Optionee and Optionee's heirs, executors, administrators, legal representatives,
successors and assigns.

            14. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of California, without regard
to that body of law pertaining to choice of law or conflict of law.

            15. ACCEPTANCE. Optionee hereby acknowledges receipt of a copy of
the Plan and this Agreement. Optionee has read and understands the terms and
provisions thereof, and accepts this Option subject to all the terms and
conditions of the Plan and this Agreement. Optionee acknowledges that there may
be adverse tax consequences upon exercise of this Option or disposition of the
Shares and that the Company has advised Optionee to consult a tax advisor prior
to such exercise or disposition.

                                        6
<PAGE>
                                                    Netscreen Technologies, Inc.
                                                          Stock Option Agreement
                                                          2002 Stock Option Plan

          IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate by its duly authorized representative and Optionee has
executed this Agreement in duplicate as of the Date of Grant.

NETSCREEN TECHNOLOGIES, INC.           OPTIONEE

By:
   ----------------------------------  ------------------------------------
                                       (Signature)

-------------------------------------  ------------------------------------
(Please print name)                    (Please print name)

-------------------------------------
(Please print title)

                                        7
<PAGE>
                                    EXHIBIT A

                         STOCK OPTION EXERCISE AGREEMENT
<PAGE>
                                                    Netscreen Technologies, Inc.
                                                          Stock Option Agreement
                                                          2002 Stock Option Plan

                                    EXHIBIT A

                          NETSCREEN TECHNOLOGIES, INC.
                       2002 STOCK OPTION PLAN (THE "PLAN")
                         STOCK OPTION EXERCISE AGREEMENT

I hereby elect to purchase the number of shares of Common Stock of Netscreen
Technologies, Inc. (the "Company") as set forth below:

Optionee                          Number of Shares Purchased:
        ------------------------                             -------------------
Social Security Number:           Purchase Price per Share:
                       ---------                           ---------------------
Address:                          Aggregate Purchase Price:
        ------------------------                           ---------------------
                                  Date of Option Agreement:
        ------------------------                           ---------------------
                                  Exact Name of Title to Shares:
        ------------------------                                ----------------

Type of Option:  [X] Nonqualified Stock Option

1. DELIVERY OF PURCHASE PRICE. Optionee hereby delivers to the Company the
Aggregate Purchase Price, to the extent permitted in the Option Agreement (the
"Option Agreement") as follows (check as applicable and complete):

[ ] in cash (by check) in the amount of $_____________________, receipt of which
    is acknowledged by the Company;

[ ] by cancellation of indebtedness of the Company to Optionee in the amount of
    $___________________________________;

[ ] by delivery of ______________________________ fully-paid, nonassessable and
    vested shares of the Common Stock of the Company owned by Optionee for at
    least six (6) months prior to the date hereof (and which have been paid for
    within the meaning of SEC Rule 144), or obtained by Optionee in the open
    public market, and owned free and clear of all liens, claims, encumbrances
    or security interests, valued at the current Fair Market Value of $_________
    per share;

[ ] by the waiver hereby of compensation due or accrued to Optionee for services
    rendered in the amount of $____________________________________ ; or

[ ] through a "same-day-sale" commitment, delivered herewith, from Optionee and
    the NASD Dealer named therein, in the amount of $__________________________.

2. TAX CONSEQUENCES. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE TAX
CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF THE SHARES.
OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX CONSULTANT(S)
OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE
SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.

3. ENTIRE AGREEMENT. The Plan and Option Agreement are incorporated herein by
reference. This Exercise Agreement, the Plan and the Option Agreement constitute
the entire agreement and understanding of the parties and supersede in their
entirety all prior understandings and agreements of the Company and Optionee
with respect to the subject matter hereof, and are governed by California law
except for that body of law pertaining to choice of law or conflict of law.

Date:
     ---------------------------------      -----------------------------------
                                            SIGNATURE OF OPTIONEEExhibit 4.1

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

                            [NAME OF ISSUING TRUST],
                                   as Issuer,

                                       and

                          [NAME OF INDENTURE TRUSTEE],
                              as Indenture Trustee

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

                                    INDENTURE
                          DATED AS OF ________1, 200__

                          HOME EQUITY LOAN-BACKED NOTES
                 HOME EQUITY LOAN-BACKED VARIABLE FUNDING NOTES
                    HOME EQUITY LOAN-BACKED SUBORDINATE NOTES

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

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I DEFINITIONS..........................................................2

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

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

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

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

     Section 3.01.  [Reserved.]................................................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..................................................5
     Section 3.05.  Payment of Principal and Interest; Defaulted Interest......6
     Section 3.06.  Protection of Trust Estate.................................9
     Section 3.07.  Opinions as to Trust Estate...............................10
     Section 3.08.  Performance of Obligations; Sale and Servicing
                    Agreement.................................................11
     Section 3.09.  Negative Covenants........................................11
     Section 3.10.  Annual Statement as to Compliance.........................12
     Section 3.11.  Recordation of Assignments................................12
     Section 3.12.  Representations and Warranties Concerning the
                    Mortgage Loans............................................12
     Section 3.13.  Assignee of Record of the Mortgage Loans..................12
     Section 3.14.  Servicer as Agent and Bailee of the Indenture
                    Trustee...................................................13
     Section 3.15.  Investment Company Act....................................13
     Section 3.16.  Issuer May Not Consolidate, etc...........................13
     Section 3.17.  Successor or Transferee...................................15
     Section 3.18.  No Other Business.........................................15
     Section 3.19.  No Borrowing..............................................15
     Section 3.20.  Guarantees................................................15
     Section 3.21.  Capital Expenditures......................................15
     Section 3.22.  Indenture Trustee Not Liable for Notes or
                    Related Documents.........................................16
     Section 3.23.  Notice of Events of Default...............................16
     Section 3.24.  Further Instruments and Acts..............................16
     Section 3.25.  Statements to Noteholders.................................16
     Section 3.26.  Allocation of Principal Payments to the Offered Notes
                    and the Variable Funding Notes............................16
     Section 3.27.  Reserved..................................................17
     Section 3.28.  Allocation of Losses on the Mortgage Loans................17
     Section 3.29.  Additional Representations and Warranties of the
                    Issuer....................................................18

ARTICLE IV THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE.................19

<PAGE>

     Section 4.01.  The Notes.................................................19
     Section 4.02.  Registration of and Limitations on Transfer and
                    Exchange of Notes; Appointment of Certificate
                    Registrar.................................................20
     Section 4.03.  Mutilated, Destroyed, Lost or Stolen Notes................23
     Section 4.04.  Persons Deemed Owners.....................................24
     Section 4.05.  Cancellation..............................................24
     Section 4.06.  Book-Entry Notes..........................................24
     Section 4.07.  Notices to Depository.....................................25
     Section 4.08.  Definitive Notes..........................................25
     Section 4.09.  Tax Treatment.............................................26
     Section 4.10.  Reserved..................................................26
     Section 4.11.  Satisfaction and Discharge of Indenture...................26
     Section 4.12.  Application of Trust Money................................27
     Section 4.13.  [Reserved.]...............................................28
     Section 4.14.  Repayment of Monies Held by Paying Agent..................28
     Section 4.15.  Temporary Offered Notes...................................28

ARTICLE V DEFAULT AND REMEDIES................................................28

     Section 5.01.  Notification of Certain Events of Default.................28
     Section 5.02.  Acceleration of Maturity; Rescission and Annulment........28
     Section 5.03.  Collection of Indebtedness and Suits for Enforcement
                    by Indenture Trustee......................................29
     Section 5.04.  Remedies; Priorities......................................31
     Section 5.05.  Optional Preservation of the Trust Estate.................33
     Section 5.06.  Limitation of Suits.......................................34
     Section 5.07.  Unconditional Right of Noteholders To Receive
                    Principal and Interest....................................34
     Section 5.08.  Restoration of Rights and Remedies........................34
     Section 5.09.  Rights and Remedies Cumulative............................35
     Section 5.10.  Delay or Omission Not a Waiver............................35
     Section 5.11.  Control by Noteholders....................................35
     Section 5.12.  Waiver of Past Defaults...................................36
     Section 5.13.  Undertaking for Costs.....................................36
     Section 5.14.  Waiver of Stay or Extension Laws..........................36
     Section 5.15.  Sale of Trust Estate......................................37
     Section 5.16.  Action on Notes...........................................38
     Section 5.17.  Performance and Enforcement of Certain Obligations........38

ARTICLE VI THE INDENTURE TRUSTEE..............................................39

     Section 6.01.  Duties of Indenture Trustee...............................39
     Section 6.02.  Rights of Indenture Trustee...............................40
     Section 6.03.  Individual Rights of Indenture Trustee....................41
     Section 6.04.  Indenture Trustee's Disclaimer............................41
     Section 6.05.  Notice of Event of Default................................41
     Section 6.06.  Reports by Indenture Trustee to Noteholders...............41
     Section 6.07.  Compensation..............................................42

<PAGE>

     Section 6.08.  Replacement of Indenture Trustee..........................42
     Section 6.09.  Successor Indenture Trustee by Merger.....................43
     Section 6.10.  Appointment of Co-Indenture Trustee or Separate
                    Indenture Trustee.........................................44
     Section 6.11.  Eligibility; Disqualification.............................45
     Section 6.12.  Preferential Collection of Claims Against Issuer..........46
     Section 6.13.  Representations and Warranties............................46
     Section 6.14.  Directions to Indenture Trustee...........................46
     Section 6.15.  Conflicting Instructions..................................47

ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS....................................47

     Section 7.01.  Issuer To Furnish Indenture Trustee Names and
                    Addresses of Noteholders..................................47
     Section 7.02.  Preservation of Information; Communications to
                    Noteholders...............................................47
     Section 7.03.  Reports by Issuer.........................................47
     Section 7.04.  Reports by Indenture Trustee..............................48

ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES.............................48

     Section 8.01.   Collection of Money......................................48
     Section 8.02.   [Reserved.]..............................................49
     Section 8.03.   Officer's Certificate....................................49
     Section 8.04.   Termination upon Distribution to Noteholders.............49
     Section 8.05.   Release of Trust Estate..................................49
     Section 8.06.   Surrender of Notes upon Final Payment....................49

ARTICLE IX SUPPLEMENTAL INDENTURES............................................49

     Section 9.01.   Supplemental Indentures Without Consent of Noteholders...49
     Section 9.02.   Supplemental Indentures With Consent of Noteholders......51
     Section 9.03.   Execution of Supplemental Indentures.....................52
     Section 9.04.   Effect of Supplemental Indenture.........................52
     Section 9.05.   Conformity with Trust Indenture Act......................53
     Section 9.06.   Reference in Notes to Supplemental Indentures............53

ARTICLE X MISCELLANEOUS.......................................................53

     Section 10.01. Compliance Certificates and Opinions, etc.................53
     Section 10.02. Form of Documents Delivered to Indenture Trustee..........55
     Section 10.03. Acts of Noteholders.......................................55
     Section 10.04. Notices...................................................56
     Section 10.05. Notices to Noteholders; Waiver............................56
     Section 10.06. Conflict with Trust Indenture Act.........................57
     Section 10.07. Effect of Headings........................................57
     Section 10.08. Successors and Assigns....................................57
     Section 10.09. Severability of Provisions................................57
     Section 10.10. [Reserved.]...............................................57
     Section 10.11. Legal Holidays............................................57
     Section 10.12. Governing Law.............................................57

<PAGE>

     Section 10.13. Counterparts..............................................58
     Section 10.14. Recording of Indenture....................................58
     Section 10.15. Issuer Obligation.........................................58
     Section 10.16. No Petition...............................................58
     Section 10.17. Inspection................................................58

Appendix A     Definitions
Exhibit A-1    Form of Offered Senior Notes (includes Form of Class I-A Note,
               Class II-A Note and Class A-IO Note)
Exhibit A-2    Form of Offered Subordinate Notes (includes Form of Class M-1
               Note, Class M-2 Note, Class B-1 Note and Class B-2 Note)
Exhibit A-3    Form of Non-Offered Senior Notes (includes Form of Variable
               Funding Note and Capped Funding Note)
Exhibit A-4    Form of Non-Offered Subordinate Notes (includes Form of Class X-1
               Note, Class X-2A Note and Class X-2B Note)
Exhibit B      Form of Rider 144A Investment Representation
Exhibit C      Form of Investor Representation Letter
Exhibit D      Form of Transferor Representation Letter
Exhibit E      Form of Representation Letter
Exhibit F      Certificate of Non-Foreign Status

<PAGE>

     This INDENTURE, dated as of ________1, 200__, is between [Name of Issuer] a
[Delaware statutory trust], as issuer (the "Issuer"), and [Name Of Indenture
Trustee], as trustee (the "Indenture Trustee").

                                   WITNESSETH:

     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 Home Equity
Loan-Backed Notes, Series [200__-_] (the "Offered Notes"), the Holders of the
Issuer's Home Equity Loan-Backed Variable Funding Notes, Series [200__-_] (the
"Variable Funding Notes") and the Holders of the Issuer's Home Equity
Loan-Backed Subordinate Notes, Series 2003-C (the "Subordinate Notes" and,
together with the Variable Funding Notes and the Offered Notes, the "Notes").

                                 GRANTING CLAUSE

     The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as
trustee for the benefit of the Noteholders, all of the Issuer's right, title and
interest, whether now existing or hereafter created, in and to (i) the Mortgage
Loans and all Additional Balances, (ii) all funds on deposit from time to time
in the Collection Account and the Trustee Collection Account (in each case as
defined in Appendix A hereto) and all proceeds thereof, (iii) the assignment of
the Depositor's right, title and interest in the representations and warranties
made by the Seller in the Mortgage Loan Purchase and Servicing Agreement and
(iv) all present and future claims, demands, causes and choses in action in
respect of any or all of the foregoing and all payments on or under, and all
proceeds of every kind and nature whatsoever in respect of, any or all of the
foregoing and all payments on or under, and all proceeds of every kind and
nature whatsoever in the conversion thereof, voluntary or involuntary, into cash
or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables, instruments and
other property that 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 herein.

     The Indenture Trustee, as trustee on behalf of the Noteholders,
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.

<PAGE>

                                   ARTICLE I
                                   DEFINITIONS

     Section 1.01. Definitions.

     For all purposes of this Indenture, except as otherwise expressly provided
herein or unless the context otherwise requires, capitalized terms used herein
that are not otherwise defined shall have the meanings ascribed thereto in
Appendix A attached hereto, which is incorporated by reference herein.

     Section 1.02. Incorporation by Reference of Trust Indenture Act.

     Whenever this Indenture refers to a provision of the Trust Indenture Act of
1939, as amended (the "TIA"), such 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 meanings 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" includes "and/or"; (iv) "including" means including
without limitation; (v) words in the singular include the plural and words in
the plural include the singular; (vi) the term "proceeds" has the meaning
ascribed thereto in the UCC; (vii) any agreement, instrument or statute defined
or referred to herein or in any instrument or certificate delivered in
connection herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented and includes (in the case of agreements
or instruments) references to all attachments thereto and instruments
incorporated therein; and (viii) references to a Person are also to such
Person's permitted successors and assigns.

                                       2
<PAGE>

                                   ARTICLE II
                           ORIGINAL ISSUANCE OF NOTES

     Section 2.01. Form.

     The Senior Notes (other than the Variable Funding Notes), the Subordinate
Notes, the Variable Funding Notes (including the Capped Funding Notes) and the
Non-Offered Subordinate Notes, in each case together with the Indenture
Trustee's certificate of authentication, shall be in substantially the forms set
forth in Exhibit A-1, A-2, A-3, and A-4, respectively, 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 thereof. Any portion of the text of a Note may be
set forth on the reverse thereof, with an appropriate reference thereto on the
face thereof.

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

     The terms of the Notes set forth in Exhibits A-1, A-2, A-3, and A-4 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 shall 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
Offered Notes for original issuance in their Initial Class Note Balance or
Notional Amount as of the Cut-Off Date and Variable Funding Notes for original
issuance in an aggregate initial principal amount of zero. Notwithstanding the
foregoing, (i) at any time the Variable Funding Balance may not exceed the
Maximum Variable Funding Balance, and (ii) the Variable Funding Balance may not
increase more than $[100,000] in any month unless the Indenture Trustee receives
an Opinion of Counsel to the effect that such increase will not have any
material adverse tax consequences to the Trust.

     Each Note shall be dated the date of its authentication. The Notes, other
than the Class [A-IO] Notes, shall be issuable as registered Notes in minimum
initial Note Balances of $1,000 and in integral multiples of $1 in excess
thereof. The Class [A-IO] Notes shall be issuable as registered Notes in minimum
percentage interests of 5% and in integral multiples of 5% in excess thereof.

                                       3
<PAGE>

     Each Variable Funding Note shall be initially issued with a Variable
Funding Balance of $0 or, if applicable, with a Variable Funding Balance in an
amount equal to the sum of the Additional Balance Differential for the
Collection Period relating to the Payment Date following the date of issuance of
such Variable Funding Note pursuant to Section 4.01.

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

                                   ARTICLE III
                                    COVENANTS

     Section 3.01. Reserved.]

     Section 3.02. Maintenance of Office or Agency.

     The Issuer shall maintain an office or agency where, subject to the
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 of the Indenture Trustee, 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.

     All payments of amounts due and payable with respect to any Notes pursuant
to Section 3.05 shall be made on behalf of the Issuer by the Indenture Trustee
or the Paying Agent, and no amounts shall be paid to the Issuer except as
provided in this Section. The Indenture Trustee shall initially be the Paying
Agent.

     The Issuer shall 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 as Paying Agent, the
Indenture Trustee hereby so agrees), subject to the provisions of this Section,
that such Paying Agent will:

     (a) 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;

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

                                       4
<PAGE>

     (c) 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;

     (d) immediately resign as Paying Agent and forthwith pay to the Indenture
Trustee all sums held by it in trust for payments in respect of the 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;

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

     (f) deliver to the Indenture Trustee a copy of the statement to Noteholders
prepared with respect to each Payment Date pursuant to Section 4.01 of the Sale
and Servicing Agreement.

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

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

     Section 3.04. Existence.

     The Issuer shall keep in full force and effect its existence, rights and
franchises as a statutory trust under the laws of the State of [Delaware]
(unless it becomes, or any successor Issuer hereunder is or becomes, organized
under the laws of any other State or of the United

                                       5
<PAGE>

States of America, in which case the Issuer shall keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction) and
shall 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 (other than a Payment Date after an Event of
Default and an acceleration of the Notes), from amounts on deposit in the
Trustee Collection Account resulting from Interest Collections and Principal
Collections with respect to the Mortgage Loans (after the Indenture Trustee has
removed any investment earnings to be retained by it pursuant to Section 6.07 or
paid to the Depositor pursuant to Section 5.03 of the Sale and Servicing
Agreement), minus the Indenture Trustee Fee payable to the Indenture Trustee for
such Payment Date and any permitted expenses reimbursable to the Indenture
Trustee pursuant to Section 6.07, the Indenture Trustee shall apply the
following amounts in the following order of priority, in accordance with the
Report to Noteholders:

          first, to pay the accrued and unpaid interest due on the Note Balances
     (or Variable Funding Balance in the case of the Variable Funding Notes) of
     the Notes and the notional balance of the Class [A-IO] Notes at their
     respective Note Rates, in the following order:

               (A) to the Senior Notes on a pro rata basis in accordance with
          the amount of accrued interest due thereon;

               (B) to the Class M-1 notes;

               (C) to the Class M-2 notes;

               (D) to the Class B-1 notes; and

               (E) to the Class B-2 notes;

          second, to pay as principal on the Notes (other than the Class [A-IO]
     Notes), in an amount equal to the Principal Collection Distribution Amount,
     in the following order:

               (A) to the Senior Notes, in the order specified in Section
          3.26(a) and (b), until their aggregate Note Balance has been reduced
          to the Senior Optimal Principal Balance;

               (B) to the Class M-1 Notes, until the Note Balance thereof has
          been reduced to the Class M-1 Optimal Balance;

               (C) to the Class M-2 Notes, until the Note Balance thereof has
          been reduced to the Class M-2 Optimal Balance;

               (D) to the Class B-1 Notes, until the Note Balance thereof has
          been reduced to the Class B-1 Optimal Balance;

                                       6
<PAGE>

               (E) to the Class B-2 Notes, until the Note Balance thereof has
          been reduced to the Class B-2 Optimal Balance;

          third, to pay as principal on the Senior Notes, in the order specified
     in Section 3.26(a) and (b), until their aggregate Note Balance has been
     reduced to the Senior Optimal Principal Balance, an amount equal to the
     Liquidation Loss Distribution Amount;

          fourth, to pay as principal on the Class M-1 Notes, until the Note
     Balance thereof has been reduced to the Class M-1 Optimal Balance, an
     amount equal to the Liquidation Loss Distribution Amount, to the extent not
     distributed to the holders of the Senior Notes under clause third above;

          fifth, to pay as principal on the Class M-2 Notes, until the Note
     Balance thereof has been reduced to the Class M-2 Optimal Balance, an
     amount equal to the Liquidation Loss Distribution Amount, to the extent not
     distributed to the holders of the Senior Notes or the Class M-1 Notes under
     clause third and fourth above respectively;

          sixth, to pay as principal on the Class B-1 Notes, until the Note
     Balance thereof has been reduced to the Class B-1 Optimal Balance, an
     amount equal to the Liquidation Loss Distribution Amount, to the extent not
     distributed to the holders of the Senior Notes, the Class M-1 Notes or the
     Class M-2 Notes under clauses third, fourth and fifth above, respectively;

          seventh, to pay as principal on the Class B-2 Notes, until the Note
     Balance thereof has been reduced to the Class B-2 Optimal Balance, an
     amount equal to the Liquidation Loss Distribution Amount, to the extent not
     distributed to the holders of the Senior Notes, the Class M-1 Notes, the
     Class M-2 Notes or the Class B-1 Notes under clauses third, fourth, fifth
     and sixth above, respectively;

          eighth, to pay as principal on the Senior Notes, in the order
     specified in Section 3.26(a) and (b), until their aggregate Note Balance
     has been reduced to the Senior Optimal Principal Balance, an amount equal
     to the Overcollateralization Increase Amount (up to the
     Overcollateralization Funding Amount);

          ninth, to pay as principal on the Class M-1 Notes, until the Note
     Balance thereof has been reduced to the Class M-1 Optimal Principal
     Balance, an amount equal to the Overcollateralization Increase Amount (up
     to the Overcollateralization Funding Amount, less any portion thereof
     applied under clause eighth above), to the extent not distributed to the
     holders of the Senior Notes under clause eighth above;

          tenth, to pay as principal on the Class M-2 Notes, until the Note
     Balance thereof has been reduced to the Class M-2 Optimal Principal
     Balance, an amount equal to the Overcollateralization Increase Amount (up
     to the Overcollateralization Funding Amount, less any portion thereof
     applied under clauses eighth or ninth above), to the extent not distributed
     to the holders of the Senior Notes or the Class M-1 Notes under clauses
     eighth or ninth above respectively;

                                       7
<PAGE>

          eleventh, to pay as principal on the Class B-1 Notes, until the Note
     Balance thereof has been reduced to the Class B-1 Optimal Principal
     Balance, an amount equal to the Overcollateralization Increase Amount (up
     to the Overcollateralization Funding Amount, less any portion thereof
     applied under clauses eighth, ninth or tenth above), to the extent not
     distributed to the holders of the Senior Notes, the Class M-1 Notes or the
     Class M-2 Notes under clauses eighth, ninth or tenth above;

          twelfth, to pay as principal on the Class B-2 Notes, until the Note
     Balance thereof has been reduced to the Class B-2 Optimal Principal
     Balance, an amount equal to the Overcollateralization Increase Amount (up
     to the Overcollateralization Funding Amount, less any portion thereof
     applied under clauses eighth, ninth, tenth or eleventh above), to the
     extent not distributed to the holders of the Senior Notes, the Class M
     Notes, or the Class B-1 Notes under clauses eighth, ninth, tenth or
     eleventh above;

          thirteenth, to pay the Indenture Trustee, the Administrator, the
     Master Servicer and the Owner Trustee any unpaid expenses and other
     reimbursable amounts owed to them;

          fourteenth, to pay any unpaid Interest Carry-Forward Amounts, together
     with interest thereon, in the following order:

               (A) to the Senior Notes on a pro rata basis in accordance with
          the amount of any unpaid Interest Carry-Forward Amounts;

               (B) to the Class M-1 Notes;

               (C) to the Class M-2 Notes;

               (D) to the Class B-1 Notes; and

               (E) to the Class B-2 Notes; and

          fifteenth, any remaining amounts to the holders of the Non-Offered
     Subordinate Notes and the Certificates in the proportions and priorities
     set forth in Section 3.26(d).

provided, however, that the foregoing is also subject to the allocation rules
and priorities set forth in Sections 3.26 and 3.28.

     Notwithstanding the foregoing, on the applicable Legal Final Payment Date
of the Offered Notes (other than the [Class A-IO Notes]) and the Variable
Funding Notes, the amounts to be paid pursuant to clause second above shall be
equal to the sum of the Offered Note Balance of the applicable Class or Classes
of Offered Notes and the Variable Funding Balance of the Variable Funding Notes
immediately prior to such Payment Date.

     In the event that any withholding tax is imposed on distributions (or
allocations of income) to a Holder of a Note or Certificate, such tax shall
reduce the amount otherwise distributable to such Holder in accordance with this
Section 3.05. The Indenture Trustee is hereby authorized and directed to retain
or cause to be retained from amounts otherwise

                                       8
<PAGE>

distributable to the Holders of the Notes or Certificates sufficient funds for
the payment of any tax that is legally owed by the Issuer; provided, that such
authorization shall not prevent the Indenture Trustee from contesting any such
tax in appropriate Proceedings and withholding payment thereof, if permitted by
law, pending the outcome of such Proceedings. The amount of any withholding tax
imposed with respect to a Holder of a Note or Certificate shall be treated as
cash distributed to such Holder at the time it is withheld by the Indenture
Trustee and remitted to the appropriate taxing authority. If there is a
possibility that withholding tax is payable with respect to a distribution, the
Indenture Trustee may in its sole discretion withhold such amounts in accordance
with this paragraph.

     Amounts paid to Noteholders shall be paid in respect of the Offered Notes,
the Variable Funding Notes or the Non-Offered Subordinate Notes, as the case may
be, in accordance with the applicable percentage as set forth in paragraph (b)
below. Any installment of interest or principal payable on any Note that is
punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall be paid to the Holder of record thereof on the immediately preceding
Record Date by wire transfer to an account specified in writing by such Holder
reasonably satisfactory to the Indenture Trustee, or by check or money order
mailed to the address of such Noteholder reflected in the Note Register, in the
amount required to be distributed to such Holder on such Payment Date pursuant
to such Holder's Notes; provided, that the Indenture Trustee shall not pay to
any such Holder any amounts required to be withheld from a payment to such
Holder by the Code.

     (b) Principal of each Note (other than the Class [A-IO] Notes) shall be due
and payable in full on the Legal Final Payment Date for the related Class of
Notes as provided in the applicable form of Note set forth in Exhibits A-1, A-2,
A-3, and A-4. All principal payments on the Offered Notes and the Variable
Funding Notes shall be made pro rata to the Class of Noteholders entitled
thereto in accordance with the related Percentage Interests represented thereby.
Upon written notice to the Indenture Trustee by the Issuer, the Indenture
Trustee shall notify the Person in the name of which a Note is registered at the
close of business on the Record Date preceding the related Legal Final Payment
Date. Such notice shall be mailed no later than five Business Days prior to the
related Legal Final Payment Date and shall specify that payment of the principal
amount and any interest due with respect to such Note at the related Legal 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 shall 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 shall take such other action necessary or advisable to:

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

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

                                       9
<PAGE>

          (iii) cause the Trust to enforce any of the Mortgage Loans; or

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

     (b) Except as otherwise provided in this Indenture, the Indenture Trustee
shall not remove any portion of the Trust Estate that consists of money or that
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 shall have yet been
delivered pursuant to Section 3.07(b)), unless the Indenture Trustee shall have
first received an Opinion of Counsel to the effect that the Lien and security
interest created by this Indenture with respect to such property will continue
to be maintained after giving effect to such action or actions.

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

     Section 3.07. Opinions as to Trust Estate.

     (a) On the Closing Date, the Issuer shall furnish to the Indenture Trustee
and the Owner Trustee an Opinion of Counsel, at the expense of the Issuer,
stating that (i) 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 (ii) in the
opinion of such counsel, no such action is necessary to make such Lien and
security interest effective.

     (b) On or before December 31st of each calendar year, commencing in 200__,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuer stating that (i) in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re-recording and
re-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 is necessary to maintain the
Lien and security interest in the Mortgage Loans and reciting the details of
such action or (ii) 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 re-filing 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 of the following
calendar year.

                                       10
<PAGE>

     Section 3.08. Performance of Obligations; Sale and Servicing Agreement.

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

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

     (c) The Issuer shall not take any action or permit any action to be taken
by others that would release any Person from any of such Person's covenants or
obligations under any document relating to the Mortgage Loans (including the
Mortgage Documents and the Related Documents) or under any instrument included
in the Trust Estate, or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any such document or any such instrument, except such actions
as the Master Servicer is expressly permitted to take in the Sale and Servicing
Agreement.

     (d) The Issuer 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:

     (a) 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;

     (b) 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;

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

     (d) impair or cause to be impaired the Issuer's interest in the Mortgage
Loans, the Mortgage Loan Purchase and Servicing Agreement or in any other Basic
Document, if any such action would materially and adversely affect the interests
of the Noteholders.

                                       11
<PAGE>

     Section 3.10. Annual Statement as to Compliance.

     The Issuer shall deliver to the Indenture Trustee, on or before March 15 of
each year (commencing with 200__), an Officer's Certificate stating, as to the
Authorized Officer signing such Officer's Certificate, that:

     (a) a review of the activities of the Issuer during such year (or from the
Closing Date in the case of the first such Certificate) and of its performance
under this Indenture and the Trust Agreement has been made under such Authorized
Officer's supervision; and

     (b) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has complied with all conditions and covenants under this
Indenture and the Trust Agreement throughout such year (or from the Closing Date
in the case of the first such Certificate) 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. Recordation of Assignments.

     The Issuer shall enforce the obligation of the Master Servicer under
Section 3.13 of the Sale and Servicing Agreement to submit or cause to be
submitted for recording Assignments of Mortgages in accordance with such
Section.

     Section 3.12. Representations and Warranties Concerning the Mortgage Loans.

     The Indenture Trustee, as pledgee of the Mortgage Loans, shall have the
benefit of the representations and warranties of the Seller in Sections 7.01 and
7.02 of the Mortgage Loan Purchase and Servicing Agreement, assigned to the
Issuer in Section 2.01 of the Sale and Servicing Agreement and restated by the
Seller in Section 2.07 of the Sale and Servicing Agreement, concerning the
Mortgage Loans, including without limitation the right to enforce the remedies
against the Seller and the Depositor provided in Sections 7.03 and 12.01 of the
Mortgage Loan Purchase and Servicing Agreement and Section 2.08 of the Sale and
Servicing Agreement to the same extent as though such representations and
warranties were made directly to the Indenture Trustee.

     Section 3.13. Assignee of Record of the Mortgage Loans.

     As pledgee of the Mortgage Loans, the Indenture Trustee shall hold record
title to the Mortgage Loans by being named as payee in the endorsements of the
Mortgage Notes and assignee in the Assignments of Mortgage recorded to the
extent required by Section 3.13 of the Sale and Servicing Agreement. Except as
expressly provided in the Mortgage Loan Purchase and Servicing Agreement or the
Sale and Servicing Agreement with respect to any Mortgage Loan, the Indenture
Trustee shall not execute any endorsement or assignment or otherwise release or
transfer record title to such Mortgage Loan until such time as the remaining
Trust Estate, or any portion thereof, may be released pursuant to Section 8.05
hereof.

                                       12
<PAGE>

     Section 3.14. Servicer as Agent and Bailee of the Indenture Trustee.

     Solely for purposes of perfection under Section 9-313 of the UCC or other
similar applicable law, rule or regulation of the State in which 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 Indenture Trustee in
holding amounts on deposit in the Collection Account pursuant to Section 3.04
and Section 5.02 of the Sale and Servicing Agreement that are allocable to the
Mortgage Loans, as well as the agent and bailee of the Indenture Trustee in
holding any Related Documents released to the Master Servicer pursuant to
Section 3.09 of the Sale and Servicing Agreement, and any other items
constituting a part of the Trust Estate that 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 3.01 of the Sale and Servicing
Agreement, the Indenture Trustee, as pledgee of the Mortgage Loans, will be
deemed to have possession of such Related Documents, such monies and such other
items for purposes of Section 9-313 of the UCC 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, 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, that the Issuer shall be in compliance with this Section 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 Not Consolidate, etc.

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

          (i) the Person (if other than the Issuer) formed by or surviving such
     consolidation or merger shall be a Person organized and existing under the
     laws of the United States of America or any State, 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
     the 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;

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

          (iii) each Rating Agency shall have notified the Issuer that such
     transaction will not cause a Rating Event;

          (iv) the Issuer shall have received an Opinion of Counsel (and shall
     have delivered a copy thereof to the Indenture Trustee) to the effect that
     such transaction will

                                       13
<PAGE>

     not have any material adverse tax consequence to the Issuer, any Noteholder
     or any Certificateholder;

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

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

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

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

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

          (iii) each Rating Agency shall have notified the Issuer that such
     transaction will not cause a Rating Event;

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

          (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

                                       14
<PAGE>

     such supplemental indenture comply with this Article 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, the issuance of
the Notes and the Certificate in the manner contemplated by this Indenture and
the other 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.

     Except as contemplated by this Indenture or the other 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 Person.

     Section 3.21. Capital Expenditures.

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

                                       15
<PAGE>

     Section 3.22. Indenture Trustee Not Liable for Notes or Related Documents.

     The recitals contained herein shall be taken as the statements of the
Depositor, and the Indenture Trustee assumes no responsibility for the
correctness thereof. The Indenture Trustee makes no representations as to the
validity or sufficiency of this Indenture, of any other Basic Document or of the
Notes (other than the signatures of the Indenture Trustee on the authentication
of the Notes) or of any other documents relating thereto. The Indenture Trustee
shall at no time have any responsibility or liability with respect to the
sufficiency of the Trust Estate or its ability to generate the payments to be
distributed to the Noteholders under this Indenture, including the compliance by
the Depositor or the Seller with any representation or warranty made under any
Basic Document or in any related document or the accuracy of any such
representation or warranty, or any action of the Paying Agent or the Note
Registrar or the Indenture Trustee taken in the name of the Owner Trustee.

     Section 3.23. Notice of Events of Default.

     The Issuer shall give the Indenture Trustee, the Administrator and each
Rating Agency prompt written notice of each Event of Default hereunder.

     Section 3.24. Further Instruments and Acts.

     Upon request of the Indenture Trustee, the Issuer shall 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 3.25. Statements to Noteholders.

     On each Payment Date, the Indenture Trustee will make the Report to
Noteholders (and, at its option, any additional files containing the same
information in alternative format) available to Noteholders, the Depositor and
the Issuer via the Indenture Trustee's internet website. The Indenture Trustee's
internet website shall initially be located at www.ctslink.com. Assistance in
using the website can be obtained by calling the Trustee's customer service desk
at (___) ___-____. Persons that are unable to use the above distribution options
are entitled to have a paper copy mailed to them via first class mail by calling
the customer service desk and indicating such. The Indenture Trustee shall have
the right to change the way Report to Noteholders are distributed in order to
make such distribution more convenient and/or more accessible to the above
Persons, and the Indenture Trustee shall provide timely and adequate
notification to all above Persons regarding any such changes.

     Section 3.26. Allocation of Principal Payments to the Offered Notes and the
Variable Funding Notes.

     (a) All principal payments made to the holders of the Senior Notes (other
than the Class [A-IO] Notes) on each Payment Date from whatever source with
respect to the Principal Collection Distribution Amount, the Liquidation Loss
Amount and the Overcollateralization Increase Amount shall be distributed
concurrently to: (a) the Class [I-A] Notes and (b) the [Group II] Notes in the
aggregate, in each case in proportion to the percentage of the Principal
Collections (net of Principal Collections from [Group II] used to purchase any
Additional

                                       16
<PAGE>

Balances) derived from the related Loan Group (with respect to which any related
Notes are outstanding) for that Payment Date, until the Note Balances of the
Class [I-A] Notes and the [Group II] notes in the aggregate have been reduced to
zero. After the Note Balances of either the Class [I-A] Notes or the [Group II]
Notes in the aggregate have been reduced to zero, all principal payments
allocated to the Senior Notes of such Group shall be distributed to the
remaining class or classes of Senior Notes of the other Group in reduction of
the Note Balance or Balances thereof.

     (b) Payments of principal that are allocated to the [Group II] Notes will
be paid to the Class [II-A] Notes and the Variable Funding Notes pro rata based
on the outstanding Note Balance or Variable Funding Balance, as applicable,
thereof until paid in full.

     (c) Any provision in this Agreement to the contrary notwithstanding, until
the Step-down Date, no principal payments shall be distributed to the
Subordinate Notes unless the Note Balances of all of the Senior Notes have been
reduced to zero. In addition, if on any Payment Date the Loss and Delinquency
Tests are not satisfied, amounts otherwise payable to the Subordinate Notes with
respect to principal shall be paid to the Senior Notes, and the Subordinate
Notes shall receive no distributions of principal on that Payment Date.

     (d) Payments to the holders of the Non-Offered Subordinate Notes and
Certificates on each Payment Date will be equal to the amount of remaining funds
in the Trustee Collection Account under clause fifteenth of Section 3.05(a).
Payment of such aggregate amount on each Payment Date will be made to the Holder
of the Non-Offered Subordinate Notes as follows: first, to the Class X-1 Notes,
solely as a payment of principal, until the Class X-1 Note Balance has been
reduced to $0, and thereafter, to the Class [X-2A] and Class [X-2B] Notes in the
proportion of [25%] and [75%], respectively, of the aggregate amount to be paid
on each Payment Date. No payment of any portion of such aggregate amount will be
made to the Holder of the Certificate on any Payment Date.

     Section 3.27. Reserved.

     Section 3.28. Allocation of Losses on the Mortgage Loans.

     On each Payment Date, the amount of Liquidation Loss Amounts incurred on
the Mortgage Loans in the related Collection Period that were not distributed
pursuant to clauses third, fourth, fifth, sixth or seventh of Sections 3.05(a)
will be applied as follows:

     first,  to reduce any Overcollateralization Amount (after allocation of
             Principal Collections and Interest Collections on the Mortgage
             Loans for such Payment Date) until such amount has been reduced to
             $0;

     second, to reduce the Note Balance of the Class B-2 Notes, until the
             outstanding Note Balance thereof has been reduced to $0;

     third,  to reduce the Note Balance of the Class B-1 Notes, until the
             outstanding Note Balance thereof has been reduced to $0;

                                       17
<PAGE>

     fourth, to reduce the Note Balance of the Class M-2 Notes, until the
             outstanding Note Balance thereof has been reduced to $0;

     fifth,  to reduce the Note Balance of the Class M-1 Notes, until the
             outstanding Note Balance thereof has been reduced to $0; and

     sixth,  to reduce the Note Balance of the Senior Notes until the
             outstanding Note Balances thereof have been reduced to zero.

Any such Liquidation Loss Amounts allocated to Senior Notes (other than the
Class [A-IO] Notes) shall be allocated to the Senior Notes on a pro rata basis.
The reduction of the Note Balance of any Class of Notes by application of
Liquidation Loss Amounts as described above shall entitle such Class to
reimbursement for such amount, with interest thereon, in accordance with Section
3.05(a) as a distribution of the Liquidation Loss Distribution Amount (but
without double counting for any prior distribution of Liquidation Loss
Distribution Amounts to such Class covering such loss amounts). Payment of that
reimbursement amount will not further reduce the Note Balance of the applicable
Class of Subordinate Notes. Notwithstanding any provision of this section to the
contrary, after the Note Balance of any Class has been reduced to $0, that Class
will no longer be entitled to distributions.

     Section 3.29. Additional Representations and Warranties of the Issuer.

     This Indenture creates a valid and continuing security interest (as defined
in the applicable UCC) in the Mortgage Loans in favor of the Indenture Trustee,
which security interest is prior to all other Liens, and is enforceable as such
as against creditors of and purchasers from the Issuer. The Mortgage Loans
constitute "instruments" or "accounts" within the meaning of the applicable UCC.
The Issuer owns and has good and marketable title to the Mortgage Loans free and
clear of any Lien, claim or encumbrance of any Person. All original executed
copies of each Mortgage Note (or a "lost note affidavit" in lieu thereof) that
constitute or evidence the Mortgage Loans have been delivered to the Indenture
Trustee. The Issuer has caused or will have caused, within ten days following
the Closing Date, the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law in
order to perfect the security interest in the Collateral granted to the
Indenture Trustee hereunder. Other than the security interest granted to the
Indenture Trustee pursuant to this Indenture, the Issuer has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any of the
Mortgage Loans. The Issuer has not authorized the filing of and is not aware of
any financing statements against the Issuer that include a description of
collateral covering the Mortgage Loans other than any financing statement
relating to the security interest granted to the Indenture Trustee hereunder or
that has been terminated. The Issuer is not aware of any judgment or tax lien
filings against the Issuer. None of the Mortgage Notes that constitute or
evidence the Mortgage Loans has any marks or notations indicating that they have
been pledged, assigned or otherwise conveyed to any Person other than the
Indenture Trustee. The foregoing representations and warranties shall survive
the discharge of this Indenture.

                                       18
<PAGE>

                                   ARTICLE IV
               THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE

     Section 4.01. The Notes.

     (a) The Offered Notes shall be registered in the name of a nominee
designated by the Depository. Beneficial Owners shall hold interests in the
Offered Notes through the book-entry facilities of the Depository in minimum
initial Note Balances (or Notional Balances in the case of the Class A-IO Notes)
of $1,000 and integral multiples of $1 in excess thereof. The Capped Funding
Notes shall be issued as physical notes in fully registered form in minimum
initial Capped Funding Balances of $10,000 and integral multiples of $1,000 in
excess thereof, together with any additional amount necessary to cover (i) the
aggregate Variable Funding Balance of the Variable Funding Notes at the time of
the denominational exchange thereof or (ii) the aggregate Capped Funding Balance
of any Capped Funding Notes issued in an exchange described in paragraph (d)
below. The Variable Funding Balance of the Variable Funding Notes at the time of
such exchange shall be the initial Capped Funding Balance of the Capped Funding
Notes issued in exchange therefor.

     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 Offered Notes for
the purposes of exercising the rights of Offered Noteholders hereunder. Except
as provided in the next succeeding paragraph, the rights of Beneficial Owners
with respect to the Offered 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 Offered Notes as to which they are
the Beneficial Owners. Requests and directions from, and votes of, the
Depository as Holder of the Offered 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 Offered Noteholders and give notice to the Depository
of such Record Date. Without the consent of the Issuer and the Indenture
Trustee, the Depository may not transfer any Offered Note except to a successor
Depository that agrees to hold such Offered Note for the account of the
Beneficial Owners.

     In the event that 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 after the effective date of the predecessor Depository's resignation or
removal, each Beneficial Owner shall be entitled to certificates representing
the Offered Notes it beneficially owns in the manner prescribed in Section 4.08.

     The Owner Trustee (not in its individual capacity but solely as Owner
Trustee), shall, on original issue, execute the Offered Notes on behalf of the
Issuer, and the Indenture Trustee shall authenticate and deliver the Notes to or
upon the order of the Issuer.

     (b) On each Payment Date, the aggregate Variable Funding Balance of the
Variable Funding Notes shall be increased by an amount equal to the Additional
Balance Differential for

                                       19
<PAGE>

such Payment Date, subject to the terms and conditions set forth below. The
aggregate Variable Funding Balance of the Variable Funding Notes, including the
Capped Funding Balance of the Capped Funding Notes, shall not exceed the Maximum
Variable Funding Balance, and may not increase by more than $100,000 in any
month unless the Indenture Trustee receives an Opinion of Counsel to the effect
that such increase will not have any material adverse tax consequences to the
Trust.

     (c) The Variable Funding Note issued on the Closing Date shall bear the
Designation "VFN-1", and each Variable Funding Note issued thereafter shall bear
sequential numerical designations in the order of their issuance.

     (d) Subject to the following conditions, the Variable Funding Notes may be
exchanged pursuant to Section 4.02 for one or more Capped Funding Notes. Prior
to any such exchange, the party requesting the exchange must provide an Opinion
of Counsel, addressed to the Issuer and the Indenture Trustee, to the effect
that the Capped Funding Notes shall qualify for federal income tax purposes as
indebtedness of the Issuer and neither the Issuer nor any portion thereof will
be characterized as a taxable mortgage pool within the meaning of Section
7701(i) of the Code. Upon receipt of the Opinion of Counsel, the Indenture
Trustee shall issue Capped Funding Notes with a Capped Funding Balance equal to
the Capped Funding Balance permitted under such Opinion of Counsel, in minimum
denominations as set forth in paragraph (a) above. The Capped Funding Notes
shall bear the designation "Capped" in addition to any other applicable
designation. The Capped Funding Notes shall be issued concurrently with a
reduction in the aggregate Variable Funding Balance. Any Variable Funding
Balance not represented by a Capped Funding Note shall result in the issuance of
a new Variable Funding Note having an initial Variable Funding Balance equal to
the excess of the outstanding Variable Funding Balance of the Variable Funding
Note so surrendered over the initial Capped Funding Balances of the Capped
Funding Notes. The Indenture Trustee and the Issuer agree to cooperate with each
other, the party requesting the exchange of Variable Funding Notes for Capped
Funding Notes and the Depositor, the Seller and the Owner Trustee, and to cause
no unreasonable delay in issuing Capped Funding Notes in connection with this
Section.

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

     The Issuer shall cause to be kept at the Corporate Trust Office of the
Indenture Trustee 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 of the
Indenture Trustee, the Issuer 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 Note Balances.

     No transfer of a Non-Offered Subordinate Note shall be permitted, and no
such transfer shall be registered in the Note Register or be effective
hereunder, unless evidenced by an Opinion of Counsel that establishes that such
transfer and the registration of such transfer will

                                       20
<PAGE>

not cause the Issuer, or any portion thereof, to be characterized as an
association (or a publicly traded partnership) taxable as a corporation either
by having more than 100 holders of the Certificates and the Non-Offered
Subordinate Notes at any time during the taxable year of the Issuer or
otherwise, a corporation or a taxable mortgage pool for federal income tax
purposes.

     No Non-Offered Subordinate Note or any interest therein (the "Transferred
Note or Interest") may be transferred unless all of the Non-Offered Subordinate
Notes and all interests therein are transferred together with the Transferred
Note or Interest. Any purported transfers in violation of this provision shall
be void.

     In addition, no transfer, sale, assignment, pledge or other disposition of
a Non-Offered Subordinate Note shall be made unless the proposed transferee
executes a representation letter substantially in the form of Exhibit E, that
(i) such transferee is acquiring the Non-Offered Subordinate Note for its own
behalf and is not acting as agent or custodian for any other Person or entity in
connection with such acquisition, (ii) if such transferee is a partnership,
grantor trust or S corporation for federal income tax purposes, Non-Offered
Subordinate Notes represent not more than 50% of the assets of the partnership,
grantor trust or S corporation, (iii) such transferee agrees to be bound by the
Indenture and (iv) such transferee will not (x) incur indebtedness secured by
Non-Offered Subordinate Notes where payments on such indebtedness bear a
relationship to payments on either the Mortgage Loans in Group II or the
Mortgage Loans as a whole within the meaning of Treasury Regulations Section
301.7701(i)-1(f) or (y) use a partnership, trust or other entity to indirectly
achieve the result described in clause (x).

     Except as described below, each holder of Non-Offered Subordinate Notes
shall establish its non-foreign status by submitting to the Owner Trustee and
the Indenture Trustee an IRS Form W-9 and the Certificate of Non-Foreign Status
(in substantially the form attached hereto as Exhibit F).

     A Non-Offered Subordinate Note may be transferred to a Person unable to
establish its non-foreign status as described in the preceding paragraph only if
such Person provides an Opinion of Counsel to the Depositor, the Owner Trustee
and the Indenture Trustee, which Opinion of Counsel shall not be an expense of
the Trust, the Depositor, the Owner Trustee or the Indenture Trustee,
satisfactory to the Owner Trustee and the Indenture Trustee, that such transfer
(i) will not affect the federal income tax status of the Trust or any portion
thereof and (ii) will not adversely affect the interests of any
Certificateholder or Noteholder, including as a result of the imposition of any
federal withholding taxes on the Trust (except to the extent that such
withholding taxes would be payable solely from amounts otherwise distributable
to the Non-Offered Subordinate Notes of the prospective transferee). If such
transfer occurs and such foreign Person becomes subject to such federal
withholding taxes, any such taxes will be withheld by the Indenture Trustee.
Each holder of Non-Offered Subordinate Notes unable to establish its non-foreign
status shall submit to the Indenture Trustee a properly completed copy of the
type of Form W-8 that the Indenture Trustee shall reasonably request and shall
resubmit such form every three years or with the frequency as required by
then-applicable regulations.

     No Variable Funding Note, other than any Capped Funding Note, may be
transferred. Subject to the provisions set forth below, Capped Funding Notes may
be transferred; provided,

                                       21
<PAGE>

that with respect to the initial transfer thereof by the Seller, prior written
notification of such transfer shall have been given to each Rating Agency by the
Seller.

     No transfer, sale, pledge or other disposition of a Capped Funding Note
shall be made unless such transfer, sale, pledge or other disposition is exempt
from the registration requirements of the Securities Act, and any applicable
state securities laws, or is made in accordance with the Securities Act and such
state laws. In the event of any such transfer, the Indenture Trustee or the
Issuer shall require the transferee to execute either (i) an investment letter
in substantially the form attached hereto as Exhibit B (or in such form
reasonably satisfactory to the Indenture Trustee and the Issuer), which
investment letters shall not be an expense of the Issuer, the Owner Trustee, the
Indenture Trustee or the Depositor, and which investment letter shall state
that, among other things, such transferee is a "qualified institutional buyer"
as defined under Rule 144A, acting for its own account or for the accounts of
other "qualified institutional buyers" as defined under Rule 144A, and is aware
that the proposed transferor intends to rely on the exemption from registration
requirements under the Securities Act provided by Rule 144A or (ii) a written
Opinion of Counsel (who may be in-house counsel) acceptable to and in form and
substance reasonably satisfactory to the Indenture Trustee and the Issuer that
such transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the Securities Act and such state laws or
is being made pursuant to the Securities Act and such state laws, which Opinion
of Counsel shall not be an expense of the Issuer, the Owner Trustee, the
Indenture Trustee or the Depositor, and the Indenture Trustee shall require the
transferee to execute an investment letter in substantially the form of Exhibit
C hereto, and the transferor shall execute a representation letter,
substantially in the form of Exhibit D hereto, acceptable to and in form and
substance reasonably satisfactory to the Issuer and the Indenture Trustee
certifying to the Issuer and the Indenture Trustee the facts surrounding such
transfer, which investment letter shall not be an expense of the Indenture
Trustee or the Issuer. The Holder of a Capped Funding Note desiring to effect
such transfer shall, and does hereby agree to, indemnify the Indenture Trustee
and the Issuer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal or state laws.
Notwithstanding the foregoing, the restriction of transfer specified in this
paragraph is not applicable to any Capped Funding Notes that have been
registered under the Securities Act.

     Subject to the foregoing, at the option of the related Noteholders, Notes
may be exchanged for other Notes of like tenor and Class, in each case, in
authorized initial Note Balances evidencing the same aggregate Percentage
Interests upon surrender of the Notes to be exchanged at the Corporate Trust
Office of the Indenture Trustee, as Note Registrar. With respect to any
surrender of Capped Funding Notes for exchange, the new Capped Funding Notes
delivered in exchange therefore shall bear the designation "Capped" in addition
to any other applicable designation. Whenever any Notes are so surrendered for
exchange, the Indenture Trustee shall execute, and the Note Registrar shall
authenticate and deliver, the Notes that the Noteholder making such 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 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. Notes delivered upon

                                       22
<PAGE>

any such transfer or exchange shall evidence the same obligations, and shall 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 any Notes, but the Note Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any such registration of transfer or exchange. All Notes
surrendered for registration of transfer and exchange shall be cancelled by the
Note Registrar and delivered to the Indenture Trustee for subsequent destruction
without liability on the part of either.

     The Issuer hereby appoints the Indenture Trustee as Certificate Registrar
to keep at its Corporate Trust Office a Certificate Register pursuant to Section
3.08 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 3.04
of the Trust Agreement. The Indenture Trustee 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; provided, that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall be, 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 a 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 which it was delivered or any Person
taking such replacement Note from the 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 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, the Issuer
may require the payment by the related Noteholder of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection therewith
and any other reasonable related expenses (including the fees and expenses of
the Indenture Trustee).

     Each replacement Note issued pursuant to this Section in replacement of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not such mutilated,
destroyed, lost or stolen Note shall be at any time

                                       23
<PAGE>

enforceable by anyone each such replacement Note shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Notes duly issued hereunder.

     The provisions of this Section 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 the name of which such Note is registered as of
the date of determination as the owner of such Note for the purpose of receiving
payments of principal and interest, if any, on such Note and for all other
purposes whatsoever, whether or not such Note shall be overdue; and neither the
Issuer nor 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 that
the Issuer may have acquired in any manner whatsoever, and the Indenture Trustee
shall promptly cancel all Notes so delivered. No Notes shall be authenticated in
lieu of or in exchange for any Notes cancelled as provided in this Section,
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 of cancellation thereof,
unless the Issuer directs by Issuer Request that the same be destroyed or
returned to it; provided, that such Issuer Request shall be timely and such
Notes have not been previously disposed of by the Indenture Trustee.

     Section 4.06. Book-Entry Notes.

     The Offered Notes, upon original issuance, will be issued in the form of
typewritten notes representing Book-Entry Notes, to be delivered to The
Depository Trust Company, the initial Depository, by or on behalf of the Issuer.
The Offered 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
shall receive a Definitive Note representing such Beneficial Owner's interest in
the related Offered Note, except as provided in Section 4.08. Unless and until
definitive, fully-registered Offered Notes (the "Definitive Notes") have been
issued to Beneficial Owners pursuant to Section 4.08:

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

     (b) 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

                                       24
<PAGE>

on the Notes and the giving of instructions or directions hereunder) as the sole
Holder of the Offered Notes, and shall have no obligation to Beneficial Owners;

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

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

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

Section 4.07.     Notices to Depository.

     Whenever a notice or other communication to the Offered Noteholders 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
Offered Noteholders to the Depository, and shall have no obligation to any
Beneficial Owner.

     Section 4.08. Definitive Notes.

     If (i) the Indenture Trustee determines that the Depository is no longer
willing or able to properly discharge its responsibilities with respect to the
Offered Notes and the Indenture Trustee is unable to locate a qualified
successor, (ii) the Indenture Trustee elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of an Event of Default,
Beneficial Owners representing at least a majority of the aggregate Offered Note
Balance 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 such event and of the availability of
Definitive Notes to Beneficial Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Offered Notes representing the Book-Entry
Notes by the Depository, accompanied by registration instructions, the Issuer
shall execute and the Indenture Trustee shall authenticate Definitive Notes in
accordance with the instructions of the Depository. None of the Issuer, the Note
Registrar or the Indenture Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Notes, the
Indenture Trustee shall recognize the holders of such Definitive Notes as
Offered Noteholders.

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<PAGE>

     Section 4.09. Tax Treatment.

     (a) The Issuer has entered into this Indenture, and the Offered Senior
Notes, the Variable Funding Notes, the Offered Subordinate Notes and the Class
X-1 Notes shall be issued, with the intention that, for federal, state and local
income, single business and franchise tax purposes, such Notes will qualify as
indebtedness of the Issuer.

     The Issuer, by entering into this Indenture, and each holder of an Offered
Senior Note, the Variable Funding Notes, an Offered Subordinate Notes or a Class
X-1 Note, by its acceptance of such Note (and each Beneficial Owner by its
acceptance of an interest in such Note), agrees to treat such Note for federal,
state and local income, single business and franchise tax purposes as
indebtedness of the Issuer.

     (b) The Issuer has entered into this Indenture, and the Class X-2A Notes
and the Class X-2B Notes shall be issued, with the intention that, for federal,
state and local, income, single business and franchise tax purposes, such Notes
will qualify as equity of the Issuer.

     The Issuer, by entering into this Indenture, and each holder of a Class
X-2A Note or a Class X-2B Note, by its acceptance of such Note (and each
Beneficial Owner by its acceptance of a beneficial interest in such Note),
agrees (i) to treat such Note for federal, state and local income, single
business and franchise tax purposes as equity of the Issuer and (ii) to the
terms of Section 4.09(c) hereof and Sections 3.12 and 5.03 of the Trust
Agreement.

     (c) If the Certificates, the Class X-2A Notes and Class X-2B Notes are held
by more than one Person, the net income of the Issuer for any month as
determined for federal income tax purposes (and each item of income, gain, loss,
credit and deduction entering into the computation thereof) shall be allocated
among the Certificateholders and the holders of the Class X-2A Notes and Class
X-2B Notes as of the first Record Date following the end of such month, in
accordance with each such holder's Percentage Interest in the Certificates and
the Class X-2A Notes and Class X-2B Notes. Net losses of the Issuer, if any, for
any month as determined for federal income tax purposes (and each item of
income, gain, loss, credit and deduction entering into the computation thereof)
shall be allocated among the Certificateholders and the holders of the Class
X-2A Notes and Class X-2B Notes as of the first Record Date following the end of
such month, in accordance with each such holder's Percentage Interest in the
Certificates and the Class X-2A Notes and Class X-2B Notes. The Indenture
Trustee, on behalf of the Depositor and at the direction of the Master Servicer,
is authorized to modify the allocations in this paragraph if necessary or
appropriate for the allocations to fairly reflect the economic income, gain or
loss to the holders of the Certificates and the Class X-2A Notes and Class X-2B
Notes, or as otherwise required by the Code. The Master Servicer shall act as
agent of the tax matters partner of the Trust.

     Section 4.10. Reserved.

     Section 4.11. Satisfaction and Discharge of Indenture.

     Upon the occurrence of the events set forth in the immediately following
sentence, this Indenture shall cease to be of further effect with respect to the
Notes except as to (a) rights of registration of transfer and exchange, (b)
substitution of mutilated, destroyed, lost or stolen

                                       26
<PAGE>

Notes, (c) rights of Noteholders to receive payments of principal thereof and
interest thereon, (d) Sections 3.03, 3.04, 3.06, 3.09, 3.16, 3.18 and 3.19, (e)
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 (f) 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. The Indenture Trustee,
upon the demand and at the expense of the Issuer, shall execute proper
instruments acknowledging the satisfaction and discharge of this Indenture with
respect to the Notes, when:

          (i) 367 days after either

               (A) all Notes theretofore authenticated and delivered (other than
          (1) Notes that have been destroyed, lost or stolen and that have been
          replaced or paid as provided in Section 4.03 and (2) Notes for the
          payment of which 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

               (B) all Notes not theretofore delivered to the Indenture Trustee
          for cancellation (I) have become due and payable; (II) will become due
          and payable at the last Legal Final Payment Date within one year; or
          (III) have been declared immediately due and payable pursuant to
          Section 5.02;

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

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

     Section 4.12. Application of Trust Money.

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

                                       27
<PAGE>

     Section 4.13. [Reserved.]

     Section 4.14. Repayment of Monies Held by Paying Agent.

     In connection with the satisfaction and discharge of this Indenture with
respect to the Notes, all monies then held by any Person other than the
Indenture Trustee under the provisions of this Indenture with respect to the
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 the Paying Agent shall
be released from all further liability with respect to such monies.

Section 4.15.     Temporary Offered Notes.

     Pending the preparation of Definitive Notes, the Issuer may execute, and
upon its written direction, the Indenture Trustee may authenticate and make
available for delivery, temporary Offered 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 Offered Notes may determine, as
evidenced by their execution of such Term Notes.

     If temporary Offered Notes are issued, the Issuer shall cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of the
Definitive Notes, the temporary Offered Notes shall be exchangeable for
Definitive Notes upon surrender of such temporary Offered Notes at the office or
agency of the Indenture Trustee, without charge to the related Offered
Noteholder. Upon surrender for cancellation of any one or more temporary Offered
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 Offered Notes shall in all respects be entitled to
the same benefits under this Indenture as Definitive Notes.

                                   ARTICLE V
                              DEFAULT AND REMEDIES

Section 5.01.     Notification of Certain Events of Default.

     The Issuer shall deliver to the Indenture Trustee, within five days after
learning of the occurrence of any event that with the giving of notice and the
lapse of time would become an Event of Default under paragraph (c) of the
definition of "Event of Default", written notice in the form of an Officer's
Certificate of the status thereof 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 shall occur and be continuing with respect to the
Notes or if the Depositor or the Master Servicer shall purchase all of the
Mortgage Loans pursuant to Section 8.08 of the Sale and Servicing Agreement,
then in every such case the Indenture Trustee, acting at the direction of the
Holders of the Notes representing not less than a majority of the aggregate Note
Balance of the Notes, may (or shall in the case of a Master Servicer purchase

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<PAGE>

under Section 8.08 of the Sale and Servicing Agreement) declare the Notes to be
immediately due and payable, by a notice in writing to the Issuer and to the
Indenture Trustee; and upon any such declaration, the unpaid Note Balance of the
Notes, together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable.

     At any time after a declaration of acceleration of maturity with respect to
an Event of Default has been made with respect to the Notes and before a
judgment or decree for payment of the money due has been obtained by the
Indenture Trustee as hereinafter provided in this Article, the Holders of Notes
representing not less than a majority of the aggregate Note Balance of the Notes
that caused the acceleration of the Notes, by written notice to the Issuer and
the Indenture Trustee, may in writing waive such Event of Default and rescind
and annul such declaration and its consequences if the Issuer has paid or
deposited with the Indenture Trustee a sum sufficient to pay:

          (i) 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;

          (ii) 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

          (iii) all Events of Default, other than the nonpayment of 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 a default occurs in the payment of (i)
interest on any Note when the same becomes due and payable, and such default
continues for a period of five (5) days, or (ii) principal of any Note when the
same becomes due and payable; then, in each case the Issuer shall, upon demand
of the Indenture Trustee, pay to the Indenture Trustee, for the benefit of the
Noteholders, the entire amount then due and payable on the Notes for principal
and interest, with interest on the overdue principal at the applicable Note
Rate. In addition thereto, the foregoing shall include 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) As to the Senior Notes, in case the Issuer shall fail forthwith to pay
such amounts upon such demand, the Indenture Trustee, in its own name and as
trustee of an express trust, subject to the provisions of Section 10.16, may,
and at the direction of the Holders of Senior Notes representing not less than a
majority of the aggregate Note Balance of the Senior Notes, shall, institute
Proceedings for the collection of the sums so due and unpaid, and may prosecute
such Proceedings to judgment or final decree, and may enforce the same against
the Issuer or

                                       29
<PAGE>

other obligor on the Senior Notes and collect in the manner provided by law out
of the property of the Issuer or such other obligor on the Senior Notes,
wherever situated, the monies adjudged or decreed to be payable.

     (c) If an Event of Default shall occur and be continuing, the Indenture
Trustee, subject to the provisions of Section 10.16, may, as more particularly
provided in Section 5.04, in its discretion proceed to protect and enforce its
rights and the rights of the Noteholders by such appropriate Proceedings as the
Indenture Trustee shall deem most effective to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Indenture Trustee by this Indenture or by law.

     (d) In case there shall be pending, relating to the Issuer, any other
obligor on 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 similar law; or in
case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable Proceedings relating to the Issuer or such
other obligor, 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 expressed in such Notes or by declaration
or otherwise, and irrespective of whether the Indenture Trustee shall have made
any demand pursuant to this Section, shall be entitled and empowered, by
intervention in such Proceedings or otherwise:

          (i) to file and prove a claim for the entire 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, 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 such predecessor Indenture Trustee, except as a
     result of negligence, willful misconduct or bad faith) and the Noteholders
     allowed in the related Proceeding;

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

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

                                       30
<PAGE>

     Noteholders allowed in any judicial Proceeding relating to the Issuer, its
     creditors or its property;

and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by the Noteholders to make payments to
the Indenture Trustee and, in the event the Indenture Trustee shall consent to
the making of payments directly to the Noteholders, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable compensation of
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 such predecessor
Indenture Trustee, except as a result of negligence, willful misconduct or bad
faith.

     (e) Nothing contained herein shall be deemed to permit 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 Noteholder, or to authorize
the Indenture Trustee to vote in respect of any claim of a Noteholder in any
such Proceeding, except to vote for the election of a trustee in bankruptcy or
similar Person as provided above.

     (f) All rights of action and of asserting claims under this Indenture or in
respect of the Notes may be enforced by the Indenture Trustee without the
possession of any Notes or the production thereof in any Proceeding relating
thereto. Any such Proceeding 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 benefit of the Noteholders.

     (g) In any Proceeding brought by the Indenture Trustee (including any
Proceeding 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 Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceeding.

     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 5.05 and Section 10.16,
may, or shall, at the direction of the Holders of Notes representing not less
than a majority of the aggregate Note Balance of the Notes, do one or more of
the following:

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

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

                                       31
<PAGE>

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

          (iv) sell the Trust Estate or any smaller portion thereof or any right
     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 Notes representing 100%
of the aggregate Note Balance of the Notes, (B) the proceeds of such sale or
liquidation distributable to the Noteholders are sufficient to discharge in full
all amounts then due and unpaid on the Notes for principal and interest, 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 the same would have become due if the Notes had not been declared due
and payable, and the Indenture Trustee obtains the consent of the Holders of
Notes representing not less than 66 2/3% of the aggregate Note Balance of the
Notes. In determining such sufficiency or insufficiency with respect to clauses
(B) and (C) above, the Indenture Trustee may, but need not, obtain and rely upon
an opinion of an Independent investment banking or accounting firm of national
reputation addressed to the Indenture Trustee as to the feasibility of such
proposed action and as to the sufficiency of the portion of the Trust Estate for
such purpose. Notwithstanding the foregoing, for so long as a Servicing Default
shall not have 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 Sale and Servicing Agreement. Notwithstanding any sale of the Mortgage
Loans pursuant to this Section 5.04(a), the Indenture Trustee shall, for so long
as any principal or accrued interest on the Notes remains unpaid, continue to
act as Indenture Trustee hereunder.

     (b) If the Indenture Trustee collects any money or property pursuant to
this Article (or in any case following an Event of Default and an acceleration
of the Notes), it shall pay out such money or property in the following order:

          (i) to the Indenture Trustee, for amounts due under Section 6.07 and
     to the Administrator for amounts due under Section 4 of the Administration
     Agreement and to the Owner Trustee, for amounts due to it under the Basic
     Documents;

          (ii) to the Senior Noteholders, for amounts due and unpaid on the
     Senior Notes in respect of interest, ratably, without preference or
     priority of any kind, according to the amounts then due and payable;

          (iii) to the Senior Noteholders, for amounts due and unpaid on the
     Notes in respect of principal, ratably, without preference or priority of
     any kind, until the respective Note Balances of the Senior Notes have been
     reduced to zero;

          (iv) to the Class M-1 Noteholders, for amounts due and unpaid on the
     Class M-1 Notes in respect of interest, ratably, without preference or
     priority of any kind, according to the amounts then due and payable;

                                       32
<PAGE>

          (v) to the Class M-1 Noteholders, for amounts due and unpaid on the
     Class M-1 Notes in respect of principal, ratably, without preference or
     priority of any kind, according to the amounts then due and payable;

          (vi) to the Class M-2 Noteholders, for amounts due and unpaid on the
     Class M-2 Notes in respect of interest, ratably, without preference or
     priority of any kind, according to the amounts then due and payable;

          (vii) to the Class M-2 Noteholders, for amounts due and unpaid on the
     Class M-2 Notes in respect of principal, ratably, without preference or
     priority of any kind, according to the amounts then due and payable;

          (viii) to the Class B-1 Noteholders, for amounts due and unpaid on the
     Class B-1 Notes in respect of interest, ratably, without preference or
     priority of any kind, according to the amounts then due and payable;

          (ix) to the Class B-1 Noteholders, for amounts due and unpaid on the
     Class B-1 Notes in respect of principal, ratably, without preference or
     priority of any kind, according to the amounts then due and payable;

          (x) to the Class B-2 Noteholders, for amounts due and unpaid on the
     Class B-2 Notes in respect of interest, ratably, without preference or
     priority of any kind, according to the amounts then due and payable;

          (xi) to the Class B-2 Noteholders, for amounts due and unpaid on the
     Class B-2 Notes in respect of principal, ratably, without preference or
     priority of any kind, according to the amounts then due and payable; and

          (xii) to the Indenture Trustee any remaining amounts for distribution
     to the Holders of Certificates and the Non-Offered Subordinate Notes in
     accordance with Section 3.26(d).

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

     Section 5.05. Optional Preservation of the Trust Estate.

     If the Notes have been declared 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
Issuer 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. 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
addressed to the Indenture Trustee as to the feasibility of such proposed action
and as to the sufficiency of the Trust Estate for such purpose.

                                       33
<PAGE>

     Section 5.06. Limitation of Suits.

     No Noteholder shall have any right to institute any Proceeding with respect
to this Indenture, for the appointment of a receiver or trustee or for any other
remedy hereunder, unless (subject to the provisions of Section 10.16):

     (a) such Noteholder shall have previously given written notice to the
Indenture Trustee of a continuing Event of Default;

     (b) the Holders of Notes representing not less than 25% of the aggregate
Note Balance of the Notes shall 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;

     (c) such Noteholders shall have offered the Indenture Trustee reasonable
indemnity against the costs, expenses and liabilities that may be incurred by it
in complying with such request;

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

     (e) no direction inconsistent with such written request shall have been
given to the Indenture Trustee during such 60-day period by the Holders of Notes
representing not less than a majority of the aggregate Note Balance of the
Notes.

     No Noteholder shall have any right in any manner whatsoever by virtue of or
by availing itself of any provision of this Indenture to affect, disturb or
prejudice the rights of any other Noteholder, to obtain or to seek to obtain
priority or preference over any other Noteholder or to enforce any right under
this Indenture, in each case except in the manner herein provided.

     In the event that the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders, each
representing less than a majority of the aggregate Note Balance of the Senior
Notes, as applicable, the Indenture Trustee in its sole discretion may determine
what action, if any, shall be taken, notwithstanding any other provision of this
Indenture.

     Section 5.07. Unconditional Right of Noteholders To Receive Principal and
Interest.

     Notwithstanding any other provision of this Indenture, each Noteholder
shall have the right, which is absolute and unconditional, to receive payment of
the interest and principal, if any, due on such Noteholder's Notes on or after
the due date expressed in such Notes or in this Indenture and to institute suit
for the enforcement of any such payment. Such right shall not be impaired
without the consent of the related Noteholder.

     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,

                                       34
<PAGE>

then 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 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 Noteholder to exercise
any right or remedy accruing upon an 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 Indenture Trustee or the Noteholders may be exercised from time to time, and
as often as may be deemed expedient, by the Indenture Trustee or the
Noteholders, as the case may be.

     Section 5.11. Control by Noteholders.

     (a) The Holders of Notes representing not less than a majority of the
aggregate Note Balance of the 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 conflict with any rule of law or with
this Indenture;

          (ii) subject to Section 5.04, any direction to the Indenture Trustee
to sell or liquidate the Trust Estate shall be given by the Holders of Notes
representing 100% of the aggregate Note Balance of the 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 aggregate Note Balance of the Notes to sell
or liquidate the Trust Estate shall be of no force or 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 the Noteholders as set forth in this Subsection,
and subject to Section 6.01, the Indenture Trustee need not take any action that
it determines might subject it to

                                       35
<PAGE>

liability or might materially and adversely affect the rights of any Noteholders
not consenting thereto unless the Indenture Trustee has received indemnity
satisfactory to it from a Noteholder.

     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 representing not less than a
majority of the aggregate Note Balance of the Notes that caused the acceleration
of such 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
such Notes or (b) in respect of a covenant or provision hereof that cannot be
modified or amended without the consent of all Noteholders or each Noteholder
affected thereby. In the case of any such waiver, the Issuer, the Indenture
Trustee and the applicable Noteholders shall be restored to their respective
former positions and rights hereunder; provided, that 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; provided, that no such waiver shall extend to any subsequent or other
Event of Default or impair any right consequent thereto.

     Section 5.13. Undertaking for Costs.

     The parties hereto agree, and each Noteholder, by such Noteholder's
acceptance of a Note, shall be deemed to have agreed, that any court may in its
discretion require, in any Proceeding for the enforcement of any right or remedy
under this Indenture, or in any Proceeding against the Indenture Trustee for any
action taken, suffered or omitted by it as Indenture Trustee, the filing by any
party litigant in such Proceeding of an undertaking to pay the costs of such
Proceeding, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such
Proceeding, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided, that the provisions of this
Section shall not apply to any Proceeding instituted by (i) the Indenture
Trustee, (ii) any Noteholder or group of Noteholders, in each case holding Notes
representing in the aggregate more than 10% of the aggregate Note Balance (or in
the case of a right or remedy under this Indenture which is instituted by the
Senior Notes, or the Subordinate Notes, more than 10% of the Note Balance of the
Senior Notes or the Subordinate Notes, as the case may be) or (iii) any
Noteholder for the enforcement of the payment of principal of or interest on any
Note on or after the due date 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, plead or in any manner whatsoever claim or
take the benefit or advantage of any stay or extension law wherever enacted, now
or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Indenture

                                       36
<PAGE>

Trustee, but will suffer and permit the execution of each 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 (each, a "Sale") of
the Trust Estate pursuant to Section 5.04 is expressly subject to the provisions
of Section 5.05 and this Section. 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. The power to effect any such Sale shall continue unimpaired
until the Trust Estate has been sold or all amounts payable on the related
Classes of Notes under this Indenture 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 smaller portion thereof, unless:

          (i) the Noteholders of all affected Notes direct the Indenture Trustee
     to make such Sale;

          (ii) the proceeds of such Sale would be not less than the entire
     amount that would be payable to the affected Securityholders, in full
     payment thereof in accordance with Section 5.02, on the Payment Date next
     succeeding the date of such Sale; or

          (iii) 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 (and in making any such determination, the Indenture
     Trustee may rely upon an opinion of an Independent investment banking firm
     obtained and delivered as provided in Section 5.05), and the Holders of
     Notes representing not less than 66 2/3% of the aggregate Note Balance of
     the affected 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 paragraph.

     (c) Unless the Noteholders 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 clause
(ii) of paragraph (b) of this Section 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 greater than the highest
other bid.

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

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

                                       37
<PAGE>

     upon distribution of the net proceeds of such Sale, payable thereon. 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;

          (ii) the Indenture Trustee may bid for and acquire the property
     offered for Sale, may, subject to any requirements of and to the extent
     permitted by applicable law in connection therewith, purchase all or any
     portion of the Trust Estate in a private Sale, and may, in lieu of paying
     cash therefor, make settlement for the purchase price by crediting the
     gross sale price against the sum of (A) the amount that would be
     distributable to the Securityholders 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 such Sale and of any Proceeding in connection
     therewith that 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;

          (iii) 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;

          (iv) 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

          (v) no purchaser or transferee at any such 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 any other 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 written request from the Indenture Trustee to do
so, the Issuer, in its capacity as owner 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
Servicer, as applicable, of each of their obligations to the Issuer under or in
connection with the Mortgage Loan Purchase and Servicing Agreement

                                       38
<PAGE>

and the Sale and 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 and Servicing Agreement, and the Sale
and 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 Proceedings to compel or secure performance by
the Seller or the Master Servicer of each of their obligations under the
Mortgage Loan Purchase and Servicing Agreement and the Sale and Servicing
Agreement.

     (b) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee, as pledgee of the Mortgage Loans, at the direction (which
direction shall be in writing or by telephone confirmed in writing promptly
thereafter) of the Holders of Notes representing not less than 66 2/3% of the
aggregate Note Balance 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 and Servicing
Agreement or the Sale and 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 respective obligations
to the Issuer thereunder and to give any consent, request, notice, direction,
approval, extension or waiver under the Mortgage Loan Purchase and Servicing
Agreement or the Sale and Servicing Agreement, as the case may be, and any right
of the Issuer to take such action shall not be suspended. In connection
therewith, as determined by the Indenture Trustee, the Issuer shall execute all
documents provided to it by the Indenture Trustee necessary to effect the
transfer of the Mortgage Loans to the Indenture Trustee.

                                   ARTICLE VI
                              THE INDENTURE TRUSTEE

     Section 6.01. Duties of Indenture Trustee.

     (a) If an Event of Default shall have occurred and be 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 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 that conform to the
     requirements of this Indenture; provided, that the Indenture Trustee shall
     examine such certificates and opinions to determine whether or not they
     conform to the requirements of this Indenture.

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<PAGE>

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

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

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

          (iii) the Indenture Trustee shall not be liable with respect to any
     action it takes or omits to take in good faith in accordance with a
     direction received by it pursuant to Section 5.11.

     (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.

     (h) For all purposes under this Indenture, the Indenture Trustee shall not
be deemed to have notice or knowledge of any Amortization Event or Event of
Default unless a Responsible Officer has actual knowledge thereof or unless
written notice of any event which is in fact an Amortization Event or an Event
of Default is received by the Indenture Trustee at the Corporate Trust Office,
and such notice references the Notes generally, the Issuer, or this Indenture.

     (i) The Indenture Trustee shall comply with all applicable information
reporting requirements with respect to payments on the Notes under this
Indenture.

     Section 6.02. Rights of Indenture Trustee.

     (a) The Indenture Trustee may rely upon 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 such 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 any such Officer's Certificate or Opinion of Counsel.

                                       40
<PAGE>

     (c) The Indenture Trustee may execute any of the trusts or powers or
perform any duties hereunder either directly or by or through agents, attorneys,
a custodian or a 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 that it believes to be authorized or within its
rights or powers, provided 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 Securities and may otherwise deal with the Issuer and
its Affiliates with the same rights that it would have if it were not Indenture
Trustee. Any Note Registrar, co-registrar or co-paying agent may do the same
with like rights. Notwithstanding the foregoing, 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 (a) responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes,
(b) accountable for the Issuer's use of the proceeds from the sale of the Notes
or (c) responsible for any statement of the Issuer in the Indenture, 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.

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

     Section 6.06. Reports by Indenture Trustee to Noteholders.

     The Indenture Trustee shall deliver to each Noteholder such information in
the possession of the Indenture Trustee as may be required to enable such
Noteholder to prepare its federal and state income tax returns. In addition,
upon Issuer Request, the Indenture Trustee shall promptly furnish information in
the possession of the Indenture Trustee reasonably requested by the Issuer

                                       41
<PAGE>

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.

     The Indenture Trustee shall be compensated and indemnified by the Master
Servicer in accordance with Section 6.06 of the Sale and Servicing Agreement,
including without limitation the payment to itself on each Payment Date of the
Indenture Trustee Fee then due, and all amounts owing to the Indenture Trustee
hereunder and not paid pursuant to Sections 3.17 and 6.06 of the Sale and
Servicing Agreement shall be paid solely as provided in Sections 3.05(a) and
5.04 (subject to the priorities set forth therein). Except as provided in the
following sentence, the permitted expenses reimbursable to the Indenture Trustee
pursuant to the first paragraph of Section 3.05(a) shall be limited to a total
of $[_____] per year. In the event that the Indenture Trustee becomes the
successor to the Master Servicer pursuant to Section 7.02 of the Sale and
Servicing Agreement, then the expenses of the Indenture Trustee payable in
connection with the transfer of servicing shall also constitute permitted
expenses reimbursable under the first paragraph of Section 3.05(a) and shall not
be subject to the $[_____] Indenture Trustee yearly expense cap contained in the
preceding sentence.

     The Indenture Trustee's compensation shall not be limited by any law
relating to compensation of a trustee of an express trust. The Issuer shall
reimburse the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by the Indenture Trustee in addition to the compensation for
its services as provided in Section 3.05(a) (subject to the priorities set forth
therein). Such expenses shall include costs of collection and reasonable
compensation and expenses, disbursements and advances of the Indenture Trustee's
agents, counsel, accountants and experts, and payment to the Owner Trustee of
its unpaid expenses and reimbursable amounts.

     The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of an Event of Default specified in
paragraph (d) or (e) of the definition thereof with respect to the Issuer, such
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. The
Indenture Trustee may resign at any time by so notifying the Issuer. The Holders
of Notes representing not less than a majority of the aggregate Note Balance of
the Notes may remove the Indenture Trustee by so notifying the Indenture Trustee
and may appoint a successor Indenture Trustee. The Issuer shall remove the
Indenture Trustee if:

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

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

                                       42
<PAGE>

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

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

     If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee, which consent shall
not be unreasonably withheld. In addition, the Indenture Trustee shall resign to
avoid being directly or indirectly controlled by the Issuer.

     A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and 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 the 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 Notes representing not less than a
majority of the aggregate Note Balance 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 a court of competent jurisdiction for the removal of the Indenture
Trustee and the appointment of a successor 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 without any further act shall be the successor Indenture Trustee
hereunder; provided, that such corporation or banking association shall be
otherwise qualified and eligible under Section 6.11. The Indenture Trustee shall
provide each Rating Agency with written notice of any such transaction after the
Closing Date.

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

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<PAGE>

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

     (a) Notwithstanding any other provision 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 such 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, and to vest in such Person or Persons, in such capacity and
for the benefit of the Noteholders, such title to the Trust Estate or any part
thereof and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Indenture Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.11, and no notice to Noteholders of the appointment of any co-trustee or
separate trustee shall be required under Section 6.08.

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

          (i) all rights, powers, duties and obligations conferred or imposed
     upon the 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. Each instrument
appointing a separate trustee or co-trustee shall refer to this Indenture and to
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Indenture
Trustee or separately, as may be provided therein, subject to all provisions of
this Indenture, including each provision relating to the conduct of, affecting
the liability of or affording protection to the Indenture Trustee. Each such
instrument shall be filed with the Indenture Trustee.

     (d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any

                                       44
<PAGE>

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.

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

     (b) Within ninety (90) days after ascertaining the occurrence of an Event
of Default which shall not have been cured or waived, unless authorized by the
TIA or the Commission, the Indenture Trustee shall resign with respect to the
Senior Notes, the Class M Notes and/or the Class B Notes in accordance with
Section 6.08 of this Indenture, and the Issuer shall appoint a successor
Indenture Trustee for two or more of such Classes, as applicable, so that there
will be separate Indenture Trustees for the Senior Notes, the Class M Notes and
the Class B Notes. In the event the Indenture Trustee fails to comply with the
terms of the preceding sentence, the Indenture Trustee shall comply with clauses
(ii) and (iii) of TIA Section 310(b).

     (c) In the case of the appointment hereunder of a successor Indenture
Trustee with respect to any Class of Notes pursuant to this Section 6.11,
Issuer, the retiring Indenture Trustee and the successor Indenture Trustee with
respect to such Class of Notes shall execute and deliver an indenture
supplemental hereto wherein each successor Indenture Trustee shall accept such
appointment and which (i) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, the successor Indenture
Trustee all the rights, powers, trusts and duties of the retiring Indenture
Trustee with respect to the Notes of the Class to which the appointment of such
successor Indenture Trustee relates, (ii) if the retiring Indenture Trustee is
not retiring with respect to all Classes of Notes, shall contain such provisions
as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Indenture Trustee with respect to the
Notes of each Class as to which the retiring Indenture Trustee is not retiring
shall continue to be vested in the Indenture Trustee and (iii) 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
Indenture Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Indenture Trustees co-trustees of
the same trust and that each such Indenture Trustee shall be a trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Indenture Trustee; and upon the removal of the
retiring Indenture Trustee shall become effective to the extent provided herein.

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<PAGE>

     Section 6.12. Preferential Collection of Claims Against Issuer.

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

     Section 6.13. Representations and Warranties.

     The Indenture Trustee hereby represents and warrants that:

     (a) the Indenture Trustee is a national banking association duly organized,
validly existing and in good standing under the laws of the United States, with
full power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently conducted;

     (b) 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 action;

     (c) 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 charter or bylaws of the Indenture Trustee
or any agreement or other instrument to which the Indenture Trustee is a party
or by which it may be bound;

     (d) there are no Proceedings or investigations pending or, to the Indenture
Trustee's knowledge, threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Indenture Trustee or any of its properties: (i) asserting the
invalidity of this Indenture, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Indenture or (iii) 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; and

     (e) the Indenture Trustee does not have notice of any adverse claim (as
such terms are used in UCC Section 8-302) with respect to the Mortgage Loans.

     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 Trust Estate in
trust for the benefit of the Noteholders;

     (b) to authenticate and deliver the Notes substantially in the form of
Exhibits A-1, A-2, A-3, and A-4 hereto 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.

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<PAGE>

     Section 6.15. Conflicting Instructions.

     If the Indenture Trustee receives conflicting instructions from the Senior
Noteholders and the Subordinate Noteholders, the instructions of the Senior
Noteholders shall control.

                                  ARTICLE VII
                         NOTEHOLDERS' LISTS AND REPORTS

     Section 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders.

     The Issuer shall furnish or cause to be furnished to the Indenture Trustee
(i) 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
Noteholders as of such Record Date, and (ii) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list in similar form and of similar content as of
a date not more than 10 days prior to the time such list is furnished; provided,
that for so long as the Indenture Trustee is the Note Registrar, no such list
need 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 Noteholders contained in
the most recent list furnished to the Indenture Trustee as provided in Section
7.01, and the names and addresses of the Noteholders 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 upon receipt of a new list so
furnished.

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

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

     Section 7.03. Reports by Issuer.

     (a) Within 15 days after each Payment Date, the Indenture Trustee shall
file with the Commission via the Electronic Data Gathering and Retrieval System
(EDGAR), a Form 8-K with a copy of the statement to the Noteholders for such
Payment Date as an exhibit thereto. Prior to January 31, 200__ the Indenture
Trustee shall prepare a Form 15 Suspension Notification with respect to the
Trust Estate. Prior to March 31, 200__, the Indenture Trustee shall prepare and
file a Form 10-K to be executed by the Master Servicer on behalf of the Issuer,
in substance conforming to industry standards, with respect to the Trust Estate.
The Master Servicer shall execute the Form 10-K after reviewing a satisfactory
document and the Indenture Trustee shall file the Form 10-K. The Issuer hereby
grants to each of the Master Servicer and the Indenture Trustee a limited power
of attorney to file each such document on behalf of the Issuer. Such power of
attorney shall continue until either the earlier of (i) receipt by the Indenture
Trustee from the Issuer of written termination of such power of attorney and
(ii) the termination of the Issuer. The Issuer agrees to promptly furnish to the
Indenture Trustee, from time to time

                                       47
<PAGE>

upon request, such further information, reports, and financial statements within
its control related to this Indenture and the Mortgage Loans as the Indenture
Trustee reasonably deems appropriate to prepare and file all necessary reports
with the Commission. The Indenture Trustee shall have no responsibility to file
any item other that those specified in this section.

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

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

     (d) In order to comply with their obligations in clause (a) above, the
Indenture Trustee and the Master Servicer shall deliver the documents referred
to in Section 3.16 of the Sale and Servicing Agreement to each other within the
time periods specified therein.

     Section 7.04. Reports by Indenture Trustee.

     If required by TIA ss.313(a), within 60 days after each January 1,
commencing with January 1, 200__, the Indenture Trustee shall mail to each
Noteholder as required by TIA ss.313(c). The Indenture Trustee also shall comply
with TIA ss. 313(b).

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

                                       48
<PAGE>

     Section 8.02. [Reserved.]

     Section 8.03. Officer's Certificate.

     The Indenture Trustee shall receive at least seven days prior written
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 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 satisfied.

     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 and the Indenture Trustee of all amounts required to
be distributed pursuant to Article III or Article V.

     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 shall be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to the
application of any monies.

     (b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to this Indenture
have been paid, release the 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 only upon
receipt of an Issuer Request.

     Section 8.06. Surrender of Notes upon Final Payment.

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

                                   ARTICLE IX
                            SUPPLEMENTAL INDENTURES

     Section 9.01. Supplemental Indentures Without Consent of Noteholders.

     Without the consent of the Holders of any Notes, but with prior written
notice to each Rating Agency, 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

                                       49
<PAGE>

execution thereof), in form satisfactory to the Indenture Trustee, for any of
the following purposes:

     (a) 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;

     (b) 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;

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

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

     (e) to cure any ambiguity or mistake, 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;

     (f) 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
Noteholders (as evidenced by an Opinion of Counsel addressed to the Indenture
Trustee);

     (g) 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

     (h) 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 supplemental indentures shall be entered into
unless the Indenture Trustee shall have received (1) an Opinion of Counsel to
the effect that entering into such supplemental indenture will not (i) cause the
Issuer, or any portion thereof, to be characterized as an association (or a
publicly traded partnership) taxable as a corporation, a corporation or a
taxable mortgage pool for federal income tax purposes or (ii) have any material
adverse tax consequence to the Noteholders or (2) confirmation from the Rating
Agencies that such Supplemental Indenture will not result in a Rating Event.

     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.

                                       50
<PAGE>

     Section 9.02. Supplemental Indentures With Consent of Noteholders.

     The Issuer and the Indenture Trustee, when authorized by an Issuer Request,
may, with prior written notice to each Rating Agency and the Holders of Notes
representing not less than a majority of the aggregate Note Balance of (i) the
Class I-A Notes if any Class I-A Notes are the only Notes affected thereby, (ii)
the Group II Notes if any Group II Notes are the only Notes affected thereby,
(iii) the Class A-IO Notes if the Class A-IO Notes are the only Notes Affected
(iv) the Subordinate Notes if any Subordinate Notes are the only Notes affected
thereby and (v) all Notes, if the Class I-A Notes, the Group II Notes, the Class
A-IO Notes and the Subordinate Notes, are all affected thereby, by Act of such
Noteholders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provision to, or changing in any manner or eliminating any of the provisions of,
this Indenture or of modifying in any manner the rights of such Noteholders
under this Indenture; provided, that no such supplemental indenture may, without
the consent of the Holder of each Note affected thereby:

     (a) change the date of payment of any installment of principal of or
interest on any Note, 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, 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;

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

     (c) 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";

     (d) reduce the percentage of the aggregate Note Balance or the Percentage
Interest with respect to which the consent of the Holders of Notes representing
such Note Balance is required to direct the Indenture Trustee to direct the
Issuer to sell or liquidate the Trust Estate pursuant to Section 5.04;

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

     (f) modify any provision of this Indenture in such a 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

                                       51
<PAGE>

     (g) 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.

     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 all Noteholders, 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 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, the Indenture Trustee shall
mail to the Noteholders to which such amendment or supplemental indenture
relates a notice setting forth in general terms the substance of such
supplemental indenture. Notwithstanding the foregoing, any failure of the
Indenture Trustee to mail such notice or any defect therein shall not in any way
impair or affect the validity of any such supplemental indenture.

     No supplemental indentures may be entered into under this Section 9.02
unless the Indenture Trustee shall have received an Opinion of Counsel to the
effect that such supplemental indenture will not (i) cause the Issuer, or any
portion thereof, to be characterized as an association (or a publicly traded
partnership) taxable as a corporation, a corporation or a taxable mortgage pool
for federal income tax purposes or (ii) have any material adverse tax
consequence to the Noteholders.

     Section 9.03. Execution of Supplemental Indentures.

     In executing or permitting the additional trusts created by any
supplemental indenture permitted by this Article 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
Noteholders shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all 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.

                                       52
<PAGE>

     Section 9.05. Conformity with Trust Indenture Act.

     Each amendment of this Indenture and every supplemental indenture executed
pursuant to this Article shall conform to the requirements of the TIA as then in
effect for so long as this Indenture shall then be qualified under the TIA.

     Section 9.06. Reference in Notes to Supplemental Indentures.

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

                                    ARTICLE X
                                 MISCELLANEOUS

     Section 10.01. Compliance Certificates and Opinions, etc.

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

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

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

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

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

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

                                       53
<PAGE>

          (v) if the signer of such certificate or opinion is required to be
     Independent, the statement required by the definition of the term
     "Independent".

     (b) Prior to the deposit of any Collateral or other property or securities
with the Indenture Trustee that is to be made as 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.

     (c) 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 paragraph (b) 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 as 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 paragraph (b) above and this paragraph,
is 10% or more of the aggregate Note Balance, but such a certificate need not be
furnished with respect to any securities so deposited, if the fair value thereof
to the Issuer as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the aggregate Note Balance.

     (d) 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.

     (e) 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 paragraph (d) 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 paragraph (f) 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 paragraph (d) above and this
paragraph equals 10% or more of the aggregate Note Balance, 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 aggregate Note Balance.

     (f) Notwithstanding any provision of this Indenture, the Issuer may,
without compliance with the requirements of the other provisions of this
Section, (i) collect, sell or otherwise dispose of the Mortgage Loans as and to
the extent permitted or required by the Basic Documents or (ii) make cash
payments out of the Trustee Collection 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 twelve months, commencing December 31, 200__, an
Officer's Certificate of the Issuer stating that all the dispositions of
Collateral described in clauses (i) or (ii) above that

                                       54
<PAGE>

occurred during the preceding twelve calendar months were in the ordinary course
of the Issuer's business and that the proceeds thereof were applied in
accordance with the Basic Documents.

     Section 10.02. Form of Documents Delivered to Indenture Trustee.

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

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

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

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

     Section 10.03. Acts of Noteholders.

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

                                       55
<PAGE>

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,
shall be conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section.

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

     (c) The Note Register shall prove ownership of Notes.

     (d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by any Noteholder 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.

     Notices required to be given hereunder shall be given in the manner set
forth in Section 8.03 of the Sale and Servicing Agreement.

     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's
address as it appears on the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Noteholders is given by mail, neither the failure to
mail such notice nor any defect in any notice so mailed to any 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, any Person entitled
to receive such notice may waive such notice in writing, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Noteholders shall be filed with the Indenture Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

     In 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 each Rating Agency, 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.

                                       56
<PAGE>

     Section 10.06. Conflict with Trust Indenture Act.

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

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

     Section 10.07. Effect of Headings.

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

     Section 10.08. Successors and Assigns.

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

     Section 10.09. Severability of Provisions.

     If any one or more of the covenants, agreements, provisions or terms of
this Indenture shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Indenture, and
shall in no way affect the validity or enforceability of the other provisions of
this Indenture or of the Notes or the rights of the Noteholders.

     Section 10.10. [Reserved.]

     Section 10.11. Legal Holidays.

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

     Section 10.12. Governing Law.

     THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT CONSIDERATION OF THE CHOICE OF LAW PRINCIPLES THEREOF, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                                       57
<PAGE>

     Section 10.13. 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 10.14. 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 10.15. 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 respective
individual capacities) 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 Articles V, VI and VII of the Trust Agreement.

     Section 10.16. No Petition.

     The Indenture Trustee, by entering into this Indenture, and each
Noteholder, by its acceptance of 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 federal or state bankruptcy or similar law in connection
with any obligation relating to the Notes, this Indenture or any of the other
Basic Documents.

     Section 10.17. Inspection.

     The Issuer agrees that, on reasonable prior written notice, it will 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

                                       58
<PAGE>

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 applicable law (and all reasonable applications for confidential treatment
are unavailing), and except to the extent the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.

                                *    *    *

                                       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.

                                  [NAME OF ISSUING TRUST],
                                  as Issuer

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

                                  By: __________________________________________
                                      Name:
                                      Title:

                                  [NAME OF INDENTURE TRUSTEE],
                                    as Indenture Trustee

                                  By: __________________________________________
                                      Name:
                                      Title:

[NAME OF INDENTURE TRUSTEE] hereby
accepts the appointment as Paying
Agent pursuant to Section 3.03
hereof and as Note Registrar
pursuant to Section 4.02 hereof.

By: ______________________________
    Name:
    Title:

                                       60
<PAGE>

STATE OF _________   )
                     )    SS.:
COUNTY OF ________   )

     On this __ day of ______, 200__, before me personally appeared _______, to
me known, who being by me duly sworn, did depose and say that he is the ______of
[Name of Indenture Trustee], as Indenture Trustee, one of the parties described
in and that executed the above instrument; that he knows the seal of said party;
that the seal affixed to said instrument is the seal of such party; that it was
so affixed by order of said party; and that he signed his name thereto by like
order.

     Sworn to and subscribed before me this ____ day of ______, 200__,, by
_________________.

                                         ____________________________________
                                         Notary Public

                                         Name:  _____________________________

                                         My Commission Expires: _____________

[Notarial Seal]

                                       61
<PAGE>

                                                                     EXHIBIT A-1

                          FORM OF OFFERED SENIOR NOTES

     Exhibit A-1a - Form of Class I-A Note
     Exhibit A-1b - Form of Class II-A Note
     Exhibit A-1c - Form of Class A-IO Note

                                     A-1-1
<PAGE>

                                                                    EXHIBIT A-1a

                             FORM OF CLASS I-A NOTE

                                     A-1-2
<PAGE>

                                                                    EXHIBIT A-1b

                             FORM OF CLASS II-A NOTE

                                     A-1-3
<PAGE>

                                                                    EXHIBIT A-1c

                             FORM OF CLASS A-IO NOTE

                                     A-1-4
<PAGE>

                                                                     EXHIBIT A-2

                        FORM OF OFFERED SUBORDINATE NOTES

     Exhibit A-2a - Form of Class M-1 Note
     Exhibit A-2b - Form of Class M-2 Note
     Exhibit A-2c - Form of Class B-1 Note
     Exhibit A-2d - Form of Class B-2 Note

                                     A-2-1
<PAGE>

                                                                    EXHIBIT A-2a

                             Form of Class M-1 Note

                                     A-2-2
<PAGE>

                                                                    EXHIBIT A-2b

                             Form of Class M-2 Note

                                     A-2-3
<PAGE>

                                                                    EXHIBIT A-2c

                             Form of Class B-1 Note

                                     A-2-4
<PAGE>

                                                                    EXHIBIT A-2d

                             Form of Class B-2 Note

                                     A-2-5
<PAGE>

                                                                     EXHIBIT A-3

                         FORM OF NON-OFFERED SENIOR NOTE

     Exhibit A-3a - Form of Variable Funding Note
     Exhibit A-3b - Form of Capped Funding Note

                                     A-3-1
<PAGE>

                                                                    EXHIBIT A-3a

                          Form of Variable Funding Note

                                     A-3-2
<PAGE>

                                                                    EXHIBIT A-3b

                           Form of Capped Funding Note

                      FORM OF CAPPED VARIABLE FUNDING NOTE

     THIS CAPPED VARIABLE FUNDING NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
     TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE
     EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND
     IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF THE
     INDENTURE REFERRED TO HEREIN.

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

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

                             [NAME OF ISSUING TRUST]

              HOME EQUITY LOAN-BACKED CAPPED VARIABLE FUNDING NOTE,
                                 SERIES 200__-__

     No. VFN Capped -___

     Note Rate: as set forth herein.

     Initial Principal Balance: ___

     [Name of Issuing Trust], a statutory trust duly organized and existing
under the laws of the State of [Delaware] (herein referred to as the "Issuer"),
for value received, hereby promises to pay to [Name of Sellyr] or its registered
assigns, the principal amount set forth on Schedule A attached hereto (or
otherwise owing hereunder as determined pursuant to the Indenture), payable on
each Payment Date in an amount equal to the pro rata portion allocable hereto
(based on the Variable Funding Balances of all Variable Funding Notes
immediately prior to such Payment Date) of the aggregate amount, if any, payable
in respect of principal of the Variable Funding Notes pursuant to Section 3.05
of the indenture dated as of ______, 200__, (the "Indenture"),

                                     A-3-3
<PAGE>

between the Issuer and Wells Fargo Bank Minnesota, National Association, as
indenture trustee (the "Indenture Trustee"); provided, however, that the entire
unpaid principal amount of this Capped Variable Funding Note shall be due and
payable on the [_______________] Payment Date to the extent not previously paid
on a prior Payment Date. Capitalized terms used herein that are not otherwise
defined shall have the meaning set forth in Appendix A to the Indenture.

     Interest on this Capped Variable Funding Note will be paid monthly on each
Payment Date at the Note Rate for the related Interest Period subject to
limitations that may result in Interest Carry-Forward Amounts (as further
described in the Indenture). Interest on this Capped Variable Funding Note will
accrue for each Payment Date from the most recent Payment Date on which interest
has been paid (in the case of the first Payment Date, from the Closing Date) to
but excluding such Payment Date. Interest will be computed on the basis of the
actual number of days in each Interest Period and 360-day year.

     Principal of and interest on this Capped Variable Funding Note will be
payable on the related Payment Date as described in the Indenture. "Payment
Date" means the 25th day of each month or, if any such day is not a Business
Day, the immediately succeeding Business Day.

     If an Event of Default shall have occurred and be continuing with respect
to the Notes, then the Indenture Trustee, acting at the direction of the Holders
of Notes representing not less than a majority of the aggregate Note Balance of
the Notes, may declare the Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the
Variable Funding Notes shall be made pro rata to the Holders of Variable Funding
Notes entitled thereto.

     Payments of interest on this Capped Variable Funding Note due and payable
on each Payment Date, together with the installment of principal, if any, to the
extent not in full payment of this Capped Variable Funding Note, shall be made
by check mailed to the Person whose name appears as the Registered Holder of
this Capped Variable Funding Note (or one or more Predecessor Notes) on the Note
Register as of the close of business on each Record Date. Any reduction in the
principal amount of this Capped Variable Funding Note (or any one or more
Predecessor Notes) effected by any payments made on any Payment Date shall be
binding upon all future Holders of this Capped Variable Funding Note and of any
Variable Funding Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Capped Variable Funding Note
on a Payment Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Registered Holder hereof as of
the Record Date preceding such Payment Date by notice mailed or transmitted by
facsimile prior to such Payment Date and the amount then due and payable shall
be payable only upon presentation and surrender of this Capped Variable Funding
Note at the address specified in such notice of final payment.

     Principal of and interest on this Capped Variable Funding Note will be
payable in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts. All payments
made by the Issuer with respect to this Capped Variable Funding Note will
generally be applied first to interest due and payable on this

                                     A-3-4
<PAGE>

Capped Variable Funding Note and then to the unpaid principal of this Capped
Variable Funding Note.

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

     Unless the certificate of authentication hereon has been executed by the
Indenture Trustee by manual signature, this Capped Variable Funding Note shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.

     To the extent that any provision of this Note contradicts or is
inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supercede such contradictory or inconsistent
provision herein. The Notes are subject to all terms of the Indenture.

                                     A-3-5
<PAGE>

                     REVERSE OF CAPPED VARIABLE FUNDING NOTE

     This Capped Variable Funding Note is one of a duly authorized issue of
Variable Funding Notes of the Issuer, designated as its Home Equity Loan-Backed
Variable Funding Notes, Series 200__-__ (the "Variable Funding Notes"), all
issued under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Variable Funding Notes. The Variable Funding Notes are subject to all terms
of the Indenture.

     The Variable Funding Notes and the Offered Notes (collectively, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.

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

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

     Each Holder of a Variable Funding Note, by its acceptance of a Variable
Funding Note, covenants and agrees by accepting the benefits of the Indenture
that such Holder will not at any

                                     A-3-6
<PAGE>

time institute against the Depositor, the Seller, the Master Servicer or the
Issuer, or join in any institution against the Depositor, the Seller, the Master
Servicer or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under any federal or state bankruptcy or
similar law in connection with any obligations relating to the Capped Variable
Funding Notes, the Indenture or the other Basic Documents.

     Each Beneficial Owner or Variable Funding Noteholder, by its acceptance of
a Variable Funding Note (or in the case of a Beneficial Owner of a Variable
Funding Note, a beneficial interest in such Variable Funding Note) represents
either (i) that it is not, and is not purchasing the Variable Funding Note with
assets of, an employee benefit plan subject to Section 406 of ERISA or a plan
subject to Section 4975 of the Code or a governmental plan or church plan that
is subject to applicable federal, state or local law similar to the foregoing
provisions of ERISA and/or the Code or (ii) that a class or individual exemption
under Section 406 of ERISA or Section 4975 of the Code is applicable to the
acquisition and holding of the Variable Funding Note by such Beneficial Owner or
Noteholder or the acquisition and holding of the Variable Funding Note by such
Beneficial Owner or Noteholder does not constitute or give rise to a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or other
applicable federal, state or local law, for which no statutory, regulatory or
administrative exemption is available.

     The Issuer has entered into the Indenture and this Capped Variable Funding
Note is issued with the intention that, for federal, state and local income,
single business and franchise tax purposes, the Variable Funding Notes will
qualify as indebtedness of the Issuer. Each Holder of a Variable Funding Note,
by its acceptance of a Variable Funding Note, agrees to treat the Variable
Funding Notes for federal, state and local income, single business and franchise
tax purposes as indebtedness of the Issuer.

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

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the Indenture Trustee and the rights of the Holders of the Variable
Funding Notes under the Indenture at any time by the Issuer and the Indenture
Trustee with the consent of the Holders of Notes representing not less than a
majority of the aggregate Note Balance of the Notes affected thereby, and with
prior written notice to each Rating Agency. The Indenture also contains
provisions permitting the Holders of Notes representing specified aggregate Note
Balances, on behalf of all Noteholders, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Capped Variable Funding Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such Holder and upon all future Holders of this
Capped Variable Funding Note and of any Variable Funding Note issued upon the
registration of transfer hereof

                                     A-3-7
<PAGE>

or in exchange hereof or in lieu hereof whether or not notation of such consent
or waiver is made upon this Capped Variable Funding Note. The Indenture also
permits the Indenture Trustee to amend or waive certain terms and conditions set
forth in the Indenture without the consent of the Noteholders but with prior
written notice to each Rating Agency.

     The term "Issuer" as used in this Capped Variable Funding Note includes any
successor to the Issuer under the Indenture.

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

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

     This Capped Variable Funding Note and the Indenture shall be construed in
accordance with the laws of the State of New York, and the obligations, rights
and remedies of the parties hereunder and thereunder shall be determined in
accordance with such laws. No reference herein to the Indenture and no provision
of this Capped Variable Funding Note or of the Indenture shall alter or impair
the obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Capped Variable Funding Note at the times,
place and rate, and in the coin or currency herein prescribed.

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

                                     A-3-8
<PAGE>

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

                                      [NAME OF ISSUING TRUST]

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

                                           By:  _______________________________
                                                      Authorized Signatory

                                      Dated:

                                     A-3-9
<PAGE>

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Capped Variable Funding Notes referred to in the
     within-mentioned Indenture.

                                      [NAME OF ISSUING TRUST]

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

                                           By:  _______________________________
                                                      Authorized Signatory

                                      Dated:

                                     A-3-10
<PAGE>

                                   ASSIGNMENT

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

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
________________________________________________________________________________
________________________________________________________________________________
     (name and address of assignee)

     the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.

     Dated:_________________________           _______________________________*/

                                               _______________________________*/

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

                                     A-3-11
<PAGE>

                                   ASSIGNMENT

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

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
________________________________________________________________________________
________________________________________________________________________________
     (name and address of assignee)

     the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.

     Dated:_________________________           _______________________________*/

                                               _______________________________*/

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

                                     A-3-12
<PAGE>

                                                                     EXHIBIT A-4

                      FORM OF NON-OFFERED SUBORDINATE NOTE

         Exhibit A-4a - Form of X-1 Note
         Exhibit A-4b - Form of X-2A Note
         Exhibit A-4c - Form of X-2B Note

                                     A-4-1
<PAGE>

                                                                    EXHIBIT A-4a

                         Exhibit A-4a - Form of X-1 Note

                                     A-4-2
<PAGE>

                                                                    EXHIBIT A-4b

                        Exhibit A-4b - Form of X-2A Note

                                     A-4-3
<PAGE>

                                                                    EXHIBIT A-4c

                        Exhibit A-4c - Form of X-2B Note

                                     A-4-4
<PAGE>

                                                                       EXHIBIT B

                   FORM OF RULE 144A INVESTMENT REPRESENTATION

         Description of Rule 144A Securities, including numbers:

____________________________
____________________________
____________________________
____________________________

     The undersigned seller, as registered holder (the "Seller"), intends to
     transfer the Rule 144A Securities described above to the undersigned buyer
     (the "Buyer").

(a) In connection with such transfer and in accordance with the agreements
pursuant to which the Rule 144A Securities were issued, the Seller hereby
certifies the following facts: Neither the Seller nor anyone acting on its
behalf has offered, transferred, pledged, sold or otherwise disposed of the Rule
144A Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of' general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the 1933 Act.

(b) The Buyer warrants and represents to, and covenants with, the Indenture
Trustee and the Issuer (as defined in the Indenture (the "Indenture"), dated as
of ______, 200__,, between [Name of Issuing Trust], as Issuer, and [Name of
Indenture Trustee], as Indenture Trustee), pursuant to Section 4.02 of the
Indenture, as follows:

     a.   The Buyer understands that the Rule 144A Securities have not been
          registered under the 1933 Act or the securities laws of any state.

     b.   The Buyer considers itself a substantial, sophisticated institutional
          investor having such knowledge and experience in financial and
          business matters that it is capable of evaluating the merits and risks
          of investment in the Rule 144A Securities.

     c.   The Buyer has been furnished with all information regarding the Rule
          144A Securities that it has requested from the Seller, the Indenture
          Trustee, the Owner Trustee or the Master Servicer.

     d.   Neither the Buyer nor anyone acting on its behalf has offered,
          transferred, pledged, sold or otherwise disposed of the Rule 144A
          Securities, any interest in

                                      B-1
<PAGE>

          the Rule 144A Securities or any other similar security to, or
          solicited any offer to buy or accept a transfer, pledge or other
          disposition of the Rule 144A Securities, any interest in the Rule 144A
          Securities or any other similar security from, or otherwise approached
          or negotiated with respect to the Rule 144A Securities, any interest
          in the Rule 144A Securities or any other similar security with, any
          person in any manner, or made any general solicitation by means of
          general advertising or in any other manner, or taken any other action,
          that would constitute a distribution of the Rule 144A Securities under
          the 1933 Act or that would render the disposition of the Rule 144A
          Securities a violation of Section 5 of the 1933 Act or require
          registration pursuant thereto, nor will it act, nor has it authorized
          or will it authorize any person to act, in such manner with respect to
          the Rule 144A Securities.

     e.   The Buyer is a "qualified institutional buyer" as that term is defined
          in Rule 144A under the 1933 Act and has completed either of the forms
          of certification to that effect attached hereto as Annex 1 or Annex 2.
          The Buyer is aware that the sale to it is being made in reliance on
          Rule 144A. The Buyer is acquiring the Rule 144A Securities for its own
          account or the accounts of other qualified institutional buyers,
          understands that such Rule 144A Securities may be resold, pledged or
          transferred only (i) to a person reasonably believed to be a qualified
          institutional buyer that purchases for its own account or for the
          account of a qualified institutional buyer to whom notice is given
          that the resale, pledge or transfer is being made in reliance on Rule
          144A, or (ii) pursuant to another exemption from registration under
          the 1933 Act.

(c) This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.

                                      B-2
<PAGE>

     IN WITNESS WHEREOF, each of the parties has executed this document as of
the date set forth below.

____________________________________     _______________________________________
Print Name of Seller                     Print Name of Buyer

By: ________________________________     By:____________________________________
    Name:                                   Name:
    Title:                                  Title:

Taxpayer Identification:                 Taxpayer Identification:

No:_________________________________     No:____________________________________

Date:_______________________________     Date:__________________________________

                                      B-3
<PAGE>

                                                            ANNEX 1 TO EXHIBIT B

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

              For Buyers Other Than Registered Investment Companies

The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this Certification is attached:

     1.   As indicated below, the undersigned is the President, Chief Financial
          Officer, Senior Vice President or other executive officer of the
          Buyer.

     2.   In connection with purchases by the Buyer, the Buyer is a "qualified
          institutional buyer" as that term is defined in Rule 144A under the
          Securities Act of 1933, as amended ("Rule 144A"), because (i) the
          Buyer owned and/or invested on a discretionary basis
          $_________________* in securities (except for the excluded securities
          referred to below) as of the end of the Buyer's most recent fiscal
          year (such amount being calculated in accordance with Rule 144A) and
          (ii) the Buyer satisfies the criteria in the category marked below.

     ___ Corporation, etc. The Buyer is a corporation (other than a bank,
     savings and loan association or similar institution), Massachusetts or
     similar statutory trust, partnership, or charitable organization described
     in Section 501(c)(3) of the Internal Revenue Code.

     ___ Bank. The Buyer (i) is a national bank or banking institution organized
     under the laws of any State, territory or the District of Columbia, the
     business of which is substantially confined to banking and is supervised by
     the State or territorial banking commission or similar official or is a
     foreign bank or equivalent institution, and (ii) has an audited net worth
     of at least $25,000,000 as demonstrated in its latest annual financial
     statements, a copy of which is attached hereto.

     ___ Savings and Loan. The Buyer (i) is a savings and loan association,
     building and loan association, cooperative bank, homestead association or
     similar institution, which is supervised and examined by a state or federal
     authority having supervision over any such institutions or is a foreign
     savings and loan association or equivalent institution and (ii) has an
     audited net worth of at least $25,000,000 as demonstrated in its latest
     annual financial statements.

     ___ Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15
     of the Securities Exchange Act of 1934, as amended.

     ___ Insurance Company. The Buyer is an insurance company whose primary and
     predominant business activity is the writing of insurance or the reinsuring
     of risks underwritten by insurance companies and which is subject to
     supervision by the insurance commissioner or a similar official or agency
     of a State or territory of the United States.

                                   Annex 1-1
<PAGE>

     ___ State or Local Plan. The Buyer is a plan established and maintained by
     a State, its political subdivisions, or any agency or instrumentality of
     such State or its political subdivisions, for the benefit of its employees.

     ___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
     Title I of the Employee Retirement Income Security Act of 1974, as amended.

     ___ Investment Adviser. The Buyer is an investment adviser registered under
     the Investment Advisers Act of 1940, as amended.

     ___ SBIC. The Buyer is a Small Business Investment Company licensed by the
     U.S. Small Business Administration under Section 301(c) or (d) of the Small
     Business Investment Act of 1958, as amended.

     ___ Business Development Company. The Buyer is a business development
     company as defined in Section 202(a)(22) of the Investment Advisers Act of
     1940, as amended.

     ___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust
     company and whose participants are exclusively (i) plans established and
     maintained by a State, its political subdivisions, or any agency or
     instrumentality of the State or its political subdivisions, for the benefit
     of its employees, or (ii) employee benefit plans within the meaning of
     Title I of the Employee Retirement Income Security Act of 1974, as amended,
     but is not a trust fund that includes as participants individual retirement
     accounts or H.R. 10 plans.

     3.   The term "securities" as used herein does not include (i) securities
          of issuers that are affiliated with the Buyer, (ii) securities that
          are part of an unsold allotment to or subscription by the Buyer, if
          the Buyer is a dealer, (iii) bank deposit notes and certificates of
          deposit, (iv) loan participations, (v) repurchase agreements, (vi)
          securities owned but subject to a repurchase agreement and (vii)
          currency, interest rate and commodity swaps.

     4.   For purposes of determining the aggregate amount of securities owned
          and/or invested on a discretionary basis by the Buyer, the Buyer used
          the cost of such securities to the Buyer and did not include any of
          the securities referred to in the preceding paragraph. Further, in
          determining such aggregate amount, the Buyer may have included
          securities owned by subsidiaries of the Buyer, but only if such
          subsidiaries are consolidated with the Buyer in its financial
          statements prepared in accordance with generally accepted accounting
          principles and if the investments of such subsidiaries are managed
          under the Buyer's direction. However, such securities were not
          included if the Buyer is a majority-owned, consolidated subsidiary of
          another enterprise and the Buyer is not itself a reporting company
          under the Securities Exchange Act of 1934, as amended.

     5.   The Buyer acknowledges that it is familiar with Rule 144A and
          understands that the seller to it and other parties related to the
          Rule 144A Securities are relying and will continue to rely on the
          statements made herein because one or more sales to the Buyer may be
          in reliance on Rule 144A.

                                   Annex 1-2
<PAGE>

     Yes _____      No  ______      Will the Buyer be purchasing the Rule 144A
                                    Securities only for the Buyer's own account?

     6.   If the answer to the foregoing question is "no", the Buyer agrees
          that, in connection with any purchase of securities sold to the Buyer
          for the account of a third party (including any separate account) in
          reliance on Rule 144A, the Buyer will only purchase for the account of
          a third party that at the time is a "qualified institutional buyer"
          within the meaning of Rule 144A. In addition, the Buyer agrees that
          the Buyer will not purchase securities for a third party unless the
          Buyer has obtained a current representation letter from such third
          party or taken other appropriate steps contemplated by Rule 144A to
          conclude that such third party independently meets the definition of
          "qualified institutional buyer" set forth in Rule 144A.

     7.   The Buyer will notify each of the parties to which this certification
          is made of any changes in the information and conclusions herein.
          Until such notice is given, the Buyer's purchase of Rule 144A
          Securities will constitute a reaffirmation of this certification as of
          the date of such purchase.

                                                ________________________________
                                                Print Name of Buyer

                                                By:_____________________________
                                                   Name:
                                                   Title:

                                                   Date:________________________

                                   Annex 1-3
<PAGE>

                                                            ANNEX 2 TO EXHIBIT B

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

              [For Buyers that are Registered Investment Companies]

The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this Certification is attached:

     1.   As indicated below, the undersigned is the President, Chief Financial
          Officer or Senior Vice President of the Buyer or, if the Buyer is a
          "qualified institutional buyer" as that term is defined in Rule 144A
          under the Securities Act of 1933, as amended ("Rule 144A") because the
          Buyer is part of a Family of Investment Companies (as defined below),
          is such an officer of the Adviser.

     2.   In connection with purchases by Buyer, the Buyer is a "qualified
          institutional buyer" as defined in SEC Rule 144A because (i) the Buyer
          is an investment company registered under the Investment Company Act
          of 1940, as amended, and (ii) as marked below, the Buyer alone, or the
          Buyer's Family of Investment Companies, owned at least $100,000,000 in
          securities (other than the excluded securities referred to below) as
          of the end of the Buyer's most recent fiscal year. For purposes of
          determining the amount of securities owned by the Buyer or the Buyer's
          Family of Investment Companies, the cost of such securities was used.

     ___ The Buyer owned $____________ in securities (other than the excluded
     securities referred to below) as of the end of the Buyer's most recent
     fiscal year (such amount being calculated in accordance with Rule 144A).

     ___ The Buyer is part of a Family of Investment Companies which owned in
     the aggregate $_____________ in securities (other than the excluded
     securities referred to below) as of the end of the Buyer's most recent
     fiscal year (such amount being calculated in accordance with Rule 144A).

     3.   The term "Family of Investment Companies" as used herein means two or
          more registered investment companies (or series thereof) that have the
          same investment adviser or investment advisers that are affiliated (by
          virtue of being majority owned subsidiaries of the same parent or
          because one investment adviser is a majority owned subsidiary of the
          other).

     4.   The term "securities" as used herein does not include (i) securities
          of issuers that are affiliated with the Buyer or are part of the
          Buyer's Family of Investment Companies, (ii) bank deposit notes and
          certificates of deposit, (iii) loan participations, (iv) repurchase
          agreements, (v) securities owned but subject to a repurchase agreement
          and (vi) currency, interest rate and commodity swaps.

     5.   The Buyer is familiar with Rule 144A and understands that each of the
          parties to which this certification is made are relying and will
          continue to rely on the statements made herein because one or more
          sales to the Buyer will be in reliance

                                   Annex 2-1
<PAGE>

          on Rule 144A. In addition, the Buyer will only purchase for the
          Buyer's own account.

         6.       The undersigned will notify each of the parties to which this
                  certification is made of any changes in the information and
                  conclusions herein. Until such notice, the Buyer's purchase of
                  Rule 144A Securities will constitute a reaffirmation of this
                  certification by the undersigned as of the date of such
                  purchase.

                                                ________________________________
                                                Print Name of Buyer

                                                By:_____________________________
                                                   Name:
                                                   Title:

                                                   Date:________________________

                                                IF AN ADVISER

                                                ________________________________
                                                Print Name of Buyer

                                                By:_____________________________
                                                   Name:
                                                   Title:

                                                   Date:________________________

                                   Annex 2-2
<PAGE>

                                                                       EXHIBIT C

                     FORM OF INVESTOR REPRESENTATION LETTER

Bear Stearns Asset Backed Securities, Inc.                       _________, ____
383 Madison Avenue, 10th Floor
New York, NY  10179

[Name of Indenture Trustee]
______________________________
______________________________
______________________________

Attention: Corporate Trust Administration

     Re: Home Equity Loan-Backed Capped Funding Notes, Series 200_-_

Ladies and Gentlemen:

     ________________ (the "Purchaser") intends to purchase $_________ Home
Equity Loan-Backed Capped Funding Notes], Series 200_-_ (the "Capped Funding
Notes"), issued pursuant to the indenture dated as of ______, 200__, (the
"Indenture"), between [[Name of Issuing Trust], as issuer (the "Issuer"), and
[Name of Indenture Trustee], as indenture trustee (the "Indenture Trustee").
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in Appendix A to the Indenture. The Purchaser hereby
certifies, represents and warrants to, and covenants with, the Issuer and the
Indenture Trustee that:

     (a) The Purchaser understands that (i) the Capped Funding Notes have not
been and will not be registered or qualified under the Securities Act of 1933,
as amended (the "Act") or any state securities law, (ii) the Issuer is not
required to so register or qualify the Capped Funding Notes, (iii) the Capped
Funding Notes may be resold only if registered and qualified pursuant to the
provisions of the Act or any state securities law, or if an exemption from such
registration and qualification is available, (iv) the Indenture contains
restrictions regarding the transfer of the Capped Funding Notes and (v) the
Capped Funding Notes will bear a legend to the foregoing effect.

     (b) The Purchaser is acquiring the Capped Funding Notes for its own account
for investment only and not with a view to or for sale in connection with any
distribution thereof in any manner that would violate the Act or any applicable
state securities laws.

     (c) The Purchaser is (i) a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and, in particular, in such matters related to securities similar to the Capped
Funding Notes, such that it is capable of evaluating the merits and risks of
investment in the Capped Funding Notes, (ii) able to bear the economic risks of
such an investment and (iii) an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Act.

                                      C-1
<PAGE>

     (d) The Purchaser has been furnished with, and has had an opportunity to
review (i) a copy of the Indenture and (ii) such other information concerning
the Capped Funding Notes, the Mortgage Loans and the Issuer as has been
requested by the Purchaser from the Issuer or the Seller and is relevant to the
Purchaser's decision to purchase the Capped Funding Notes. The Purchaser has had
any questions arising from such review answered by the Issuer or the Seller to
the satisfaction of the Purchaser.

     (e) The Purchaser has not and will not nor has it authorized or will it
authorize any person to (i) offer, pledge, sell, dispose of or otherwise
transfer any Note, any interest in any Note or any other similar security to any
person in any manner, (ii) solicit any offer to buy or to accept a pledge,
disposition of other transfer of any Note, any interest in any Note or any other
similar security from any person in any manner, (iii) otherwise approach or
negotiate with respect to any Note, any interest in any Note or any other
similar security with any person in any manner, (iv) make any general
solicitation by means of general advertising or in any other manner or (v) take
any other action, that (as to any of (i) through (v) above) would constitute a
distribution of any Capped Funding Note under the Act, that would render the
disposition of any Capped Funding Note a violation of Section 5 of the Act or
any state securities law, or that would require registration or qualification
pursuant thereto. The Purchaser will not sell or otherwise transfer any of the
Capped Funding Notes, except in compliance with the provisions of the Indenture.

     (f) The Purchaser is not a non-United States person.

                                            Very truly yours,

                                            By:_________________________________
                                               Name:
                                               Title:

                                      C-2
<PAGE>

                                                                       EXHIBIT D

                    FORM OF TRANSFEROR REPRESENTATION LETTER

Bear Stearns Asset Backed Securities, Inc.                       _________, ____
383 Madison Avenue, 10th Floor
New York, NY  10179

[Name of Indenture Trustee]
_______________________________
_______________________________
_______________________________

Attention: Corporate Trust Administration

     Re: Home Equity Loan-Backed Capped Funding Notes, Series 200_-_

Ladies and Gentlemen:

     ___________ (the "Purchaser") intends to purchase $________ Home Equity
Loan-Backed Capped Funding Notes, Series 200_-_ (the "Notes"), issued pursuant
to an indenture dated as of ______ 1, 200_ (the "Indenture"), between [Name of
Issuing Trust], as issuer (the "Issuer"), and [Name of Indenture Trustee], as
indenture trustee (the "Indenture Trustee"). Capitalized terms used herein that
are not otherwise defined shall have the meanings ascribed thereto in Appendix A
to the Indenture. The Seller hereby certifies, represents and warrants to, and
covenants with, the Issuer and the Indenture Trustee that:

                                      D-1
<PAGE>

     Neither the Seller nor anyone acting on its behalf has (i) offered,
pledged, sold, disposed of or otherwise transferred any Capped Funding Note, any
interest in any Capped Funding Note or any other similar security to any person
in any manner, (ii) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Capped Funding Note, any interest in any
Capped Funding Note or any other similar security from any person in any manner,
(iii) has otherwise approached or negotiated with respect to any Capped Funding
Note, any interest in any Capped Funding Note or any other similar security with
any person in any manner, (iv) has made any general solicitation by means of
general advertising or in any other manner, or (v) has taken any other action,
that (as to any of (i) through (v) above) would constitute a distribution Capped
Funding Notes under the Securities Act of 1933, as amended (the "Act"), that
would render the disposition of any Capped Funding Note a violation of Section 5
of the Act or any state securities law, or that would require registration or
qualification pursuant thereto. The Seller will not act in any manner set forth
in the foregoing sentence with respect to any Capped Funding Note. The Seller
has not and will not sell or otherwise transfer any of the Notes, except in
compliance with the provisions of the Indenture.

                                            Very truly yours,

                                            By:_________________________________
                                               Name:
                                               Title:

                                      D-2
<PAGE>

                                                                       EXHIBIT E

                          FORM OF REPRESENTATION LETTER

Bear Stearns Asset Backed Securities, Inc.                       _________, ____
383 Madison Avenue, 10th Floor
New York, NY  10179

[Name of Owner Trustee]
______________________________
______________________________
______________________________

[Name of Indenture Trustee]
______________________________
______________________________
______________________________

     Re:  Bear Stearns Asset Backed Securities Inc.
          [Name of Issuing Trust],
          Non-Offered Subordinate Notes

Dear Sirs:

     One or more Non-Offered Subordinate Notes (the "Transferee") intends to
acquire from ____________ (the "Seller"), issued pursuant to an indenture dated
as of August 1, 2003 (the "Indenture"), between [Name of Issuing Trust], as
Issuer (the "Issuer") and [Name of Indenture Trustee], as Indenture Trustee.
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed thereto in Appendix A to the Indenture.

     The Transferee hereby certifies, represents and warrants to, and covenants
with, the Depositor, the Owner Trustee, the Administrator and the Indenture
Trustee that:

     (a) the Transferee is acquiring the Non-Offered Subordinate Note for its
own behalf and is not acting as agent or custodian for any other person or
entity in connection with such acquisition;

     (b) the Transferee is not a partnership, grantor trust or S corporation for
federal income tax purposes, or, if the Transferee is a partnership, grantor
trust or S corporation for federal income tax purposes, the Non-Offered
Subordinate Notes are not more than 50% of the assets of the partnership,
grantor trust or S corporation;

                                      E-1
<PAGE>

     (c) the Transferee will not (x) incur indebtedness secured by Non-Offered
Subordinate Notes where payments on such indebtedness bear a relationship to
payments on either the Mortgage Loans in Group I or the Mortgage Loans as a
whole within the meaning of Treasury Regulations Section 301.7701(i)-1(f) or (y)
use a partnership, trust or other entity to indirectly achieve the result
described in clause (x); and

     (d) the Transferee has been furnished with, and has had an opportunity to
review a copy of the Indenture. The Transferee agrees to be bound by the
Indenture.

                                            Very truly yours,

                                            By:_________________________________
                                               Name:
                                               Title:

                                      E-2
<PAGE>

                                                                       EXHIBIT F

                        CERTIFICATE OF NON-FOREIGN STATUS

     This Certificate of Non-Foreign Status (the "Certificate") is delivered
pursuant to Section 4.02 of the indenture dated as of ______ 1, 200_ (the
"Indenture"), between [Name of Issuing Trust], as Issuer (the "Issuer") and
[Name of Indenture Trustee], as Indenture Trustee, in connection with the
acquisition of, transfer to or possession by the undersigned, whether as
beneficial owner (the "Beneficial Owner"), or nominee on behalf of the
Beneficial Owner of the Non-Offered Subordinate Note. Capitalized terms used
herein but not otherwise defined shall have the meanings ascribed thereto in
Appendix A to the Indenture.

     Each holder must complete Part I, Part II (if the holder is a nominee), and
in all cases sign and otherwise complete Part III.

     In addition, each holder shall submit with this Certificate an IRS Form W-9
relating to such holder.

     To confirm to the Indenture Trustee, the Owner Trustee and the Issuer that
the provisions of Sections 871, 881 or 1446 of the Internal Revenue Code
(relating to withholding tax on foreign partners) do not apply in respect of the
Non-Offered Subordinate Note held by the undersigned, the undersigned hereby
certifies:

Part I -    Complete Either A or B

            A.   Individual as Beneficial Owner

                 1.   I am (The Beneficial Owner is) not a non-resident alien
for purposes of U.S. income taxation;

                 2.   My (The Beneficial Owner's) name and home address

                 _____________________________
                 _____________________________; and

                 3.   My (The Beneficial Owner's) U.S. taxpayer identification
number (Social Security Number) is ___________________.

            B.   Corporate, Partnership or Other Entity as Beneficial Owner

                 1.   _________________ (Name of the Beneficial Owner) is not a
foreign corporation, foreign foreign trust or foreign estate (as those terms are
defined in the Code and Treasury Regulations;

                 2.   The Beneficial Owner's office address and place of
incorporation (if applicable) is and

                                      F-1
<PAGE>

                 3.   The Beneficial Owner's U.S. employer identification number
is ________________.

Part II -   Nominees

     If the undersigned is the nominee for the Beneficial Owner, the undersigned
certifies that this Certificate has been made in reliance upon information
contained in:

     ___ an IRS Form W-9

     ___ a form such as this or substantially similar

provided to the undersigned by an appropriate person and (i) the undersigned
agrees to notify the Trust at least 30 days prior to the date that the form
relied upon becomes obsolete, and (ii) in connection with change in Beneficial
Owners, the undersigned agrees to submit a new Certificate to the Trust promptly
after such change.

Part III -  Declaration

     The undersigned, as the Beneficial Owner or a nominee thereof, agrees to
notify the Trust within 60 days of the date that the Beneficial Owner becomes a
foreign person. The undersigned understands that this Certificate may be
disclosed to the Internal Revenue Service by the Trust and any false statement
contained therein could be punishable by fines, imprisonment or both.

     Under penalties of perjury, I declare that I have examined this Certificate
and to the best of my knowledge and belief it is true, correct and complete and
will further declare that I will inform the Trust of any change in the
information provided above, and, if applicable, I further declare that I have
the authority* to sign this document.

                                             ___________________________________
                                                           Name
                                             ___________________________________
                                                   Title (if applicable)
                                             ___________________________________
                                                     Signature and Date

*NOTE: If signed pursuant to a power of attorney, the power of attorney must
accompany this Certificate.

                                      F-2

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