Document:

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                                                                   Exhibit 10.48

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            SECOND AMENDED AND RESTATED SALE AND SERVICING AGREEMENT

                                      among

                         OPTION ONE OWNER TRUST 2001-1A

                                    as Issuer

                                       and

                      OPTION ONE LOAN WAREHOUSE CORPORATION

                                  as Depositor

                                       and

                         OPTION ONE MORTGAGE CORPORATION
                         as Loan Originator and Servicer

                                       and

                             WELLS FARGO BANK, N.A.
                              as Indenture Trustee

                           Dated as of April 29, 2005

                         OPTION ONE OWNER TRUST 2001-1A
                              MORTGAGE-BACKED NOTES

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

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                                TABLE OF CONTENTS
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ARTICLE I       DEFINITIONS

     Section 1.01      Definitions......................................................................       1
     Section 1.02      Other Definitional Provisions....................................................      31

ARTICLE II      CONVEYANCE OF THE TRUST ESTATE; ADDITIONAL NOTE PRINCIPAL BALANCES

     Section 2.01      Conveyance of the Trust Estate; Additional Note Principal Balances...............      32
     Section 2.02      Ownership and Possession of Loan Files...........................................      34
     Section 2.03      Books and Records; Intention of the Parties......................................      34
     Section 2.04      Delivery of Loan Documents.......................................................      35
     Section 2.05      Acceptance by the Indenture Trustee of the Loans; Certain Substitutions
                       and Repurchases; Certification by the Custodian..................................      36
     Section 2.06      Conditions Precedent to Transfer Dates, Funding Dates and Collateral
                       Value Increase Dates.............................................................      38
     Section 2.07      Termination of Revolving Period..................................................      41
     Section 2.08      Correction of Errors.............................................................      41

ARTICLE III     REPRESENTATIONS AND WARRANTIES

     Section 3.01      Representations and Warranties of the Depositor..................................      42
     Section 3.02      Representations and Warranties of the Loan Originator............................      44
     Section 3.03      Representations, Warranties and Covenants of the Servicer........................      46
     Section 3.04      Reserved.........................................................................      49
     Section 3.05      Representations and Warranties Regarding Loans...................................      49
     Section 3.06      Purchase and Substitution........................................................      49
     Section 3.07      Dispositions.....................................................................      52
     Section 3.08      Servicer Put; Servicer Call......................................................      55
     Section 3.09      Modification of Underwriting Guidelines..........................................      55

ARTICLE IV      ADMINISTRATION AND SERVICING OF THE LOANS

     Section 4.01      Servicer's Servicing Obligations.................................................      55

ARTICLE V       ESTABLISHMENT OF TRUST ACCOUNTS; TRANSFER OBLIGATION

     Section 5.01      Collection Account and Distribution Account......................................      56
     Section 5.02      Payments to Securityholders......................................................      60
     Section 5.03      Trust Accounts; Trust Account Property...........................................      61
     Section 5.04      Advance Account..................................................................      63
     Section 5.05      Transfer Obligation Account......................................................      63
     Section 5.06      Transfer Obligation..............................................................      64

ARTICLE VI      STATEMENTS AND REPORTS; SPECIFICATION OF TAX MATTERS

     Section 6.01      Statements.......................................................................      66
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     Section 6.02      Specification of Certain Tax Matters.............................................    68
     Section 6.03      Valuation of Loans and Residual Securities, Hedge Value and Retained
                       Securities Value; Market Value Agent.............................................    69

ARTICLE VII     HEDGING; FINANCIAL COVENANTS

     Section 7.01      Hedging Instruments..............................................................    70
     Section 7.02      Financial Covenants..............................................................    71

ARTICLE VIII    THE SERVICER

     Section 8.01      Indemnification; Third Party Claims..............................................    71
     Section 8.02      Merger or Consolidation of the Servicer..........................................    73
     Section 8.03      Limitation on Liability of the Servicer and Others...............................    74
     Section 8.04      Servicer Not to Resign;Assignment................................................    74
     Section 8.05      Relationship of Servicer to Issuer and the Indenture Trustee.....................    74
     Section 8.06      Servicer May Own Securities......................................................    75
     Section 8.07      Indemnification of the Indenture Trustee and Initial Noteholder..................    75

ARTICLE IX      SERVICER EVENTS OF DEFAULT

     Section 9.01      Servicer Events of Default.......................................................    75
     Section 9.02      Appointment of Successor.........................................................    77
     Section 9.03      Waiver of Defaults...............................................................    78
     Section 9.04      Accounting Upon Termination of Servicer..........................................    79

ARTICLE X       TERMINATION; PUT OPTION

     Section 10.01     Termination......................................................................    79
     Section 10.02     Optional Termination.............................................................    80
     Section 10.03     Notice of Termination............................................................    80
     Section 10.04     Put Option.......................................................................    80

ARTICLE XI      MISCELLANEOUS PROVISIONS

     Section 11.01     Acts of Securityholders..........................................................    81
     Section 11.02     Amendment........................................................................    81
     Section 11.03     Recordation of Agreement.........................................................    82
     Section 11.04     Duration of Agreement............................................................    82
     Section 11.05     Governing Law....................................................................    82
     Section 11.06     Notices..........................................................................    82
     Section 11.07     Severability of Provisions.......................................................    83
     Section 11.08     No Partnership...................................................................    83
     Section 11.09     Counterparts.....................................................................    83
     Section 11.10     Successors and Assigns...........................................................    83
     Section 11.11     Headings.........................................................................    83
     Section 11.12     Actions of Securityholders.......................................................    83
     Section 11.13     Non-Petition Agreement...........................................................    84
     Section 11.14     Holders of the Securities........................................................    84
     Section 11.15     Due Diligence Fees, Due Diligence................................................    84
     Section 11.16     No Reliance......................................................................    85
     Section 11.17     Confidential Information.........................................................    86
     Section 11.18     Conflicts........................................................................    87
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    Section 11.19     Limitation on Liability..........................................................    87
    Section 11.20     No Agency........................................................................    87
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                          SALE AND SERVICING AGREEMENT

      This Second Amended and Restated Sale and Servicing Agreement is entered
into effective as of April 29, 2005, among OPTION ONE OWNER TRUST 2001-1A, a
Delaware business trust (the "Issuer" or the "Trust"), OPTION ONE LOAN WAREHOUSE
CORPORATION, a Delaware corporation, as Depositor (in such capacity, the
"Depositor"), OPTION ONE MORTGAGE CORPORATION, a California corporation ("Option
One"), as Loan Originator (in such capacity, the "Loan Originator") and as
Servicer (in such capacity, the "Servicer"), and WELLS FARGO BANK, N.A.
(formerly known as Wells Fargo Bank Minnesota, National Association), a national
banking association, as Indenture Trustee on behalf of the Noteholders (in such
capacity, the "Indenture Trustee").

                              W I T N E S S E T H:

      In consideration of the mutual agreements herein contained, the Issuer,
the Depositor, the Loan Originator, the Servicer and the Indenture Trustee
hereby agree as follows for the benefit of each of them and for the benefit of
the holders of the Securities:

                                   ARTICLE I

                                   DEFINITIONS

      Section 1.01 Definitions.

      Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the meanings specified in this
Article. Unless otherwise specified, all calculations of interest described
herein shall be made on the basis of a 360-day year and the actual number of
days elapsed in each Accrual Period.

      2001-1B Sale and Servicing Agreement: The Sale and Servicing Agreement,
dated as of April 1, 2001, and as amended and restated through and including
April 16, 2004, among Option One Owner Trust 2001 -1B, the Depositor, Option One
and the Indenture Trustee.

      Accepted Servicing Practices: The Servicer's normal servicing practices in
servicing and administering similar mortgage loans for its own account, which in
general will conform to the mortgage servicing practices of prudent mortgage
lending institutions which service for their own account mortgage loans of the
same type as the Loans in the jurisdictions in which the related Mortgaged
Properties are located and will give due consideration to the Noteholders'
reliance on the Servicer.

      Accrual Period: With respect to the Notes, the period commencing on and
including the preceding Payment Date (or, in the case of the first Payment Date,
the period commencing on and including the first Transfer Date (which first
Transfer Date is the first date on which the Note Principal Balance is greater
than zero)) and ending on the day preceding the related Payment Date.

      Act or Securities Act: The Securities Act of 1933, as amended.

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      Additional Advance Rate: As defined in the Pricing Side Letter.

      Additional LIBOR Margin: As defined in the Pricing Side Letter.

      Additional Note Balance: As defined in the Advance Indenture.

      Additional Note Principal Balance: With respect to each (i) Transfer Date,
the aggregate Sales Prices of all Loans and Residual Securities conveyed on such
date and (ii) Funding Date, the amount of Additional Note Balance purchased by
the Issuer from the Advance Trust on such date.

      Adjustment Date: With respect to each ARM, the date set forth in the
related Promissory Note on which the Loan Interest Rate on such ARM is adjusted
in accordance with the terms of the related Promissory Note.

      Administration Agreement: The Administration Agreement, dated as of April
1, 2001, among the Issuer and the Administrator.

      Administrator: Option One Mortgage Corporation, in its capacity as
Administrator under the Administration Agreement.

      Advance Account: The account established and maintained pursuant to
Section 5.04.

      Advance Depositor: Option One Advance Corporation.

      Advance Documents: The "Transaction Documents" as defined in the Advance
Indenture.

      Advance Indenture: The Indenture, dated as of November 1, 2003, between
Option One Advance Trust 2003-ADV1, as issuer and Wells Fargo Bank Minnesota,
National Association, not in its individual capacity, but solely as indenture
trustee.

      Advance Note: Any of the Advance Trust's Advance Receivables Backed Notes,
Series 2003-ADV1, executed, authenticated and delivered under the Advance
Indenture.

      Advance Note Event of Default: An "Event of Default" as defined in the
Advance Indenture.

      Advance Note Purchase Agreement: The Note Purchase Agreement, dated as of
November 1, 2003, among the Advance Trust, Option One Owner Trust 2001-1A,
Option One Owner Trust 2001-1B, Option One Owner Trust 2001-2 and Greenwich
Capital Financial Products, Inc. as agent.

      Advance Trust: Option One Advance Trust 2003-ADV1.

      Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct

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the management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise, and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.

      Agreement: This Agreement, as the same may be amended and supplemented
from time to time.

      ALTA: The American Land Title Association and its successors in interest.

      Appraised Value: With respect to any Loan, and the related Mortgaged
Property, the lesser of:

                  (i) the lesser of (a) the value thereof as determined by an
appraisal made for the originator of the Loan at the time of origination of the
Loan by an appraiser who met the minimum requirements of Fannie Mae or Freddie
Mac or through an automated appraisal process consistent with the Underwriting
Guidelines, and (b) the value thereof as determined by a review appraisal
conducted by the Loan Originator in the event any such review appraisal
determines an appraised value more than 10% lower than the value thereof, in the
case of a Loan with a Loan-to-Value Ratio less than or equal to 80%, or more
than 5% lower than the value thereof, in the case of a Loan with a Loan-to-Value
Ratio greater than 80%, as determined by the appraisal referred to in clause
(i)(a) above; and

                  (ii) the purchase price paid for the related Mortgaged
Property by the Borrower with the proceeds of the Loan; provided, however, that
in the case of a refinanced Loan (which is a Loan the proceeds of which were not
used to purchase the related Mortgaged Property) or a Loan originated in
connection with a "lease option purchase" if the "lease option purchase price"
was set 12 months or more prior to origination, such value of the Mortgaged
Property is based solely upon clause (i) above.

                  (iii) ARM: Any Loan, the Loan Interest Rate with respect to
which is subject to adjustment during the life of such Loan.

      Assignment: With respect to the Loans, an LPA Assignment or S&SA
Assignment. With respect to the Residual Securities, an RSTA Assignment or S&SA
Assignment.

      Assignment of Mortgage: With respect to any Loan, an assignment of the
related Mortgage in blank or to Wells Fargo Bank, N.A., as custodian or trustee
under the applicable custodial agreement or trust agreement, and notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the assignment and pledge of such Mortgage.

      Balloon Loan: Any Loan for which the related monthly payments, other than
the monthly payment due on the maturity date stated in the Promissory Note, are
computed on the basis of a period to full amortization ending on a date that is
later than such maturity date.

      Basic Documents: This Agreement, the Administration Agreement, the
Custodial Agreement, the Indenture, the Loan Purchase and Contribution
Agreement, the Master Disposition Confirmation Agreement, the Note Purchase
Agreement, the Guaranty, the Advance

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Note Purchase Agreement, the Trust Agreement, the Residual Securities Transfer
Agreement, each Hedging Instrument and, as and when required to be executed and
delivered, the Assignments.

      Bill of Sale: With respect to any Funding Date, a bill of sale,
substantially in the form attached as Exhibit C to the Receivables Purchase
Agreement, delivered by Option One and the Depositor to the Issuer, the Agent
and the Indenture Trustee pursuant to the Receivables Purchase Agreement.

      Block: Block Financial Corporation, A Delaware corporation, and any
successor thereto.

      Borrower: The obligor or obligors on a Promissory Note.

      Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day
on which the New York Stock Exchange, the Federal Reserve Bank of New York or
banking institutions in New York City, California, Maryland, Minnesota,
Pennsylvania, Delaware or in the city in which the corporate trust office of the
Indenture Trustee is located or the city in which the Servicer's servicing
operations are located are authorized or obligated by law or executive order to
be closed, or (iii) a day on which trading in securities on the New York Stock
Exchange or any other major securities exchange in the United States is not
conducted.

      Certificateholder: A holder of a Trust Certificate.

      Change of Control: As defined in the Indenture.

      Clean-up Call Date: The first Payment Date occurring after the end of the
Revolving Period and the date on which the Note Principal Balance declines to
10% or less of the aggregate Note Principal Balance as of the end of the
Revolving Period.

      Closing Date: April 18, 2001.

      Code: The Internal Revenue Code of 1986, as amended from time to time, and
the regulations promulgated by the United States Treasury thereunder.

      Collateral Percentage: As defined in the Pricing Side Letter.

      Collateral Value: As defined in the Pricing Side Letter.

      Collateral Value Increase Date: any date following the related Transfer
Date that the Collateral Value of specified Mortgage Loans shall be 102%
pursuant to clause (III)(a)(2)(A) of the definition of Collateral Value.

      Collection Account: The account designated as such, established and
maintained by the Servicer in accordance with Section 5.01(a)(1) hereof.

      Combined LTV or CLTV: With respect to any Second Lien Loan, the ratio of
the outstanding Principal Balance on the related date of origination of (a) (i)
such Loan plus (ii) the loan constituting the first lien to the lesser of (b)
(x) the Appraised Value of the Mortgaged

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Property at origination or (y) if the Mortgaged Property was purchased within 12
months of the origination of the Loan, the purchase price of the Mortgaged
Property, expressed as a percentage.

      Commission: The Securities and Exchange Commission.

      Convertible Loan: A Loan that by its terms and subject to certain
conditions contained in the related Mortgage or Promissory Note allows the
Borrower to convert the adjustable Loan Interest Rate on such Loan to a fixed
Loan Interest Rate.

      Credit Score: With respect to each Borrower, the credit score for such
Borrower from a nationally recognized credit repository; provided, however, in
the event that a credit score for such Borrower was obtained from two
repositories, the "Credit Score" shall be the lower of the two scores; provided,
further, in the event that a credit score for such Borrower was obtained from
three repositories, the "Credit Score" shall be the middle score of the three
scores.

      Custodial Agreement: The custodial agreement dated as of April 1, 2001,
among the Issuer, the Servicer, the Indenture Trustee and the Custodian,
providing for the retention of the Custodial Loan Files by the Custodian on
behalf of the Indenture Trustee.

      Custodial Loan File: As defined in the Custodial Agreement.

      Custodian: The custodian named in the Custodial Agreement, which custodian
shall not be affiliated with the Servicer, the Loan Originator, the Depositor or
any Subservicer. Wells Fargo Bank, N.A., a national banking association, shall
be the initial Custodian pursuant to the terms of the Custodial Agreement.
Custodian Fee: For any Payment Date, the fee payable to the Custodian on such
Payment Date as set forth in the Custodian Fee Notice for such Payment Date,
which fee shall be calculated in accordance with the separate fee letter between
the Custodian and the Servicer.

      Custodian Fee Notice: For any Payment Date, the written notice provided by
the Custodian to the Servicer and the Indenture Trustee pursuant to Section
6.01, which notice shall specify the amount of the Custodian Fee payable on such
Payment Date.

      Daily Interest Accrual Amount: With respect to each day and the related
Accrual Period, the sum of (i) interest accrued at the Note Interest Rate with
respect to such Accrual Period on the Note Principal Balance as of the preceding
Business Day minus the principal balance of the Advance Note and the portion of
the Note Principal Balance related to the Residual Securities as of the
preceding Business Day after giving effect to all changes to the Note Principal
Balance, the principal amount of the Advance Note and the portion of the Note
Principal Balance related to the Residual Securities on or prior to such
preceding Business Day and (ii) interest accrued at the Additional Advance Rate
plus the Additional LIBOR Margin on the portion of the Note Principal Balance
equal to the outstanding principal balance of the Advance Note and the portion
of the Note Principal Balance related to the Residual Securities as of the
preceding Business Day after giving effect to all changes to the principal
amount of the Advance Note and the portion of the Note Principal Balance related
to the Residual Securities on or prior to such Business Day.

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      Deemed Cured: With respect to the occurrence of a Performance Trigger or
Rapid Amortization Trigger, when the condition that originally gave rise to the
occurrence of such trigger has not continued for 20 consecutive days, or if the
occurrence of such Performance Trigger or Rapid Amortization Trigger has been
waived in writing by the Majority Noteholder.

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

      Defaulted Loan: With respect to any Determination Date, any Loan,
including, without limitation, any Liquidated Loan with respect to which any of
the following has occurred as of the end of the related Remittance Period: (a)
foreclosure or similar proceedings have been commenced; or (b) the Servicer or
any Subservicer has determined in good faith and in accordance with the
servicing standard set forth in Section 4.01 of the Servicing Addendum that such
Loan is in default or imminent default.

      Deleted Loan: A Loan replaced or to be replaced by one or more Qualified
Substitute Loans.

      Deleted Residual Security: A Residual Security replaced or to be replaced
by one or more Qualified Substitute Residual Securities.

      Delinquent: A Loan is "Delinquent" if any Monthly Payment due thereon is
not made by the close of business on the day such Monthly Payment is required to
be paid. A Loan is "30 days Delinquent" if any Monthly Payment due thereon has
not been received by the close of business on the corresponding day of the month
immediately succeeding the month in which such Monthly Payment was required to
be paid or, if there is no such corresponding day (e.g., as when a 30-day month
follows a 31-day month in which a payment was required to be paid on the 31st
day of such month), then on the last day of such immediately succeeding month.
The determination of whether a Loan is "60 days Delinquent," "90 days
Delinquent", etc., shall be made in like manner.

      Delivery: When used with respect to Trust Account Property means:

            (a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the UCC and are
susceptible of physical delivery (except with respect to Trust Account Property
consisting of certificated securities (as defined in Section 8-102(a)(4) of the
UCC)), physical delivery to the Indenture Trustee or its custodian (or the
related Securities Intermediary) endorsed to the Indenture Trustee or its
custodian (or the related Securities Intermediary) or endorsed in blank (and if
delivered and endorsed to the Securities Intermediary, by continuous credit
thereof by book-entry to the related Trust Account);

            (b) with respect to a certificated security (i) delivery of such
certificated security endorsed to, or registered in the name of, the Indenture
Trustee or endorsed in blank to its custodian or the related Securities
Intermediary and the making by such Securities Intermediary of appropriate
entries in its records identifying such certificated securities as credited to
the related Trust Account, or (ii) by delivery thereof to a "clearing
corporation" (as defined in Section 8-102(5) of the UCC) and the making by such
clearing corporation of

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appropriate entries in its records crediting the securities account of the
related Securities Intermediary by the amount of such certificated security and
the making by such Securities Intermediary of appropriate entries in its records
identifying such certificated securities as credited to the related Trust
Account (all of the Trust Account Property described in Subsections (a) and (b),
"Physical Property");

            and, in any event, any such Physical Property in registered form
shall be in the name of the Indenture Trustee or its nominee or custodian (or
the related Securities Intermediary); and such additional or alternative
procedures as may hereafter become appropriate to effect the complete transfer
of ownership of any such Trust Account Property to the Indenture Trustee or its
nominee or custodian, consistent with changes in applicable law or regulations
or the interpretation thereof;

            (c) with respect to any security issued by the U.S. Treasury, Fannie
Mae or Freddie Mac that is a book-entry security held through the Federal
Reserve System pursuant to federal book-entry regulations, the following
procedures, all in accordance with applicable law, including applicable federal
regulations and Articles 8 and 9 of the UCC: the making by a Federal Reserve
Bank of an appropriate entry crediting such Trust Account Property to an account
of the related Securities Intermediary or the securities intermediary that is
(x) also a "participant" pursuant to applicable federal regulations and (y) is
acting as securities intermediary on behalf of the Securities Intermediary with
respect to such Trust Account Property; the making by such Securities
Intermediary or securities intermediary of appropriate entries in its records
crediting such book-entry security held through the Federal Reserve System
pursuant to federal book-entry regulations and Articles 8 and 9 of the UCC to
the related Trust Account; and such additional or alternative procedures as may
hereafter become appropriate to effect complete transfer of ownership of any
such Trust Account Property to the Indenture Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or the
interpretation thereof; and

            (d) with respect to any item of Trust Account Property that is an
uncertificated security (as defined in Section 8-102(a)(18) of the UCC) and that
is not governed by clause (c) above, registration in the records of the issuer
thereof in the name of the related Securities Intermediary, and the making by
such Securities Intermediary of appropriate entries in its records crediting
such uncertificated security to the related Trust Account.

      Designated Depository Institution: With respect to an Eligible Account, an
institution whose deposits are insured by the Bank Insurance Fund or the Savings
Association Insurance Fund of the FDIC, the long-term deposits of which shall be
rated A or better by S&P or A2 or better by Moody's and the short-term deposits
of which shall be rated P-1 or better by Moody's and A-1 or better by S&P,
unless otherwise approved in writing by the Initial Noteholder and which is any
of the following: (A) a federal savings and loan association duly organized,
validly existing and in good standing under the federal banking laws, (B) an
institution duly organized, validly existing and in good standing under the
applicable banking laws of any state, (C) a national banking association duly
organized, validly existing and in good standing under the federal banking laws,
(D) a principal subsidiary of a bank holding company or (E) approved in writing
by the Initial Noteholder and, in each case acting or designated by the Servicer
as the

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depository institution for the Eligible Account; provided, however, that any
such institution or association shall have combined capital, surplus and
undivided profits of at least $50,000,000.

      Depositor: Option One Loan Warehouse Corporation, a Delaware corporation,
and any successors thereto.

      Determination Date: With respect to any Payment Date occurring on the 10th
day of a month, the last calendar day of the month immediately preceding the
month of such Payment Date, and with respect to any other Payment Date, as
mutually agreed by the Servicer and the Noteholders.

      Disposition: A Securitization, Whole Loan Sale transaction, or other
disposition of Loans or Residual Securities.

      Disposition Agent: Greenwich Capital Markets, Inc. and its successors and
assigns acting at the direction, and as agent, of the Majority Noteholders.

      Disposition Participant: As applicable, with respect to a Disposition, any
"depositor" with respect to such Disposition, the Disposition Agent, the
Majority Noteholders, the Issuer, the Servicer, the related trustee and the
related custodian, any nationally recognized credit rating agency, the related
underwriters, the related placement agent, the related credit enhancer, the
related whole-loan purchaser, the related purchaser of securities and/or any
other party necessary or, in the good faith belief of any of the foregoing,
desirable to effect a Disposition.

      Disposition Proceeds: With respect to a Disposition, (x) the proceeds of
the Disposition remitted to the Trust in respect of the Loans or Residual
Securities transferred on the date of and with respect to such Disposition,
including without limitation, any cash and Retained Securities created in any
related Securitization less all costs, fees and expenses incurred in connection
with such Disposition, including, without limitation, all amounts deposited into
any reserve accounts upon the closing thereof plus or minus (y) the net positive
or net negative value of all Hedging Instruments terminated in connection with
such Disposition minus (z) all other amounts agreed upon in writing by the
Initial Noteholder, the Trust and the Servicer.

      Distribution Account: The account established and maintained pursuant to
Section 5.01(a)(2) hereof.

      Due Date: The day of the month on which the Monthly Payment is due from
the Borrower with respect to a Loan.

      Due Diligence Fees: Shall have the meaning provided in Section 11.15
hereof.

      Eligible Account: At any time, an account which is: (i) maintained with a
Designated Depository Institution; (ii) fully insured by either the Bank
Insurance Fund or the Savings Association Insurance Fund of the FDIC; (iii) a
trust account (which shall be a "segregated trust account") maintained with the
corporate trust department of a federal or state chartered depository
institution or trust company with trust powers and acting in its fiduciary
capacity for the benefit of the Indenture Trustee and the Issuer, which
depository institution or trust company

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shall have capital and surplus of not less than $50,000,000; or (iv) with the
prior written consent of the Majority Noteholders, any other account.

      Eligible Servicer: (x) Option One or (y) any other Person that (a) (i) has
been designated as an approved seller-servicer by Fannie Mae or Freddie Mac for
first and second mortgage loans and (ii) has equity of not less than
$15,000,000, as determined in accordance with GAAP or (b) any other Person to
which the Majority Noteholders may consent in writing.

      Escrow Payments: With respect to any Loan, the amounts constituting ground
rents, taxes, assessments, water rates, sewer rents, municipal charges, fire,
hazard, liability and other insurance premiums, condominium charges, and any
other payments required to be escrowed by the related Borrower with the lender
or servicer pursuant to the Mortgage or any other document.

      Event of Default: Either a Servicer Event of Default or an Event of
Default under the Indenture.

      Exceptions Report: The meaning set forth in the Custodial Agreement.

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

      Fannie Mae: The Federal National Mortgage Association and any successor
thereto.

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

      Fidelity Bond: As described in Section 4.10 of the Servicing Addendum.

      Final Put Date: The Put Date following the end of the Revolving Period on
which the Majority Noteholders exercise the Put Option with respect to the
entire outstanding Note Principal Balance.

      Final Recovery Determination: With respect to any defaulted Loan or any
Foreclosure Property, a determination made by the Servicer that all Mortgage
Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which
the Servicer, in its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Servicer shall
maintain records, prepared by a servicing officer of the Servicer, of each Final
Recovery Determination.

      Financial Covenants: With respect to Option One, the following financial
covenants:

      (a) Option One must maintain a minimum "Tangible Net Worth" (defined and
determined in accordance with GAAP and exclusive of (i) any loans outstanding to
any officer or director of Option One or its Affiliates (ii) any intangibles
(other than originated or purchased servicing rights) and (iii) any receivables
from Block) of $425 million as of any day.

      (b) Option One must maintain a ratio of 1.0 or greater at any time
pursuant to the Capital Adequacy Test, attached as Exhibit I hereto.

                                       9
<PAGE>

      (c) Option One may not exceed a maximum non-warehouse leverage ratio (the
ratio of (i) the sum of (A) all funded debt (excluding debt from Block or any of
its Affiliates and all non-recourse debt) less (B) 91% of its mortgage loan
inventory held for sale less (C) 90% of servicing advance receivables
(determined and valued in accordance with GAAP) to (ii) Tangible Net Worth) of
0.50x at any time. Any direct or indirect debt provided by Block will be subject
to the Subordination Agreement; or, if Block does not enter into the
Subordination Agreement, the maximum permitted non-warehousing leverage ratio
including debt from Block will be 1.0x at any time, provided, that no more than
0.5x of such non-warehouse leverage ratio can be funded by entities not
affiliated with Option One or Block.

      (d) Option One must maintain a minimum liquidity facility (defined as a
committed, unsecured, non-amortizing liquidity facility from Block not to mature
(scheduled or accelerated) prior to the Maturity Date) in an amount no less than
$150 million. Such facility from Block cannot contain covenants or termination
events more restrictive than the covenants or termination events contained in
the Basic Documents.

      (e) Option One must maintain a minimum "Net Income" (defined and
determined in accordance with GAAP) of at least $1 based on the total of the
current quarter combined with the previous three quarters.

      First Lien Loan: A Loan secured by the lien on the related Mortgaged
Property, subject to no prior liens on such Mortgaged Property.

      Foreclosed Loan: As of any Determination Date, any Loan that as of the end
of the preceding Remittance Period has been discharged as a result of (i) the
completion of foreclosure or comparable proceedings by the Servicer on behalf of
the Issuer; (ii) the acceptance of the deed or other evidence of title to the
related Mortgaged Property in lieu of foreclosure or other comparable
proceeding; or (iii) the acquisition of title to the related Mortgaged Property
by operation of law.

      Foreclosure Property: Any real property securing a Foreclosed Loan that
has been acquired by the Servicer on behalf of the Issuer through foreclosure,
deed in lieu of foreclosure or similar proceedings in respect of the related
Loan.

      Freddie Mac: The Federal Home Loan Mortgage Corporation and any successor
thereto.

      Funding Account: As defined in the Advance Indenture.

      Funding Date: With respect to the Advance Note, the day on which
Additional Note Balance is purchased by the Issuer under the Advance Note
Purchase Agreement.

      Funding Notice: As defined in the Advance Indenture.

      GAAP: Generally Accepted Accounting Principles as in effect in the United
States.

      Gross Margin: With respect to each ARM, the fixed percentage amount set
forth in the related Promissory Note.

                                       10
<PAGE>

      Guaranty: The Guaranty made by H&R Block, Inc. in favor of the Indenture
Trustee and the Noteholders.

      Hedge Funding Requirement: With respect to any day, all amounts required
to be paid or delivered by the Issuer under any Hedging Instrument, whether in
respect of payments thereunder or in order to meet margin, collateral or other
requirements thereof. Such amounts shall be calculated by the Market Value Agent
and the Indenture Trustee shall be notified of such amount by the Market Value
Agent.

      Hedge Value: With respect to any Business Day and a specific Hedging
Instrument, the positive amount, if any, that is equal to the amount that would
be paid to the Issuer in consideration of an agreement between the Issuer and an
unaffiliated third party, that would have the effect of preserving for the
Issuer the net economic equivalent, as of such Business Day, of all payment and
delivery requirements payable to and by the Issuer under such Hedging Instrument
until the termination thereof, as determined by the Market Value Agent in
accordance with Section 6.03 hereof.

      Hedging Counterparty: A Person (i) (A) the long-term and commercial paper
or short-term deposit ratings of which are acceptable to the Majority
Noteholders and (B) which shall agree in writing that, in the event that any of
its long-term or commercial paper or short-term deposit ratings cease to be at
or above the levels deemed acceptable by the Majority Noteholders, it shall
secure its obligations in accordance with the request of the Majority
Noteholders, (ii) that has entered into a Hedging Instrument and (iii) that is
acceptable to the Majority Noteholders.

      Hedging Instrument: Any interest rate cap agreement, interest rate floor
agreement, interest rate swap agreement or other interest rate hedging agreement
entered into by the Issuer with a Hedging Counterparty, and which requires the
Hedging Counterparty to deposit all amounts payable thereby directly to the
Collection Account. Each Hedging Instrument shall meet the requirements set
forth in Article VII hereof with respect thereto.

      Indenture: The Indenture dated as of April 1, 2001, and as amended and
restated through and including April 29, 2005, between the Issuer and the
Indenture Trustee, as the same may be further amended from time to time.

      Indenture Trustee: Wells Fargo Bank, N.A., a national banking association,
as Indenture Trustee under the Indenture, or any successor indenture trustee
under the Indenture.

      Indenture Trustee Fee: An annual fee of $5,000 payable by the Servicer in
accordance with a separate fee agreement between the Indenture Trustee and the
Servicer and Section 5.01 hereof.

      Independent: When used with respect to any specified Person, such Person
(i) is in fact independent of the Loan Originator, the Servicer, the Depositor
or any of their respective Affiliates, (ii) does not have any direct financial
interest in, or any material indirect financial interest in, the Loan
Originator, the Servicer, the Depositor or any of their respective Affiliates
and (iii) is not connected with the Loan Originator, the Depositor, the Servicer
or any of their respective Affiliates, as an officer, employee, promoter,
underwriter, trustee, partner, director or

                                       11
<PAGE>

Person performing similar functions; provided, however, that a Person shall not
fail to be Independent of the Loan Originator, the Depositor, the Servicer or
any of their respective Affiliates merely because such Person is the beneficial
owner of 1% or less of any class of securities issued by the Loan Originator,
the Depositor, the Servicer or any of their respective Affiliates, as the case
may be.

      Independent Accountants: A firm of nationally recognized certified public
accountants which is independent according to the provisions of SEC Regulation
S-X, Article 2.

      Index: With respect to each ARM, the index set forth in the related
Promissory Note for the purpose of calculating the Loan Interest Rate thereon.

      Initial Noteholder: Greenwich Capital Financial Products, Inc. or an
Affiliate thereof identified in writing by Greenwich Capital Financial Products,
Inc. to the Indenture Trustee and the other parties hereto.

      Interest Carry-Forward Amount: With respect to any Payment Date, the
excess, if any, of (A) the Interest Payment Amount for such Payment Date plus
the Interest Carry-Forward Amount for the prior Payment Date over (B) the amount
in respect of interest that is actually paid from the Distribution Account on
such Payment Date in respect of the interest for such Payment Date.

      Interest Payment Amount: With respect to any Payment Date, the sum of the
Daily Interest Accrual Amounts for all days in the related Accrual Period.

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

      LIBOR Determination Date: With respect to each Accrual Period, the second
LIBOR Business Day preceding the commencement of such Accrual Period.

      LIBOR Margin: As defined in the Pricing Side Letter.

      Lien: With respect to any asset, (a) any mortgage, lien, pledge, charge,
security interest, hypothecation, option or encumbrance of any kind in respect
of such asset or (b) the interest of a vendor or lessor under any conditional
sale agreement, financing lease or other title retention agreement relating to
such asset.

      Lifetime Cap: The provision in the Promissory Note for each ARM which
limits the maximum Loan Interest Rate over the life of such ARM.

      Lifetime Floor: The provision in the Promissory Note for each ARM which
limits the minimum Loan Interest Rate over the life of such ARM.

      Liquidated Loan: As defined in Section 4.03(c) of the Servicing Addendum.

                                       12
<PAGE>

      Liquidated Loan Losses: With respect to any Determination Date, the
difference between (i) the aggregate Principal Balances as of such date of all
Loans that became Liquidated Loans and (ii) all Liquidation Proceeds allocable
to principal received on or prior to such date.

      Liquidation Proceeds: With respect to a Liquidated Loan, any cash amounts
received in connection with the liquidation of such Liquidated Loan, whether
through trustee's sale, foreclosure sale or other disposition, any cash amounts
received in connection with the management of the Mortgaged Property from
Defaulted Loans, any proceeds from Primary Insurance Policies and any other
amounts required to be deposited in the Collection Account pursuant to Section
5.01(b)(1) hereof, in each case other than Mortgage Insurance Proceeds and
Released Mortgaged Property Proceeds. Liquidation Proceeds shall also include
any awards or settlements in respect of the related Mortgage Property, whether
permanent or temporary, partial or entire, by exercise of the power of eminent
domain or condemnation.

      Loan: Any loan sold to the Trust hereunder and pledged to the Indenture
Trustee, which loan includes, without limitation, (i) a Promissory Note or Lost
Note Affidavit and related Mortgage and (ii) all right, title and interest of
the Loan Originator in and to the Mortgaged Property covered by such Mortgage.
The term Loan shall be deemed to include the related Promissory Note or Lost
Note Affidavit, related Mortgage and related Foreclosure Property, if any.

      Loan Documents: With respect to a Loan, the documents comprising the
Custodial Loan File for such Loan or with respect to a Residual Security, the
related pooling and servicing agreement or indenture, the physical Residual
Security unless such Residual Security is held in book-entry form and any
transferor letters, transferee letters, assignments or bond powers required
under the related pooling and servicing agreement, the related indenture or
applicable law to transfer such Residual Security.

      Loan File: With respect to each Loan, the Custodial Loan File and the
Servicer's Loan File.

      Loan Interest Rate: With respect to each Loan, the annual rate of interest
borne by the related Promissory Note, as shown on the Loan Schedule, and, in the
case of an ARM, as the same may be periodically adjusted in accordance with the
terms of such Loan.

      Loan Originator: Option One and its permitted successors and assigns.

      Loan Pool: As of any date of determination, the pool of all Loans conveyed
to the Issuer pursuant to this Agreement on all Transfer Dates up to and
including such date of determination, which Loans have not been released from
the Lien of the Indenture pursuant to the terms of the Basic Documents, together
with the rights and obligations of a holder thereof, and the payments thereon
and proceeds therefrom received on and after the applicable Transfer Cut-off
Date, as identified from time to time on the Loan Schedule.

      Loan Purchase and Contribution Agreement: The Loan Purchase and
Contribution Agreement, between Option One, as seller and the Depositor, as
purchaser, dated as of April 1, 2001, and all supplements and amendments
thereto.

                                       13
<PAGE>

      Loan Schedule: The schedule of Loans conveyed to the Issuer on the Closing
Date and on each Transfer Date and delivered to the Initial Noteholder and the
Custodian in the form of a computer-readable transmission specifying the
information set forth on Exhibit D hereto and, with respect to Wet Funded Loans,
Exhibit C to the Custodial Agreement.

      Loan-to-Value Ratio or LTV: With respect to any First Lien Loan, the ratio
of the original outstanding principal amount of such Loan to the Appraised Value
of the Mortgaged Property at origination.

      Lost Note Affidavit: With respect to any Loan as to which the original
Promissory Note has been permanently lost or destroyed and has not been
replaced, an affidavit from the Loan Originator certifying that the original
Promissory Note has been lost, misplaced or destroyed (together with a copy of
the related Promissory Note and indemnifying the Issuer against any loss, cost
or liability resulting from the failure to deliver the original Promissory Note)
in the form of Exhibit L attached to the Custodial Agreement.

      LPA Assignment: The assignment of Loans from Option One to the Depositor
under the Loan Purchase and Contribution Agreement.

      Majority Certificateholders: Has the meaning set forth in the Trust
Agreement.

      Majority Noteholders: The holder or holders of in excess of 50% of the
Note Principal Balance. In the event of the release of the Lien of the Indenture
in accordance with the terms thereof, the Majority Noteholders shall mean the
Majority Certificateholders.

      Market Value: The market value of a Loan or Residual Security as of any
Business Day as determined by the Market Value Agent in accordance with Section
6.03 hereof.

      Market Value Agent: Greenwich Capital Financial Products, Inc. or an
Affiliate thereof designated by Greenwich Capital Financial Products, Inc. in
writing to the parties hereto and, in either case, its successors in
interest

      Master Disposition Confirmation Agreement: The Master Disposition
Confirmation Agreement, dated as of April 1, 2001, by and among Option One, the
Depositor, Option One Owner Trust 2001-1A, Option One Owner Trust 2001-1B,
Option One Owner Trust 2001-2, Wells Fargo Bank Minnesota, National Association,
Bank of America, N.A., Greenwich Capital Financial Products, Inc., and Steamboat
Funding Corporation.

      Maturity Date: With respect to the Notes, as set forth in the Indenture or
such later date as may be agreed in writing by the Majority Noteholders.

      Maximum Note Principal Balance: As defined in Section 1.01 of the Note
Purchase Agreement.

      Monthly Advance: The aggregate of the advances made by the Servicer on any
Remittance Date pursuant to Section 4.14 of the Servicing Addendum.

                                       14
<PAGE>

      Monthly Payment: The scheduled monthly payment of principal and/or
interest required to be made by a Borrower on the related Loan, as set forth in
the related Promissory Note.

      Monthly Remittance Amount: With respect to each Remittance Date, the sum,
without duplication, of (i) the aggregate payments on the Loans collected by the
Servicer pursuant to Section 5.01(b)(1)(i) during the immediately preceding
Remittance Period and (ii) the aggregate of amounts deposited into the
Collection Account pursuant to Section 5.01(b)(1)(ii) through 5.01(b)(1)(xi)
during the immediately preceding Remittance Period.

      Moody's: Moody's Investors Service, Inc., or any successor thereto.

      Mortgage: With respect to any Loan, the mortgage, deed of trust or other
instrument securing the related Promissory Note, which creates a first or second
lien on the fee in real property and/or a first or second lien on the leasehold
in real property securing the Promissory Note and the assignment of rents and
leases related thereto.

      Mortgage Insurance Policies: With respect to any Mortgaged Property or
Loan, the insurance policies required pursuant to Section 4.08 of the Servicing
Addendum.

      Mortgage Insurance Proceeds: With respect to any Mortgaged Property, all
amounts collected in respect of Mortgage Insurance Policies and not required
either pursuant to applicable law or the related Loan Documents to be applied to
the restoration of the related Mortgaged Property or paid to the related
Borrower.

      Mortgaged Property: With respect to a Loan, the related Borrower's fee
and/or leasehold interest in the real property (and/or all improvements,
buildings, fixtures, building equipment and personal property thereon (to the
extent applicable) and all additions, alterations and replacements made at any
time with respect to the foregoing) and all other collateral securing repayment
of the debt evidenced by the related Promissory Note.

      Net Liquidation Proceeds: With respect to any Payment Date, Liquidation
Proceeds received during the prior Remittance Period, net of any reimbursements
to the Servicer made from such amounts for any unreimbursed Servicing
Compensation and Servicing Advances (including Nonrecoverable Servicing
Advances) made and any other fees and expenses paid in connection with the
foreclosure, inspection, conservation and liquidation of the related Liquidated
Loans or Foreclosure Properties pursuant to Section 4.03 of the Servicing
Addendum.

      Net Loan Losses: With respect to any Defaulted Loan that is subject to a
modification pursuant to Section 4.01 of the Servicing Addendum, an amount equal
to the portion of the Principal Balance, if any, released in connection with
such modification.

      Net Worth: With respect to any Person, the excess of total assets of such
Person, over total liabilities of such Person, determined in accordance with
GAAP.

      Nonrecoverable Monthly Advance: Any Monthly Advance previously made or
proposed to be made with respect to a Loan or Foreclosure Property that, in the
good faith business judgment of the Servicer, as evidenced by an Officer's
Certificate of a Servicing Officer delivered to the Initial Noteholder, will
not, or, in the case of a proposed Monthly Advance,

                                       15
<PAGE>

would not be, ultimately recoverable from the related late payments, Mortgage
Insurance Proceeds, Liquidation Proceeds or condemnation proceeds on such Loan
or Foreclosure Property as provided herein.

      Nonrecoverable Servicing Advance: With respect to any Loan or any
Foreclosure Property, (a) any Servicing Advance previously made and not
reimbursed from late collections, condemnation proceeds, Liquidation Proceeds,
Mortgage Insurance Proceeds or the Released Mortgaged Property Proceeds on the
related Loan or Foreclosure Property or (b) a Servicing Advance proposed to be
made in respect of a Loan or Foreclosure Property either of which, in the good
faith business judgment of the Servicer, as evidenced by an Officer's
Certificate of a Servicing Officer delivered to the Initial Noteholder, would
not be ultimately recoverable.

      Nonutilization Fee: As defined in the Pricing Side Letter.

      Note: The meaning assigned thereto in the Indenture.

      Noteholder: The meaning assigned thereto in the Indenture.

      Note Interest Rate: With respect to each Accrual Period, a per annum
interest rate equal to One-Month LIBOR for the related LIBOR Determination Date
plus the LIBOR Margin and the Additional LIBOR Margin for such Accrual Period.

      Note Principal Balance: With respect to the Notes, as of any date of
determination (a) the sum of the Additional Note Principal Balances purchased on
or prior to such date pursuant to the Note Purchase Agreement less (b) all
amounts previously distributed in respect of principal of the Notes on or prior
to such day.

      Note Purchase Agreement: The Note Purchase Agreement, dated as of April
18, 2001, and as amended and restated through and including April 29, 2005,
among the Initial Noteholder, the Issuer and the Depositor, as The same may be
amended from time to time.

      Note Redemption Amount: As of any Determination Date, an amount without
duplication equal to the sum of (i) the then outstanding Note Principal Balance
of the Notes, plus the Interest Payment Amount for the related Payment Date,
(ii) any Trust Fees and Expenses due and unpaid on the related Payment Date,
(iii) any Servicing Advance Reimbursement Amount as of such Determination Date
and (iv) all amounts due to Hedging Counterparties in respect of the termination
of all related Hedging Instruments.

      Officer's Certificate: A certificate signed by a Responsible Officer of
the Depositor, the Loan Originator, the Servicer or the Issuer, in each case, as
required by this Agreement.

      One-Month LIBOR: With respect to each Accrual Period, the rate determined
by the Initial Noteholder on the related LIBOR Determination Date on the basis
of the offered rate for one-month U.S. dollar deposits, as such rate appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on such LIBOR Determination
Date; provided that if such rate does not appear on Telerate Page 3750, the rate
for such date will be determined on the basis of the offered rates of the
Reference Banks for one-month U.S. dollar deposits, as of 11:00 a.m. (London
time) on such LIBOR Determination Date. In such event, the Initial Noteholder
will request the principal

                                       16
<PAGE>

London office of each of the Reference Banks to provide a quotation of its rate.
If on such LIBOR Determination Date, two or more Reference Banks provide such
offered quotations, One-Month LIBOR for the related Accrual Period shall be the
arithmetic mean of all such offered quotations (rounded to the nearest whole
multiple of 1/16%). If on such LIBOR Determination Date, fewer than two
Reference Banks provide such offered quotations, One-Month LIBOR for the Accrual
Period shall be the higher of (i) LIBOR as determined on the previous LIBOR
Determination Date and (ii) the Reserve Interest Rate. Notwithstanding the
foregoing, if, under the priorities described above, One-Month LIBOR for a LIBOR
Determination Date would be based on One-Month LIBOR for the previous LIBOR
Determination Date for the third consecutive LIBOR Determination Date, the
Initial Noteholder shall select an alternative comparable index (over which the
Initial Noteholder has no control), used for determining one-month Eurodollar
lending rates that is calculated and published (or otherwise made available) by
an independent party.

      Opinion of Counsel: A written opinion of counsel who may be employed by
the Servicer, the Depositor, the Loan Originator or any of their respective
Affiliates.

      Option One: Option One Mortgage Corporation, a California corporation.

      Overcollateralization Shortfall: As defined in the Pricing Side Letter.

      Owner Trustee: means Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as Owner Trustee under
this Agreement, and any successor owner trustee under the Trust Agreement.

      Owner Trustee Fee: The annual fee of $4,000 payable in equal monthly
installments to the Servicer pursuant to Section 5.01(c)(3)(i) which shall in
turn pay such amount annually to the Owner Trustee on the anniversary of the
Closing Date occurring each year during the term of this Agreement.

      Paying Agent: The meaning assigned thereto in the Indenture.

      Payment Date: Each of, (i) the 10th day of each calendar month commencing
on the first such 10th day to occur after the first Transfer Date, or if any
such day is not a Business Day, the first Business Day immediately following
such day, (ii) any day a Loan or Residual Security is sold pursuant to the terms
hereof, (iii) a Put Date as specified by the Majority Noteholder pursuant to
Section 10.05 of the Indenture, and (iv) an additional Payment Date pursuant to
Section 5.01(c)(4)(i) and 5.01(c)(4)(iii). From time to time, the Majority
Noteholders and the Issuer may agree, upon written notice to the Owner Trustee
and the Indenture Trustee, to additional Payment Dates in accordance with
Section 5.01(c)(4)(ii).

      Payment Statement: As defined in Section 6.01(b) hereof.

      Percentage Interest: As defined in the Trust Agreement.

      Performance Trigger: Shall exist, as of any Determination Date, if the
aggregate Principal Balance of all Loans that are not Scratch & Dent Loans and
that are Delinquent greater than 59 days (including Defaulted Loans and
Foreclosed Loans) as of such Determination Date

                                       17
<PAGE>

divided by the Pool Principal Balance as of such Determination Date is greater
than 2%, provided, however, that a Performance Trigger shall not occur if such
percentage is reduced to less than 2% within 5 Business Days of such
Determination Date as the result of the exercise of a Servicer Call. A
Performance Trigger shall continue to exist until Deemed Cured.

      Periodic Cap: With respect to each ARM Loan and any Rate Change Date
therefor, the annual percentage set forth in the related Promissory Note, which
is the maximum annual percentage by which the Loan Interest Rate for such Loan
may increase or decrease (subject to the Lifetime Cap or the Lifetime Floor) on
such Rate Change Date from the Loan Interest Rate in effect immediately prior to
such Rate Change Date.

      Permitted Investments: Each of the following:

            (e) Direct general obligations of the United States or the
obligations of any agency or instrumentality of the United States fully and
unconditionally guaranteed, the timely payment or the guarantee of which
constitutes a full faith and credit obligation of the United States.

            (f) Federal Housing Administration debentures rated Aa2 or higher by
Moody's and AA or better by S&P.

            (g) Freddie Mac senior debt obligations rated Aa2 or higher by
Moody's and AA or better by S&P.

            (h) Federal Home Loan Banks' consolidated senior debt obligations
rated Aa2 or higher by Moody's and AA or better by S&P.

            (i) Fannie Mae senior debt obligations rated Aa2 or higher by
Moody's.

            (j) Federal funds, certificates or deposit, time and demand
deposits, and bankers' acceptances (having original maturities of not more than
365 days) of any domestic bank, the short-term debt obligations of which have
been rated A-1 or better by S&P and P-1 or better by Moody's.

            (k) Investment agreements approved by the Initial Noteholder
provided:

                  (1) The agreement is with a bank or insurance company which
has an unsecured, uninsured and unguaranteed obligation (or claims-paying
ability) rated Aa2 or better by Moody's and AA or better by S&P, and

                  (2) Monies invested thereunder may be withdrawn without any
penalty, premium or charge upon not more than one day's notice (provided such
notice may be amended or canceled at any time prior to the withdrawal date), and

                  (3) The agreement is not subordinated to any other obligations
of such insurance company or bank, and

                                       18
<PAGE>

                  (4) The same guaranteed interest rate will be paid on any
future deposits made pursuant to such agreement, and

                  (5) The Indenture Trustee and the Initial Noteholder receive
an opinion of counsel that such agreement is an enforceable obligation of such
insurance company or bank.

            (l) Commercial paper (having original maturities of not more than
365 days) rated A-1 or better by S&P and P-1 or better by Moody's.

            (m) Investments in money market funds rated AAAM or AAAM-G by S&P
and Aaa or P-1 by Moody's.

            (n) Investments approved in writing by the Initial Noteholder;

provided that no instrument described above is permitted to evidence either the
right to receive (a) only interest with respect to obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further,
that no instrument described above may be purchased at a price greater than par
if such instrument may be prepaid or called at a price less than its purchase
price prior to stated maturity; and provided, further, that, with respect to any
instrument described above, such instrument qualifies as a "permitted
investment" within the meaning of Section 860G(a)(5) of the Code and the
regulations thereunder.

      Each reference in this definition to the Rating Agency shall be construed,
as a reference to each of S&P and Moody's.

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

      Physical Property: As defined in clause (b) of the definition of
"Delivery" above.

      Pool Principal Balance: With respect to any Determination Date, the
aggregate Principal Balances of the Loans as of such Determination Date.

      Prepaid Installment: With respect to any Loan, any installment of
principal thereof and interest thereon received prior to the scheduled Due Date
for such installment, intended by the Borrower as an early payment thereof and
not as a Prepayment with respect to such Loan.

      Prepayment: Any payment of principal of a Loan which is received by the
Servicer in advance of the scheduled due date for the payment of such principal
(other than the principal portion of any Prepaid Installment), and the proceeds
of any Mortgage Insurance Policy which are to be applied as a payment of
principal on the related Loan shall be deemed to be Prepayments for all purposes
of this Agreement.

                                       19
<PAGE>

      Preservation Expenses: Expenditures made by the Servicer in connection
with a foreclosed Loan prior to the liquidation thereof, including, without
limitation, expenditures for real estate property taxes, hazard insurance
premiums, property restoration or preservation.

      Pricing Side Letter: The pricing letter of even date herewith, signed by
the parties hereto.

      Primary Insurance Policy: A policy of primary mortgage guaranty insurance
issued by a Qualified Insurer pursuant to Section 4.06 of the Servicing
Addendum.

      Principal Balance: With respect to any Loan or related Foreclosure
Property, (i) at the Transfer Cut-off Date, the Transfer Cut-off Date Principal
Balance and (ii) with respect to any other date of determination, the
outstanding unpaid principal balance of the Loan as of the end of the preceding
Remittance Period (after giving effect to all payments received thereon and the
allocation of any Net Loan Losses with respect thereto for a Defaulted Loan
prior to the end of such Remittance Period); provided, however, that any
Liquidated Loan shall be deemed to have a Principal Balance of zero. With
respect to any Residual Security, (i) at the Transfer Cut-off Date the Transfer
Cut-off Date Principal Balance and (ii) with respect to any other date of
determination, the outstanding unpaid principal balance of the Residual Security
as of such date.

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

      Promissory Note: With respect to a Loan, the original executed promissory
note or other evidence of the indebtedness of the related Borrower or Borrowers.

      Put/Call Loan: Any (i) non-Scratch & Dent Loan that has become 30 or more
days (but less than 60 days) Delinquent, (ii) non-Scratch & Dent Loan that has
become 60 or more days (but less than 90 days) Delinquent, (iii) non-Scratch &
Dent Loan that has become 90 or more days Delinquent, (iv) non-Scratch & Dent
Loan that is a Defaulted Loan, (v) non-Scratch & Dent Loan that has been in
default for a period of 30 days or more (other than a Loan referred to in clause
(i), (ii), (iii) or (iv) hereof), (vi) non-Scratch & Dent Loan that does not
meet criteria established by independent rating agencies or surety agency
conditions for Dispositions which criteria have been established at the related
Transfer Date and may be modified only to match changed criteria of independent
rating agencies or surety agents, or (vii) non-Scratch & Dent Loan that is
inconsistent with the intended tax status of a Securitization.

      Put Date: Any date on which all or a portion of the Notes are to be
purchased by the Issuer as a result of the exercise of the Put Option.

      Put Option: The right of the Majority Noteholders to require the Issuer to
repurchase all or a portion of the Notes in accordance with Section 10.04 of the
Indenture.

      QSPE Affiliate: Option One Owner Trust 2001-1B, Option One Owner Trust
2001-2, Option One Owner Trust 2002-3, Option One Owner Trust 2003-4. Option One
Owner Trust 2003-5 or any other Affiliate which is a "qualified special purpose
entity" in accordance with Financial Accounting Standards Board's Statement No.
140 or 125.

                                       20
<PAGE>

      Qualified Insurer: An insurance company duly qualified as such under the
laws of the states in which the Mortgaged Property is located, duly authorized
and licensed in such states to transact the applicable insurance business and to
write the insurance provided and that meets the requirements of Fannie Mae and
Freddie Mac.

      Qualified Substitute Loan: A Loan or Loans substituted for a Deleted Loan
pursuant to Section 3.06 hereof, which (i) has or have been approved in writing
by the Majority Noteholders and (ii) complies or comply as of the date of
substitution with each representation and warranty set forth in Exhibit E and is
or are not 30 or more days Delinquent as of the date of substitution for such
Deleted Loan or Loans.

      Qualified Substitute Residual Security: A Residual Security or Residual
Securities substituted for a Deleted Residual Security pursuant to Section 3.06
hereof, which has or have been approved in writing by the Majority Noteholders.

      Rapid Amortization Trigger: Shall exist, as of any Determination Date, if
the aggregate Principal Balance of all Loans that are not Scratch & Dent Loans
and that are Delinquent greater than 59 days (including Defaulted Loans and
Foreclosed Loans) as of such Determination Date divided by the Pool Principal
Balance as of such Determination Date is greater than 3%; provided, however,
that a Rapid Amortization Trigger shall not occur if such percentage is reduced
to less than 3% within 5 Business Days of such Determination Date as a result of
the exercise of a Servicer Call. A Rapid Amortization Trigger shall continue to
exist until it is Deemed Cured.

      Rate Change Date: The date on which the Loan Interest Rate of each ARM is
subject to adjustment in accordance with the related Promissory Note.

      Rating Agencies: S&P and Moody's or such other nationally recognized
credit rating agencies as may from time to time be designated in writing by the
Majority Noteholders in their sole discretion.

      Receivables Purchase Agreement: The Receivables Purchase Agreement, dated
as of November 1, 2003, among Option One, the Advance Depositor and the Advance
Trust.

      Receivables Seller: Option One.

      Record Date: With respect to each Payment Date, the close of business of
the immediately preceding Business Day.

      Reference Banks: Deutsche Bank National Trust Company, Barclay's Bank PLC,
The Tokyo Mitsubishi Bank and National Westminster Bank PLC and their successors
in interest; provided, however, that if the Initial Noteholder determines that
any of the foregoing banks are not suitable to serve as a Reference Bank, then
any leading banks selected by the Initial Noteholder with the approval of the
Issuer, which approval shall not be unreasonably withheld, which are engaged in
transactions in Eurodollar deposits in the international Eurocurrency market (i)
with an established place of business in London and (ii) which have been
designated as such by the Initial Noteholder with the approval of the Issuer,
which approval shall not be unreasonably withheld.

                                       21
<PAGE>

      Refinanced Loan: A Loan the proceeds of which were not used to purchase
the related Mortgaged Property.

      Released Mortgaged Property Proceeds: With respect to any Loan, proceeds
received by the Servicer in connection with (i) a taking of an entire Mortgaged
Property by exercise of the power of eminent domain or condemnation or (ii) any
release of part of the Mortgaged Property from the lien of the related Mortgage,
whether by partial condemnation, sale or otherwise; which proceeds in either
case are not released to the Borrower in accordance with applicable law and/or
Accepted Servicing Practices.

      Remittance Date: The Business Day immediately preceding each Payment Date.

      Remittance Period: With respect to any Payment Date, the period commencing
immediately following the Determination Date for the preceding Payment Date (or,
in the case of the initial Payment Date, commencing immediately following the
initial Transfer Cut-off Date) and ending on and including the related
Determination Date.

      Repurchase Price: With respect to a Loan the sum of (i) the Principal
Balance thereof as of the date of purchase or repurchase, plus (ii) all accrued
and unpaid interest on such Loan to the date of purchase or repurchase computed
at the applicable Loan Interest Rate, plus (iii) the amount of any unreimbursed
Servicing Advances made by the Servicer with respect to such Loan (after
deducting therefrom any amounts received in respect of such purchased or
repurchased Loan and being held in the Collection Account for future
distribution to the extent such amounts represent recoveries of principal not
yet applied to reduce the related Principal Balance or interest (net of the
Servicing Fee) for the period from and after the date of repurchase). The
Repurchase Price shall be (i) increased by the net negative value or (ii)
decreased by the net positive value of all Hedging Instruments terminated with
respect to the purchase of such Loan. To the extent the Servicer does not
reimburse itself for amounts, if any, in respect of the Servicing Advance
Reimbursement Amount pursuant to Section 5.01(c)(1) hereof, with respect to such
Loan, the Repurchase Price shall be reduced by such amounts. With respect to a
Residual Security the sum of (i) the Principal Balance thereof as of the date of
purchase or repurchase, plus (ii) all accrued and unpaid interest on such
Residual Security to the date of purchase or repurchase computed at the
applicable Residual Security Interest Rate.

      Residual Security: Any security sold to the Trust hereunder and pledged to
the Indenture Trustee, which security must be (i) a mortgage-backed security
issued by Option One Mortgage Acceptance Corp. and evidencing an interest in a
securitization trust backed by residential mortgage loans, which mortgage loans
are serviced by Option One (including, without limitation, securities designated
as class C certificates and class P certificates that meet the foregoing
criteria) or (ii) net interest margin security issued by a trust sponsored by
Option One and backed by class C certificates and/or class P certificates, which
certificates are in turn backed by residential mortgage loans serviced by Option
One.

      Residual Securities Interest Rate: With respect to each Residual Security,
the annual rate of interest borne by such Residual Security.

                                       22
<PAGE>

      Residual Securities Pool: As of any date of determination, the pool of all
Residual Securities conveyed to the Issuer pursuant to this Agreement on all
Transfer Dates up to and including such date of determination, which Residual
Securities have not been released from the Lien of the Indenture pursuant to the
terms of the Basic Documents, together with the rights and obligations of a
holder thereof, and the payments thereon and proceeds therefrom received on and
after the applicable Transfer Cut-off Date, as identified from time to time on
the Residual Securities Schedule.

      Residual Securities Schedule: The schedule of Residual Securities conveyed
to the Issuer on the Closing Date and on each Transfer Date and delivered to the
Initial Noteholder in the form of a computer-readable transmission specifying
the information set forth on Exhibit G hereto.

      Residual Securities Transfer Agreement: The Residual Securities Transfer
Agreement dated as of April 16, 2004, between the Loan Originator and the
Depositor, as the same may be further amended or supplemented from time to time.

      Reserve Interest Rate: With respect to any LIBOR Determination Date, the
rate per annum that the Initial Noteholder determines to be either (i) the
arithmetic mean (rounded to the nearest whole multiple of 1/16%) of the
one-month U.S. dollar lending rates which New York City banks selected by the
Initial Noteholder are quoting on the relevant LIBOR Determination Date to the
principal London offices of leading banks in the London interbank market or (ii)
in the event that the Initial Noteholder can determine no such arithmetic mean,
the lowest one-month U.S. dollar lending rate which New York City banks selected
by the Initial Noteholder are quoting on such LIBOR Determination Date to
leading European banks.

      Responsible Officer: When used with respect to the Indenture Trustee or
Custodian, any officer within the corporate trust office of such Person,
including any Vice President, Assistant Vice President, Secretary, Assistant
Secretary or any other officer of such Person customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject. When used with respect to the Issuer or any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and who is identified on the list of Authorized Officers delivered
by the Administrator to the Owner Trustee on the date hereof (as such list may
be modified or supplemented from time to time thereafter) and, so long as the
Administration Agreement is in effect, any Vice President or more senior officer
of the Administrator who is authorized to act for the Administrator in matters
relating to the Issuer and to be acted upon by the Administrator pursuant to the
Administration Agreement and who is identified on the list of Responsible
Officers delivered by the Administrator to the Owner Trustee on the date hereof
(as such list may be modified or supplemented from time to time thereafter).
When used with respect to the Depositor, the Loan Originator or the Servicer,
the President, any Vice President, or the Treasurer.

      Retained Securities: With respect to a Securitization, any subordinated
securities issued or expected to be issued, or excess collateral value retained
or expected to be retained, in

                                       23
<PAGE>

connection therewith to the extent the Depositor, the Loan Originator or an
Affiliate thereof retains, instead of sell, such securities.

      Retained Securities Value: With respect to any Business Day and a Retained
Security, the market value thereof as determined by the Market Value Agent in
accordance with Section 6.03(d) hereof.

      Revolving Period: With respect to the Notes, the period commencing on
April 29, 2005 and ending on the earlier of (i) April 28, 2006 and (ii) the date
on which the Revolving Period is terminated pursuant to Section 2.07.

      RSTA Assignment: The assignment of Residual Securities from Option One to
the Depositor under the Residual Securities Transfer Agreement.

      Sales Price: With respect to each Loan and each Residual Security and any
Transfer Date, the sum of the Collateral Values with respect to such Loan or
such Residual Security conveyed on such Transfer Date as of such Transfer Date.

      S&SA Assignment: An assignment, in the form of Exhibit C hereto, of Loans
or Residual Securities and other property from the Depositor to the Issuer
pursuant to this Agreement.

      Scratch & Dent Loan: A Loan identified as having minor documentation,
appraisal or underwriting deficiencies, which Loan may not be Delinquent on the
Transfer Date; provided, that the Loan Originator has provided a detailed
description of such deficiencies to the Initial Noteholder prior to the Transfer
Date (or, with respect to Loans that become Scratch & Dent Loans after the
Transfer Date, within one Business Day of the discovery, of such deficiencies);
provided further, however, that any Scratch & Dent Loan which has deficiencies
that render it an Unqualified Loan will be repurchased or substituted pursuant
to the procedures in Section 3.05.

      Second Lien Loan: A Loan secured by the lien on the Mortgaged Property,
subject to one Senior Lien on such Mortgaged Property.

      Securities: The Notes and the Trust Certificates.

      Securities Intermediary: A "securities intermediary" as defined in Section
8-102(a)(14) of the UCC that is holding a Trust Account for the Indenture
Trustee as the sole "entitlement holder" as defined in Section 8-102(a)(7) of
the UCC.

      Securitization: A sale or transfer of Loans or Residual Securities by the
Issuer at the direction of the Majority Noteholders to any other Person in order
to effect one or a series of structured-finance securitization transactions,
including but not limited to transactions involving the issuance of securities
which may be treated for federal income tax purposes as indebtedness of Option
One or one or more of its wholly-owned subsidiaries.

      Securityholder: Any Noteholder or Certificateholder.

                                       24
<PAGE>

      Senior Lien: With respect to any Second Lien Loan, the mortgage loan
having a senior priority lien on the related Mortgaged Property.

      Servicer: Option One, in its capacity as the servicer hereunder, or any
successor appointed as herein provided.

      Servicer Call: The optional repurchase by the Servicer of a Loan pursuant
to Section 3.08(b) hereof.

      Servicer Event of Default: As described in Section 9.01 hereof.

      Servicer Put: The mandatory repurchase by the Servicer, at the option of
the Majority Noteholders, of a Loan pursuant to Section 3.08(a) hereof.

      Servicer's Fiscal Year: May 1st of each year through April 30th of the
following year.

      Servicer's Loan File: With respect to each Loan, the file held by the
Servicer, consisting of all documents (or electronic images thereof) relating to
such Loan, including, without limitation, copies of all of the Loan Documents
included in the related Custodial Loan File.

      Servicer's Remittance Report: A report prepared and computed by the
Servicer in substantially the form of Exhibit B attached hereto.

      Servicing Addendum: The terms and provisions set forth in Exhibit F
attached hereto relating to the administration and servicing of the Loans.

      Servicing Advance Reimbursement Amount: With respect to any Determination
Date, the amount of any Servicing Advances that have not been reimbursed as of
such date, including Nonrecoverable Servicing Advances.

      Servicing Advances: As defined in Section 4.14(b) of the Servicing
Addendum.

      Servicing Compensation: The Servicing Fee and other amounts to which the
Servicer is entitled pursuant to Section 4.15 of the Servicing Addendum.

      Servicing Fee: As to each Loan (including any Loan that has been
foreclosed and for which the related Mortgaged Property has become a Foreclosure
Property, but excluding any Liquidated Loan), the fee payable monthly to the
Servicer, which shall be the product of 0.50% (50 basis points), or such other
lower amount as shall be mutually agreed to in writing by the Majority
Noteholders and the Servicer, and the Principal Balance of such Loan as of the
beginning of the related Remittance Period, divided by 12. The Servicing Fee
shall only be payable to the extent interest is collected on a Loan.

      Servicing Officer: Any officer of the Servicer or Subservicer involved in,
or responsible for, the administration and servicing of the Loans whose name and
specimen signature appears on a list of servicing officers annexed to an
Officer's Certificate furnished by the Servicer or the Subservicer,
respectively, on the date hereof to the Issuer and the Indenture Trustee, on
behalf of the Noteholders, as such list may from time to time be amended.

                                       25
<PAGE>

      S&P: Standard & Poor's Rating Services, a division of The McGraw-Hill
Companies, Inc.

      State: Means any one of the states of the United States of America or the
District of Columbia.

      Subservicer: Any Person with which the Servicer has entered into a
Subservicing Agreement and which is an Eligible Servicer and satisfies any
requirements set forth in Section 4.22 of the Servicing Addendum in respect of
the qualifications of a Subservicer.

      Subservicing Account: An account established by a Subservicer pursuant to
a Subservicing Agreement, which account must be an Eligible Account.

      Subservicing Agreement: Any agreement between the Servicer and any
Subservicer relating to subservicing and/or administration of any or all Loans
as provided in Section 4.22 in the Servicing Addendum.

      Subsidiary: With respect to any Person, any corporation, partnership or
other entity of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether or not at the
time securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have or might have voting
power by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person.

      Substitution Adjustment: With respect to any Loan, as to any date on which
a substitution occurs pursuant to Section 2.05 or Section 3.06 hereof, the
amount, if any, by which (a) the aggregate principal balance of any Qualified
Substitute Loans (after application of principal payments received on or before
the related Transfer Cut-off Date) is less than (b) the aggregate of the
Principal Balances of the related Deleted Loans as of the first day of the month
in which such substitution occurs. With respect to any Residual Security, as to
any date on which a substitution occurs pursuant to Section 2.05 or Section 3.06
hereof, the amount, if any, by which (a) the aggregate principal balance of any
Qualified Substitute Residual Security (after application of principal payments
received on or before the related Transfer Cut-off Date) is less than (b) the
aggregate of the Principal Balances of the related Deleted Residual Securities
as of the first day of the month in which such substitution occurs.

      Tangible Net Worth: With respect to any Person, as of any date of
determination, the consolidated Net Worth of such Person and its Subsidiaries,
less the consolidated net book value of all assets of such Person and its
Subsidiaries (to the extent reflected as an asset in the balance sheet of such
Person or any Subsidiary at such date) which will be treated as intangibles
under GAAP, including, without limitation, such items as deferred financing
expenses, net leasehold improvements, good will, trademarks, trade names,
service marks, copyrights, patents, licenses and unamortized debt discount and
expense; provided, that residual securities issued by such Person or its
Subsidiaries shall not be treated as intangibles for purposes of this
definition.

                                       26
<PAGE>

      Termination Price: As of any Determination Date, an amount without
duplication equal to the greater of (A) the Note Redemption Amount and (B) the
sum of (i) the Principal Balance of each Loan included in the Trust as of the
end of the preceding Remittance Period; (ii) all unpaid interest accrued on the
Principal Balance of each such Loan at the related Loan Interest Rate to the end
of the preceding Remittance Period; (iii) the aggregate fair market value of
each Foreclosure Property included in the Trust as of the end of the preceding
Remittance Period, as determined by an Independent appraiser acceptable to the
Majority Noteholders as of a date not more than 30 days prior to such Payment
Date; (iv) the Note Principal Balance of the Advance Note as of such date; (v)
all accrued and unpaid interest on the Advance Note; (v) the Principal Balance
of each Residual Security as of such date; (vi) all accrued and unpaid interest
on the Residual Security as of such date; and (vii) all other amounts due under
the Advance Documents.

      Transfer Cut-off Date: With respect to each Loan or Residual Security, the
first day of the month in which the Transfer Date with respect to such Loan or
Residual Security occurs or, with respect a Loan originated in such month, the
date of origination.

      Transfer Cut-off Date Principal Balance: As to each Loan or Residual
Security, its Principal Balance as of the opening of business on the Transfer
Cut-off Date (after giving effect to any payments received on the Loan or
Residual Security before the Transfer Cut-off Date).

      Transfer Date: With respect to each Loan or Residual Security, the day
such Loan or Residual Security is either (i) sold and conveyed to the Depositor
by the Loan Originator pursuant to the Loan Purchase and Contribution Agreement
or the Residual Securities Transfer Agreement and to the Issuer by the Depositor
pursuant to Section 2.01 hereof or (ii) sold to the Issuer pursuant to the
Master Disposition Confirmation Agreement, which results in an increase in the
Note Principal Balance by the related Additional Note Principal Balance. With
respect to any Qualified Substitute Loan or Qualified Substitute Residual
Security, the Transfer Date shall be the day such Loan is conveyed to the Trust
pursuant to Section 2.05 or 3.06.

      Transfer Obligation: The obligation of the Loan Originator under Section
5.06 hereof to make certain payments in connection with Dispositions and other
related matters.

      Transfer Obligation Account: The account designated as such, established
and maintained pursuant to Section 5.05 hereof.

      Transfer Obligation Target Amount: With respect to any Payment Date, the
cumulative total of all withdrawals pursuant to Section 5.05(e), 5.05(f),
5.05(g), and 5.05(h) hereof from the Transfer Obligation Account to but not
including such Payment Date minus any amount withdrawn from the Transfer
Obligation Account to return to the Loan Originator pursuant to Section
5.05(i)(i).

      Trust: Option One Owner Trust 2001-1A, the Delaware business trust created
pursuant to the Trust Agreement.

      Trust Agreement: The Trust Agreement dated as of April 1, 2001 among the
Depositor and the Owner Trustee.

                                       27
<PAGE>

      Trust Account Property: The Trust Accounts, all amounts and investments
held from time to time in the Trust Accounts and all proceeds of the foregoing.

      Trust Accounts: The Distribution Account, the Collection Account and the
Transfer Obligation Account.

      Trust Certificate: The meaning assigned thereto in the Trust Agreement.

      Trust Estate: Shall mean the assets subject to this Agreement, the Trust
Agreement and the Indenture and assigned to the Trust, which assets consist of:
(i) such Loans as from time to time are subject to this Agreement as listed in
the Loan Schedule, as the same may be amended or supplemented on each Transfer
Date and by the removal of Deleted Loans and Unqualified Loans and by the
addition of Qualified Substitute Loans, together with the Servicer's Loan Files
and the Custodial Loan Files relating thereto and all proceeds thereof, (ii) the
Mortgages and security interests in the Mortgaged Properties, (iii) all payments
in respect of interest and principal with respect to each Loan and Residual
Security received on or after the related Transfer Cut-off Date, (iv) such
assets as from time to time are identified as Foreclosure Property, (v) such
assets and funds as are from time to time deposited in the Distribution Account,
Collection Account and the Transfer Obligation Account, including, without
limitation, amounts on deposit in such accounts that are invested in Permitted
Investments, (vi) lenders' rights under all Mortgage Insurance Policies and to
any Mortgage Insurance Proceeds, (vii) Net Liquidation Proceeds and Released
Mortgaged Property Proceeds, (viii) all right, title and interest of the Trust
(but none of the obligations) in and to the obligations of Hedging
Counterparties under Hedging Instruments (ix) the Advance Note and all right,
title and interest of the Trust in and under the Advance Documents, including
without limitation, all voting and consent rights of the Noteholders thereunder,
(x) such Residual Securities as from time to time are subject to this Agreement
as listed in the Residual Securities Schedule, as the same may be amended or
supplemented on each Transfer Date and by the removal of Deleted Residual
Securities and Unqualified Residual Securities and by the addition of Qualified
Substitute Residual Securities, together with the Loan Documents relating
thereto and all proceeds thereof and (xi) all right, title and interest of each
of the Depositor, the Loan Originator and the Trust in and under the Basic
Documents including, without limitation, the obligations of the Loan Originator
under the Loan Purchase and Contribution Agreement, the Master Disposition
Confirmation Agreement and the Residual Securities Transfer Agreement, and all
proceeds of any of the foregoing.

      Trust Fees and Expenses: As of each Payment Date, an amount equal to the
Servicing Compensation, the Owner Trustee Fee, the Indenture Trustee Fee and the
Custodian Fee, if any, and any expenses of the foregoing.

      UCC: The Uniform Commercial Code as in effect in the State of New York.

      UCC Assignment: A form "UCC-2" or "UCC-3" statement meeting the
requirements of the Uniform Commercial Code of the relevant jurisdiction to
reflect an assignment of a secured party's interest in collateral.

                                       28
<PAGE>

      UCC-1 Financing Statement: A financing statement meeting the requirements
of the Uniform Commercial Code of the relevant jurisdiction.

      Underwriting Guidelines: The underwriting guidelines (including the loan
origination guidelines) of the Loan Originator, as the same may be amended from
time to time with notice to the Initial Noteholder.

      Unfunded Transfer Obligation: With respect to any date of determination,
an amount equal to (x) the sum of (A) 10% of the aggregate Collateral Value (as
of the related Transfer Date) of all Loans sold hereunder, plus (B) 10% of the
aggregate Collateral Value (as of the related Funding Date) of the initial
principal balance of the Advance Note and all Additional Note Balance related
thereto purchased by the Issuer, plus (C) 10% of the aggregate Collateral Value
(as of the related Transfer Date) of all Residual Securities sold hereunder,
plus (D) any amounts withdrawn from the Transfer Obligation Account for return
to the Loan Originator pursuant to Section 5.05(i)(i) hereof prior to such
Payment Date, less (y) the sum of (i) the aggregate amount of payments actually
made by the Loan Originator in respect of the Transfer Obligation pursuant to
Section 5.06, (ii) the amount obtained by multiplying (a) the Unfunded Transfer
Obligation Percentage by (b) the aggregate Collateral Value (as of the related
date of Disposition) of all Loans and Residual Securities that have been subject
to a Disposition and (iii) without duplication, the aggregate amount of the
Repurchase Prices paid by the Servicer in respect of any Servicer Puts.

      Unfunded Transfer Obligation Percentage: As of any date of determination,
an amount equal to (x) the Unfunded Transfer Obligation as of such date, divided
by (y) 100% of the aggregate Collateral Values as of the related Transfer Date
of all Loans in the Loan Pool and all Residual Securities in the Residual
Securities Pool..

      Unqualified Loan: As defined in Section 3.06(a) hereof.

      Unqualified Residual Security As defined in Section 3.06(a) hereof.

      Wet Funded Custodial File Delivery Date: With respect to a Wet Funded
Loan, the later of the fifteenth Business Day and the twentieth calendar day
after the related Transfer Date, provided that if a Default or Event of Default
shall have occurred, the Wet Funded Custodial File Delivery Date shall be the
earlier of (x) such fifteenth Business Day or twentieth calendar day and (y) the
fifth day after the occurrence of such event.

      Wet Funded Loan: A Loan for which the related Custodial Loan File shall
not have been delivered to the Custodian as of the related Transfer Date.

      Whole Loan Sale: A Disposition of Loans pursuant to a whole-loan sale.

      Section 1.02 Other Definitional Provisions.

            (a) 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

                                       29
<PAGE>

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

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

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

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

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

                                   ARTICLE II

       CONVEYANCE OF THE TRUST ESTATE; ADDITIONAL NOTE PRINCIPAL BALANCES

      Section 2.01 Conveyance of the Trust Estate; Additional Note Principal
Balances.

            (a) (i) On the terms and conditions of this Agreement, on each
Transfer Date during the Revolving Period, the Depositor agrees to offer for
sale and to sell a portion of each of the Loans or Residual Securities, as
applicable, and contribute to the capital stock of the Issuer the balance of
each of the Loans or Residual Securities, as applicable, and deliver the related
Loan Documents to or at the direction of the Issuer. To the extent the Issuer
has or is able to obtain sufficient funds under the Note Purchase Agreement and
the Notes for the purchase thereof, the Issuer agrees to purchase such Loans
offered for sale by the Depositor. On the terms and conditions of this Agreement
and the Master Disposition Confirmation Agreement, on each Transfer Date during
the Revolving Period, the Issuer may acquire Loans from another QSPE Affiliate
of the Loan Originator to the extent the Issuer has or is able to obtain
sufficient funds for the purchase thereof. On the terms and conditions of this
Agreement and the Residual Securities Transfer Agreement, on each Transfer Date
during the Revolving Period, the Issuer may acquire Residual Securities from the
Loan Originator to the extent the Issuer has or is able to obtain sufficient
funds for the purchase thereof. On the terms and conditions of this Agreement
and the Advance Note Purchase Agreement, on each Funding Date during the

                                       30
<PAGE>

Revolving Period, the Issuer shall acquire Additional Note Balance from the
Advance Trust to the extent the Issuer has or is able to obtain sufficient funds
under the Note Purchase Agreement and the Notes for the purchase thereof.

                  (ii) On each Transfer Date, in consideration of the payment of
the Additional Note Principal Balance pursuant to Section 2.06(a) hereof and as
a contribution to the assets of the Issuer, the Depositor as of the related
Transfer Date and concurrently with the execution and delivery hereof, hereby
sells, transfers, assigns, sets over and otherwise conveys to the Issuer,
without recourse, but subject to the other terms and provisions of this
Agreement, all of the right, title and interest of the Depositor in and to the
Trust Estate.

                  (iii) During the Revolving Period, on each Transfer Date,
subject to the conditions precedent set forth in Section 2.06(a) and in
accordance with the procedures set forth in Section 2.01(c), the Depositor,
pursuant to an S&SA Assignment, will assign to the Issuer without recourse all
of its respective right, title and interest, in and to the Loans and Residual
Securities and all proceeds thereof listed on the Loan Schedule or Residual
Securities Schedule, as applicable, attached to such S&SA Assignment, including
all interest and principal received by the Loan Originator, the Depositor or the
Servicer on or with respect to the Loans or Residual Securities on or after the
related Transfer Cut-off Date, together with all right, title and interest in
and to the proceeds of any related Mortgage Insurance Policies and all of the
Depositor's rights, title and interest in and to (but none of its obligations
under) the Loan Purchase and Contribution Agreement, the Residual Securities
Transfer Agreement and all proceeds of the foregoing.

                  (iv) The foregoing sales, transfers, assignments, set overs
and conveyances do not, and are not intended to, result in a creation or an
assumption by the Issuer of any of the obligations of the Depositor, the Loan
Originator or any other Person in connection with the Trust Estate or under any
agreement or instrument relating thereto except as specifically set forth
herein.

            (b) As of the Closing Date and as of each Transfer Date and each
Funding Date, the Issuer acknowledges the conveyance to it of the Trust Estate,
including, as applicable, all rights, title and interest of the Depositor and
any QSPE Affiliate in and to the Trust Estate, receipt of which is hereby
acknowledged by the Issuer. Concurrently with such delivery, as of the Closing
Date and as of each Transfer Date and each Funding Date, pursuant to the
Indenture the Issuer pledges the Trust Estate to the Indenture Trustee. In
addition, concurrently with such delivery and in exchange therefor, the Owner
Trustee, pursuant to the instructions of the Depositor, has executed (not in its
individual capacity, but solely as Owner Trustee on behalf of the Issuer) and
caused the Trust Certificates to be authenticated and delivered to or at the
direction of the Depositor.

            (c) (i) Pursuant to and subject to the Note Purchase Agreement, the
Trust may, at its sole option, from time to time request that the Initial
Noteholder advance on any Transfer Date Additional Note Principal Balances and
the Initial Noteholder shall remit on such Transfer Date, to the Advance
Account, an amount equal to the Additional Note Principal Balance. In addition,
if the Initial Noteholder determines on any date following the related Transfer
Date (any such date, a "Collateral Value Increase Date") that the Collateral
value of specified Mortgage Loans shall be 102% pursuant to clause (2)(A) of the
definition of Collateral

                                       31
<PAGE>

Value, the Trust may request that the Initial Noteholder advance Additional Note
Principal Balances equal to such increase in the Collateral Value of the related
Mortgage Loans and the Initial Noteholder may, in its sole discretion, make such
advance of Additional Note Principal Balances. Pursuant to and subject to the
Note Purchase Agreement, the Trust shall request that the Initial Noteholder
advance on each Funding Date Additional Note Principal Balances equal to the
Additional Note Balance to be purchased by the Trust on such date and the
Initial Noteholder shall remit on such Funding Date to the Funding Account an
amount equal to such Additional Note Principal Balance.

                  (ii) Notwithstanding anything to the contrary herein, in no
event shall the Initial Noteholder be required to advance Additional Note
Principal Balances on a Transfer Date or Collateral Value Increase Date if the
conditions precedent with respect to such Transfer Date or Collateral Value Date
under Section 2.06(a) and the conditions precedent to the purchase of Additional
Note Principal Balances set forth in Section 3.01 of the Note Purchase Agreement
have not been fulfilled. Notwithstanding anything to the contrary herein, in no
event shall the Initial Noteholder be required to advance Additional Note
Principal Balances on a Funding Date if the conditions precedent with respect to
such Funding Date under Section 2.06(b), the conditions precedent to the
purchase of Additional Note Principal Balances set forth in Section 3.02 of the
Note Purchase Agreement and the conditions precedent to the purchase of
Additional Principal Balances set forth in Section 3.01 of the Advance Note
Purchase Agreement have not been fulfilled.

                  (iii) The Servicer shall appropriately note such Additional
Note Principal Balance (and the increased Note Principal Balance) in the next
succeeding Payment Statement; provided, however, that failure to make any such
notation in such Payment Statement or any error in such notation shall not
adversely affect any Noteholder's rights with respect to its Note Principal
Balance and its right to receive interest and principal payments in respect of
the Note Principal Balance held by such Noteholder. The Initial Noteholder shall
record on the schedule attached to such Noteholder's Note, the date and amount
of any Additional Note Principal Balance advanced by it; provided, that failure
to make such recordation on such schedule or any error in such schedule shall
not adversely affect any Noteholder's rights with respect to its Note Principal
Balance and its right to receive interest payments in respect of the Note
Principal Balance held by such Noteholder.

                  (iv) Absent manifest error, the Note Principal Balance of each
Note as set forth in the Initial Noteholder's records shall be binding upon the
Noteholders and the Trust, notwithstanding any notation made by the Servicer in
its Payment Statement pursuant to the preceding paragraph.

      Section 2.02 Ownership and Possession of Loan Files.

      With respect to each Loan, as of the related Transfer Date the ownership
of the related Promissory Note, the related Mortgage and the contents of the
related Servicer's Loan File and Custodial Loan File shall be vested in the
Trust for the benefit of the Securityholders, although possession of the
Servicer's Loan File on behalf of and for the benefit of the Securityholders
shall remain with the Servicer, and the Custodian shall take possession of the
Custodial Loan Files as contemplated in Section 2.05 hereof.

                                       32
<PAGE>

      Section 2.03 Books and Records; Intention of the Parties.

            (a) As of each Transfer Date, the sale of each of the Loans and
Residual Securities conveyed by the Depositor on such Transfer Date shall be
reflected on the balance sheets and other financial statements of the Depositor
and the Loan Originator, as the case may be, as a sale of assets and a
contribution to capital by the Loan Originator and the Depositor, as applicable,
under GAAP. Each of the Servicer and the Custodian shall be responsible for
maintaining, and shall maintain, a complete set of books and records for each
Loan and Residual Security which shall be clearly marked to reflect the
ownership of each Loan or Residual Security, as of the related Transfer Date, by
the Issuer and for the benefit of the Securityholders.

            (b) It is the intention of the parties hereto that, other than for
federal, state and local income or franchise tax purposes, the transfers and
assignments of the Trust Estate on the initial Closing Date, on each Transfer
Date and as otherwise contemplated by the Basic Documents and the Assignments
shall constitute a sale of the Loans, Residual Securities and all related
property from the Depositor to the Issuer and such property shall not be
property of the Depositor. It is the intention of the parties hereto that, other
than for federal, state and local income or franchise tax purposes, the
transfers and assignments on each Funding Date shall constitute a sale of the
Advance Note, the related Additional Note Balances and all related property from
the Advance Trust to the Issuer and such property shall not be property of the
Advance Depositor or the Receivables Seller. The parties hereto shall treat the
Notes as indebtedness for federal, state and local income and franchise tax
purposes.

            (c) If any of the assignments and transfers of the Loans or the
Residual Securities and the other property of the Trust Estate specified in
Section 2.01(a) hereof to the Issuer pursuant to this Agreement or the
conveyance of the Loans or the Residual Securities or any of such other property
of the Trust Estate to the Issuer, other than for federal, state and local
income or franchise tax purposes, is held or deemed not to be a sale or is held
or deemed to be a pledge of security for a loan, the Depositor intends that the
rights and obligations of the parties shall be established pursuant to the terms
of this Agreement and that, in such event, with respect to such property, (i)
consisting of Loans or Residual Securities and related property, the Depositor
shall be deemed to have granted, as of the related Transfer Date, to the Issuer
a first priority security interest in the entire right, title and interest of
the Depositor in and to such Loans or Residual Securities and proceeds and all
other property conveyed to the Issuer as of such Transfer Date, (ii) consisting
of any other property specified in Section 2.01(a), the Depositor shall be
deemed to have granted, as of the initial Closing Date, to the Issuer a first
priority security interest in the entire right, title and interest of the
Depositor in and to such property and the proceeds thereof. In such event, with
respect to such property, this Agreement shall constitute a security agreement
under applicable law.

            (d) On the Closing Date, the Depositor shall, at such party's sole
expense, cause to be filed UCC-1 Financing Statements naming the Issuer as
"secured party" and describing the Trust Estate being sold by the Depositor to
the Issuer with the appropriate governmental filing office in the state in which
the Depositor is organized and any other jurisdictions as shall be necessary to
perfect a security interest in the Trust Estate. In addition, on the Closing
Date, the Loan Originator shall, at its expense, cause to be filed UCC-1
Financing Statements naming the Depositor as "secured party" and describing the
Loans being sold by the

                                       33
<PAGE>

Loan Originator to the Depositor with the appropriate governmental office in the
state in which the Loan Originator is organized and such other jurisdictions as
shall be necessary to perfect a security interest in the Trust Estate. In
addition, on the Closing Date, the Depositor shall, at its expense, cause to be
filed UCC-1 Financing Statements naming the Depositor as "secured party" and
describing the Loans being sold by the Loan Originator to the Depositor with the
appropriate governmental office in the state in which the Loan Originator is
organized and such other jurisdictions as shall be necessary to perfect a
security interest in the Trust Estate. On or before the initial Funding Date,
the Issuer shall, at its expense, cause to be filed UCC-1 Financing Statements
naming the Issuer as "secured party" and describing the Advance Note being sold
by the Advance Trust to the Issuer with the appropriate governmental office in
the state in which the Advance Trust is organized and such other jurisdictions
as shall be necessary to perfect a security interest in the Trust Estate. On or
before the initial Transfer Date with respect to Residual Securities, the Issuer
shall, at its expense, cause to be filed UCC-1 Financing Statements naming the
Issuer as "secured party" and describing each Residual Security being sold by
the Advance Trust to the Issuer with the appropriate governmental office in the
state of Delaware and such other jurisdictions as shall be necessary to perfect
a security interest in the Trust Estate.

      Section 2.04 Delivery of Loan Documents.

            (a) The Loan Originator shall, prior to the related Transfer Date
(or, in the case of each Wet Funded Loan, the related Wet Funded Custodial File
Delivery Date), in accordance with the terms and conditions set forth in the
Custodial Agreement, deliver or cause to be delivered to the Custodian, as the
designated agent of the Indenture Trustee, a Loan Schedule and each of the
documents constituting the Custodial Loan File with respect to each Loan. The
Loan Originator shall assure that (i) in the event that any Wet Funded Loan is
not closed and funded to the order of the appropriate Borrower on the day funds
are provided to the Loan Originator by the Initial Noteholder on behalf of the
Issuer, such funds shall be promptly returned to the Initial Noteholder on
behalf of the Issuer and (ii) in the event that any Wet Funded Loan is subject
to a recission, all funds received in connection with such recission shall be
promptly returned to the Initial Noteholder on behalf of the Issuer. With
respect to each Residual Security, the Loan Originator shall, prior to the
related Transfer Date, deliver or cause to be delivered to the Indenture trustee
a Residual Security Schedule and each of the related Loan Documents and shall
cause the Delivery of such Residual Security to the Indenture Trustee.

            (b) The Loan Originator shall, on the related Transfer Date (or in
the case of a Wet Funded Loan, on or before the related Wet Funded Custodial
File Delivery Date), deliver or cause to be delivered to the Servicer the
related Servicer's Loan File (i) for the benefit of, and as agent for, the
Noteholders and (ii) for the benefit of the Indenture Trustee, on behalf of the
Noteholders, for so long as the Notes are outstanding; after the Notes are not
outstanding, the Servicer's Loan File shall be held in the custody of the
Servicer for the benefit of, and as agent for, the Certificateholders.

            (c) The Indenture Trustee shall cause the Custodian to take and
maintain continuous physical possession of the Custodial Loan Files in the State
of California (or upon prior written notice from the Custodian to the Loan
Originator and the Initial Noteholder and delivery of an Opinion of Counsel with
respect to the continued perfection of the Indenture

                                       34
<PAGE>

Trustee's security interest, in the State of Minnesota or Utah) and, in
connection therewith, shall act solely as agent for the Noteholders in
accordance with the terms hereof and not as agent for the Loan Originator, the
Servicer or any other party.

      Section 2.05 Acceptance by the Indenture Trustee of the Loans; Certain
Substitutions and Repurchases; Certification by the Custodian.

            (a) The Indenture Trustee declares that it will cause the Custodian
to hold the Custodial Loan Files and any additions, amendments, replacements or
supplements to the documents contained therein, as well as any other assets
included in the Trust Estate and delivered to the Custodian, in trust, upon and
subject to the conditions set forth herein. The Indenture Trustee further agrees
to cause the Custodian to execute and deliver such certifications as are
required under the Custodial Agreement and to otherwise direct the Custodian to
perform all of its obligations with respect to the Custodial Loan Files in
strict accordance with the terms of the Custodial Agreement.

            (b) (i) With respect to any Loans which are set forth as exceptions
in the Exceptions Report, the Loan Originator shall cure such exceptions by
delivering such missing documents to the Custodian or otherwise curing the
defect no later than, in the case of (x) a non-Wet Funded Loan, 5 Business Days,
or (y) in the case of a Wet Funded Loan one Business Day after the Wet Funded
Custodial File Delivery Date, in each case, following the receipt of the first
Exceptions Report listing such exception with respect to such Loan.

                (ii) In the event that, with respect to any Loan, the Loan
Originator does not comply with the document delivery requirements of this
Section 2.05 and such failure has a material adverse effect on the value or
enforceability of any Loan or the interests of the Securityholders in any Loan,
the Loan Originator shall repurchase such Loan within one Business Day of notice
thereof from the Indenture Trustee or the Initial Noteholder at the Repurchase
Price thereof with respect to such Loan by depositing such Repurchase Price in
the Collection Account. In lieu of such a repurchase, the Depositor and Loan
Originator may comply with the substitution provisions of Section 3.06 hereof.
The Loan Originator shall provide the Servicer, the Indenture Trustee, the
Issuer and the Initial Noteholder with a certification of a Responsible Officer
on or prior to such repurchase or substitution indicating that the Loan
Originator intends to repurchase or substitute such Loan.

                (iii) It is understood and agreed that the obligation of the
Loan Originator to repurchase or substitute any such Loan pursuant to this
Section 2.05(b) shall constitute the sole remedy with respect to such failure to
comply with the foregoing delivery requirements.

            (c) In performing its reviews of the Custodial Loan Files pursuant
to the Custodial Agreement, the Custodian shall have no responsibility to
determine the genuineness of any document contained therein and any signature
thereon. The Custodian shall not have any responsibility for determining whether
any document is valid and binding, whether the text of any assignment or
endorsement is in proper or recordable form, whether any document has been
recorded in accordance with the requirements of any applicable jurisdiction, or
whether a blanket assignment is permitted in any applicable jurisdiction.

                                       35
<PAGE>

            (d) The Servicer's Loan File shall be held in the custody of the
Servicer (i) for the benefit of, and as agent for, the Noteholders and (ii) for
the benefit of the Indenture Trustee, on behalf of the Noteholders, for so long
as the Notes are outstanding; after the Notes are not outstanding, the
Servicer's Loan File shall be held in the custody of the Servicer for the
benefit of, and as agent for, the Certificateholders. It is intended that, by
the Servicer's agreement pursuant to this Section 2.05(d), the Indenture Trustee
shall be deemed to have possession of the Servicer's Loan Files for purposes of
Section 9-305 of the UCC of the state in which such documents or instruments are
located. The Servicer shall promptly report to the Indenture Trustee any failure
by it to hold the Servicer's Loan File as herein provided and shall promptly
take appropriate action to remedy any such failure. In acting as custodian of
such documents and instruments, the Servicer agrees not to assert any legal or
beneficial ownership interest in the Loans or such documents or instruments.
Subject to Section 8.01(d), the Servicer agrees to indemnify the Securityholders
and the Indenture Trustee, their officers, directors, employees, agents and
"control persons" as such term is used under the Act and under the Securities
Exchange Act of 1934, as amended for any and all liabilities, obligations,
losses, damages, payments, costs or expenses of any kind whatsoever which may be
imposed on, incurred by or asserted against the Securityholders or the Indenture
Trustee as the result of the negligence or willful misfeasance by the Servicer
relating to the maintenance and custody of such documents or instruments which
have been delivered to the Servicer; provided, however, that the Servicer will
not be liable for any portion of any such amount resulting from the negligence
or willful misconduct of any Securityholders or the Indenture Trustee; and
provided, further, that the Servicer will not be liable for any portion of any
such amount resulting from the Servicer's compliance with any instructions or
directions consistent with this Agreement issued to the Servicer by the
Indenture Trustee or the Majority Noteholders. The Indenture Trustee shall have
no duty to monitor or otherwise oversee the Servicer's performance as custodian
of the Servicer Loan File hereunder.

      Section 2.06 Conditions Precedent to Transfer Dates, Funding Dates and
Collateral Value Increase Dates.

      (a) Two (2) Business Days prior to each Transfer Date, the Issuer shall
give notice to the Initial Noteholder of such upcoming Transfer Date and provide
an estimate of the number of Loans and Residual Securities and the aggregate
Principal Balance of such Loans and the aggregate Principal Balance of such
Residual Securities to be transferred on such Transfer Date. On the Business Day
prior to each Transfer Date, the Issuer shall provide the Initial Noteholder a
final Loan Schedule with respect to the Loans to be transferred on such Transfer
Date and a final Residual Securities Schedule with respect to the Residual
Securities to be transferred on such Transfer Date. On each Transfer Date, the
Depositor or the applicable QSPE Affiliate shall convey to the Issuer, the
Loans, Residual Securities and the other property and rights related thereto
described in the related S&SA Assignment, and the Issuer, only upon the
satisfaction of each of the conditions set forth below on or prior to such
Transfer Date, shall deposit or cause to be deposited cash in the amount of the
Additional Note Principal Balance received from the Initial Noteholder in the
Advance Account in respect thereof, and the Servicer shall, promptly after such
deposit, withdraw the amount deposited in respect of applicable Additional Note
Principal Balance from the Advance Account, and distribute such amount to or at
the direction of the Depositor or the applicable QSPE Affiliate.

                                       36
<PAGE>

      As of the Closing Date, each Transfer Date and, as applicable, each
Collateral Value Increase Date:

                  (i) the Depositor, the QSPE Affiliate and the Servicer, as
applicable, shall have delivered to the Issuer and the Initial Noteholder duly
executed Assignments, which shall have attached thereto a Loan Schedule and
Residual Securities Schedule, as applicable, setting forth the appropriate
information with respect to all Loans and Residual Securities conveyed on such
Transfer Date and shall have delivered to the Initial Noteholder a computer
readable transmission of such Loan Schedule and/or Residual Securities Schedule;

                  (ii) the Depositor shall have deposited, or caused to be
deposited, in the Collection Account all collections received with respect to
each of the Loans and Residual Securities on and after the applicable Transfer
Cut-off Date or, in the case of purchases from a QSPE Affiliate, such QSPE
Affiliate shall have deposited, or caused to be deposited, in the Collection
Account all collections received with respect to each of the Loans and allocable
to the period after the related Transfer Date;

                  (iii) as of such Transfer Date or Collateral Value Increase
Date, neither the Loan Originator, the Depositor or the QSPE Affiliate, as
applicable, shall (A) be insolvent, (B) be made insolvent by its respective sale
of Loans or Residual Securities or (C) have reason to believe that its
insolvency is imminent;

                  (iv) the Revolving Period shall not have terminated;

                  (v) as of such Transfer Date or Collateral Value Increase Date
(after giving effect to the sale of Loans on such Transfer Date), there shall be
no Overcollateralization Shortfall;

                  (vi) in the case of non-Wet Funded Loans, the Issuer shall
have delivered the Custodial Loan File to the Custodian in accordance with the
Custodial Agreement and the Initial Noteholder shall have received a copy of the
Trust Receipt and Exceptions Report reflecting such delivery;

                  (vii) each of the representations and warranties made by the
Loan Originator contained in Exhibit E with respect to the Loans and Section 3
of the Residual Securities Transfer Agreement with respect to the Residual
Securities shall be true and correct in all material respects as of the related
Transfer Date with the same effect as if then made and the proviso set forth in
Section 3.05 with respect to Loans sold by a QSPE Affiliate shall not be
applicable to any Loans, and the Depositor or the QSPE Affiliate, as applicable,
shall have performed all obligations to be performed by it under the Basic
Documents on or prior to such Transfer Date or Collateral Value Increase Date;

                  (viii) the Depositor or the QSPE Affiliate shall, at its own
expense, within one Business Day following the Transfer Date, indicate in its
computer files that the Loans and Residual Securities identified in each S&SA
Assignment have been sold to the Issuer pursuant to this Agreement and the S&SA
Assignment;

                                       37
<PAGE>

                  (ix) the Depositor or the QSPE Affiliate shall have taken any
action requested by the Indenture Trustee, the Issuer or the Noteholders
required to maintain the ownership interest of the Issuer in the Trust Estate;

                  (x) no selection procedures believed by the Depositor or the
QSPE Affiliate to be adverse to the interests of the Noteholders shall have been
utilized in selecting the Loans or the Residual Securities to be conveyed on
such Transfer Date;

                  (xi) the Depositor shall have provided the Issuer, the
Indenture Trustee and the Initial Noteholder no later than two Business Days
prior to such date a notice of Additional Note Principal Balance in the form of
Exhibit A hereto;

                  (xii) after giving effect to the Additional Note Principal
Balance associated therewith, the Note Principal Balance will not exceed the
Maximum Note Principal Balance;

                  (xiii) all conditions precedent to the Depositor's purchase of
Loans and the Residual Securities pursuant to the Loan Purchase and Contribution
Agreement and the Residual Securities Transfer Agreement shall have been
fulfilled as of such Transfer Date and, in the case of purchases from a QSPE
Affiliate, all conditions precedent to the Issuer's purchase of Loans pursuant
to the Master Disposition Confirmation Agreement shall have been fulfilled as of
such Transfer Date;

                  (xiv) all conditions precedent to the Noteholders' purchase of
Additional Note Principal Balance pursuant to the Note Purchase Agreement shall
have been fulfilled as of such Transfer Date or Collateral Value Increase Date;

                  (xv) with respect to each Loan acquired from any QSPE
Affiliate that has a limited right of recourse to the Loan Originator under the
terms of the applicable loan purchase agreement, the Loan Originator has not
been required to pay any amount to or on behalf of such QSPE Affiliate that
lowered the recourse to the Loan Originator available to such QSPE Affiliate
below the maximum recourse to the Loan Originator available to such QSPE
Affiliate under the terms of the related loan purchase contract providing for
recourse by that QSPE Affiliate to the Loan Originator; and

                  (xvi) with respect to each Wet Funded Loan, the Guaranty shall
be in full force and effect.

        (b) Two (2) Business Days prior to each Funding Date, the Issuer shall
deliver or cause to be delivered to the Initial Noteholder the Funding Notice
and Funding Date Report delivered by the Receivables Seller pursuant to the
Receivables Purchase Agreement. On each Funding Date, the Issuer shall purchase
the Additional Note Balance issued by the Advance Trust on such Funding Date,
and the Issuer, only upon the satisfaction of each of the conditions set forth
below on or prior to such Funding Date, shall cause the Initial Noteholder to
deposit the applicable Additional Note Principal Balance into the Funding
Account.

                                       38
<PAGE>

      As of the each Funding Date:

                  (xvii) the Receivables Seller and the Advance Depositor, shall
have delivered to the Issuer the related Funding Notice and Bill of Sale, and
the exhibits related thereto, pursuant to the Receivables Purchase Agreement;

                  (xviii) neither the Loan Originator nor the Depositor shall
(A) be insolvent or (B) have reason to believe that its insolvency is imminent;

                  (xix) the Revolving Period shall not have terminated;

                  (xx) after giving effect to the purchase of Additional Note
Balance on such Funding Date, there shall be no Overcollateralization Shortfall;

                  (xxi) the Issuer shall have taken any action requested by the
Indenture Trustee or the Noteholders required to maintain the ownership interest
of the Issuer in the Trust Estate;

                  (xxii) the Issuer shall have provided the Indenture Trustee
and the Initial Noteholder no later than two Business Days prior to such date a
notice of Additional Note Principal Balance in the form of Exhibit A hereto;

                  (xxiii) after giving effect to the Additional Note Principal
Balance associated therewith, the Note Principal Balance will not exceed the
Maximum Note Principal Balance;

                  (xxiv) all conditions precedent to the Issuer's purchase of
Additional Note Balance pursuant to the Advance Note Purchase Agreement shall
have been fulfilled as of such Funding Date; and

                  (xxv) all conditions precedent to the Noteholders' purchase of
Additional Note Balance pursuant to the Note Purchase Agreement shall have been
fulfilled as of such Funding Date.

      Section 2.07 Termination of Revolving Period.

      Upon the occurrence of (i) an Event of Default or Default or (ii) a Rapid
Amortization Trigger or (iii) the Unfunded Transfer Obligation Percentage equals
4.0% or less or (iv) Option One or any of its Affiliates shall default under, or
fail to perform as requested under, or shall otherwise materially breach the
terms of any repurchase agreement, loan and security agreement or similar credit
facility or agreement entered into by Option One or any of its Affiliates,
including the 2001-1B Sale and Servicing Agreement and the Sale and Servicing
Agreement, dated as of April 1, 2001, as amended and restated through and
including November 25, 2003, among the Option One Owner Trust 2001-2, the
Depositor, Option One and the Indenture Trustee, and such default, failure or
breach shall entitle any counterparty to declare the Indebtedness thereunder to
be due and payable prior to the maturity thereof, the Initial Noteholder may, in
any such case, in its sole discretion, terminate the Revolving Period.

                                       39
<PAGE>

      Section 2.08 Correction of Errors.

      The parties hereto who have relevant information shall cooperate to
reconcile any errors in calculating the Sales Price from and after the Closing
Date. In the event that an error in the Sales Price is discovered by either
party, including without limitation, any error due to miscalculations of Market
Value where insufficient information has been provided with respect to a Loan or
Residual Security to make an accurate determination of Market Value as of any
applicable Transfer Date, any miscalculations of Principal Balance, accrued
interest, Overcollateralization Shortfall or aggregate unreimbursed Servicing
Advances attributable to the applicable Loan or Residual Security, or any
prepayments not properly credited, such party shall give prompt notice to the
other parties hereto, and the party that shall have benefitted from such error
shall promptly remit to the other, by wire transfer of immediately available
funds, the amount of such error with no interest thereon.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

      Section 3.01 Representations and Warranties of the Depositor.

      The Depositor hereby represents, warrants and covenants to the other
parties hereto and the Securityholders that as of the Closing Date and as of
each Transfer Date:

            (a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization and
has, and had at all relevant times, full power to own its property, to carry on
its business as currently conducted, to enter into and perform its obligations
under each Basic Document to which it is a party;

            (b) The execution and delivery by the Depositor of each Basic
Document to which the Depositor is a party and its performance of and compliance
with all of the terms thereof will not violate the Depositor's organizational
documents or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the breach or
acceleration of, any material contract, agreement or other instrument to which
the Depositor is a party or which are applicable to the Depositor or any of its
assets;

            (c) The Depositor has the full power and authority to enter into and
consummate the transactions contemplated by each Basic Document to which the
Depositor is a party, has duly authorized the execution, delivery and
performance of each Basic Document to which it is a party and has duly executed
and delivered each Basic Document to which it is a party; each Basic Document to
which it is a party, assuming due authorization, execution and delivery by the
other party or parties thereto, constitutes a valid, legal and binding
obligation of the Depositor, enforceable against it in accordance with the terms
thereof, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to or
affecting the rights of creditors generally, and by general equity principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law);

                                       40
<PAGE>

            (d) The Depositor is not in violation of, and the execution and
delivery by the Depositor of each Basic Document to which the Depositor is a
party and its performance and compliance with the terms of each Basic Document
to which the Depositor is a party will not constitute a violation with respect
to, any order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction, which violation
would materially and adversely affect the condition (financial or otherwise) or
operations of the Depositor or any of its properties or materially and adversely
affect the performance of any of its duties hereunder;

            (e) There are no actions or proceedings against, or investigations
of, the Depositor currently pending with regard to which the Depositor has
received service of process and no action or proceeding against, or
investigation of, the Depositor is, to the knowledge of the Depositor,
threatened or otherwise pending before any court, administrative agency or other
tribunal that (A) if determined adversely to the Depositor, would prohibit its
entering into any of the Basic Documents to which it is a party or render the
Securities invalid, (B) seek to prevent the issuance of the Securities or the
consummation of any of the transactions contemplated by any of the Basic
Documents to which it is a party or (C) if determined adversely to the
Depositor, would reasonably be expected to prohibit or materially and adversely
affect the performance by the Depositor of its obligations under, or the
validity or enforceability of, any of the Basic Documents to which it is a party
or the Securities (it being understood that the satisfaction of the Financial
Covenants by the Loan Originator is not considered an obligation of the
Depositor);

            (f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, any of the
Basic Documents to which the Depositor is a party or the Securities, or for the
consummation of the transactions contemplated by any of the Basic Documents to
which the Depositor is a party, except for such consents, approvals,
authorizations and orders, if any, that have been obtained prior to such date;

            (g) The Depositor is solvent, is able to pay its debts as they
become due and has capital sufficient to carry on its business and its
obligations hereunder; it will not be rendered insolvent by the execution and
delivery of any of the Basic Documents to which it is a party or the assumption
of any of its obligations thereunder; no petition of bankruptcy (or similar
insolvency proceeding) has been filed by or against the Depositor;

            (h) The Depositor did not transfer the Loans or Residual Securities
sold thereon by the Depositor to the Trust with any intent to hinder, delay or
defraud any of its creditors; nor will the Depositor be rendered insolvent as a
result of such sale;

            (i) The Depositor had good title to, and was the sole owner of, each
Loan and Residual Security sold thereon by the Depositor free and clear of any
lien other than any such lien released simultaneously with the sale contemplated
herein, and, immediately upon each transfer and assignment herein contemplated,
the Depositor will have delivered to the Trust good title to, and the Trust will
be the sole owner of, each Loan and Residual Security transferred by the
Depositor thereon free and clear of any lien;

                                       41
<PAGE>

            (j) The Depositor acquired title to each of the Loans and Residual
Securities sold thereon by the Depositor in good faith, without notice of any
adverse claim;

            (k) None of the Basic Documents to which the Depositor is a party,
nor any Officer's Certificate, statement, report or other document prepared by
the Depositor and furnished or to be furnished by it pursuant to any of the
Basic Documents to which it is a party or in connection with the transactions
contemplated thereby contains any untrue statement of material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading;

            (l) The Depositor is not required to be registered as an "investment
company" under the Investment Company Act of 1940, as amended;

            (m) The transfer, assignment and conveyance of the Loans and the
Residual Securities by the Depositor thereon pursuant to this Agreement is not
subject to the bulk transfer laws or any similar statutory provisions in effect
in any applicable jurisdiction;

            (n) The Depositor's principal place of business and chief executive
offices are located at Irvine, California or at such other address as shall be
designated by such party in a written notice to the other parties hereto;

            (o) The Depositor covenants that during the continuance of this
Agreement it will comply in all respects with the provisions of its
organizational documents in effect from time to time; and

            (p) The representations and warranties set forth in (h), (i), (j)
and (m) above were true and correct (with respect to the applicable QSPE
Affiliate) with respect to each Loan transferred to the Trust by any QSPE
Affiliate at the time such Loan was transferred to a QSPE Affiliate.

      Section 3.02 Representations and Warranties of the Loan Originator.

      The Loan Originator hereby represents and warrants to the other parties
hereto and the Securityholders that as of the Closing Date and as of each
Transfer Date:

            (a) The Loan Originator is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and (i) is duly qualified, in good standing and licensed to carry
on its business in each state where any Mortgaged Property related to a Loan
sold by it is located and (ii) is in compliance with the laws of any such
jurisdiction, in both cases, to the extent necessary to ensure the
enforceability of such Loans in accordance with the terms thereof and had at all
relevant times, full corporate power to originate such Loans, to own its
property, to carry on its business as currently conducted and to enter into and
perform its obligations under each Basic Document to which it is a party;

            (b) The execution and delivery by the Loan Originator of each Basic
Document to which it is a party and its performance of and compliance with the
terms thereof will not violate the Loan Originator's articles of organization or
by-laws or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or

                                       42
<PAGE>

result in the breach or acceleration of, any contract, agreement or other
instrument to which the Loan Originator is a party or which may be applicable to
the Loan Originator or any of its assets;

            (c) The Loan Originator has the full power and authority to enter
into and consummate all transactions contemplated by the Basic Documents to be
consummated by it, has duly authorized the execution, delivery and performance
of each Basic Document to which it is a party and has duly executed and
delivered each Basic Document to which it is a party; each Basic Document to
which it is a party, assuming due authorization, execution and delivery by each
of the other parties thereto, constitutes a valid, legal and binding obligation
of the Loan Originator, enforceable against it in accordance with the terms
hereof, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to or
affecting the rights of creditors generally, and by general equity principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law);

            (d) The Loan Originator is not in violation of, and the execution
and delivery of each Basic Document to which it is a party by the Loan
Originator and its performance and compliance with the terms of each Basic
Document to which it is a party will not constitute a violation with respect to,
any order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction, which violation
would materially and adversely affect the condition (financial or otherwise) or
operations of the Loan Originator or its properties or materially and adversely
affect the performance of its duties under any Basic Document to which it is a
party;

            (e) There are no actions or proceedings against, or investigations
of, the Loan Originator currently pending with regard to which the Loan
Originator has received service of process and no action or proceeding against,
or investigation of, the Loan Originator is, to the knowledge of the Loan
Originator, threatened or otherwise pending before any court, administrative
agency or other tribunal that (A) if determined adversely to the Loan
Originator, would prohibit its entering into any Basic Document to which it is a
party or render the Securities invalid, (B) seek to prevent the issuance of the
Securities or the consummation of any of the transactions contemplated by any
Basic Document to which it is a party or (C) if determined adversely to the Loan
Originator, would reasonably be expected to prohibit or materially and adversely
affect the sale of the Loans or Residual Securities to the Depositor, the
performance by the Loan Originator of its obligations under, or the validity or
enforceability of, any Basic Document to which it is a party or the Securities,
provided, however, that for purposes of calculating whether the Loan Seller
satisfies the Financial Covenants, such action, proceeding or investigation
shall not be taken into account unless there is a reasonable possibility of an
adverse determination of such action, proceeding or investigation;

            (f) No consent, approval, authorization or order of any court or
governmental agency or body is required for: (1) the execution, delivery and
performance by the Loan Originator of, or compliance by the Loan Originator
with, any Basic Document to which it is a party, (2) the issuance of the
Securities, (3) the sale and contribution of the Loans or the sale of the
Residual Securities, or (4) the consummation of the transactions required of it
by any Basic Document to which it is a party, except such as shall have been
obtained before such date;

                                       43
<PAGE>

            (g) Immediately prior to the sale of any Loan or Residual Security
to the Depositor, the Loan Originator had good title to such Loan or Residual
Security sold by it on such date without notice of any adverse claim;

            (h) The information, reports, financial statements, exhibits and
schedules furnished in writing by or on behalf of the Loan Originator to the
Initial Noteholder in connection with the negotiation, preparation or delivery
of the Basic Documents to which it is a party or delivered pursuant thereto,
when taken as a whole, do not contain any untrue statement of material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. All
written information furnished after the date hereof by or on behalf of the Loan
Originator to the Initial Noteholder in connection with the Basic Documents to
which it is a party and the transactions contemplated thereby will be true,
complete and accurate in every material respect, or (in the case of projections)
based on reasonable estimates, on the date as of which such information is
stated or certified.

            (i) The Loan Originator is solvent, is able to pay its debts as they
become due and has capital sufficient to carry on its business and its
obligations under each Basic Document to which it is a party; it will not be
rendered insolvent by the execution and delivery of this Agreement or by the
performance of its obligations under each Basic Document to which it is a party;
no petition of bankruptcy (or similar insolvency proceeding) has been filed by
or against the Loan Originator prior to the date hereof;

            (j) The Loan Originator has transferred the Loans or Residual
Securities transferred by it on or prior to such Transfer Date without any
intent to hinder, delay or defraud any of its creditors;

            (k) The Loan Originator has received fair consideration and
reasonably equivalent value in exchange for the Loans and Residual Securities
sold by it on such Transfer Date to the Depositor;

            (l) The Loan Originator has not dealt with any broker or agent or
other Person who might be entitled to a fee, commission or compensation in
connection with the transaction contemplated by this Agreement;

            (m) The Loan Originator is in compliance with each of its financial
covenants set forth in Section 7.02; and

            (n) The Loan Originator's principal place of business and chief
executive offices are located at Irvine, California or at such other address as
shall be designated by such party in a written notice to the other parties
hereto.

      It is understood and agreed that the representations and warranties set
forth in this Section 3.02 shall survive delivery of the respective Custodial
Loan Files to the Custodian (as the agent of the Indenture Trustee) and shall
inure to the benefit of the Securityholders, the Depositor, the Servicer, the
Indenture Trustee, the Owner Trustee and the Issuer. Upon discovery by the Loan
Originator, the Depositor, the Servicer, the Indenture Trustee or the Trust of a
breach of any of the foregoing representations and warranties that materially
and adversely affects the value of

                                       44
<PAGE>

any Loan or Residual Security or the interests of the Securityholders in any
Loan or Residual Security or in the Securities, the party discovering such
breach shall give prompt written notice (but in no event later than two Business
Days following such discovery) to the other parties. The obligations of the Loan
Originator set forth in Sections 2.05 and 3.06 hereof to cure any breach or to
substitute for or repurchase an affected Loan or Residual Security shall
constitute the sole remedies available hereunder to the Securityholders, the
Depositor, the Servicer, the Indenture Trustee or the Trust respecting a breach
of the representations and warranties contained in this Section 3.02. The fact
that the Initial Noteholder has conducted or has failed to conduct any partial
or complete due diligence investigation of the Loan Files shall not affect the
Securityholders rights to demand repurchase or substitution as provided under
this Agreement.

      Section 3.03 Representations, Warranties and Covenants of the Servicer.

      The Servicer hereby represents and warrants to and covenants with the
other parties hereto and the Securityholders that as of the Closing Date and as
of each Transfer Date:

            (a) The Servicer is a corporation duly organized, validly existing
and in good standing under the laws of the State of California and (i) is duly
qualified, in good standing and licensed to carry on its business in each state
where any Mortgaged Property is located, and (ii) is in compliance with the laws
of any such state, in both cases, to the extent necessary to ensure the
enforceability of the Loans in accordance with the terms thereof and to perform
its duties under each Basic Document to which it is a party and had at all
relevant times, full corporate power to own its property, to carry on its
business as currently conducted, to service the Loans and to enter into and
perform its obligations under each Basic Document to which it is a party;

            (b) The execution and delivery by the Servicer of each Basic
Document to which it is a party and its performance of and compliance with the
terms thereof will not violate the Servicer's articles of incorporation or
by-laws or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the breach or
acceleration of, any material contract, agreement or other instrument to which
the Servicer is a party or which are applicable to the Servicer or any of its
assets;

            (c) The Servicer has the full power and authority to enter into and
consummate all transactions contemplated by each Basic Document to which it is a
party, has duly authorized the execution, delivery and performance of each Basic
Document to which it is a party and has duly executed and delivered each Basic
Document to which it is a party. Each Basic Document to which it is a party,
assuming due authorization, execution and delivery by each of the other parties
thereto, constitutes a valid, legal and binding obligation of the Servicer,
enforceable against it in accordance with the terms hereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar laws relating to or affecting the
rights of creditors generally, and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at law);

            (d) The Servicer is not in violation of, and the execution and
delivery of each Basic Document to which it is a party by the Servicer and its
performance and compliance with the terms of each Basic Document to which it is
a party will not constitute a violation with respect to, any order or decree of
any court or any order or regulation of any federal, state,

                                       45
<PAGE>

municipal or governmental agency having jurisdiction, which violation would
materially and adversely affect the condition (financial or otherwise) or
operations of the Servicer or materially and adversely affect the performance of
its duties under any Basic Document to which it is a party;

            (e) There are no actions or proceedings against, or investigations
of, the Servicer currently pending with regard to which the Servicer has
received service of process and no action or proceeding against, or
investigation of, the Servicer is, to the knowledge of the Servicer, threatened
or otherwise pending before any court, administrative agency or other tribunal
that (A) if determined adversely to the Servicer, would prohibit its entering
into any Basic Document to which it is a party, (B) seek to prevent the
consummation of any of the transactions contemplated by any Basic Document to
which it is a party or (C) if determined adversely to the Servicer, would
reasonably be expected to prohibit or materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, any Basic Document to which it is a party or the Securities,
provided, however, that for the purpose of calculating whether the Servicer
satisfies the Financial Covenants, such action, proceeding or investigation
shall not be taken into account unless there is a reasonable possibility of an
adverse determination of such action, proceeding or investigation;

            (f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, any Basic
Document to which it is a party or the Securities, or for the consummation of
the transactions contemplated by any Basic Document to which it is a party,
except for such consents, approvals, authorizations and orders, if any, that
have been obtained prior to such date;

            (g) The information, reports, financial statements, exhibits and
schedules furnished in writing by or on behalf of the Servicer to the Initial
Noteholder in connection with the negotiation, preparation or delivery of the
Basic Documents to which it is a party or delivered pursuant thereto, when taken
as a whole, do not contain any untrue statement of material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. All written
information furnished after the date hereof by or on behalf of the Servicer to
the Initial Noteholder in connection with the Basic Documents to which it is a
party and the transactions contemplated thereby will be true, complete and
accurate in every material respect, or (in the case of projections) based on
reasonable estimates, on the date as of which such information is stated or
certified.

            (h) The Servicer is solvent and will not be rendered insolvent as a
result of the performance of its obligations pursuant to under the Basic
Documents to which it is a party;

            (i) The Servicer acknowledges and agrees that the Servicing
Compensation represents reasonable compensation for the performance of its
services hereunder and that the entire Servicing Compensation shall be treated
by the Servicer, for accounting purposes, as compensation for the servicing and
administration of the Loans pursuant to this Agreement;

            (j) The Servicer is in compliance with each of its financial
covenants set forth in Section 7.02; and

                                       46
<PAGE>

            (k) The Servicer is an Eligible Servicer and covenants to remain an
Eligible Servicer or, if not an Eligible Servicer, each Subservicer is an
Eligible Servicer and the Servicer covenants to cause each Subservicer to be an
Eligible Servicer.

      It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.03 shall survive delivery of the
respective Custodial Loan Files to the Indenture Trustee or the Custodian on its
behalf and shall inure to the benefit of the Depositor, the Securityholders, the
Indenture Trustee and the Issuer. Upon discovery by the Loan Originator, the
Depositor, the Servicer, the Indenture Trustee, the Owner Trustee or the Issuer
of a breach of any of the foregoing representations, warranties and covenants
that materially and adversely affects the value of any Loan or Residual Security
or the interests of the Securityholders therein or in the Securities, the party
discovering such breach shall give prompt written notice (but in no event later
than two Business Days following such discovery) to the other parties. The fact
that the Initial Noteholder has conducted or has failed to conduct any partial
or complete due diligence investigation shall not affect the Securityholders,
rights to exercise their remedies as provided under this Agreement.

      Section 3.04 Reserved.

      Section 3.05 Representations and Warranties Regarding Loans.

      The Loan Originator makes each of the representations and warranties set
forth on Exhibit E hereto with respect to each Loan and makes each
representation and warranty set forth in Section 3 of the Residual Securities
Transfer Agreement with respect to each Residual Security, provided, however,
that with respect to each Loan transferred to the Issuer by a QSPE Affiliate, to
the extent that the Loan Originator has at the time of such transfer actual
knowledge of any facts or circumstances that would render any of such
representations and warranties materially false, the Loan Originator shall
notify the Initial Noteholder of such facts or circumstances and, in such event,
shall have no obligation to make such materially false representation and
warranty.

      In addition, the Loan Originator represents and warrants with respect to
each Loan sold by a QSPE Affiliate that the Loan Originator has not been
required to pay any amount to or on behalf of such QSPE Affiliate that lowered
the recourse to the Loan Originator available to such QSPE Affiliate below the
maximum recourse to the Loan Originator available to such QSPE Affiliate under
the terms of any loan purchase agreement providing for recourse by that QSPE
Affiliate to the Loan Originator.

      Section 3.06 Purchase and Substitution.

            (a) It is understood and agreed that the representations and
warranties set forth in Exhibit E hereto and in Section 3 of the Residual
Securities Transfer Agreement shall survive the conveyance of the Loans or the
Residual Securities to the Indenture Trustee on behalf of the Issuer, and the
delivery of the Securities to the Securityholders. Upon discovery by the
Depositor, the Servicer, the Loan Originator, the Custodian, the Issuer, the
Indenture Trustee or any Securityholder of a breach of any of such
representations and warranties or the representations and warranties of the Loan
Originator set forth in Section 3.02 which materially

                                       47
<PAGE>

and adversely affects the value or enforceability of any Loan or Residual
Security or the interests of the Securityholders in any Loan or Residual
Security (notwithstanding that such representation and warranty was made to the
Loan Originator's best knowledge) or which, as a result of the attributes of the
aggregate Loan Pool or Residual Securities Pool, constitutes a breach of the
representations and warranties set forth in Exhibit E or in Section 3 of the
Residual Securities Transfer Agreement, the party discovering such breach shall
give prompt written notice to the others. The Loan Originator shall within 5
Business Days of the earlier of the Loan Originator's discovery or the Loan
Originator's receiving notice of any breach of a representation or warranty,
promptly cure such breach in all material respects. If within 5 Business Days
after the earlier of the Loan Originator's discovery of such breach or the Loan
Originator's receiving notice thereof such breach has not been remedied by the
Loan Originator and such breach materially and adversely affects the interests
of the Securityholders in the related Loan (an "Unqualified Loan") or related
Residual Security (an "Unqualified Residual Security"), the Loan Originator
shall promptly upon receipt of written instructions from the Majority
Noteholders either (i) remove such Unqualified Loan (in which case it shall
become a Deleted Loan) or Unqualified Residual Security (in which case it shall
become a Deleted Residual Security) from the Trust and substitute one or more
Qualified Substitute Loans (in place of a Deleted Loan) or Qualified Residual
Securities (in place of a Deleted Residual Security) in the manner and subject
to the conditions set forth in this Section 3.06 or (ii) purchase such
Unqualified Loan or Unqualified Residual Security at a purchase price equal to
the Repurchase Price with respect to such Unqualified Loan or Unqualified
Residual Security by depositing or causing to be deposited such Repurchase Price
in the Collection Account.

      Any substitution of Loans or Residual Securities pursuant to this Section
3.06(a) shall be accompanied by payment by the Loan Originator of the
Substitution Adjustment, if any, (x) if no Overcollateralization Shortfall
exists on the date of such substitution (after giving effect to such
substitution), remitted to the Noteholders in accordance with Section
5.01(c)(4)(i) or (y) otherwise to be deposited in the Collection Account
pursuant to Section 5.01(b)(1) hereof.

            (b) As to any Deleted Loan or Deleted Residual Security for which
the Loan Originator substitutes a Qualified Substitute Loan or Loans or
Qualified Substitute Residual Security or Residual Securities, the Loan
Originator shall effect such substitution by delivering to the Indenture Trustee
and Initial Noteholder a certification executed by a Responsible Officer of the
Loan Originator to the effect that the Substitution Adjustment, if any, has been
(x) if no Overcollateralization Shortfall exists on the date of such
substitution (after giving effect to such substitution), remitted to the
Noteholders in accordance with Section 5.01(c)(4)(i), or (y) otherwise deposited
in the Collection Account. As to any Deleted Loan for which the Loan Originator
substitutes a Qualified Substitute Loan or Loans, the Loan Originator shall
effect such substitution by delivering to the Custodian the documents
constituting the Custodial Loan File for such Qualified Substitute Loan or
Loans. As to any Deleted Residual Security for which the Loan Originator
substitutes a Qualified Substitute Residual Security or Residual Securities, the
Loan Originator shall effect such substitution by delivering to the Trustee the
Loan Documents for such Qualified Substitute Residual Security or Residual
Securities.

      The Servicer shall deposit in the Collection Account all payments received
in connection with each Qualified Substitute Loan or Qualified Substitute
Residual Security after the date of such substitution. Monthly Payments received
with respect to Qualified Substitute Loans or

                                       48
<PAGE>

Qualified Substitute Residual Securities on or before the date of substitution
will be retained by the Loan Originator. The Trust will be entitled to all
payments received on the Deleted Loan or Deleted Residual Security on or before
the date of substitution and the Loan Originator shall thereafter be entitled to
retain all amounts subsequently received in respect of such Deleted Loan or
Residual Security. The Loan Originator shall give written notice to the Issuer,
the Servicer (if the Loan Originator is not then acting as such), the Indenture
Trustee and Initial Noteholder that such substitution has taken place and the
Servicer shall amend the Loan Schedule or Residual Security Schedule, as
applicable, to reflect (i) the removal of such Deleted Loan or Deleted Residual
Security from the terms of this Agreement and (ii) the substitution of the
Qualified Substitute Loan or Qualified Substitute Residual Security. The
Servicer shall promptly deliver to the Issuer, the Loan Originator, the
Indenture Trustee and Initial Noteholder, a copy of the amended Loan Schedule
and/or a copy of the amended Residual Security Schedule. Upon such substitution,
such Qualified Substitute Loan or Loans or Qualified Substitute Residual
Security or Residual Securities shall be subject to the terms of this Agreement
in all respects, and the Loan Originator shall be deemed to have made with
respect to such Qualified Substitute Loan or Loans, as of the date of
substitution, the covenants, representations and warranties set forth in Exhibit
E hereto and with respect to such or Qualified Substitute Residual Security or
Residual Securities, the covenants, representations and warranties set forth in
the Residual Securities Transfer Agreement. On the date of such substitution,
the Loan Originator will (x) if no Overcollateralization Shortfall exists as of
the date of substitution (after giving effect to such substitution), remit to
the Noteholders as provided in Section 5.01(c)(4)(i) or (y) otherwise deposit
into the Collection Account, in each case an amount equal to the related
Substitution Adjustment, if any. In addition, on the date of such substitution,
the Servicer shall cause the Indenture Trustee to release the Deleted Loan or
Deleted Residual Securities from the lien of the Indenture and the Servicer will
cause such Qualified Substitute Loan or Qualified Substitute Residual Securities
to be pledged to the Indenture Trustee under the Indenture as part of the Trust
Estate.

            (c) With respect to all Unqualified Loans, Unqualified Residual
Securities or other Loans or Residual Securities repurchased by the Loan
Originator pursuant to this Agreement, upon the deposit of the Repurchase Price
therefor into the Collection Account, (i) the Issuer shall assign to the Loan
Originator, without representation or warranty, all of the Issuer's right, title
and interest in and to such Unqualified Loan or Unqualified Residual Security,
which right, title and interest were conveyed to the Issuer pursuant to Section
2.01 hereof and (ii) the Indenture Trustee shall assign to the Loan Originator,
without recourse, representation or warranty, all the Indenture Trustee's right,
title and interest in and to such Unqualified Loans or Loans or Unqualified
Residual Security or Residual Securities, which right, title and interest were
conveyed to the Indenture Trustee pursuant to Section 2.01 hereof and the
Indenture. The Issuer and the Indenture Trustee shall, at the expense of the
Loan Originator, take any actions as shall be reasonably requested by the Loan
Originator to effect the repurchase of any such Loans or Residual Securities and
to have the Custodian return the Custodial Loan File of the deleted Loan to the
Servicer or to have the Trustee return the Loan Documents of the Deleted
Residual Security to the Servicer.

            (d) It is understood and agreed that the obligations of the Loan
Originator set forth in this Section 3.06 to cure, purchase or substitute for a
Unqualified Loan or Unqualified

                                       49
<PAGE>

Residual Security constitute the sole remedies hereunder of the Depositor, the
Issuer, the Indenture Trustee, the Owner Trustee and the Securityholders
respecting a breach of the representations and warranties contained in Sections
3.02 hereof and in Exhibit E hereto and the Residual Security Transfer
Agreement. Any cause of action against the Loan Originator relating to or
arising out of a defect in a Custodial Loan File or the Loan Documents (with
respect to a Residual Security) or against the Loan Originator relating to or
arising out of a breach of any representations and warranties made in Sections
3.02 hereof and in Exhibit E hereto or the Residual Security Transfer Agreement
shall accrue as to any Loan or Residual Security upon (i) discovery of such
defect or breach by any party and notice thereof to the Loan Originator or
notice thereof by the Loan Originator to the Indenture Trustee, (ii) failure by
the Loan Originator to cure such defect or breach or purchase or substitute such
Loan or Residual Security as specified above, and (iii) demand upon the Loan
Originator, as applicable, by the Issuer or the Majority Noteholders for all
amounts payable in respect of such Loan or Residual Security.

            (e) Neither the Issuer nor the Indenture Trustee shall have any duty
to conduct any affirmative investigation other than as specifically set forth in
this Agreement as to the occurrence of any condition requiring the repurchase or
substitution of any Loan or Residual Security pursuant to this Section or the
eligibility of any Loan for purposes of this Agreement.

      Section 3.07 Dispositions.

            (a) The Majority Noteholders may at any time, and from time to time,
require that the Issuer redeem all or any portion of the Note Principal Balance
of the Notes by paying the Note Redemption Amount with respect to the Note
Principal Balance to be redeemed. In connection with any such redemption, the
Issuer shall effect Dispositions at the direction of the Majority Noteholders in
accordance with this Agreement, including in accordance with this Section 3.07.

            (b) (i) In consideration of the consideration received from the
Depositor under the Loan Purchase and Contribution Agreement and the Residual
Securities Transfer Agreement, the Loan Originator hereby agrees and covenants
that in connection with each Disposition it shall effect the following:

                  (A) make such representations and warranties concerning the
Loans as of the "cut-off date" of the related Disposition to the Disposition
Participants as may be necessary to effect the Disposition and such additional
representations and warranties as may be necessary, in the reasonable opinion of
any of the Disposition Participants, to effect such Disposition; provided, that,
to the extent that the Loan Originator has at the time of the Disposition actual
knowledge of any facts or circumstances that would render any of such
representations and warranties materially false, the Loan Originator may notify
the Disposition Participants of such facts or circumstances and, in such event,
shall have no obligation to make such materially false representation and
warranty;

                  (B) supply such information, opinions of counsel, letters from
law and/or accounting firms and other documentation and certificates regarding
the origination of the Loans or the issuance of the Residual Securities as any
Disposition Participant shall reasonably request to effect a Disposition and
enter into such indemnification agreements customary for such

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<PAGE>

transaction relating to or in connection with the Disposition as the Disposition
Participants may reasonably require;

                  (C) make itself available for and engage in good faith
consultation with the Disposition Participants concerning information to be
contained in any document, agreement, private placement memorandum, or filing
with the Securities and Exchange Commission relating to the Loan Originator, the
Loans or the Residual Securities in connection with a Disposition and shall use
reasonable efforts to compile any information and prepare any reports and
certificates, into a form, whether written or electronic, suitable for inclusion
in such documentation;

                  (D) to implement the foregoing and to otherwise effect a
Disposition, enter into, or arrange for its Affiliates to enter into insurance
and indemnity agreements, underwriting or placement agreements, servicing
agreements, purchase agreements and any other documentation which may reasonably
be required of or reasonably deemed appropriate by the Disposition Participants
in order to effect a Disposition; and

                  (E) take such further actions as may be reasonably necessary
to effect the foregoing;

provided, that notwithstanding anything to the contrary, (a) the Loan Originator
shall have no liability for the Loans or the Residual Securities arising from or
relating to the ongoing ability of the related Borrowers to pay under the Loans
or under the loans underlying the Residual Securities; (b) none of the
indemnities hereunder shall constitute an unconditional guarantee by the Loan
Originator of collectibility of the Loans or the Residual Securities; (c) the
Loan Originator shall have no obligation with respect to the financial inability
of any Borrower to pay principal, interest or other amount owing by such
Borrower under a Loan or under a loan underlying a Residual Security; and (d)
the Loan Originator shall only be required to enter into documentation in
connection with Dispositions that is consistent with the prior public
securitizations of affiliates of the Loan Originator, provided that to the
extent an Affiliate of the Initial Noteholder acts as "depositor" or performs a
similar function in a Securitization, additional indemnities and informational
representations and warranties are provided which are consistent with those in
the Basic Documents and may upon request of the Loan Originator be set forth in
a separate agreement between an Affiliate of the Initial Noteholder and the Loan
Originator.

                  (ii) In the event of any Disposition to the Loan Originator or
any of its Affiliates (except in connection with a Securitization or a
Disposition to a QSPE Affiliate), the purchase price paid by the Loan Originator
or any such Affiliate shall be the "fair market value" of the Loans or the
Residual Securities subject to such Disposition (as determined by the Market
Value Agent based upon recent sales of comparable loans or securities or such
other objective criteria as may be approved for determining "fair market value"
by a "Big Five" national accounting firm).

                  (iii) As long as no Event of Default or Default shall have
occurred and be continuing under this Agreement or the Indenture, the Servicer
may continue to service the Loans included in any Disposition subject to any
applicable "term-to-term" servicing provisions in Section 9.01(c) and subject to
any required amendments to the related servicing provisions as

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<PAGE>

may be necessary to effect the related Disposition including but not limited to
the obligation to make recoverable principal and interest advances on the Loans.

            After the termination of the Revolving Period, the Loan Originator,
the Issuer and the Depositor shall use commercially reasonable efforts to effect
a Disposition at the direction of the Disposition Agent.

            (c) The Issuer shall effect Dispositions at the direction of the
Majority Noteholders in accordance with the terms of this Agreement and the
Basic Documents. In connection therewith, the Trust agrees to assist the Loan
Originator in such Dispositions and accordingly it shall, at the request and
direction of the Majority Noteholders:

                  (i) transfer, deliver and sell all or a portion of the Loans
or Residual Securities, as of the "cut-off dates" of the related Dispositions,
to such Disposition Participants as may be necessary to effect the Dispositions;
provided, that any such sale shall be for "fair market value," as determined by
the Market Value Agent in its reasonable discretion;

                  (ii) deposit the cash Disposition Proceeds into the
Distribution Account pursuant to Section 5.01(c)(2)(D);

                  (iii) to the extent that a Securitization creates any Retained
Securities, to accept such Retained Securities as a part of the Disposition
Proceeds in accordance with the terms of this Agreement; and

                  (iv) take such further actions, including executing and
delivering documents, certificates and agreements, as may be reasonably
necessary to effect such Dispositions.

            (d) The Servicer hereby covenants that it will take such actions as
may be reasonably necessary to effect Dispositions as the Disposition
Participants may request and direct, including without limitation providing the
Loan Originator such information as may be required to make representations and
warranties required hereunder, and covenants that it will make such
representations and warranties regarding its servicing of the Loans hereunder as
of the Cut-off Date of the related Disposition as reasonably required by the
Disposition Participants.

            (e) [reserved]

            (f) The Majority Noteholders may effect Whole Loan Sales upon
written notice to the Servicer of its intent to cause the Issuer to effect a
Whole Loan Sale at least 5 Business Days in advance thereof. The Disposition
Agent shall serve as agent for Whole Loan Sales and will receive a reasonable
fee for such services provided that no such fee shall be payable if (i) the Loan
Originator or its Affiliates purchase such Loans and (ii) no Event of Default or
Default shall have occurred. The Loan Originator or its Affiliates may
concurrently bid to purchase Loans in a Whole Loan Sale; provided, however, that
neither the Loan Originator nor any such Affiliates shall pay a price in excess
of the fair market value thereof (as determined by the Market Value Agent based
upon recent sales of comparable loans or such other objective criteria as may be
approved for determining "fair market value" by a "Big Five" national accounting
firm). In the event that the Loan Originator does not bid in any such Whole Loan

                                       52
<PAGE>

Sale, it shall have a right of first refusal to purchase the Loans offered for
sale at the price offered by the highest bidder. The Disposition Agent shall
conduct any Whole Loan Sale subject to the Loan Originator's right of first
refusal and shall promptly notify the Loan Originator of the amount of the
highest bid. The Loan Originator shall have five (5) Business Days following its
receipt of such notice to exercise its right of first refusal by notifying the
Disposition Agent in writing.

            (g) Except as otherwise expressly set forth under this Section 3.07,
the parties' rights and obligations under this Section 3.07 shall continue
notwithstanding the occurrence of an Event of Default.

            (h) The Disposition Participants (and the Majority Noteholders to
the extent directing the Disposition Participants) shall be independent
contractors to the Issuer and shall have no fiduciary obligations to the Issuer
or any of its Affiliates. In that connection, the Disposition Participants shall
not be liable for any error of judgment made in good faith and shall not be
liable with respect to any action they take or omits to take in good faith in
the performance of their duties.

      Section 3.08 Servicer Put; Servicer Call.

            (a) Servicer Put. The Servicer shall promptly purchase, upon the
written demand of the Majority Noteholders, any Put/Call Loan; provided,
however, that the Servicer may, upon receipt of such demand, elect to repurchase
such Put/Call Loan pursuant to (b) below, in which case such repurchase shall be
deemed a Servicer Call.

            (b) Servicer Call. The Servicer may repurchase any Put/Call Loan at
any time. Such Servicer Calls shall be solely at the option of the Servicer.
Prior to exercising a Servicer Call, the Servicer shall deliver written notice
to the Majority Noteholders and the Indenture Trustee which notice shall
identify each Loan to be purchased and the Repurchase Price therefor; provided,
however, that the Servicer may irrevocably waive its right to repurchase any
Put/Call Loan as soon as reasonably practicable following its receipt of notice
of the occurrence of any event or events giving rise to such Loan being a
Put/Call Loan.

            (c) In connection with each Servicer Put, the Servicer shall remit
for deposit into the Collection Account the Repurchase Price for the Loans to be
repurchased. In connection with each Servicer Call, the Servicer shall deposit
into the Collection Account the Repurchase Price for the Loans to be purchased.
The aggregate Repurchase Price of all Loans transferred pursuant to Section
3.08(a) shall in no event exceed the Unfunded Transfer Obligation at the time of
any Servicer Put.

      Section 3.09 Modification of Underwriting Guidelines.

      The Loan Originator shall give the Initial Noteholder prompt written
notification of any modification or change to the Underwriting Guidelines. If
the Noteholder objects in writing to any modification or change to the
Underwriting Guidelines within 15 days after receipt of such notice, no Loans
may be conveyed to the Issuer pursuant to this Agreement unless such Loans have
been originated pursuant to the Underwriting Guidelines without giving effect to
such modification or change. Notwithstanding anything contained in this
Agreement to the contrary,

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<PAGE>

any Loan conveyed to the Issuer pursuant to this Agreement pursuant to a
modification or change to the Underwriting Guidelines that has been rejected by
the Initial Noteholder or which the Initial Noteholder did not receive notice
of, such Loan shall be deemed an Unqualified Loan and be repurchased or
substituted for in accordance with Section 3.06.

                                   ARTICLE IV

                    ADMINISTRATION AND SERVICING OF THE LOANS

      Section 4.01 Servicer's Servicing Obligations.

      The Servicer, as independent contract servicer, shall service and
administer the Loans in accordance with the terms and provisions set forth in
the Servicing Addendum, which Servicing Addendum is incorporated herein by
reference.

                                    ARTICLE V

              ESTABLISHMENT OF TRUST ACCOUNTS; TRANSFER OBLIGATION

      Section 5.01 Collection Account and Distribution Account.

            (a) (1) Establishment of Collection Account. The Servicer, for the
benefit of the Noteholders, shall cause to be established and maintained one or
more Collection Accounts (collectively, the "Collection Account"), which shall
be separate Eligible Accounts entitled "Option One Owner Trust 2001-1A
Collection Account, Wells Fargo Bank, N.A., as Indenture Trustee, for the
benefit of the Option One Owner Trust 2001-1A Mortgage-Backed Notes." The
Collection Account shall be maintained with a depository institution and shall
satisfy the requirements set forth in the definition of Eligible Account. Funds
in the Collection Account shall be invested in accordance with Section 5.03
hereof. Net investment earnings shall not be considered part of funds available
in the Collection Account.

                  (2) Establishment of Distribution Account. The Servicer, for
the benefit of the Noteholders, shall cause to be established and maintained,
one or more Distribution Accounts (collectively, the "Distribution Account"),
which shall be separate Eligible Accounts, entitled "Option One Owner Trust
2001-1A Distribution Account, Wells Fargo Bank, N.A., as Indenture Trustee, for
the benefit of the Option One Owner Trust 2001-1A Mortgage-Backed Notes." The
Distribution Account shall be maintained with a depository institution and shall
satisfy the requirements set forth in the definition of Eligible Account. Funds
in the Distribution Account shall be invested in accordance with Section 5.03
hereof. The Servicer may, at its option, maintain one account to serve as both
the Distribution Account and the Collection Account, in which case, the account
shall be entitled "Option One Owner Trust 2001-1A Collection/Distribution
Account, Wells Fargo Bank, N.A., as Indenture Trustee, for the benefit of the
Option One Owner Trust 2001-1A Mortgage-Backed Notes." If the Servicer makes
such an election, all references herein or in any other Basic Document to either
the Collection Account or the Distribution Account shall mean the
Collection/Distribution Account described in the preceding sentence.

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<PAGE>

                  (3) The Servicer will inform the Indenture Trustee of the
location of any accounts held in the Indenture Trustee's name, including any
location to which an account is transferred.

            (b) Deposits to Collection Account. The Servicer shall deposit or
cause to be deposited (without duplication):

                  (i) all payments on or in respect of each Loan collected on or
after the related Transfer Cut- off Date or with respect to each Loan purchased
from a QSPE Affiliate, all such payments allocable to such Loan on or after the
related Transfer Date (net, in each case, of any Servicing Compensation retained
therefrom) within two (2) Business Days after receipt thereof;

                  (ii) all Net Liquidation Proceeds within two (2) Business Days
after receipt thereof;

                  (iii) all Mortgage Insurance Proceeds within two (2) Business
Days after receipt thereof;

                  (iv) all Released Mortgaged Property Proceeds within two (2)
Business Days after receipt thereof;

                  (v) any amounts payable in connection with the repurchase of
any Loan and the amount of any Substitution Adjustment pursuant to Sections 2.05
and 3.06 hereof concurrently with payment thereof;

                  (vi) any Repurchase Price payable in connection with a
Servicer Call pursuant to Section 3.08 hereof concurrently with payment thereof;

                  (vii) the deposit of the Termination Price under Section 10.02
hereof concurrently with payment thereof;

                  (viii) Nonutilization Fees;

                  (ix) [reserved];

                  (x) any payments received under Hedging Instruments or the
return of amounts by the Hedging Counterparty pledged pursuant to prior Hedge
Funding Requirements in accordance with the last sentence of this Section
5.01(b)(1); and

                  (xi) any Repurchase Price payable in connection with a
Servicer Put remitted by the Servicer pursuant to Section 3.08.

      Except as otherwise expressly provided in Section 5.01(c)(4)(i), the
Servicer agrees that it will cause the Loan Originator, Borrower or other
appropriate Person paying such amounts, as the case may be, to remit directly to
the Servicer for deposit into the Collection Account all amounts referenced in
clauses (i) through (xi) to the extent such amounts are in excess of a

                                       55
<PAGE>

Monthly Payment on the related Loan. To the extent the Servicer receives any
such amounts, it will deposit them into the Collection Account on the same
Business Day as receipt thereof.

            (c) Withdrawals From Collection Account; Deposits to Distribution
Account.

                  (1) Withdrawals From Collection Account -- Reimbursement
Items. The Paying Agent shall periodically but in any event on each
Determination Date, make the following withdrawals from the Collection Account
prior to any other withdrawals, in no particular order of priority:

                  (i) to withdraw any amount not required to be deposited in the
Collection Account or deposited therein in error, including Servicing
Compensation;

                  (ii) to withdraw the Servicing Advance Reimbursement Amount;
and

                  (iii) to clear and terminate the Collection Account in
connection with the termination of this Agreement.

                  (2) Deposits to Distribution Account - Payment Dates.

                  (A) On the Business Day prior to each Payment Date, the Paying
Agent shall deposit into the Distribution Account such amounts as are required
from the Transfer Obligation Account pursuant to Sections 5.05(e), 5.05(f),
5.05(g) and 5.05(h).

                  (B) After making all withdrawals specified in Section
5.01(c)(1) above, on each Remittance Date, the Paying Agent (based on
information provided by the Servicer for such Payment Date), shall withdraw the
Monthly Remittance Amount (or, with respect to an additional Payment Date
pursuant to Section 5.01(c)(4)(ii), all amounts on deposit in the Collection
Account on such date up to the amount necessary to make the payments due on the
related Payment Date in accordance with Section 5.01(c)(3)) from the Collection
Account not later than 5:00 P.M., New York City time and deposit such amount
into the Distribution Account.

                  (C) On each Payment Date, the Servicer shall cause to be
deposited in the Distribution Account all payments on the Advance Note made on
or before such Payment Date and not previously distributed pursuant to Section
5.01(c)(3).

                  (D) The Servicer shall deposit or cause to be deposited in the
Distribution Account any cash Disposition Proceeds pursuant to Section 3.07. To
the extent the Servicer receives such amounts, it will deposit them into the
Distribution Account on the same Business Day as receipt thereof.

                  (E) On each Payment Date, the Servicer shall cause to be
deposited in the Distribution Account all payments on each Residual Security
made on or before such Payment Date.

                  (3) Withdrawals From Distribution Account -- Payment Dates. On
each Payment Date, to the extent funds are available in the Distribution
Account, the Paying Agent

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<PAGE>

(based on the information provided by the Servicer contained in the Servicer's
Remittance Report for such Payment Date) shall make withdrawals therefrom for
application in the following order of priority:

                  (i) to distribute on such Payment Date the following amounts
in the following order: (a) to the Indenture Trustee, an amount equal to the
Indenture Trustee Fee and all unpaid Indenture Trustee Fees from prior Payment
Dates and all amounts owing to the Indenture Trustee pursuant to Section 6.07 of
the Indenture and not paid by the Servicer or the Depositor up to an amount not
to exceed $25,000 per annum, (b) to the Custodian, an amount equal to the
Custodian Fee and all unpaid Custodian Fees from prior Payment Dates, (c) to the
Servicer, an amount equal to the Servicing Compensation and all unpaid Servicing
Compensation from prior Payment Dates (to the extent not retained from
collections or remitted to the Servicer pursuant to Section 5.01(c)) and (d) to
the Servicer, in trust for the Owner Trustee, an amount equal to the Owner
Trustee Fee and all unpaid Owner Trustee Fees from prior Payment Dates;

                  (ii) to distribute on such Payment Date, the Hedge Funding
Requirement to the appropriate Hedging Counterparties;

                  (iii) to the holders of the Notes pro rata, the sum of the
Interest Payment Amount for such Payment Date and the Interest Carry-Forward
Amount for the preceding Payment Date;

                  (iv) to the holders of the Notes pro rata, the
Overcollateralization Shortfall for such Payment Date; provided, however, that
if (a) a Rapid Amortization Trigger shall have occurred and not been Deemed
Cured or (b) an Event of Default under the Indenture or Default shall have
occurred, the holders of the Notes shall receive, in respect of principal, all
remaining amounts on deposit in the Distribution Account;

                  (v) to the Initial Noteholder, the Nonutilization Fee for such
Payment Date, together with any Nonutilization Fees unpaid from any prior
Payment Dates;

                  (vi) to the appropriate Person, amounts in respect of
Issuer/Depositor Indemnities (as defined in the Trust Agreement) and Due
Diligence Fees until such amounts are paid in full;

                  (vii) to the Transfer Obligation Account, all remaining
amounts until the balance therein equals the Transfer Obligation Target Amount;

                  (viii) to the Indenture Trustee all amounts owing to the
Indenture Trustee pursuant to Section 6.07 of the Indenture and not paid
pursuant to clause (i) above;

                  (ix) all Nonrecoverable Servicing Advances not previously
reimbursed; and

                  (x) to the holders of the Trust Certificates, in accordance
with Section 5.2(b) of the Trust Agreement, all amounts remaining therein.

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<PAGE>

                  (4) (i) If the Loan Originator or the Servicer, as applicable,
repurchases, purchases or substitutes a Loan pursuant to Section 2.05, 3.06,
3.08(a), 3.08(b) or 3.08(c), then the Noteholders and the Issuer shall deem such
date to be an additional Payment Date and the Issuer shall provide written
notice to the Indenture Trustee and the Paying Agent of such additional Payment
Date at least one Business Day prior to such Payment Date. On such additional
Payment Date, the Loan Originator or the Servicer, in satisfaction of its
obligations under 2.05, 3.06, 3.08(a) 3.08(b) or 3.08(c) and in satisfaction of
the obligations of the Issuer and the Paying Agent to distribute such amounts to
the Noteholders pursuant to Section 5.01(c), shall remit to the Noteholders, on
behalf of the Issuer and the Paying Agent, an amount equal to the Repurchase
Prices and any Substitution Adjustments (as applicable) to be paid by the Loan
Originator or the Servicer by 12:00 p.m. New York City time, as applicable,
under such Section, on such Payment Date, and the Note Principal Balance will be
reduced accordingly. Such amounts shall be deemed deposited into the Collection
Account and the Distribution Account, as applicable, and such amounts will be
deemed distributed pursuant to the terms of Section 5.01(c). Upon notice of an
additional Payment Date to the Paying Agent and the Indenture Trustee as
provided above, the Paying Agent shall provide the Loan Originator or the
Servicer (as applicable) information necessary so that remittances to the
Noteholders pursuant to this clause (4)(i) may be made by the Loan Originator or
the Servicer, as applicable, in compliance with Section 5.02(a) hereof.

                        (ii) To the extent that there is deposited in the
Collection Account or the Distribution Account any amounts referenced in Section
5.01(b)(1)(vii) and 5.01(c)(2)(D), the Majority Noteholders and the Issuer may
agree, upon reasonable written notice to the Paying Agent and the Indenture
Trustee, to additional Payment Dates. The Issuer and the Majority Noteholder
shall give the Paying Agent and the Indenture Trustee at least one (1) Business
Day's written notice prior to such additional Payment Date and such notice shall
specify each amount in Section 5.01(c) to be withdrawn from the Collection
Account and Distribution Account on such day.

                        (iii) To the extent that there is deposited in the
Distribution Account any amounts referenced in Section 5.05(f), the Majority
Noteholders may, in their sole discretion, establish an additional Payment Date
by written notice delivered to the Paying Agent and the Indenture Trustee at
least one Business Day prior to such additional Payment Date. On such additional
Payment Date, the Paying Agent shall pay the sum of the Overcollateralization
Shortfall to the Noteholders in respect of principal on the Notes.

            Notwithstanding that the Notes have been paid in full, the Indenture
Trustee, the Paying Agent and the Servicer shall continue to maintain the
Distribution Account hereunder until this Agreement has been terminated.

      Section 5.02 Payments to Securityholders.

            (a) All distributions made on the Notes on each Payment Date or
pursuant to Section 5.04(b) of the Indenture will be made on a pro rata basis
among the Noteholders of record of the Notes on the next preceding Record Date
based on the Percentage Interest represented by their respective Notes, without
preference or priority of any kind, and, except as otherwise provided in the
next succeeding sentence, shall be made by wire transfer of

                                       58
<PAGE>

immediately available funds to the account of such Noteholder, if such
Noteholder shall own of record Notes having a Percentage Interest (as defined in
the Indenture) of at least 20% and shall have so notified the Paying Agent and
the Indenture Trustee 5 Business Days prior to the related Record Date, and
otherwise by check mailed to the address of such Noteholder appearing in the
Notes Register. The final distribution on each Note will be made in like manner,
but only upon presentment and surrender of such Note at the location specified
in the notice to Noteholders of such final distribution.

            (b) All distributions made on the Trust Certificates on each Payment
Date or pursuant to Section 5.04(b) of the Indenture will be made in accordance
with the Percentage Interest among the holders of the Trust Certificates of
record on the next preceding Record Date based on their Percentage Interests (as
defined in the Trust Agreement) on the date of distribution, without preference
or priority of any kind, and, except as otherwise provided in the next
succeeding sentence, shall be made by wire transfer of immediately available
funds to the account of each such holder, if such holder shall own of record a
Trust Certificate in an original denomination aggregating at least 25% of the
Percentage Interests and shall have so notified the Paying Agent and the
Indenture Trustee 5 Business Days prior to the related Record Date, and
otherwise by check mailed to the address of such Certificateholder appearing in
the Certificate Register. The final distribution on each Trust Certificate will
be made in like manner, but only upon presentment and surrender of such Trust
Certificate at the location specified in the notice to holders of the Trust
Certificates of such final distribution. Any amount distributed to the holders
of the Trust Certificates on any Payment Date shall not be subject to any claim
or interest of the Noteholders. In the event that at any time there shall be
more than one Certificateholder, the Indenture Trustee shall be entitled to
reasonable additional compensation from the Servicer for any increase in its
obligations hereunder.

      Section 5.03 Trust Accounts; Trust Account Property.

            (a) Control of Trust Accounts. Each of the Trust Accounts
established hereunder has been pledged by the issuer to the Indenture Trustee
under the Indenture and shall be subject to the lien of the Indenture. Amounts
distributed from each Trust Account in accordance with the terms of this
Agreement shall be released for the benefit of the Securityholders from the
Trust Estate upon such distribution thereunder or hereunder. The Indenture
Trustee shall possess all right, title and interest in and to all funds on
deposit from time to time in the Trust Accounts and in all proceeds thereof
(including all income thereon) and all such funds, investments, proceeds and
income shall be part of the Trust Account Property and the Trust Estate. If, at
any time, any Trust Account ceases to be an Eligible Account, the Indenture
Trustee shall, within ten Business Days (or such longer period, not to exceed 30
calendar days, with the prior written consent of the Majority Noteholders) (i)
establish a new Trust Account as an Eligible Account, (ii) terminate the
ineligible Trust Account, and (iii) transfer any cash and investments from such
ineligible Trust Account to such new Trust Account.

            With respect to the Trust Accounts, the Issuer and the Indenture
Trustee agree, that each such Trust Account shall be subject to the sole and
exclusive dominion, custody and control of the Indenture Trustee for the benefit
of the Noteholders, and, except as may be

                                       59
<PAGE>

consented to in writing by the Majority Noteholders, the Indenture Trustee shall
have sole signature and withdrawal authority with respect thereto.

            The Servicer (unless it is also the Paying Agent) shall not be
entitled to make any withdrawals or payments from the Trust Accounts.

            (b) (1) Investment of Funds. Funds held in the Collection Account,
the Distribution Account and the Transfer Obligation Account may be invested (to
the extent practicable and consistent with any requirements of the Code) in
Permitted Investments, as directed by the Servicer prior to the occurrence of an
Event of Default and by the Majority Noteholders thereafter, in writing or
facsimile transmission confirmed in writing by the Servicer or Majority
Noteholders, as applicable. In the event the Indenture Trustee has not received
such written direction, such Funds shall be invested in any Permitted Investment
described in clause (i) of the definition of Permitted Investments. In any case,
funds in the Collection Account, the Distribution Account and the Transfer
Obligation Account must be available for withdrawal without penalty, and any
Permitted Investments must mature or otherwise be available for withdrawal, one
Business Day prior to the next Payment Date and shall not be sold or disposed of
prior to its maturity subject to Subsection (b)(2) of this Section. All interest
and any other investment earnings on amounts or investments held in the
Collection Account, the Distribution Account and the Transfer Obligation Account
shall be paid to the Servicer immediately upon receipt by the Indenture Trustee.
All Permitted Investments in which funds in the Collection Account, the
Distribution Account or the Transfer Obligation Account are invested must be
held by or registered in the name of "Wells Fargo Bank, N.A., as Indenture
Trustee, in trust for the Option One Owner Trust 2001-1A Mortgage-Backed Notes."

                  (2) Insufficiency and Losses in Trust Accounts. If any amounts
are needed for disbursement from the Collection Account, the Distribution
Account or the Transfer Obligation Account held by or on behalf of the Indenture
Trustee and sufficient uninvested funds are not available to make such
disbursement, the Indenture Trustee shall cause to be sold or otherwise
converted to cash a sufficient amount of the investments in the Collection
Account, the Distribution Account or the Transfer Obligation Account, as the
case may be. The Indenture Trustee shall not be liable for any investment loss
or other charge resulting therefrom, unless such loss or charge is caused by the
failure of the Indenture Trustee to perform in accordance with written
directions provided pursuant to this Section 5.03.

            If any losses are realized in connection with any investment in the
Collection Account, the Distribution Account or the Transfer Obligation Account
pursuant to this Agreement during a period in which the Servicer has the right
to direct investments pursuant to Section 5.03(b), then the Servicer shall
deposit the amount of such losses (to the extent not offset by income from other
investments in the Collection Account, the Distribution Account or the Transfer
Obligation Account, as the case may be) into the Collection Account, the
Distribution Account or the Transfer Obligation Account, as the case may be,
immediately upon the realization of such loss. All interest and any other
investment earnings on amounts held in the Collection Account, the Distribution
Account and the Transfer Obligation Account shall be taxed to the Issuer and for
federal and state income tax purposes the Issuer shall be deemed to be the owner
of the Collection Account, the Distribution Account and/or the Transfer
Obligation Account, as the case may be.

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            (c) Subject to Section 6.01 of the Indenture, the Indenture Trustee
shall not in any way be held liable by reason of any insufficiency in any Trust
Account held by the Indenture Trustee resulting from any investment loss on any
Permitted Investment included therein.

            (d) With respect to the Trust Account Property, the Indenture
Trustee acknowledges and agrees that:

                  (1) any Trust Account Property that is held in deposit
accounts shall be held solely in the Eligible Accounts, subject to the last
sentence of Subsection (a) of this Section 5.03; and each such Eligible Account
shall be subject to the sole and exclusive dominion, custody and control of the
Indenture Trustee; and, without limitation on the foregoing, the Indenture
Trustee shall have sole signature authority with respect thereto;

                  (2) any Trust Account Property that constitutes Physical
Property shall be delivered to the Indenture Trustee in accordance with
paragraphs (a) and (b) of the definition of "Delivery" in Section 1.01 hereof
and shall be held, pending maturity or disposition, solely by the Indenture
Trustee or a securities intermediary (as such term is defined in Section
8-102(a)(14) of the UCC) acting solely for the Indenture Trustee;

                  (3) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to federal book-entry
regulations shall be delivered in accordance with paragraph (c) of the
definition of "Delivery" in Section 1.01 hereof and shall be maintained by the
Indenture Trustee, pending maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in such paragraph; and

                  (4) any Trust Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by clause (3)
above shall be delivered to the Indenture Trustee in accordance with paragraph
(d) of the definition of "Delivery" in Section 1.01 hereof and shall be
maintained by the Indenture Trustee, pending maturity or disposition, through
continued registration of the Indenture Trustee's (or its nominee's) ownership
of such security.

      Section 5.04 Advance Account.

            (a) The Servicer shall cause to be established and maintained in its
name, an Advance Account (the "Advance Account"), which need not be a segregated
account. The Advance Account shall be maintained with any financial institution
the Servicer elects.

            (b) Deposits and Withdrawals. Amounts in respect of the transfer of
Additional Note Principal Balances purchased on Transfer Dates related to Loans
and Residual Securities shall be deposited in and withdrawn from the Advance
Account as provided in Sections 2.01 (c) and 2.06 hereof and Section 3.01 of the
Note Purchase Agreement.

      Section 5.05 Transfer Obligation Account.

            (a) The Servicer, for the benefit of the Noteholders, shall cause to
be established and maintained in the name of the Indenture Trustee a Transfer
Obligation Account (the "Transfer Obligation Account"), which shall be a
separate Eligible Account and may be

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interest-bearing, entitled "Option One Owner Trust 2001-1A Transfer Obligation
Account, Wells Fargo Bank, N.A., as Indenture Trustee, in trust for the Option
One Owner Trust 2001-1A Mortgage-Backed Notes." The Indenture Trustee shall have
no monitoring or calculation obligation with respect to withdrawals from the
Transfer Obligation Account. Amounts in the Transfer Obligation Account shall be
invested in accordance with Section 5.03.

            (b) In accordance with Section 5.06, the Loan Originator shall
deposit into the Transfer Obligation Account any amounts as may be required
thereby.

            (c) On each Payment Date, the Paying Agent will deposit in the
Transfer Obligation Account any amounts required to be deposited therein
pursuant to Section 5.01(c)(3)(vii).

            (d) On the date of each Disposition, the Paying Agent shall withdraw
from the Transfer Obligation Account such amount on deposit therein in respect
of the payment of Transfer Obligations as may be requested by the Disposition
Agent in writing to effect such Disposition.

            (e) On each Payment Date, the Paying Agent shall withdraw from the
Transfer Obligation Account and deposit into the Distribution Account on such
Payment Date the lesser of (x) the amount then on deposit in the Transfer
Obligation Account and (y) the Interest Carry-Forward Amount as of such date.

            (f) If with respect to any Business Day there exists an
Overcollateralization Shortfall, the Paying Agent, upon the written direction of
the Initial Noteholder, shall withdraw from the Transfer Obligation Account and
deposit into the Distribution Account on such Business Day the lesser of (x) the
amount then on deposit in the Transfer Obligation Account and (y) the amount of
such Overcollateralization Shortfall as of such date.

            (g) If with respect to any Payment Date there shall exist a Hedge
Funding Requirement, the Paying Agent, upon the written direction of the
Servicer or the Initial Noteholder, shall withdraw from the Transfer Obligation
Account and deposit into the Distribution Account on the Business Day prior to
such Payment Date the lesser of (x) the amount then on deposit in the Transfer
Obligation Account (after making all other required withdrawals therefrom with
respect to such Payment Date) and (y) the amount of such Hedge Funding
Requirement as of such date.

            (h) In the event of the occurrence of an Event of Default under the
Indenture, the Paying Agent shall withdraw all remaining funds from the Transfer
Obligation Account and apply such funds in satisfaction of the Notes as provided
in Section 5.04(b) of the Indenture.

            (i) The Paying Agent shall return to the Loan Originator all amounts
on deposit in the Transfer Obligation Account (after making all other
withdrawals pursuant to this Section 5.05) until the Majority Noteholders
provide written notice to the Indenture Trustee (with a copy to the Loan
Originator and the Servicer) of the occurrence of a default or event of default
(however defined) under any Basic Document with respect to the Issuer, the
Depositor, the Loan Originator or any of their Affiliates and (ii) upon the date
of the termination of this

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Agreement pursuant to Article X, the Paying Agent shall withdraw any remaining
amounts from the Transfer Obligation Account and remit all such amounts to the
Loan Originator.

      Section 5.06 Transfer Obligation.

            (a) In consideration of the transactions contemplated by the Basic
Documents, the Loan Originator agrees and covenants with the Depositor that:

                  (i) In connection with each Disposition it shall fund, or
cause to be funded, reserve funds, pay credit enhancer fees, pay, or cause to be
paid, underwriting fees, fund any difference between the cash Disposition
Proceeds and the aggregate Note Principal Balance at the time of such
Disposition, and make, or cause to be made, such other payments as may be, in
the reasonable opinion of the Disposition Agent, commercially reasonably
necessary to effect Dispositions, in each case to the extent that Disposition
Proceeds are insufficient to pay such amounts;

                  (ii) In connection with Hedging Instruments, on the Business
Day prior to each Payment Date, it shall deliver to the Servicer for deposit
into the Transfer Obligation Account any Hedge Funding Requirement (to the
extent amounts available on the related Payment Date pursuant to Section 5.01
are insufficient to make such payment), when, as and if due to any Hedging
Counterparty;

                  (iii) if any Interest Carry-Forward Amount shall occur, it
shall deposit into the Transfer Obligation Account any such Interest
Carry-Forward Amount on or before the Business Day preceding such related
Payment Date;

                  (iv) If on any Business Day there exists an
Overcollateralization Shortfall, upon the written direction of the Initial
Noteholder, it shall on such Business Day deposit into the Transfer Obligation
Account the full amount of the Overcollateralization Shortfall as of such date,
provided, that in the event that notice of such Overcollateralization Shortfall
is provided to the Loan Originator after 3:00 p.m. New York City time, the Loan
Originator shall make such deposit on the following Business Day; and

                  (v) Notwithstanding anything to the contrary herein, in the
event of the occurrence of an Event of Default under the Indenture, the Loan
Originator shall promptly deposit into the Transfer Obligation Account the
entire amount of the Unfunded Transfer Obligation;

provided, that notwithstanding anything to the contrary contained herein, the
Loan Originator's cumulative payments under or in respect of the Transfer
Obligations (after subtracting therefrom any amounts returned to the Loan
Originator pursuant to Section 5.05(i)(i)) together with the Servicer's payments
in respect of any Servicer Puts shall not in the aggregate exceed the Unfunded
Transfer Obligation.

            (b) The Loan Originator agrees that the Noteholders, as ultimate
assignee of the rights of the Depositor under this Agreement and the other Basic
Documents, may enforce the rights of the Depositor directly against the Loan
Originator.

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                                   ARTICLE VI

              STATEMENTS AND REPORTS; SPECIFICATION OF TAX MATTERS

      Section 6.01 Statements.

            (a) No later than 12 noon (New York City time) on each Remittance
Date, the Servicer shall deliver to the Indenture Trustee and the Initial
Noteholder by electronic transmission, the receipt and legibility of which shall
be confirmed by telephone, and with hard copy thereof to be delivered no later
than one (1) Business Day after such Remittance Date, the Servicer's Remittance
Report, setting forth the date of such Report (day, month and year), the name of
the Issuer (i.e., "Option One Owner Trust 2001-1A"), and the date of this
Agreement, all in substantially the form set out in Exhibit B hereto.
Furthermore, on each Remittance Date, the Servicer shall deliver to the
Indenture Trustee and the Initial Noteholder a data file providing, with respect
to each Loan in the Loan Pool as of the last day of the related Remittance
Period (i) if such Loan is an ARM, the current Loan Interest Rate; (ii) the
Principal Balance with respect to such Loan; (iii) the date of the last Monthly
Payment paid in full; and (iv) such other information as may be reasonably
requested by the Initial Noteholder and the Indenture Trustee. In addition, no
later than 12:00 noon (New York City time) on the 15th day of each calendar
month (or if such day is not a Business Day, the preceding Business Day), the
Custodian shall prepare and provide to the Servicer and the Indenture Trustee by
facsimile, the Custodian Fee Notice for the Payment Date falling in such
calendar month.

            (b) No later than 12 noon (New York City time) on each Remittance
Date, the Servicer shall prepare (or cause to be prepared) and provide to the
Indenture Trustee electronically or via fax, receipt confirmed by telephone, the
Initial Noteholder and each Noteholder, a statement (the "Payment Statement"),
stating each date and amount of a purchase of Additional Note Principal Balance
(day, month and year), the name of the Issuer (i.e., "Option One Owner Trust
2001-1A"), the date of this Agreement and the following information:

                  (1) the aggregate amount of collections in respect of
principal of the Loans received by the Servicer during the preceding Remittance
Period;

                  (2) the aggregate amount of collections in respect of interest
on the Loans received by the Servicer during the preceding Remittance Period;

                  (3) all Mortgage Insurance Proceeds received by the Servicer
during the preceding Remittance Period and not required to be applied to
restoration or repair of the related Mortgaged Property or returned to the
Borrower under applicable law or pursuant to the terms of the applicable
Mortgage Insurance Policy;

                  (4) all Net Liquidation Proceeds deposited by the Servicer
into the Collection Account during the preceding Remittance Period;

                  (5) all Released Mortgaged Property Proceeds deposited by the
Servicer into the Collection Account during the preceding Remittance Period;

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<PAGE>

                  (6) the aggregate amount of all Servicing Advances made by the
Servicer during the preceding Remittance Period;

                  (7) the aggregate of all amounts deposited into the
Distribution Account in respect of the repurchase of Unqualified Loans and the
repurchase of Loans pursuant to Section 2.05 hereof during the preceding
Remittance Period;

                  (8) the aggregate Principal Balance of all Loans for which a
Servicer Call was exercised during the preceding Remittance Period;

                  (9) the aggregate Principal Balance of all Loans for which a
Servicer Put was exercised during the preceding Remittance Period;

                  (10) the aggregate amount of all payments received under
Hedging Instruments during the preceding Remittance Period;

                  (11) the aggregate amount of all withdrawals from the
Distribution Account pursuant to Section 5.01(c)(1)(i) hereof during the
preceding Remittance Period;

                  (12) the aggregate amount of cash Disposition Proceeds
received during the preceding Remittance Period;

                  (13) withdrawals from the Collection Account in respect of the
Servicing Advance Reimbursement Amount with respect to the related Payment Date;

                  (14) [reserved];

                  (15) the number and aggregate Principal Balance of all Loans
that are (i) 30-59 days Delinquent, (ii) 60- 89 days Delinquent, (iii) 90 or
more days Delinquent as of the end of the related Remittance Period;

                  (16) the aggregate amount of Liquidated Loan Losses incurred
(i) during the preceding Remittance Period, and (ii) during the preceding three
Remittance Periods;

                  (17) the aggregate of the Principal Balances of all Loans in
the Loan Pool as of the end of the related Remittance Period;

                  (18) the aggregate amount of all deposits into the
Distribution Account from the Transfer Obligation Account pursuant to Sections
5.05(e), 5.05(f), 5.05(g), and 5.05(h) on the related Payment Date;

                  (19) the aggregate amount of distributions in respect of
Servicing Compensation to the Servicer, and unpaid Servicing Compensation from
prior Payment Dates for the related Payment Date;

                  (20) the aggregate amount of distributions in respect of
Indenture Trustee Fees and unpaid Indenture Trustee Fees from prior Payment
Dates for the related Payment Date;

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<PAGE>

                  (21) the aggregate amount of distributions in respect of the
Custodian Fee and unpaid Custodian Fees from prior Payment Dates for the related
Payment Date;

                  (22) the aggregate amount of distributions in respect of the
Owner Trustee Fees and unpaid Owner Trustee Fees from prior Payment Dates and
for the related Payment Date;

                  (23) the Unfunded Transfer Obligation and
Overcollateralization Shortfall on such Payment Date for the related Payment
Date;

                  (24) the aggregate amount of distributions to the Transfer
Obligation Account for the related Payment Date;

                  (25) the aggregate amount of distributions in respect of
Trust/Depositor Indemnities for the related Payment Date;

                  (26) the aggregate amount of distributions to the holders of
the Trust Certificates for the related Payment Date;

                  (27) the Note Principal Balance of the Notes as of the last
day of the related Remittance Period (without taking into account any Additional
Note Principal Balance between the last day of such Remittance Period and the
related Payment Date) before and after giving effect to distributions made to
the holders of the Notes for such Payment Date;

                  (28) the Pool Principal Balance as of the end of the preceding
Remittance Period; and

                  (29) whether a Performance Trigger or a Rapid Amortization
Trigger shall exist with respect to such Payment Date.

Such Payment Statement shall also be provided on the Remittance Date to the
Initial Noteholder and Indenture Trustee in the form of a data file in a form
mutually agreed to by and between the Initial Noteholder, the Indenture Trustee
and the Servicer. The Indenture Trustee shall have no duty to monitor the
occurrence of a Performance Trigger, Rapid Amortization Trigger or any events
resulting in withdrawals from the Transfer Obligation Account.

      Section 6.02 Specification of Certain Tax Matters.

      The Paying Agent shall comply with all requirements of the Code and
applicable state and local law with respect to the withholding from any
distributions made to any Securityholder of any applicable withholding taxes
imposed thereon and with respect to any applicable reporting requirements in
connection therewith, giving due effect to any applicable exemptions from such
withholding and effective certifications or forms provided by the recipient. Any
amounts withheld pursuant to this Section 6.02 shall be deemed to have been
distributed to the Securityholders, as the case may be, for all purposes of this
Agreement. The Indenture Trustee shall have no responsibility for preparing or
filing any tax returns.

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<PAGE>

      Section 6.03 Valuation of Loans and Residual Securities, Hedge Value and
Retained Securities Value; Market Value Agent.

            (a) The Initial Noteholder hereby irrevocably appoints, and the
Issuer hereby consents to the appointment of, the Market Value Agent as agent on
behalf of the Noteholders to determine the Market Value of each Loan and
Residual Security, the Hedge Value of each Hedging Instrument and the Retained
Securities Value of all Retained Securities.

            (b) Except as otherwise set forth in Section 3.07, the Market Value
Agent shall determine the Market Value of each Loan and Residual Security, for
the purposes of the Basic Documents, in its sole judgment, exercised in good
faith. In determining the Market Value of each Loan and Residual Security, the
Market Value Agent may consider any information that it may deem relevant and
shall base such determination primarily on the lesser of its estimate of the
projected proceeds from such Loan's or Residual Security's inclusion in (i) a
Securitization (inclusive of the projected Retained Securities Value of any
Retained Securities to be issued in connection with such Securitization) and
(ii) a Whole Loan Sale, in each case net of such Loan's ratable share of all
costs and fees associated with such Disposition, including, without limitation,
any costs of issuance, sale, underwriting and funding reserve accounts. The
Market Value Agent's determination, in its sole judgment, of Market Value shall
be conclusive and binding upon the parties hereto, absent manifest error
(including without limitation, any error contemplated in Section 2.08).

            (c) On each Business Day the Market Value Agent shall determine in
its sole judgment, exercised in good faith, the Hedge Value of each Hedging
Instrument as of such Business Day. In making such determination the Market
Value Agent may rely exclusively on quotations provided by the Hedging
Counterparty, by leading dealers in instruments similar to such Hedging
Instrument, which leading dealers may include the Market Value Agent and its
Affiliates and such other sources of information as the Market Value Agent may
deem appropriate.

            (d) On each Business Day, the Market Value Agent shall determine in
its sole judgment, exercised in good faith, the Retained Securities Value of the
Retained Securities, if any, expected to be issued pursuant to such
Securitization as of the closing date of such Securitization. In making such
determination the Market Value Agent may rely exclusively on quotations provided
by leading dealers in instruments similar to such Retained Securities, which
leading dealers may include the Market Value Agent and its Affiliates and such
other sources of information as the Market Value Agent may deem appropriate.

                                  ARTICLE VII

                          HEDGING; FINANCIAL COVENANTS

      Section 7.01 Hedging Instruments.

            (a) On each Transfer Date, the Trust shall enter into such Hedging
Instruments as the Market Value Agent, on behalf of the Majority Noteholders,
shall determine are necessary in order to hedge the interest rate risk with
respect to the Collateral Value of the

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<PAGE>

Loans being purchased on such Transfer Date. The Market Value Agent shall
determine, in its sole discretion, whether any Hedging Instrument conforms to
the requirements of Section 7.01(b), (c) and (d).

            (b) Each Hedging Instrument shall expressly provide that in the
event of a Disposition or other removal of the Loan from the Trust, such portion
of the Hedging Instrument shall terminate as the Disposition Agent deems
appropriate to facilitate the hedging of the risks specified in Section 7.01(a).
In the event that the Hedging Instrument is not otherwise terminated, it shall
contain provisions that allow the position of the Trust to be assumed by an
Affiliate of the Trust upon the liquidation of the Trust. The terms of the
assignment documentation and the credit quality of the successor to the Trust
shall be subject to the Hedging Counterparty's approval.

            (c) Any Hedging Instrument that provides for any payment obligation
on the part of the Issuer must (i) be without recourse to the assets of the
Issuer, (ii) contain a non-petition covenant provision in the form of Section
11.13, (iii) limit payment dates thereunder to Payment Dates and (iv) contain a
provision limiting any cash payments due on any day under such Hedging
Instrument solely to funds available therefor in the Collection Account on such
day pursuant to Section 5.01(c)(3)(ii) hereof and funds available therefor in
the Transfer Obligation Account.

            (d) Each Hedging Instrument must (i) provide for the direct payment
of any amounts thereunder to the Collection Account pursuant to Section
5.01(b)(1)(x), (ii) contain an assignment of all of the Issuer's rights (but
none of its obligations) under such Hedging Instrument to the Indenture Trustee
and shall include an express consent to the Hedging Counterparty to such
assignment, (iii) provide that in the event of the occurrence of an Event of
Default, such Hedging Instrument shall terminate upon the direction of the
Majority Noteholders, (iv) prohibit the Hedging Counterparty from "setting-off"
or "netting" other obligations of the Issuer or its Affiliates against such
Hedging Counterparty's payment obligations thereunder, (v) provide that the
appropriate portion of the Hedging Instrument will terminate upon the removal of
the related Loans from the Trust Estate and (vi) have economic terms that are
fixed and not subject to alteration after the date of assumption or execution.

            (e) If agreed to by the Majority Noteholders, the Issuer may pledge
its assets in order to secure its obligations in respect of Hedge Funding
Requirements, provided that such right shall be limited solely to Hedging
Instruments for which an Affiliate of the Initial Noteholder is a Hedging
Counterparty.

            (f) The aggregate notional amount of all Hedging Instruments shall
not exceed the Note Principal Balance as of the date on which each Hedging
Instrument is entered into by the Issuer and a Hedging Counterparty.

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      Section 7.02 Financial Covenants.

      Each of the Loan Originator and the Servicer shall satisfy the Financial
Covenants.

                                  ARTICLE VIII

                                  THE SERVICER

      Section 8.01 Indemnification; Third Party Claims.

            (a) The Servicer shall indemnify the Loan Originator, the Owner
Trustee, the Trust, the Depositor, the Indenture Trustee and the Noteholders,
their respective officers, directors, employees, agents and "control persons,"
as such term is used under the Act and under the Securities Exchange Act of 1934
as amended (each a "Servicer Indemnified Party") and hold harmless each of them
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments, and other costs and expenses
resulting from any claim, demand, defense or assertion based on or grounded
upon, or resulting from, a breach of any of the Servicer's representations and
warranties and covenants contained in this Agreement or in any way relating to
the failure of the Servicer to perform its duties and service the Loans in
compliance with the terms of this Agreement except to the extent such loss
arises out of such Servicer Indemnified Party's gross negligence or willful
misconduct; provided, however, that if the Servicer is not liable pursuant to
the provisions of Section 8.01(b) hereof for its failure to perform its duties
and service the Loans in compliance with the terms of this Agreement, then the
provisions of this Section 8.01 shall have no force and effect with respect to
such failure.

            (b) None of the Loan Originator, the Depositor or the Servicer or
any of their respective Affiliates, directors, officers, employees or agents
shall be under any liability to the Owner Trustee, the Issuer, the Indenture
Trustee or the Securityholders for any action taken, or for refraining from the
taking of any action, in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Loan
Originator, the Depositor, the Servicer or any of their respective Affiliates,
directors, officers, employees, agents against the remedies provided herein for
the breach of any warranties, representations or covenants made herein, or
against any expense or liability specifically required to be borne by such party
without right of reimbursement pursuant to the terms hereof, or against any
expense or liability which would otherwise be imposed by reason of misfeasance,
bad faith or negligence in the performance of the respective duties of the
Servicer, the Depositor or the Loan Originator, as the case may be. The Loan
Originator, the Depositor, the Servicer and any of their respective Affiliates,
directors, officers, employees, agents may rely in good faith on any document of
any kind which, prima facie, is properly executed and submitted by any Person
respecting any matters arising hereunder.

            (c) The Loan Originator agrees to indemnify and hold harmless the
Depositor and the Noteholders, as the ultimate assignees from the Depositor
(each an "Originator Indemnified Party," together with the Servicer Indemnified
Parties, the "Indemnified Parties"), from and against any loss, liability,
expense, damage, claim or injury arising out of or based on (i) any breach of
any representation, warranty or covenant of the Loan Originator, the Servicer or

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<PAGE>

their Affiliates, in any Basic Document, including, without limitation, the
origination or prior servicing of the Loans by reason of any acts, omissions, or
alleged acts or omissions arising out of activities of the Loan Originator, the
Servicer or their Affiliates, and (ii) any untrue statement by the Loan
Originator, the Servicer or its Affiliates of any material fact or any such
Person's failure to state a material fact necessary to make such statements not
misleading with respect to any such Person's statements contained in any Basic
Document, including, without limitation, any Officer's Certificate, statement,
report or other document or information prepared by any such Person and
furnished or to be furnished by it pursuant to or in connection with the
transactions contemplated thereby and not corrected prior to completion of the
relevant transaction including, without limitation, such written information as
may have been and may be furnished in connection with any due diligence
investigation with respect to the Loans or any such Person's business,
operations or financial condition, including reasonable attorneys' fees and
other costs or expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim; provided that the Loan Originator shall
not indemnify an Originator Indemnified Party to the extent such loss,
liability, expense, damage or injury is due to either an Originator Indemnified
Party's willful misfeasance, bad faith or negligence or by reason of an
Originator Indemnified Party's reckless disregard of its obligations hereunder;
provided, further, that the Loan Originator shall not be so required to
indemnify an Originator Indemnified Party or to otherwise be liable to an
Originator Indemnified Party for any losses in respect of the performance of the
Loans or Residual Securities, the creditworthiness of the Borrowers under the
Loans, changes in the market value of the Loans or Residual Securities or other
similar investment risks associated with the Loans or Residual Securities
arising from a breach of any representation or warranty set forth in Exhibit E
hereto or Section 3 of the Residual Securities Transfer Agreement, as
applicable, a remedy for the breach of which is provided in Section 3.06 hereof.
The provisions of this indemnity shall run directly to and be enforceable by an
Originator Indemnified Party subject to the limitations hereof.

            (d) With respect to a claim subject to indemnity hereunder made by
any Person against an Indemnified Party (a "Third Party Claim"), such
Indemnified Party shall notify the related indemnifying parties (each an
"Indemnifying Party") in writing of the Third Party Claim within a reasonable
time after receipt by such Indemnified Party of written notice of the Third
Party Claim unless the Indemnifying Parties shall have previously obtained
actual knowledge thereof. Thereafter, the Indemnified Party shall deliver to the
Indemnifying Parties, within a reasonable time after the Indemnified Party's
receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnified Party relating to the Third Party Claim. No failure
to give such notice or deliver such documents shall effect the rights to
indemnity hereunder. Each Indemnifying Party shall promptly notify the Indenture
Trustee and the Indemnified Party (if other than the Indenture Trustee) of any
claim of which it has been notified and shall promptly notify the Indenture
Trustee and the Indemnified Party (if applicable) of its intended course of
action with respect to any claim.

            (e) If a Third Party Claim is made against an Indemnified Party,
while maintaining control over its own defense, the Indemnified Party shall
cooperate and consult fully with the Indemnifying Party in preparing such
defense, and the Indemnified Party may defend the same in such manner as it may
deem appropriate, including settling such claim or litigation after giving
notice to the Indemnifying Party of such terms and the Indemnifying Party will
promptly reimburse the Indemnified Party upon written request; provided,
however, that the

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<PAGE>

Indemnified Party may not settle any claim or litigation without the consent of
the Indemnifying Party; provided, further, that the Indemnifying Party shall
have the right to reject the selection of counsel by the Indemnified Party if
the Indemnifying Party reasonably determines that such counsel is inappropriate
in light of the nature of the claim or litigation and shall have the right to
assume the defense of such claim or litigation if the Indemnifying Party
determines that the manner of defense of such claim or litigation is
unreasonable.

      Section 8.02 Merger or Consolidation of the Servicer.

      The Servicer shall keep in full effect its existence, rights and
franchises as a corporation, and will obtain and preserve its qualification to
do business as a foreign corporation and maintain such other licenses and
permits in each jurisdiction necessary to protect the validity and
enforceability of each Basic Document to which it is a party and each of the
Loans and to perform its duties under each Basic Document to which it is a
party; provided, however, that the Servicer may merge or consolidate with any
other corporation upon the satisfaction of the conditions set forth in the
following paragraph.

      Any Person into which the Servicer may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be an Eligible Servicer and shall be the successor of the
Servicer, as applicable hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding. The Servicer shall send notice of any such merger,
conversion, consolidation or succession to the Indenture Trustee and the issuer.

      Section 8.03 Limitation on Liability of the Servicer and Others.

      The Servicer and any director, officer, employee or agent of the Servicer
may rely on any document of any kind which it in good faith reasonably believes
to be genuine and to have been adopted or signed by the proper authorities
respecting any matters arising hereunder. Subject to the terms of Section 8.01
hereof, the Servicer shall have no obligation to appear with respect to,
prosecute or defend any legal action which is not incidental to the Servicer's
duty to service the Loans in accordance with this Agreement.

      Section 8.04 Servicer Not to Resign; Assignment.

      The Servicer shall not resign from the obligations and duties hereby
imposed on it except (a) with the consent of the Majority Noteholders or (b)
upon determination that its duties hereunder are no longer permissible under
applicable law. Any such determination pursuant to clause (b) of the preceding
sentence permitting the resignation of the Servicer shall be evidenced by an
Independent opinion of counsel to such effect delivered (at the expense of the
Servicer) to the Indenture Trustee and the Majority Noteholders. No resignation
of the Servicer shall become effective until a successor servicer, appointed
pursuant to the provisions of Section 9.02 hereof shall have assumed the
Servicer's responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Agreement.

      Except as expressly provided herein, the Servicer shall not assign or
transfer any of its rights, benefits or privileges hereunder to any other
Person, or delegate to or subcontract with, or

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authorize or appoint any other Person to perform any of the duties, covenants or
obligations to be performed by the Servicer hereunder and any agreement,
instrument or act purporting to effect any such assignment, transfer, delegation
or appointment shall be void.

      The Servicer agrees to cooperate with any successor Servicer in effecting
the transfer of the Servicer's servicing responsibilities and rights hereunder
pursuant to the first paragraph of this Section 8.04, including, without
limitation, the transfer to such successor of all relevant records and documents
(including any Loan Files in the possession of the Servicer) and all amounts
received with respect to the Loans and not otherwise permitted to be retained by
the Servicer pursuant to this Agreement. In addition, the Servicer, at its sole
cost and expense, shall prepare, execute and deliver any and all documents and
instruments to the successor Servicer including all Loan Files in its possession
and do or accomplish all other acts necessary or appropriate to effect such
termination and transfer of servicing responsibilities.

      Section 8.05 Relationship of Servicer to Issuer and the Indenture Trustee.

      The relationship of the Servicer (and of any successor to the Servicer as
servicer under this Agreement) to the Issuer, the Owner Trustee and the
Indenture Trustee under this Agreement is intended by the parties hereto to be
that of an independent contractor and not of a joint venturer, agent or partner
of the issuer, the Owner Trustee or the Indenture Trustee.

      Section 8.06 Servicer May Own Securities.

      Each of the Servicer and any Affiliate of the Servicer may in its
individual or any other capacity become the owner or pledgee of Securities with
the same rights as it would have if it were not the Servicer or an Affiliate
thereof except as otherwise specifically provided herein; provided, however,
that at any time that Option One or any of its Affiliates is the Servicer,
neither the Servicer nor any of its Affiliates (other than an Affiliate which is
a corporation whose purpose is limited to holding securities and related
activities and which cannot incur recourse debt) may be a Noteholder. Securities
so owned by or pledged to the Servicer or such Affiliate shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority, or distinction as among all of the Securities; provided,
however, that any Securities owned by the Servicer or any Affiliate thereof,
during the time such Securities are owned by them, shall be without voting
rights for any purpose set forth in this Agreement unless the Servicer or such
Affiliate owns all outstanding Securities of the related class. The Servicer
shall notify the Indenture Trustee promptly after it or any of its Affiliates
becomes the owner or pledgee of a Security.

      Section 8.07 Indemnification of the Indenture Trustee and Initial
Noteholder.

      The Servicer agrees to indemnify the Indenture Trustee and its employees,
officers, directors and agents, and reimburse its reasonable out-of-pocket
expenses in accordance with Section 6.07 of the Indenture as if it was a
signatory thereto. The Servicer agrees to indemnify the Initial Noteholder in
accordance with Section 9.01 of the Note Purchase Agreement as if it were
signatory thereto.

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                                   ARTICLE IX

                           SERVICER EVENTS OF DEFAULT

      Section 9.01 Servicer Events of Default.

            (a) In case one or more of the following Servicer Events of Default
shall occur and be continuing, that is to say:

                  (1) any failure by Servicer to deposit into the Collection
Account or the Distribution Account or any failure by Servicer to make any of
the required payments therefrom; or

                  (2) any failure on the part of the Servicer duly to observe or
perform in any material respect any other of the material covenants or
agreements on the part of the Servicer, contained in any Basic Document to which
it is a party, which continues unremedied for a period of 30 days (or, in the
case of payment of insurance premiums, for a period of 15 days) after the date
on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by any other party hereto or to the
Servicer (with copy to each other party hereto), by Holders of 25% of the
Percentage Interests of the Notes or the Trust Certificates; or

                  (3) any breach on the part of the Servicer of any
representation or warranty contained in any Basic Document to which it is a
party that materially and adversely affects the interests of any of the parties
hereto or any Securityholder and which continues unremedied for a period of 30
days after the date on which notice of such breach, requiring the same to be
remedied, shall have been given to the Servicer by any other party hereto or to
the Servicer (with copy to each other party hereto), by the Initial Noteholder
or Holders of 25% of the Percentage Interests (as defined in the Indenture) of
the Notes; or

                  (4) there shall have been commenced before a court or agency
or supervisory authority having jurisdiction in the premises an involuntary
proceeding against the Servicer under any present or future federal or state
bankruptcy, insolvency or similar law for the appointment of a conservator,
receiver, liquidator, trustee or similar official in any bankruptcy, insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, which action
shall not have been dismissed for a period of 60 days; or

                  (5) the Servicer shall consent to the appointment of a
conservator, receiver, liquidator, trustee or similar official in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to it or of or relating to all
or substantially all of its property; or

                  (6) the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any
applicable bankruptcy, insolvency or reorganization statute, make an assignment
for the benefit of its creditors, voluntarily suspend payment of its
obligations, or take any corporate action in furtherance of the foregoing; or

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                  (7) Reserved; or

                  (8) the Servicer or the Loan Originator fails to comply with
any of its financial covenants set forth in Section 7.02; or

                  (9) a Change of Control of the Servicer; or

                  (10) so long as the Servicer or the Loan Originator is an
Affiliate of either of the Depositor or the Issuer and any "event of default' by
any such party occurs under any of the Basic Documents.

            (b) Then, and in each and every such case, so long as a Servicer
Event of Default shall not have been remedied, the Indenture Trustee or the
Majority Noteholders, by notice in writing to the Servicer may, in addition to
whatever rights such Person may have at law or in equity to damages, including
injunctive relief and specific performance, may terminate all the rights and
obligations of the Servicer under this Agreement and in and to the Loans and the
proceeds thereof, as servicer under this Agreement. Upon receipt by the Servicer
of such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Loans or otherwise, shall, subject to
Section 9.02 hereof, pass to and be vested in a successor servicer, and the
successor servicer is hereby authorized and empowered to execute and deliver, on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments and do or cause to be done all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
including, but not limited to, the transfer and endorsement or assignment of the
Loans and related documents. The Servicer agrees to cooperate with the successor
servicer in effecting the termination of the Servicer's responsibilities and
rights hereunder, including, without limitation, the transfer to the successor
servicer for administration by it of all amounts which shall at the time be
credited by the Servicer to each Collection Account or thereafter received with
respect to the Loans.

            (c) Upon the occurrence of (i) an Event of Default or Default under
any of the Basic Documents, (ii) a Servicer Event of Default under this
Agreement, (iii) a Rapid Amortization Trigger or (iv) a determination,
reasonably made by the Initial Noteholder, that an event has occurred that shall
materially impair the ability of the Servicer to service and administer the
Loans in accordance with the terms and provisions set forth in the Servicing
Addendum (each, a "Term Event"), the Servicer's right to service the Loans
pursuant to the terms of this Agreement shall be in effect for an initial period
commencing on the date on which such Term Event occurred and shall automatically
terminate at 5:00 p.m. (New York City time), on the last business day of the
calendar month in which such Term Event occurred (the "Initial Term").
Thereafter, the Initial Term shall be extendible in the sole discretion of the
Initial Noteholder by written notice (each, a "Servicer Extension Notice") of
the Initial Noteholder for successive one-month terms (each such term ending at
5:00 p.m. (New York City time), on the last business day of the related month).
Following a Term Event, the Servicer hereby agrees that the Servicer shall be
bound for the duration of the Initial Term and the term covered by any such
Servicer Extension Notice to act as the Servicer pursuant to this Agreement.
Following a Term Event, the Servicer agrees that if, as of 3:00 p.m. (New York
City time) on the last business day of any month, the Servicer shall not have
received a Servicer Extension Notice from the Initial Noteholder, the Servicer
shall give written notice of such non-receipt to the Initial Noteholder by

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4:00 p.m. (New York City time). Following a Term Event, the failure of the
Initial Noteholder to deliver a Servicer Extension Notice by 5:00 p.m. (New York
City time) shall result in the automatic and immediate termination of the
Servicer (the "Termination Date"). Notwithstanding these time frames, the
Servicer and the Initial Noteholder shall comply with all applicable laws in
connection with such transfer and the Servicer shall continue to service the
Loans until completion of such transfer.

      Section 9.02 Appointment of Successor.

      On and after the date the Servicer receives a notice of termination
pursuant to Section 9.01 hereof or is automatically terminated pursuant to
Section 9.01 (c) hereof, or the Owner Trustee receives the resignation of the
Servicer evidenced by an Opinion of Counsel or accompanied by the consents
required by Section 8.04 hereof, or the Servicer is removed as servicer pursuant
to this Article IX or Section 4.01 of the Servicing Addendum, then, the Majority
Noteholders shall appoint a successor servicer to be the successor in all
respects to the Servicer in its capacity as Servicer under this Agreement and
the transactions set forth or provided for herein and shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof; provided, however, that the
successor servicer shall not be liable for any actions of any servicer prior to
it.

      The successor servicer shall be obligated to make Servicing Advances
hereunder. As compensation therefor, the successor servicer appointed pursuant
to the following paragraph, shall be entitled to all funds relating to the Loans
which the Servicer would have been entitled to receive from the Collection
Account pursuant to Section 5.01 hereof as if the Servicer had continued to act
as servicer hereunder, together with other Servicing Compensation in the form of
assumption fees, late payment charges or otherwise as provided in Section 4.15
of the Servicing Addendum. The Servicer shall not be entitled to any termination
fee if it is terminated pursuant to Section 9.01 hereof but shall be entitled to
any accrued and unpaid Servicing Compensation to the date of termination.

      Any collections received by the Servicer after removal or resignation
shall be endorsed by it to the Indenture Trustee and remitted directly to the
successor servicer. The compensation of any successor servicer appointed shall
be the Servicing Fee, together with other Servicing Compensation provided for
herein. The Indenture Trustee, the Issuer, any Custodian, the Servicer and any
such successor servicer shall take such action, consistent with this Agreement,
as shall be reasonably necessary to effect any such succession. Any costs or
expenses incurred by the Indenture Trustee in connection with the termination of
the Servicer and the succession of a successor servicer shall be an expense of
the outgoing Servicer and, to the extent not paid thereby, an expense of such
successor servicer. The Servicer agrees to cooperate with the Indenture Trustee
and any successor servicer in effecting the termination of the Servicer's
servicing responsibilities and rights hereunder and shall promptly provide the
successor servicer all documents and records reasonably requested by it to
enable it to assume the Servicer's functions hereunder and shall promptly also
transfer to the successor servicer all amounts which then have been or should
have been deposited in any Trust Account maintained by the Servicer or which are
thereafter received with respect to the Loans. Upon the occurrence of an Event
of Default, the Majority Noteholders shall have the right to order the
Servicer's Loan Files and all other files of the Servicer relating to the Loans
and all other records of the Servicer and all

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documents relating to the Loans which are then or may thereafter come into the
possession of the Servicer or any third parry acting for the Servicer to be
delivered to such custodian or servicer as it selects and the Servicer shall
deliver to such custodian or servicer such assignments as the Majority
Noteholders shall request. No successor servicer shall be held liable by reason
of any failure to make, or any delay in making, any distribution hereunder or
any portion thereof caused by (i) the failure of the Servicer to deliver, or any
delay in delivering, cash, documents or records to it or (ii) restrictions
imposed by any regulatory authority having jurisdiction over the Servicer
hereunder. No appointment of a successor to the Servicer hereunder shall be
effective until written notice of such proposed appointment shall have been
provided to the Initial Noteholder, the Indenture Trustee, the Issuer and the
Depositor, the Majority Noteholders and the Issuer shall have consented in
writing thereto.

      In connection with such appointment and assumption, the Majority
Noteholder may make such arrangements for the compensation of such successor
servicer out of payments on the Loans as they and such successor servicer shall
agree.

      Section 9.03 Waiver of Defaults.

      The Majority Noteholders may waive any events permitting removal of the
Servicer as servicer pursuant to this Article IX. Upon any waiver of a past
default, such default shall cease to exist and any Servicer Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereto except to the extent expressly so waived.

      Section 9.04 Accounting Upon Termination of Servicer.

      Upon termination of the Servicer under this Article IX, the Servicer
shall, at its own expense:

            (a) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee the funds in any Trust Account maintained by
the Servicer;

            (b) deliver to its successor or, if none shall yet have been
appointed, to the Custodian all Loan Files and related documents and statements
held by it hereunder and a Loan portfolio computer tape;

            (c) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee and to the Issuer and the Securityholders a
full accounting of all funds, including a statement showing the Monthly Payments
collected by it and a statement of monies held in trust by it for payments or
charges with respect to the Loans; and

            (d) execute and deliver such instruments and perform all acts
reasonably requested in order to effect the orderly and efficient transfer of
servicing of the Loans to its successor and to more fully and definitively vest
in such successor all rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer under this Agreement.

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                                   ARTICLE X

                             TERMINATION; PUT OPTION

      Section 10.01 Termination.

            (a) This Agreement shall terminate upon either: (A) the later of (i)
the satisfaction and discharge of the Indenture and the provisions thereof and
payment to the Noteholders of all amounts due and owing in accordance with the
provisions hereof or (ii) the disposition of all funds with respect to the last
Loan and Residual Security and the remittance of all funds due hereunder and the
payment of all amounts due and payable, including, in both cases, without
limitation, indemnification payments payable pursuant to any Basic Document to
the Indenture Trustee, the Owner Trustee, the Issuer, the Servicer and the
Custodian, written notice of the occurrence of either of which shall be provided
to the Indenture Trustee by the Servicer; or (B) the mutual consent of the
Servicer, the Depositor and all Securityholders in writing and delivered to the
Indenture Trustee by the Servicer.

            (b) The Securities shall be subject to an early redemption or
termination at the option of the Servicer and the Majority Noteholders in the
manner and subject to the provisions of Section 10.02 and 10.04 of this
Agreement.

            (c) Except as provided in this Article X, none of the Depositor, the
Servicer nor any Certificateholder or Noteholder shall be entitled to revoke or
terminate the Trust.

      Section 10.02 Optional Termination.

            (a) The Servicer may, at its option, effect an early termination of
the Trust on any Payment Date on or after the Clean-up Call Date. The Servicer
shall effect such early termination by providing notice thereof to the Indenture
Trustee and Owner Trustee and by purchasing all of the Loans, the Residual
Securities and the Advance Note at a purchase price, payable in cash, equal to
or greater than the Termination Price. The expense of any Independent appraiser
required in connection with the calculation and payment of the Termination Price
under this Section 10.02 shall be a nonreimbursable expense of the Servicer.

      Any such early termination by the Servicer shall be accomplished by
depositing into the Collection Account on the third Business Day prior to the
Payment Date on which the purchase is to occur the amount of the Termination
Price to be paid. The Termination Price and any amounts then on deposit in the
Collection Account (other than any amounts withdrawable pursuant to Section
5.01(c) (1) hereof) shall be deposited in the Distribution Account and
distributed by the Indenture Trustee pursuant to Section 5.01(c)(3) of this
Agreement and Section 9.1 of the Trust Agreement on the next succeeding Payment
Date; and any amounts received with respect to the Loans, the Residual
Securities and Foreclosure Properties subsequent to the final Payment Date shall
belong to the purchaser thereof.

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      Section 10.03 Notice of Termination.

      Notice of termination of this Agreement or of early redemption and
termination of the Issuer pursuant to Section 10.01 shall be sent by the
Indenture Trustee to the Noteholders in accordance with Section 10.02 of the
Indenture.

      Section 10.04 Put Option.

      The Majority Noteholders may, at their option, effect a put of the entire
outstanding Note Principal Balance, or any portion thereof, to the Trust on any
date by exercise of the Put Option. The Majority Noteholders shall effect such
put by providing notice thereof in accordance with Section 10.05 of the
Indenture.

      Unless otherwise agreed by the Majority Noteholders, on the third Business
Day prior to the Put Date, the Issuer shall deposit the Note Redemption Amount
into the Distribution Account and, if the Put Date occurs after the termination
of the Revolving Period and constitutes a put of the entire outstanding Note
Principal Balance, any amounts then on deposit in the Collection Account (other
than any amounts withdrawable pursuant to Section 5.01(c)(1) hereof) shall be
deposited in the Distribution Account and distributed by the Paying Agent
pursuant to section 5.01 (c) (3) of this Agreement on the Put Date; and any
amounts received with respect to the Loans, Residual Securities and Foreclosure
Properties subsequent to the Put Date shall belong to the Issuer.

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

      Section 11.01 Acts of Securityholders.

      Except as otherwise specifically provided herein and except with respect
to Section 11.02(b), whenever action, consent or approval of the Securityholders
is required under this Agreement, such action, consent or approval shall be
deemed to have been taken or given on behalf of, and shall be binding upon, all
Securityholders if the Majority Noteholders agree to take such action or give
such consent or approval.

      Section 11.02 Amendment.

            (a) This Agreement may be amended from time to time by the
Depositor, the Servicer, the Loan Originator, the Indenture Trustee and the
Issuer by written agreement with notice thereof to the Securityholders, without
the consent of any of the Securityholders, to cure any error or ambiguity, to
correct or supplement any provisions hereof which may be defective or
inconsistent with any other provisions hereof or to add any other provisions
with respect to matters or questions arising under this Agreement; provided,
however, that such action will not adversely affect in any material respect the
interests of the Securityholders, as evidenced by an Opinion of Counsel to such
effect provided at the expense of the party requesting such Amendment.

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            (b) This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Loan Originator, the Indenture Trustee and the
Issuer by written agreement, with the prior written consent of the Majority
Noteholders, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement, or of modifying
in any manner the rights of the Securityholders; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
collections of payments on Loans or Residual Securities or distributions which
are required to be made on any Security, without the consent of the holders of
100% of the Securities, (ii) adversely affect in any material respect the
interests of any of the holders of the Securities in any manner other than as
described in clause (i), without the consent of the holders of 100% of the
Securities, or (iii) reduce the percentage of the Securities, the consent of
which is required for any such amendment, without the consent of the holders of
100% of the Securities.

            (c) It shall not be necessary for the consent of Securityholders
under this Section to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof.

      Prior to the execution of any amendment to this Agreement, the Issuer and
the Indenture Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement. The Issuer and the Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Issuer's own
rights, duties or immunities of the Issuer or the Indenture Trustee, as the case
may be, under this Agreement.

      Section 11.03 Recordation of Agreement.

      To the extent permitted by applicable law, this Agreement, or a memorandum
thereof if permitted under applicable law, is subject to recordation in all
appropriate public offices for real property records in all of the counties or
other comparable jurisdictions in which any or all of the Mortgaged Property is
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Servicer at the Securityholders' expense
on direction of the Majority Noteholders but only when accompanied by an Opinion
of Counsel to the effect that such recordation materially and beneficially
affects the interests of the Securityholders or is necessary for the
administration or servicing of the Loans.

      Section 11.04 Duration of Agreement.

      This Agreement shall continue in existence and effect until terminated as
herein provided.

      Section 11.05 Governing Law.

      THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.

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      Section 11.06 Notices.

      All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if (i) delivered personally, mailed by
overnight mail, certified mail or registered mail, postage prepaid, or (ii)
transmitted by telecopy, upon telephone confirmation of receipt thereof, as
follows: (1) in the case of the Depositor, to Option One Loan Warehouse
Corporation, 3 Ada, Irvine, California 92618, or such other addresses or
telecopy or telephone numbers as may hereafter be furnished to the
Securityholders and the other parties hereto in writing by the Depositor; (2) in
the case of the Trust, to Option One Owner Trust 2001-1A, c/o Wilmington Trust
Company, One Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890, Attention: Corporate Trust Administration, telecopy number: (302)
651-8882, telephone number: (302) 651-1000, or such other address or telecopy or
telephone numbers as may hereafter be furnished to the Noteholders and the other
parties hereto in writing by the Trust; (3) in the case of the Loan Originator,
to Option One Mortgage Corporation, 3 Ada, Irvine, California 92618, Attention:
William O'Neill, telecopy number: (949) 790-7540, telephone number: (949)
790-7504 or such other addresses or telecopy or telephone numbers as may
hereafter be furnished to the Securityholders and the other parties hereto in
writing by the Loan Originator; (4) in the case of the Servicer, to Option One
Mortgage Corporation, 3 Ada, Irvine, California 92618, Attention: William
O'Neill, telecopy number: (949) 790-7540, telephone number: (949) 790-7504 or
such other addresses or telecopy or telephone numbers as may hereafter be
furnished to the Securityholders and the other parties hereto in writing by the
Servicer; and (5) in the case of the Indenture Trustee, at the Corporate Trust
Office, as defined in the Indenture, any such notices shall be deemed to be
effective with respect to any party hereto upon the receipt of such notice or
telephone confirmation thereof by such party, except; provided, that notices to
the Securityholders shall be effective upon mailing or personal delivery.

      Section 11.07 Severability of Provisions.

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

      Section 11.08 No Partnership.

      Nothing herein contained shall be deemed or construed to create any
partnership or joint venture between the parties hereto and the services of the
Servicer shall be rendered as an independent contractor.

      Section 11.09 Counterparts.

      This Agreement 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 Agreement.

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      Section 11.10 Successors and Assigns.

      This Agreement shall inure to the benefit of and be binding upon the
Servicer, the Loan Originator, the Depositor, the Indenture Trustee, the Issuer
and the Securityholders and their respective successors and permitted assigns.

      Section 11.11 Headings.

      The headings of the various Sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed to be part of this
Agreement.

      Section 11.12 Actions of Securityholders.

            (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Securityholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by an
agent duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Depositor, the Servicer or the Issuer. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and conclusive in favor of the
Depositor, the Servicer and the Issuer if made in the manner provided in this
Section 11.12.

            (b) The fact and date of the execution by any Securityholder of any
such instrument or writing may be proved in any reasonable manner which the
Depositor, the Servicer or the Issuer may deem sufficient.

            (c) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Securityholder shall bind every holder of every
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be done,
by the Depositor, the Servicer or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Security.

            (d) The Depositor, the Servicer or the Issuer may require additional
proof of any matter referred to in this Section 11.12 as it shall deem
necessary.

      Section 11.13 Non-Petition Agreement.

      Notwithstanding any prior termination of any Basic Document, the Loan
Originator, the Servicer, the Depositor and the Indenture Trustee each severally
and not jointly covenants that it shall not, prior to the date which is one year
and one day after the payment in full of the all of the Notes, acquiesce,
petition or otherwise, directly or indirectly, invoke or cause the Trust or the
Depositor to invoke the process of any governmental authority for the purpose of
commencing or sustaining a case against the Issuer or Depositor under any
Federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or Depositor or any substantial part of their respective property
or ordering the winding up or liquidation of the affairs of the Issuer or the
Depositor.

                                       81
<PAGE>

      Section 11.14 Holders of the Securities.

            (a) Any sums to be distributed or otherwise paid hereunder or under
this Agreement to the holders of the Securities shall be paid to such holders
pro rata based on their Percentage Interests;

            (b) Where any act or event hereunder is expressed to be subject to
the consent or approval of the holders of the Securities, such consent or
approval shall be capable of being given by the holder or holders evidencing in
the aggregate not less than 51% of the Percentage Interests.

      Section 11.15 Due Diligence Fees, Due Diligence.

      The Loan Originator acknowledges that the Initial Noteholder has the right
to perform continuing due diligence reviews with respect to the Loans, for
purposes of verifying compliance with the representations, warranties and
specifications made hereunder, or otherwise, and the Loan Originator agrees that
upon reasonable prior notice (with no notice being required upon the occurrence
of an Event of Default) to the Loan Originator, the Initial Noteholder, the
Indenture Trustee and Custodian or its authorized representatives will be
permitted during normal business hours to examine, inspect, and make copies and
extracts of, the Loan Files and any and all documents, records, agreements,
instruments or information relating to such Loans in the possession or under the
control of the Servicer and the Indenture Trustee. The Loan Originator also
shall make available to the Initial Noteholder a knowledgeable financial or
accounting officer for the purpose of answering questions respecting the Loan
Files and the Loans and the financial condition of the Loan Originator. Without
limiting the generality of the foregoing, the Loan Originator acknowledges that
the Initial Noteholder may purchase Notes based solely upon the information
provided by the Loan Originator to the Initial Noteholder in the Loan Schedule
and the representations, warranties and covenants contained herein, and that the
Initial Noteholder, at its option, has the right at any time to conduct a
partial or complete due diligence review on some or all of the Loans securing
such purchase, including without limitation ordering new credit reports and new
appraisals on the related Mortgaged Properties and otherwise re-generating the
information used to originate such Loan. The Initial Noteholder may underwrite
such Loans itself or engage a mutually agreed upon third party underwriter to
perform such underwriting. The Loan Originator agrees to cooperate with the
Initial Noteholder and any third party underwriter in connection with such
underwriting, including, but not limited to, providing the Initial Noteholder
and any third party underwriter with access to any and all documents, records,
agreements, instruments or information relating to such Loans in the possession,
or under the control, of the Servicer. The Loan Originator further agrees that
the Loan Originator shall reimburse the Initial Noteholder for any and all
reasonable out-of-pocket costs and expenses incurred by the Initial Noteholder
in connection with the Initial Noteholder's activities pursuant to this Section
11.15 hereof (the "Due Diligence Fees"). In addition to the obligations set
forth in Section 11.17 of this Agreement, the Initial Noteholder agrees (on
behalf of itself and its Affiliates, directors, officers, employees and
representatives) to use reasonable precaution to keep confidential, in
accordance with its customary procedures for handling confidential information
and in accordance with safe and sound practices, and not to disclose to any
third party, any non-public information supplied to it or otherwise obtained by
it hereunder with respect to the Loan Originator or any of its Affiliates
(including, but not limited to, the Loan

                                       82
<PAGE>

File); provided, however, that nothing herein shall prohibit the disclosure of
any such information to the extent required by statute, rule, regulation or
judicial process; provided, further that, unless specifically prohibited by
applicable law or court order, the Initial Noteholder shall, prior to disclosure
thereof, notify the Loan Originator of any request for disclosure of any such
non-public information. The Initial Noteholder further agrees not to use any
such non-public information for any purpose unrelated to this Agreement and that
the Initial Noteholder shall not disclose such non-public information to any
third party underwriter in connection with a potential Disposition without
obtaining a written agreement from such third party underwriter to comply with
the confidentiality provisions of this Section 11.15.

      Section 11.16 No Reliance.

      Each of the Loan Originator, the Depositor and the Issuer hereby
acknowledges that it has not relied on the Initial Noteholder or any of its
officers, directors, employees, agents and "control persons" as such term is
used under the Act and under the Securities Exchange Act of 1934, as amended,
for any tax, accounting, legal or other professional advice in connection with
the transactions contemplated by the Basic Documents, that each of the Loan
Originator, the Depositor and the Issuer has retained and been advised by such
tax, accounting, legal and other professionals as it has deemed necessary in
connection with the transactions contemplated by the Basic Documents and that
the Initial Noteholder makes no representation or warranty, and shall have no
liability with respect to, the tax, accounting or legal treatment or
implications relating to the transactions contemplated by the Basic Documents.

      Section 11.17 Confidential Information.

      In addition to the confidentiality requirements set forth in Section 11.15
of the Agreement, each Noteholder, as well as the Indenture Trustee and the
Disposition Agent (each of said parties singularly referred to herein as a
"Receiving Party" and collectively referred to herein as the "Receiving
Parties"), agrees to hold and treat all Confidential Information (as defined
below) in confidence and in accordance with this Section. Such Confidential
Information will not, without the prior written consent of the Servicer and the
Loan Originator, be disclosed or used by such Receiving Parties or its
subsidiaries, Affiliates, directors, officers, members, employees, agents or
controlling persons (collectively, the "Information Recipients") other than for
the purpose of making a decision to purchase or sell Notes or taking any other
permitted action under this Agreement and or any other Basic Document. Each
Receiving Party agrees to disclose Confidential Information only to its
Information Recipients who need to know it for the purpose of making a decision
to purchase or sell Notes or the taking of any other permitted action under this
Agreement and or any other Basic Document (including in connection with the
servicing of the Loans and in connection with any servicing transfers) and who
are informed by such Receiving Party of its confidential nature and who agree to
be bound by the terms of this Section 11.17. Disclosure that is not in violation
of the Right to Financial Privacy Act, the Gramm-Leach-Bliley Act or other
applicable law by such Receiving Party of any Confidential Information at the
request of its outside auditors or governmental regulatory authorities in
connection with an examination of a Receiving Party by any such authority shall
not constitute a breach of its obligations under this Section 11.17 and shall
not require the prior consent of the Servicer and the Loan Originator.

                                       83
<PAGE>

      Each Receiving Party shall be responsible for any breach of this Section
11.17 by its Information Recipients. The Initial Noteholder may use Confidential
Information for internal due diligence purposes in connection with its analysis
of the transactions contemplated by the Basic Documents. The Disposition Agent
may disclose Confidential Information to the Disposition Participants as
required to effect Dispositions. This Section 11.17 shall terminate upon the
occurrence of an Event of Default; provided, however, that such termination
shall not relieve the Receiving Parties or their respective Information
Recipients from the obligation to comply with the Gramm-Leach-Bliley Act or
other applicable law with respect to their use or disclosure of Confidential
Information following the occurrence of an Event of Default.

      As used herein, "Confidential Information" means non-public personal
information (as defined in the Gramm-Leach-Bliley Act and its enabling
regulations issued by the Federal Trade Commission) regarding Borrowers.
Confidential Information shall not include information which (i) is or becomes
generally available to the public other than as a result of a disclosure by a
Receiving Party or any Information Recipients; (ii) was available to a Receiving
Party on a non-confidential basis prior to its disclosure to Receiving Party by
the Servicer or the Loan Originator; (iii) is required to be disclosed by a
governmental authority or related governmental agencies or as otherwise required
by law; (iv) becomes available to a Receiving Party on a non-confidential basis
from a Person other than the Servicer or the Loan Originator who, to the best
knowledge of such Receiving Party, is not otherwise bound by a confidentiality
agreement with the Servicer or the Loan Originator and is not otherwise
prohibited from transmitting the information to such Receiving Party.

      Section 11.18 Conflicts.

      Notwithstanding anything contained in the Basic Documents to the contrary,
in the event of the conflict between the terms of this Agreement and any other
Basic Document, the terms of this Agreement shall control.

      Section 11.19 Limitation on Liability.

      It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by Wilmington Trust Company, not
individually or personally, but solely as Owner Trustee of Option One Owner
Trust 2001-1A, in the exercise of the powers and authority conferred and vested
in it, (b) each of the representations, undertakings and agreements herein made
on the part of the Issuer is made and intended not as personal representations,
undertakings and agreements by Wilmington Trust Company but is made and intended
for the purpose for binding only the Issuer, (c) nothing herein contained shall
be construed as creating any liability on Wilmington Trust Company, individually
or personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto
and by any Person claiming by, through or under the parties hereto and (d) under
no circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Issuer or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Issuer under this Agreement or any other related documents.

                                       84
<PAGE>

      Section 11.20 No Agency.

      Nothing contained herein or in the Basic Documents shall be construed to
create an agency or fiduciary relationship between the Initial Noteholder or the
Majority Noteholders or any of their Affiliates and the Issuer, the Depositor,
the Loan Originator or the Servicer. None of the Initial Noteholder, the
Majority Noteholders or any of their Affiliates shall be liable for any acts or
actions affected in connection with a disposition of Loans or Residual
Securities, including without limitation, any Securitization pursuant to Section
3.06, any Loan Originator Put or Servicer Call pursuant to Section 3.07 hereof
nor any Whole Loan Sale pursuant to Section 3.10 hereof.

                            (SIGNATURE PAGE FOLLOWS)

                                       85
<PAGE>

      IN WITNESS WHEREOF, the Issuer, the Depositor, the Servicer, the Indenture
Trustee and the Loan Originator have caused their names to be signed by their
respective officers thereunto duly authorized, as of the day and year first
above written, to this Second Amended and Restated Sale and Servicing Agreement.

                                         OPTION ONE OWNER TRUST 2001-1A,
                                         By: Wilmington Trust Company
                                             not in its individual capacity
                                             but solely as Owner Trustee

                                         By: /s/ Mary Kay Pupillo
                                             -----------------------------------
                                             Name: Mary Kay Pupillo
                                             Title: Assistant Vice President

                                         OPTION ONE LOAN WAREHOUSE
                                         CORPORATION, as Depositor

                                         By: /s/ David S. Wells
                                             -----------------------------------
                                             Name: David S. Wells
                                             Title: Assistant Secretary

                                         OPTION ONE MORTGAGE CORPORATION,
                                         as Loan Originator and Servicer

                                         By: /s/ David S. Wells
                                             -----------------------------------
                                             Name: David S. Wells
                                             Title: Vice President

                                         WELLS FARGO BANK, N.A.,
                                         as Indenture Trustee

                                         By: /s/ Darron C. Woodus
                                             -----------------------------------
                                             Name: Darron C. Woodus
                                             Title: Assistant Vice President

                                       86<PAGE>

                                                                   EXHIBIT 10.49

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

                                    INDENTURE

                                     between

                         OPTION ONE OWNER TRUST 2001-1A
                                    as Issuer

                                       and

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
                              as Indenture Trustee

                            Dated as of April 1, 2001

                         OPTION ONE OWNER TRUST 2001-1A
                              MORTGAGE-BACKED NOTES

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                  Page
                                                                                  ----
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                                    ARTICLE I

                                   DEFINITIONS

Section 1.01. Definitions.......................................................    2
Section 1.02. Rules of Construction.............................................    7

                                   ARTICLE II

                  GENERAL PROVISIONS WITH RESPECT TO THE NOTES
Section 2.01. Method of Issuance and Form of Notes..............................    9
Section 2.02. Execution, Authentication, Delivery and Dating....................    9
Section 2.03. Registration; Registration of Transfer and Exchange...............   10
Section 2.04. Mutilated, Destroyed, Lost or Stolen Notes........................   11
Section 2.05. Persons Deemed Noteholders........................................   11
Section 2.06. Payment of Principal and/or Interest; Defaulted Interest..........   12
Section 2.07. Cancellation......................................................   12
Section 2.08. Conditions Precedent to the Authentication of the Notes...........   13
Section 2.09. Release of Collateral.............................................   14
Section 2.10. Additional Note Principal Balance.................................   15
Section 2.11. Tax Treatment.....................................................   15
Section 2.12. Limitations on Transfer of the Notes..............................   15

                                   ARTICLE III

                                    COVENANTS
Section 3.01. Payment of Principal and/or Interest..............................   16
Section 3.02. Maintenance of Office or Agency...................................   16
Section 3.03. Money for Payments to Be Held in Trust............................   16
Section 3.04. Existence.........................................................   18
Section 3.05. Protection of Collateral..........................................   18
Section 3.06. Negative Covenants................................................   19
Section 3.07. Performance of Obligations; Servicing of Loans....................   20
Section 3.08. Reserved..........................................................   21
Section 3 09. Annual Statement as to Compliance ................................   21
Section 3.10. Covenants of the Issuer...........................................   21
Section 3.11. Servicer's Obligations............................................   22
Section 3.12. Restricted Payments...............................................   22
Section 3.13. Treatment of Notes as Debt for All Purposes.......................   22
Section 3.14. Notice of Events of Default.......................................   22
Section 3.15. Further Instruments and Acts......................................   22
</TABLE>

                                       -i-
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<TABLE>
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                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

Section 4.01. Satisfaction and Discharge of Indenture.....................................  22
Section 4.02. Application of Trust Money..................................................  23
Section 4.03. Repayment of Moneys Held by Paying Agent....................................  24

                                    ARTICLE V

                                    REMEDIES
Section 5.01. Events of Default...........................................................  24
Section 5.02. Acceleration of Maturity; Rescission and Annulment..........................  26
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee...  26
Section 5.04. Remedies; Priorities........................................................  28
Section 5.05. Optional Preservation of the Collateral.....................................  30
Section 5.06. Limitation of Suits.........................................................  30
Section 5.07. Unconditional Rights of Noteholders to Receive Principal and/or Interest....  31
Section 5.08. Restoration of Rights and Remedies..........................................  31
Section 5.09. Rights and Remedies Cumulative. ............................................  31
Section 5.10. Delay or Omission Not a Waiver..............................................  31
Section 5.11. Control by Noteholders......................................................  32
Section 5.12. Waiver of Past Defaults.....................................................  32
Section 5.13. Undertaking for Costs.......................................................  33
Section 5.14. Waiver of Stay or Extension Laws............................................  33
Section 5.15. Action on Notes.............................................................  33
Section 5.16. Performance and Enforcement of Certain Obligations..........................  33

                                   ARTICLE VI

                              THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee.................................................  34
Section 6 02. Rights of Indenture Trustee.................................................  35
Section 6.03. Individual Rights of Indenture Trustee......................................  36
Section 6.04. Indenture Trustee's Disclaimer..............................................  36
Section 6 05. Notices of Default..........................................................  36
Section 6.06. Reports by Indenture Trustee to Holders.....................................  36
Section 6 07. Compensation and Indemnity..................................................  36
Section 6.08. Replacement of Indenture Trustee............................................  37
Section 6.09. Successor Indenture Trustee by Merger.......................................  38
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee...........  38
Section 6 11. Eligibility.................................................................  40

                                   ARTICLE VII

                         NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders......  40
</TABLE>

                                      -ii-
<PAGE>

<TABLE>
<S>                                                                                         <C>
Section 7.02. Preservation of Information.................................................  40
Section 7.03. 144A Information............................................................  40

                                  ARTICLE VIII

                      ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money.........................................................  40
Section 8.02. Trust Accounts; Distributions...............................................  41
Section 8.03. General Provisions Regarding Trust Accounts.................................  41
Section 8.04. The Paying Agent............................................................  42
Section 8.05. Release of Collateral.......................................................  42
Section 8.06. Opinion of Counsel..........................................................  42

                                   ARTICLE IX

                            SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without the Consent of the Noteholders..............  43
Section 9.02. Supplemental Indentures with Consent of Noteholders.........................  44
Section 9.03. Execution of Supplemental Indentures........................................  45
Section 9.04. Effect of Supplemental Indentures...........................................  45
Section 9.05. Reference in Notes to Supplemental Indentures...............................  45

                                    ARTICLE X

                        REDEMPTION OF NOTES; PUT OPTION
Section 10 01. Redemption.................................................................  45
Section 10.02. Form of Redemption Notice..................................................  46
Section 10.03. Notes Payable on Redemption Date ..........................................  46
Section 10.04. Put Option.................................................................  46
Section 10.05. Form of Put Option Notice..................................................  46
Section 10 06. Notes Payable on Put Date..................................................  47

                                   ARTICLE XI

                                  MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions, etc..................................  47
Section 11.02. Form of Documents Delivered to Indenture Trustee...........................  47
Section 11.03. Acts of Noteholders........................................................  48
Section 11.04. Notices, etc., to Indenture Trustee and Issuer.............................  49
Section 11.05. Notices to Noteholders; Waiver.............................................  49
Section 11.06. Effect of Headings and Table of Contents...................................  50
Section 11.07. Successors and Assigns.....................................................  50
Section 11.08. Separability...............................................................  50
Section 11.09. Benefits of Indenture......................................................  50
Section 11.10. Legal Holidays.............................................................  50
Section 11.11. GOVERNING LAW..............................................................  50
</TABLE>

                                      -iii-
<PAGE>

<TABLE>
<S>                                                                                         <C>
Section 11.12. Counterparts...............................................................  50
Section 11.13. Recording of Indenture.....................................................  50
Section 11.14. Trust Obligation...........................................................  51
Section 11.15. No Petition................................................................  51
Section 11.16. Inspection ................................................................  51
Section 11.17. Limitation on Liability....................................................  51
</TABLE>

                                    EXHIBITS

EXHIBIT A  -     Form of Notes
EXHIBIT B-l-     Form of Transferor Affidavit (144A)
EXHIBIT B-2-     Form of Transferee Affidavit (Accredited Investor)
EXHIBIT B-3-     Form of Transfer Affidavit
EXHIBIT C  -     Form of Securities Legend

                                      -iv-
<PAGE>

                                    INDENTURE

            INDENTURE dated as of April 1, 2001 (the "Indenture"), between
OPTION ONE OWNER TRUST 2001-1 A, a Delaware business trust, as Issuer (the
"Issuer"), and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as Indenture
Trustee (the "Indenture Trustee").

                                WITNESSETH THAT:

            In consideration of the mutual covenants herein contained, the
Issuer has duly authorized the execution and delivery of this Indenture to
provide for the issuance of Notes, issuable as provided in this Indenture. All
covenants and agreements made by the Issuer herein are for the benefit and
security of the Noteholders.

                                 GRANTING CLAUSE

            Subject to the terms of this Indenture, the Issuer hereby Grants on
the Closing Date, to the Indenture Trustee, as Indenture Trustee for the benefit
of the Noteholders, all of the Issuer's right, title and interest, whether now
owned or hereafter acquired, in and to: (i) such Loans as from time to time are
subject to the Sale and Servicing Agreement as listed in the Loan Schedule, as
the same may be amended or supplemented on each Transfer Date and by the removal
of Deleted Loans and Unqualified Loans and by the addition of Qualified
Substitute Loans, together with the Servicer's Loan Files and the Custodial Loan
Files relating thereto and all proceeds thereof, (ii) the Mortgages and security
interests in the Mortgaged Properties, (iii) all payments in respect of interest
and principal with respect to each Loan received on or after the related
Transfer Cut-off Date, (iv) such assets as from time to time are identified as
Foreclosure Property, (v) such assets and funds as are from time to time
deposited in the Distribution Account, Collection Account and the Transfer
Obligation Account, including, without limitation, amounts on deposit in such
accounts that are invested in Permitted Investments, (vi) lenders' rights under
all Mortgage Insurance Policies and to any Mortgage Insurance Proceeds, (vii)
Net Liquidation Proceeds and Released Mortgaged Property Proceeds, (viii) all
right, title and interest of the Trust (but none of the obligations) in and to
the obligations of Hedging Counterparties under Hedging Instruments; (ix) all
right, title and interest of each of the Depositor, the Loan Originator and the
Trust in and under the Basic Documents including, without limitation, the
obligations of the Loan Originator under the Loan Purchase and Contribution
Agreement and/or the Master Disposition Confirmation Agreement, and all proceeds
of any of the foregoing, (x) all right, title and interest of the Issuer in and
to the Sale and Servicing Agreement, including the Issuer's right to cause the
Loan Originator to repurchase Loans from the Issuer under certain circumstances
described therein), (xi) all other Property of the Trust from time to time and
(xii) all present and future claims, demands, causes of action 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, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing (collectively, the "Collateral").

<PAGE>

            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, and to secure compliance with the provisions of this Indenture, all as
provided in this Indenture.

            The Indenture Trustee, as Indenture Trustee on behalf of the
Noteholders, acknowledges such Grant, accepts the trusts hereunder and agrees to
perform its duties required in this Indenture to the best of its ability to the
end that the interests of the Noteholders may adequately and effectively be
protected.

                                    ARTICLE I

                                   DEFINITIONS

            Section 1.01. Definitions. (a) Except as otherwise specified herein,
the following terms have the respective meanings set forth below for all
purposes of this Indenture.

            "Act" has the meaning specified in Section 11.03(a) hereof.

            "Additional Note Principal Balance" As defined in the Sale and
Servicing Agreement.

            "Administration Agreement" means the Administration Agreement dated
as of April 1, 2001, between the Issuer and the Administrator.

            "Administrator" means Option One Mortgage Corporation, or any
successor Administrator under the Administration Agreement.

            "Authorized Officer" means, with respect to the Issuer, any officer
of the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter) and, so
long as the Administration Agreement is in effect, any Vice President or more
senior officer of the Administrator who is authorized to act for the
Administrator in matters relating to the Issuer and to be acted upon by the
Administrator pursuant to the Administration Agreement and who is identified on
the list of Authorized Officers delivered by the Administrator to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).

            "Basic Documents" As defined in the Sale and Servicing Agreement.

            "Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit C to the Trust Agreement.

            "Change of Control" means the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of outstanding shares of voting stock of the Loan
Originator at any time if after giving effect to such acquisition (i) such
Person or

                                        2
<PAGE>

Persons owns twenty percent (20%) or more of such outstanding voting stock or
(ii) H&R Block, Inc. does not own more than fifty percent (50%) of such
outstanding shares of voting stock.

            "Clean-up Call Date" As defined in the Sale and Servicing Agreement.

            "Closing Date" means April 18, 2001.

            "Collateral" has the meaning specified in the Granting Clause of
this Indenture.

            "Commission" means the Securities and Exchange Commission.

            "Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at date of execution of this Indenture is located,
for note transfer purposes, at Sixth Street and Marquette Avenue, Minneapolis,
Minnesota 55479, Attention: Option One Owner Trust 2001-1A, telecopy number:
(612) 667-6282, telephone number: (800) 344-5128, and for all other purposes, at
11000 Broken Land Parkway, Columbia, Maryland 21044, Attention: Option One
Owner Trust 2001-1A, telecopy number: (410) 884-2372, telephone number: (410)
884-2000, or at such other address as the Indenture Trustee may designate from
time to time by notice to the Noteholders and the Issuer, or the principal
corporate trust office of any successor Indenture Trustee at the address
designated by such successor Indenture Trustee by notice to the Noteholders and
the Issuer.

            "Default" means any occurrence that is, or with notice or the lapse
of time or both would become, an Event of Default.

            "Depositor" shall mean Option One Loan Warehouse Corporation, a
Delaware corporation; in its capacity as depositor under the Sale and Servicing
Agreement, or any successor in interest thereto.

            "Depository Institution" means any depository institution or trust
company, including the Indenture Trustee, that (a) is incorporated under the
laws of the United States of America or any State thereof, (b) is subject to
supervision and examination by federal or state banking authorities and (c) has
outstanding unsecured commercial paper or other short-term unsecured debt
obligations that are rated at a rating to which the Majority Noteholders consent
in writing.

            "Event of Default" has the meaning specified in Section 5.01 hereof.

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

            "Executive Officer" means, with respect to (i) the Depositor, the
Servicer, the Loan Originator or any Affiliate of any of them, the President,
any Vice President or the Treasurer of such corporation; and with respect to any
partnership, any general partner thereof, (ii) the Note Registrar, any
Responsible Officer of the Indenture Trustee, (iii) any other corporation, the
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such entity and (iv) any partnership, any general partner thereof.

                                        3
<PAGE>

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

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

            "ICA Owner" means "beneficial owner" as such term is used in Section
3(c)(1) of the Investment Company Act of 1940. as amended (other than any
persons who are excluded from such term or from the 100-beneficial owner test of
Section 3(c)(1) by law or regulations adopted by the Securities and Exchange
Commission.

            "Indenture" means this Indenture and any amendments hereto.

            "Indenture Trustee" means Wells Fargo Bank Minnesota, National
Association, a national banking association, as Indenture Trustee under this
Indenture, or any successor Indenture Trustee hereunder.

            "Issuer" means Option One Owner Trust 2001-1A.

            "Issuer Order" and "Issuer Request" mean a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.

            "Loan Originator" means Option One Mortgage Corporation, a
California corporation.

            "Majority Certificateholders" As defined in the Sale and Servicing
Agreement.

            "Maturity Date" means, with respect to the Notes, 364 days after the
commencement of the Revolving Period, provided that the Maturity Date shall
automatically be extended for an additional 364 days unless the Initial
Noteholder notifies the Depositor and the Issuer in writing at least 180 days
prior to the expiration of the initial 364 day period that it elects not to
extend the Maturity Date for such additional 364 day period.

            "Maximum Note Principal Balance" As defined in the Note Purchase
Agreement.

            "Note" means any Note authorized by and authenticated and delivered
under this Indenture.

                                        4
<PAGE>

            "Note Interest Rate" means for each Accrual Period, a per annum
interest rate equal to One-Month LIBOR for the related LIBOR Determination Date
plus the LIBOR Margin and the Additional LIBOR Margin for such Accrual Period.

            "Note Principal Balance" As defined in the Sale and Servicing
Agreement.

            "Note Purchase Agreement" means the Note Purchase Agreement dated as
of April 18, 2001, among the Issuer, the Depositor and Greenwich Capital
Financial Products, Inc.

            "Note Redemption Amount" As defined in the Sale and Servicing
Agreement.

            "Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.03 hereof.

            "Noteholder" means the Person in whose name a Note is registered on
the Note Register.

            "Officer's Certificate" means a certificate signed by any Authorized
Officer of the Issuer or the Administrator, under the circumstances described
in, and otherwise complying with, the applicable requirements of Section 11.01
hereof, and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in this Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer or the Administrator.

            "Opinion of Counsel" means one or more written opinions of counsel
who may, except as otherwise expressly provided in this Indenture, be an
employee of or counsel to the Issuer, and which opinion or opinions shall be
addressed to the Indenture Trustee, as Indenture Trustee, and shall comply with
any applicable requirements of Section 11.01 hereof and shall be in form and
substance satisfactory to the Initial Noteholder.

            "Outstanding" means, with respect to any Note and as of the date of
determination, any Note theretofore authenticated and delivered under this
Indenture except:

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

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

            (iii) Notes in exchange for or in lieu of which other Notes have
      been authenticated and delivered pursuant to this Indenture unless proof
      satisfactory to the Indenture Trustee is presented that any such Notes are
      held by a bona fide purchaser; provided, however, that in determining
      whether the Noteholders representing the requisite Percentage Interests of
      the Outstanding Notes have given any request, demand, authorization,
      direction, notice, consent

                                        5
<PAGE>

      or waiver hereunder or under any Basic Document, Notes owned by the
      Issuer, any other obligor upon the Notes, the Depositor or any Affiliate
      of any of the foregoing Persons shall be disregarded and deemed not to be
      Outstanding, except that, in determining whether the Indenture Trustee
      shall be protected in relying upon any such request, demand,
      authorization, direction, notice, consent or waiver, only Notes that the
      Indenture Trustee actually knows to be owned in such manner shall be
      disregarded. Notes owned in such manner that have been pledged in good
      faith may be regarded as Outstanding if the pledgee certifies to the
      Indenture Trustee (y) that the pledgee has the right so to act with
      respect to such Notes and (z) that the pledgee is not the Issuer, any
      other obligor upon the Notes, the Depositor or any Affiliate of any of the
      foregoing Persons.

            "Owner Trustee" means Wilmington Trust Company, not in its
individual capacity but solely as Owner Trustee under the Trust Agreement, or
any successor Owner Trustee under the Trust Agreement.

            "Paving Agent" means (unless the Paying Agent is the Servicer) a
Person that meets the eligibility standards for the Indenture Trustee specified
in Section 6.11 hereof and is authorized by the Issuer to make payments to and
distributions from the Collection Account and the Distribution Account,
including payment of principal of or interest on the Notes on behalf of the
Issuer. The initial Paying Agent shall be the Servicer; provided that if the
Servicer is terminated as Paying Agent for any reason, the Indenture Trustee
shall be the Paying Agent until another Paying Agent is appointed by the Initial
Noteholder pursuant to Section 8.04 herein. The Indenture Trustee shall be
entitled to reasonable additional compensation for assuming the role of Paying
Agent.

            "Payment Date" As defined in the Sale and Servicing Agreement.

            "Percentage Interest" means, with respect to any Note and as of any
date of determination, the percentage equal to a fraction, the numerator of
which is the principal balance of such Note as of such date of determination and
the denominator of which is the Note Principal Balance.

            "Person" As defined in the Sale and Servicing Agreement.

            "Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.04 hereof in lieu of a mutilated,
lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.

            "Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.

            "Record Date" As defined in the Sale and Servicing Agreement.

            "Redemption Date" means in the case of a redemption of the Notes
pursuant to Section 10.01 hereof, the Payment Date specified by the Servicer
pursuant to such Section 10.01.

                                        6
<PAGE>

            "Registered Holder" means the Person in the name of which a Note is
registered on the Note Register on the applicable Record Date.

            "Revolving Period" As defined in the Sale and Servicing Agreement.

            "Sale Agent" has the meaning assigned to such term in Section 5.11
hereof.

            "Sale and Servicing Agreement" means the Sale and Servicing
Agreement dated as of April 1, 2001, among the Issuer, the Depositor, the
Servicer, the Loan Originator and the Indenture Trustee on behalf of the
Noteholders.

            "Servicer" shall mean Option One Mortgage Corporation, in its
capacity as servicer under the Sale and Servicing Agreement, and any successor
servicer thereunder.

            "State" means any one of the States of the United States of America
or the District of Columbia.

            "Termination Price" As defined in the Sale and Servicing Agreement.

            "Transfer Date" As defined in the Sale and Servicing Agreement.

            "Trust Agreement" means the Trust Agreement dated as of April 1,
2001, between the Depositor and the Owner Trustee.

            "Trust Certificate" has the meaning assigned to such term in Section
1.1 of the Trust Agreement.

            "Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.

            (b) Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used but not otherwise defined herein have
the respective meanings set forth in the Sale and Servicing Agreement for all
purposes of this Indenture.

            Section 1.02. 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 GAAP;

            (iii) "or" is not exclusive;

            (iv) "including" means including without limitation;

                                        7
<PAGE>

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

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

                                        8
<PAGE>

                                   ARTICLE II

                  GENERAL PROVISIONS WITH RESPECT TO THE NOTES

            Section 2.01. Method of Issuance and Form of Notes.

            (a) The Notes shall be designated generally as the "Option One Owner
Trust 2001-1A Mortgage-Backed Notes" of the Issuer. Each Note shall bear upon
its face the designation so selected for the Notes. All Notes shall be identical
in all respects except for the denominations thereof. All Notes issued under
this Indenture shall be in all respects equally and ratably entitled to the
benefits thereof without preference, priority or distinction on account of the
actual time or times of authentication and delivery, all in accordance with the
terms and provisions of this Indenture.

            The Notes may be typewritten, printed, lithographed or engraved or
produced by any combination of these methods, all as determined by the officers
executing such Notes, as evidenced by their execution of such Notes.

            Each Note shall be dated the date of its authentication.

            The terms of the Notes shall be set forth in this Indenture.

            The Notes shall be in definitive form and shall bear a legend
substantially in the form of Exhibit C attached hereto.

            Section 2.02. Execution, Authentication, Delivery and Dating. The
Notes shall be executed on behalf of the Issuer by an Authorized Officer of the
Owner Trustee or the Administrator. 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 Owner Trustee or the Administrator
shall bind the Issuer, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Notes or did not hold such offices at the date of such Notes.

            Subject to the satisfaction of the conditions set forth in Section
2.08 hereof, the Indenture Trustee shall upon Issuer Order authenticate and
deliver the Notes.

            The Notes that are authenticated and delivered by the Indenture
Trustee to or upon the order of the Issuer on the Closing Date shall be dated as
of such Closing Date. All other Notes that are authenticated after the Closing
Date for any other purpose under the Indenture shall be dated the date of their
authentication. The Notes shall be issued in such denominations as may be agreed
by the Issuer and the Initial Noteholder.

            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

                                        9
<PAGE>

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.

            Section 2.03. Registration; Registration of Transfer and Exchange.
The Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee initially shall be the "Note Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of the Note
Registrar.

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

            Upon surrender for registration of transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 3.02
hereof, the Issuer shall execute, and the Indenture Trustee shall authenticate
and the Noteholder shall obtain from the Indenture Trustee, in the name of the
designated transferee or transferees, one or more new Notes in any authorized
denominations, of a like aggregate Note Principal Balance.

            At the option of the Holder, Notes may be exchanged for other Notes
in any authorized denominations, of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Issuer shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, the Notes which the Noteholder making the exchange is
entitled to receive.

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

            Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in the form attached to the form of Note attached as Exhibit A hereto
duly executed by the Holder thereof or such Holder's attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Securities Transfer Agents' Medallion Program
("STAMP").

            No service charge shall be made to a Noteholder for any registration
of transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 9.05 hereof not involving any transfer.

                                       10
<PAGE>

            The preceding provisions of this Section 2.03 notwithstanding, the
Issuer shall not be required to make, and the Note Registrar need not register,
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to such
Note.

            Section 2.04. 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 Issuer and Indenture Trustee such
security or indemnity as may reasonably be required by it to hold the Issuer and
the Indenture Trustee, as applicable, 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, an Authorized Officer of the Owner
Trustee or the Administrator on behalf of the Issuer shall execute, and upon its
written request the Indenture Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a
replacement Note; provided, however, that if any such destroyed, lost or stolen
Note, but not a mutilated Note, shall have become or within seven days shall be
due and payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so
due or payable or upon the Redemption Date without surrender thereof. If, after
the delivery of such replacement Note or payment of a destroyed, lost or stolen
Note pursuant to the proviso to the preceding sentence, a bona fide purchaser of
the original Note in lieu of which such replacement Note was issued presents for
payment such original Note, the Issuer 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 such Person to which such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and the Issuer and the Indenture Trustee shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in
connection therewith.

            Upon the issuance of any replacement Note under this Section 2.04,
the Issuer may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.

            Every replacement Note issued pursuant to this Section 2.04 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

            The provisions of this Section 2.04 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.

            Section 2.05. Persons Deemed Noteholders. 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 any Note is registered (as of the day of determination) as the
Noteholder for the purpose of receiving payments of principal of and

                                       11
<PAGE>

interest, if any, on such Note and for all other purposes whatsoever, whether or
not such Note be overdue, and none of the Issuer, the Indenture Trustee or any
agent of the Issuer or the Indenture Trustee shall be affected by notice to the
contrary.

            Section 2.06. Payment of Principal and/or Interest; Defaulted
Interest.

            (a) The Notes shall accrue interest at the Note Interest Rate, and
such interest shall be payable on each Payment Date, subject to Section 3.01
hereof. Any installment of interest or principal, if any, payable on any Note
that is punctually paid or duly provided for by the Issuer on the applicable
Payment Date shall be paid to the Person in the name of which such Note (or one
or more Predecessor Notes) is registered on the next preceding Record Date based
on the Percentage Interest represented by its respective Note, without
preference or priority of any kind, and, except as otherwise provided in the
next succeeding sentence, shall be made by wire transfer of immediately
available funds to the account of such Noteholder, if such Noteholder shall own
of record Notes having a Percentage Interest of at least 20% and shall have so
notified the Paying Agent and the Indenture Trustee, and otherwise by check
mailed to the address of such Noteholder appearing in the Note Register no less
than five days preceding the related Record Date. The final installment of
principal payable with respect to such Note shall be payable as provided in
Section 2.06(b) below. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.03 hereof.

            (b) The principal of each Note shall be payable in installments on
each Payment Date as provided in Sections 5.01 and 5.02 of the Sale and
Servicing Agreement and Section 5.04(b) hereof. Notwithstanding the foregoing,
the entire unpaid principal amount of the Notes shall be due and payable, if not
previously paid, on the earlier of (i) the Maturity Date, (ii) the Redemption
Date, (iii) the Final Put Date and (iv) the date on which an Event of Default
shall have occurred and be continuing, if the Indenture Trustee or the Majority
Noteholders shall have declared the Notes to be immediately due and payable in
the manner provided in Section 5.02 hereof.

            All principal payments on the Notes shall be made pro rata to the
Noteholders based on their respective Percentage Interests. The Paying Agent
shall notify the Person in the name of which a Note is registered at the close
of business on the Record Date preceding the Payment Date on which the Issuer
expects that the final installment of principal of and interest on such Note
will be paid. Such notice shall be mailed or transmitted by facsimile prior to
such final Payment Date and shall specify that such final installment will be
payable only upon presentation and surrender of such Note and shall specify the
place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be provided
to Noteholders as set forth in Section 10.02 hereof.

            Section 2.07. 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 promptly be canceled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall promptly be canceled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes canceled as provided in this

                                       12
<PAGE>

Section 2.07, except as expressly permitted by this Indenture. All canceled
Notes may be held or disposed of by the Indenture Trustee in accordance with its
standard retention or disposal policy as in effect at the time unless the Issuer
shall direct by an Issuer Order that they be destroyed or returned to it;
provided, however, that such Issuer Order is timely and the Notes have not been
previously disposed of by the Indenture Trustee.

            Section 2.08. Conditions Precedent to the Authentication of the
Notes. The Notes may be authenticated by the Indenture Trustee upon receipt by
the Indenture Trustee of the following:

            (a) An Issuer Order authorizing authentication of such Notes by the
Indenture Trustee;

            (b) All of the items of Collateral which are to be delivered
pursuant to the Basic Documents to the Indenture Trustee or its designee by the
related Closing Date shall have been delivered;

            (c) An executed counterpart of each Basic Document;

            (d) One or more Opinions of Counsel addressed to the Indenture
Trustee to the effect that:

            (i) all conditions precedent provided for in this Indenture relating
      to the authentication of the Notes have been complied with;

            (ii) the Owner Trustee has power and authority to execute, deliver
      and perform its obligations under the Trust Agreement;

            (iii) the Issuer has been duly formed, is validly existing as a
      business trust under the laws of the State of Delaware, 12 Del. C. Section
      3801 et seq., and has power, authority and legal right to execute and
      deliver this Indenture, the Note Purchase Agreement, the Custodial
      Agreement, the Administration Agreement and the Sale and Servicing
      Agreement;

            (iv) assuming due authorization, execution and delivery hereof by
      the Indenture Trustee, the Indenture is a valid, legal and binding
      obligation of the Issuer, enforceable in accordance with its terms,
      subject to bankruptcy, insolvency, reorganization, arrangement,
      moratorium, fraudulent or preferential conveyance and other similar laws
      of general application affecting the rights of creditors generally and to
      general principles of equity (regardless of whether such enforcement is
      considered in a Proceeding in equity or at law);

            (v) the Notes, when executed and authenticated as provided herein
      and delivered against payment therefor, will be the valid, legal and
      binding obligations of the Issuer pursuant to the terms of this Indenture,
      entitled to the benefits of this Indenture, and will be enforceable in
      accordance with their terms, subject to bankruptcy, insolvency,
      reorganization, arrangement, moratorium, fraudulent or preferential
      conveyance and other similar laws of general application affecting the
      rights of creditors generally and to general principles of

                                       13
<PAGE>

      equity (regardless of whether such enforcement is considered in a
      Proceeding in equity or at law);

            (vi) Reserved;

            (vii) this Indenture is not required to be qualified under the Trust
      Indenture Act;

            (viii) no authorization, approval or consent of any governmental
      body having jurisdiction in the premises which has not been obtained by
      the Issuer is required to be obtained by the Issuer for the valid issuance
      and delivery of the Notes, except that no opinion need be expressed with
      respect to any such authorizations, approvals or consents as may be
      required under any state securities or "blue sky" laws; and

            (ix) any other matters that the Indenture Trustee may reasonably
      request.

            (e) An Officer's Certificate complying with the requirements of
      Section 11.01 hereof and stating that:

            (i) the Issuer is not in Default under this Indenture and the
      issuance of the Notes applied for will not result in any breach of any of
      the terms, conditions or provisions of, or constitute a default under, the
      Trust Agreement, any indenture, mortgage, deed of trust or other agreement
      or instrument to which the Issuer is a party or by which it is bound, or
      any order of any court or administrative agency entered in any Proceeding
      to which the Issuer is a party or by which it may be bound or to which it
      may be subject, and that all conditions precedent provided in this
      Indenture relating to the authentication and delivery of the Notes applied
      for have been complied with;

            (ii) the Issuer is the owner of all of the Loans, has not assigned
      any interest or participation in the Loans (or, if any such interest or
      participation has been assigned, it has been released) and has the right
      to Grant all of the Loans to the Indenture Trustee;

            (iii) the Issuer has Granted to the Indenture Trustee all of its
      right, title and interest in and to the Collateral, and has delivered or
      caused the same to be delivered to the Indenture Trustee; and

            (iv) all conditions precedent provided for in this Indenture
      relating to the authentication of the Notes have been complied with.

            Section 2.09. Release of Collateral. (a) Except as otherwise
provided by the terms of the Basic Documents, the Indenture Trustee shall
release the Collateral from the lien of this Indenture only upon receipt of an
Issuer Request accompanied by the written consent of the Majority Noteholders in
accordance with the procedures set forth in the Custodial Agreement. To the
extent it deems necessary, the Indenture Trustee may seek direction from the
Initial Noteholder with regard to the release of Collateral other than the
Custodial Loan File.

                                       14
<PAGE>

            (b) The Indenture Trustee shall, if requested by the Servicer,
temporarily release or cause the Custodian temporarily to release to the
Servicer the Custodial Loan File pursuant to the provisions of Section 5(b) of
the Custodial Agreement upon compliance by the Servicer with the provisions
thereof; provided, however, that the Custodian's records shall indicate the
Issuer's pledge to the Indenture Trustee under the Indenture.

            Section 2.10. Additional Note Principal Balance. In the event of
payment of Additional Note Principal Balance by the Noteholders as provided in
Section 2.01(c) of the Sale and Servicing Agreement, each Noteholder shall, and
is hereby authorized to, record on the schedule attached to its Note the date
and amount of any Additional Note Principal Balance advanced by it and each
repayment thereof; provided that failure to make any such recordation on such
schedule or any error in such schedule shall not adversely affect any
Noteholder's rights with respect to its Additional Note Principal Balance and
its right to receive interest payments in respect of the Additional Note
Principal Balance held by such Noteholder.

            Absent manifest error, the Note Principal Balance of each Note as
set forth in the notations made by the related Noteholder on such Note shall be
binding upon the Indenture Trustee and the Issuer; provided that failure by a
Noteholder to make such recordation on its Note or any error in such notation
shall not adversely affect any Noteholder's rights with respect to its Note
Principal Balance and its right to receive principal and interest payments in
respect thereof.

            Section 2.11. Tax Treatment. The Issuer has entered into this
Indenture, and the Notes will be issued, with the intention that for all
purposes, including federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Collateral. The Issuer, by entering into this Indenture, and each
Noteholder, by its acceptance of a Note, agree to treat the Notes for all
purposes, including federal, state and local income, single business and
franchise tax purposes, as indebtedness of the Issuer. The Indenture Trustee
will have no responsibility for filing or preparing any tax returns.

            Section 2.12. Limitations on Transfer of the Notes.

            (a) The Notes have not been and will not be registered under the
Securities Act and will not be listed on any exchange. No transfer of a Note
shall be made unless such transfer is made pursuant to an effective registration
statement under the Securities Act and all applicable state securities laws or
is exempt from the registration requirements under the Securities Act and such
state securities laws. In order to assure compliance with the Securities Act and
state securities laws, any transfer of a Note shall be made (A) in reliance on
Rule 144A under the Securities Act, in which case, the Indenture Trustee shall
require that the transferor deliver a certification substantially in the form of
Exhibit B-1 hereto and that the transferee deliver a certification
substantially in the form of Exhibit B-3 hereto, or (B) to an institutional
"accredited investor" within the meaning of Rule 501 (a)(1), (2), (3) or (7) of
Regulation D under the Securities Act that is not a "qualified institutional
buyer," in which case the Indenture Trustee shall require that the transferee
deliver a certification substantially in the form of Exhibit B-2 hereto. The
Indenture Trustee shall not make any transfer or re-registration of the Notes if
after such transfer or re-registration, there would be more than five
Noteholders. Each Noteholder shall, by its acceptance of a Note, be deemed to
have represented and warranted that the number of ICA Owners with respect to all
of its Notes shall not exceed four.

                                       15
<PAGE>

            (b) The Note Registrar shall not register the transfer of any Note
unless the Indenture Trustee has received a certificate from the transferee to
the effect that either (i) the transferee is not an employee benefit plan or
other retirement plan or arrangement subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended, or Section 4975 of the
Internal Revenue Code of 1986, as amended (each, a "Plan"), and is not acting on
behalf of or investing the assets of a Plan or (ii) if the transferee is a Plan
or is acting on behalf of or investing the assets of a Plan, the conditions for
exemptive relief under at least one of the following prohibited transaction
class exemptions have been satisfied; Prohibited Transaction Class Exemption
("PTCE") 96-23 (relating to transactions effected by an "in-house asset
manager"), PTCE 95-60 (relating to transactions involving insurance company
general accounts),PTCE 91-38 (relating to transactions involving bank collective
investment funds), PTCE 90-1 (relating to transactions involving insurance
company pooled separate accounts) and PTCE 84-14 (relating to transactions
effected by a "qualified professional asset manager").

                                   ARTICLE III

                                    COVENANTS

            Section 3.01. Payment of Principal and/or Interest. The Issuer will
duly and punctually pay (or will cause to be paid duly and punctually) the
principal of and interest on the Notes in accordance with the terms of the
Notes, this Indenture and the Sale and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a payment to any Noteholder of
interest and/or principal shall be considered as having been paid by the Issuer
to such Noteholder for all purposes of this Indenture. The Notes shall be
non-recourse obligations of the Issuer and shall be limited in right of payment
to amounts available from the Collateral, as provided in this Indenture. The
Issuer shall not otherwise be liable for payments on the Notes. If any other
provision of this Indenture shall be deemed to conflict with the provisions of
this Section 3.01, the provisions of this Section 3.01 shall control.

            Section 3.02. Maintenance of Office or Agency. The Indenture Trustee
shall maintain at the Corporate Trust Office an office or agency where 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 Indenture Trustee shall give prompt written notice to the Issuer of
the location, and of any change in the location, of any such office or agency.

            Section 3.03. Money for Payments to Be Held in Trust. As provided in
Section 8.02(a) and (b) hereof, all payments of amounts due and payable with
respect to any Notes that are to be made from amounts withdrawn from the
Distribution Account pursuant to Section 8.02(c) hereof shall be made on behalf
of the Issuer by the Indenture Trustee or by the Paying Agent, and *** amounts
so withdrawn from the Distribution Account for payments of Notes shall be paid
over to the Issuer except as provided in this Section 3.03.

            Any Paying Agent shall be appointed by the Initial Noteholder with
written notice thereof to the Indenture Trustee. The Issuer shall not appoint
any Paying Agent (other than the Indenture Trustee or Servicer) which is not, at
the time of such appointment, a Depository Institution.

                                       16
<PAGE>

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

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

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

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

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

            (v) comply with all requirements of the Code with respect to the
      withholding from any payments made by it on any Notes of any applicable
      withholding taxes imposed thereon and with respect to any applicable
      reporting requirements in connection therewith; provided, however, that
      with respect to withholding and reporting requirements applicable to
      original issue discount (if any) on the Notes, the Issuer shall have first
      provided the calculations pertaining thereto to the Indenture Trustee.

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

            Subject to applicable laws with respect to escheat of funds or
abandoned property, 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 two years 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 a newspaper of general circulation in the
City of New York customarily published in the English

                                       17
<PAGE>

language on each Business Day, 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 shall also adopt and employ
any other reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Noteholders whose Notes have
been called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed at the last address of record
for each such Noteholder determinable from the records of the Indenture Trustee
or of any Paying Agent. Any costs and expenses of the Indenture Trustee and the
Paying Agent incurred in the holding of such funds shall be charged against such
funds. Monies so held shall not bear interest.

            Section 3.04. Existence. (a) Subject to subparagraph (b) of this
Section 3.04, the Issuer will keep in full effect its existence, rights and
franchises as a business trust under the laws of the State of Delaware (unless
it becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other State or of the United States of America, in which case the
Issuer will keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Notes and the Collateral. The Issuer shall comply in all respects with the
covenants contained in the Trust Agreement, including without limitation, the
"special purpose entity" set forth in Section 4.1 thereof.

            (b) Any successor to the Owner Trustee appointed pursuant to Section
10.2 of the Trust Agreement shall be the successor Owner Trustee under this
Indenture without the execution or filing of any paper, instrument or further
act to be done on the part of the parties hereto.

            (c) Upon any consolidation or merger of or other succession to the
Owner Trustee, the Person succeeding to the Owner Trustee under the Trust
Agreement may exercise every right and power of the Owner Trustee under this
Indenture with the same effect as if such Person had been named as the Owner
Trustee herein.

            Section 3.05. Protection of Collateral. The Issuer will from time to
time execute and deliver all such reasonable supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:

            (i) provide further assurance with respect to the Grant of all or
      any portion of the Collateral;

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

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

            (iv) enforce any rights with respect to the Collateral; and

                                       18
<PAGE>

            (v) preserve and defend title to the Collateral and the rights of
      the Indenture Trustee and the Noteholders in such Collateral against the
      claims of all Persons and parties.

            The Issuer hereby designates the Administrator, its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.05.

            Section 3.06. Negative Covenants. Without the written consent of the
Majority Noteholders, so long as any Notes are Outstanding, the Issuer shall
not:

            (i) except as expressly permitted by the Basic Documents, sell,
      transfer, exchange or otherwise dispose of any of the properties or assets
      of the Issuer, including those included in any part of the Trust Estate,
      unless directed to do so by the Noteholders as permitted herein;

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

            (iii) engage in any business or activity other than as expressly
      permitted by this Indenture and the other Basic Documents, other than in
      connection with, or relating to, the issuance of Notes pursuant to this
      Indenture, or amend this Indenture as in effect on the Closing Date other
      than in accordance with Article IX hereof;

            (iv) issue any debt obligations except under this Indenture;

            (v) incur or assume any indebtedness or guaranty any indebtedness of
      any Person, except for such indebtedness as may be incurred by the Issuer
      in connection with the issuance of the Notes pursuant to this Indenture;

            (vi) dissolve or liquidate in whole or in part or merge or
      consolidate with any other Person;

            (vii) (A) permit the validity or effectiveness of this Indenture to
      be impaired, or permit the lien of this Indenture to be amended,
      hypothecated, subordinated, terminated or discharged, or permit any Person
      to be released from any covenants or obligations with respect to the Notes
      except as may expressly be permitted hereby, (B) except as provided in the
      Basic Documents, permit any lien, charge, excise, claim, security
      interest, mortgage or other encumbrance to be created on or extend to or
      otherwise arise upon or burden the Trust Estate or any part thereof or any
      interest therein or the proceeds thereof (other than tax liens, mechanics'
      liens and other liens that arise by operation of law, in each case, on any
      Mortgaged Property and arising solely as a result of an action or omission
      of the related Borrowers) or (C) except as provided in the Basic
      Documents, permit any Person other than itself, the Owner Trustee and the
      Noteholders to have any right title or interest in the Trust Estate;

                                       19
<PAGE>

            (viii) remove the Administrator without the prior written consent of
      the Majority Noteholders; or

            (ix) take any other action or fail to take any action which may
      cause the Trust to be taxable as (a) an association pursuant to Section
      7701 of the Code and the corresponding regulations, or (b) as a taxable
      mortgage pool pursuant to Section 7701(i) of the Code.

            Section 3.07. Performance of Obligations; Servicing of Loans. (a)
The Issuer will not take any action and will use its best efforts not to permit
any action to be taken by others that would release any Person from any of such
Person's material covenants or obligations under any instrument or agreement
included in the Collateral or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any such instrument or agreement, except as expressly provided
in the Basic Documents or such other instrument or agreement.

            (b) The Issuer may contract with or otherwise obtain the assistance
of other Persons (including, without limitation, the Administrator under the
Administration Agreement) to assist it in performing its duties under this
Indenture, and any performance of such duties by a Person identified to the
Indenture Trustee in an Officer's Certificate of the Issuer shall be deemed to
be action taken by the Issuer. Initially, the Issuer has contracted with the
Servicer and the Administrator to assist the Issuer in performing its duties
under this Indenture.

            (c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, in the Basic Documents
and in the instruments and agreements included in the Collateral, including but
not limited to (i) filing or causing to be filed all UCC financing statements
and continuation statements required to be filed by the terms of this Indenture
and the Sale and Servicing Agreement and (ii) recording or causing to be
recorded all Mortgages, Assignments of Mortgage, all intervening Assignments of
Mortgage and all assumption and modification agreements required to be recorded
by the terms of the Sale and Servicing Agreement, in accordance with and within
the time periods provided for in this Indenture and/or the Sale and Servicing
Agreement, as applicable. Except as otherwise expressly provided therein, the
Issuer shall not waive, amend, modify, supplement or terminate any Basic
Document or any provision thereof without the consent of the Indenture Trustee
and the Majority Noteholders.

            (d) If the Issuer shall have knowledge of the occurrence of a
Servicing Event of Default, the Issuer shall promptly notify the Indenture
Trustee and the Initial Noteholder thereof, and shall specify in such notice the
action, if any, the Issuer is taking with respect to such default. If a
Servicing Event of Default shall arise from the failure of the Servicer to
perform any of its duties or obligations under the Sale and Servicing Agreement
with respect to the Loans, the Issuer shall take all reasonable steps available
to it to remedy such failure.

            (e) Reserved.

                                       20
<PAGE>

            (f) Upon any termination of the Servicer's rights and powers
pursuant to the Sale and Servicing Agreement, the Issuer shall promptly notify
the Indenture Trustee. As soon as a successor servicer is appointed, the Issuer
shall notify the Indenture Trustee of such appointment, specifying in such
notice the name and address of such successor servicer.

            (g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees (i) that it will not, without the
prior written consent of the Indenture Trustee, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Collateral
(except to the extent otherwise permitted by the Sale and Servicing Agreement)
or the Basic Documents, or waive timely performance or observance by the
Servicer or the Depositor under the Sale and Servicing Agreement; and (ii) that
any such amendment shall not (A) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, distributions that are required to be made
for the benefit of the Noteholders or (B) reduce the aforesaid percentage of the
Notes that is required to consent to any such amendment, without the consent of
Noteholders evidencing 100% Percentage Interests of the Outstanding Notes. If
any such amendment, modification, supplement or waiver shall so be consented to
by the Indenture Trustee, the Issuer agrees, promptly following a request by the
Indenture Trustee to do so, to execute and deliver, in its own name and at its
own expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may deem necessary or appropriate in the circumstances.

            Section 3.08. Reserved.

            Section 3.09. Annual Statement as to Compliance. So long as the
Notes are Outstanding, the Issuer will deliver to the Indenture Trustee, within
120 days after the end of each fiscal year of the Issuer (commencing with the
fiscal year beginning on May 1, 2001), an Officer's Certificate stating, as to
the Authorized Officer signing such Officer's Certificate, that:

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

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

            Section 3.10. Covenants of the Issuer. All covenants of the Issuer
in this Indenture are covenants of the Issuer and are not covenants of the Owner
Trustee. The Owner Trustee is, and any successor Owner Trustee under the Trust
Agreement will be, entering into this Indenture solely as Owner Trustee under
the Trust Agreement and not in its respective individual capacity, and in no
case whatsoever shall the Owner Trustee or any such successor Owner Trustee be
personally liable on, or for any loss in respect of, any of the statements,
representations, warranties or obligations of the Issuer hereunder, as to all of
which the parties hereto agree to look solely to the property of the Issuer.

                                       21
<PAGE>

            Section 3.11. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with the Sale and Servicing Agreement.

            Section 3.12. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, (x)
distributions to the Servicer, the Indenture Trustee, the Owner Trustee and the
Noteholders and the holders of the Trust Certificates as contemplated by, and to
the extent funds are available for such purpose under, the Sale and Servicing
Agreement or the Trust Agreement and (y) payments to the Indenture Trustee
pursuant to Section l(a)(ii) of the Administration Agreement. The Issuer will
not, directly or indirectly, make or cause to be made payments to or
distributions from the Distribution Account except in accordance with this
Indenture and the Basic Documents.

            Section 3.13. Treatment of Notes as Debt for All Purposes. The
Issuer shall, and shall cause the Administrator to, treat the Notes as
indebtedness for all purposes.

            Section 3.14. Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Initial Noteholder prompt written notice of each Event
of Default hereunder each default on the part of the Servicer or the Loan
Originator of their respective obligations under any of the Basic Documents.

            Section 3.15. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

            Section 4.01. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to the Notes (except
as to (i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections 3.03,
3.04 and 3.10 hereof, (v) the rights, obligations and immunities of the
Indenture Trustee hereunder (including the rights of the Indenture Trustee under
Section 6.07 hereof and the obligations of the Indenture Trustee under Section
4.02 hereof) and (vi) the rights of Noteholders as beneficiaries hereof with
respect to the property so deposited with the Indenture Trustee payable to all
or any of them), and the Indenture Trustee, on demand of and at the expense of
the Issuer, shall execute proper instruments satisfactory to it, and prepared
and delivered to it by the Issuer, acknowledging satisfaction and discharge of
this Indenture with respect to the Notes, when all of the following have
occurred:

                                       22
<PAGE>

            (A) either

                  (1)   all Notes theretofore authenticated and delivered (other
                        than (i) Notes that have been destroyed, lost or stolen
                        and that have been replaced or paid as provided in
                        Section 2.04 hereof and (ii) 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 hereof) shall have
                        been delivered to the Indenture Trustee for
                        cancellation; or

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

                        a.    shall have become due and payable, or

                        b.    are to be called for redemption within one year
                              under arrangements satisfactory to the Indenture
                              Trustee for the giving of notice of redemption by
                              the Indenture Trustee in the name, and at the
                              expense, of the Issuer,

                        c.    and the Issuer, in the case of clause a. or b.
                              above, has irrevocably deposited or caused
                              irrevocably to be deposited with the Indenture
                              Trustee cash or direct obligations of or
                              obligations guaranteed by the United States of
                              America (which will mature prior to the date such
                              amounts are payable), in trust for such purpose,
                              in an amount sufficient to pay and discharge the
                              entire indebtedness on such Notes not theretofore
                              delivered to the Indenture Trustee for
                              cancellation when due to the applicable Maturity
                              Date or the Redemption Date (if Notes shall have
                              been called for redemption pursuant to Section
                              10.01 hereof), as the case may be; and

            (B) the latest of (a) the payment in full of all outstanding
obligations under the Notes, (b) the payment in full of all unpaid Trust Fees
and Expenses and (c) the date on which the Issuer has paid or caused to be paid
all other sums payable hereunder by the Issuer; and

            (C) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel, each meeting the applicable
requirements of Section 11.01 hereof and, subject to Section 11.02 hereof, each
stating that all conditions precedent herein provided for, relating to the
satisfaction and discharge of this Indenture with respect to the Notes, have
been complied with.

            Section 4.02. Application of Trust Money. All moneys deposited with
the Indenture Trustee pursuant to Sections 3.03 and 4.01 hereof shall be held in
trust and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or

                                       23
<PAGE>

through any Paying Agent, as the Indenture Trustee may determine, to the
Noteholders for the payment or redemption of which such moneys have been
deposited with the Indenture Trustee, of all sums due and to become due thereon
for principal and/or interest; but such moneys need not be segregated from other
funds except to the extent required herein or in the Sale and Servicing
Agreement or required by law.

            Section 4.03. Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes shall,
upon demand of the Issuer, be paid to the Indenture Trustee to be held and
applied according to Section 3.03 hereof and thereupon such Paying Agent shall
be released from all further liability with respect to such moneys.

                                    ARTICLE V

                                    REMEDIES

            Section 5.01. Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

            (a) notwithstanding any insufficiency of funds in the Distribution
Account for payment thereof on the related Payment Date, default in the payment
of any interest on any Note when the same becomes due and payable; or

            (b) notwithstanding any insufficiency of funds in the Distribution
Account for payment thereof on the related Payment Date, default in the payment
of any installment of the Overcollateralization Shortfall of any Note (i) on any
Payment Date or (ii) on the Maturity Date, or, to the extent that there are
funds available in the Distribution Account therefor, default in the payment of
any installment of the principal of any Note from such available funds, as a
result of the occurrence of a Rapid Amortization Trigger; or

            (c) the occurrence of a Servicer Event of Default; or

            (d) default in the observance or performance of any covenant or
agreement of the Issuer made in any Basic Document to which it is a party (other
than a covenant or agreement, a default in the observance or performance of
which is elsewhere in this Section 5.01 specifically dealt with), or any
representation or warranty of the Issuer made in any Basic Document to which it
is a party or in any certificate or other writing delivered pursuant thereto or
in connection therewith proving to have been incorrect in any material respect
as of the time when the same shall have been made, and such default shall
continue or not be cured, or the circumstance or condition in respect of which
such misrepresentation or warranty was incorrect shall not have been eliminated
or otherwise cured, for a period of 30 days after there shall have been given,
by registered or certified mail, to the Issuer by the Indenture Trustee, or to
the Issuer, the Depositor and the Indenture Trustee by Noteholders evidencing at
least 25% Percentage Interests of the Outstanding Notes, a written

                                       24
<PAGE>

notice specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a notice of Default
hereunder; or

            (e) default in the observance or performance of any covenant or
agreement of the Depositor made in any Basic Document to which it is a party or
any representation or warranty of the Depositor (except as otherwise expressly
provided in the Basic Documents with respect to representations and warranties
regarding the Loans) or Loan Originator made in any Basic Document to which they
are a party, proving to have been incorrect in any material respect as of the
time when the same shall have been made, and such default shall continue or not
be cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been eliminated or
otherwise cured, for a period of 30 days (or five days in the case of the
failure of the Loan Originator to make a payment in respect of the Transfer
Obligation) after there shall have been given, by registered or certified mail,
to the Issuer and the Depositor by the Indenture Trustee, or to the Issuer, the
Depositor and the Indenture Trustee by Noteholders evidencing at least 25%
Percentage Interests of the Outstanding Notes, a written notice specifying such
Default or incorrect representation or warranty and requiring it to be remedied
and stating that such notice is a notice of Default hereunder; or

            (f) default in the observance or performance of any covenant or
agreement of the Loan Originator made in any repurchase agreement, loan and
security agreement or other similar credit facility agreement entered into by
the Loan Originator and any third party for borrowed funds in excess of
$10,000,000, including any default which entitles any party to require
acceleration or prepayment of any indebtedness thereunder; or

            (g) the filing of a decree or order for relief by a court having
jurisdiction over the Issuer, the Depositor or the Loan Originator or all or
substantially all of the Collateral in an involuntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or hereafter in
effect, or the appointing of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Issuer, the Depositor or the
Loan Originator or for all or substantially all of the Collateral, or the
ordering of the winding-up or liquidation of the affairs of the Issuer, the
Depositor or the Loan Originator, and such decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or

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

            (i) a Change of Control of the Loan Originator; or

                                       25
<PAGE>

            (j) the Notes shall be Outstanding on the day after the end of the
Revolving Period.

            The Issuer shall deliver to the Indenture Trustee, within five days
after the occurrence thereof, written notice in the form of an Officer's
Certificate of any event which with the giving of notice and the lapse of time
would become an Event of Default under clauses (d) or (e) above, the status of
such event and what action the Issuer or the Depositor, as applicable, is taking
or proposes to take with respect thereto.

            Section 5.02. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default should occur and be continuing, then and in every such case
the Indenture Trustee, at the direction or upon the prior written consent of the
Majority Noteholders, may declare all the Notes to be immediately due and
payable, by a notice in writing to the Issuer (and to the Indenture Trustee if
given by Noteholders), and upon any such declaration, the unpaid principal
amount of such Notes, together with accrued and unpaid interest thereon through
the date of acceleration, shall become immediately due and payable.

            At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the moneys due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Majority Noteholders, by written notice to the Issuer and the Indenture Trustee,
may rescind and annul such declaration and its consequences if:

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

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

      2.    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

            (b) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration, have
been cured or waived as provided in Section 5.12 hereof. No such rescission
shall affect any subsequent default or impair any right consequent thereto.

            Section 5.03. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee. (a) The Issuer covenants that if (i) default is made in
the payment of any interest on any Note when the same becomes due and payable,
and such default continues for a period of five days, or (ii) default is made in
the payment of the principal of or any installment of the principal of any Note
when the same becomes due and payable, the Issuer will, upon demand of the
Indenture Trustee, pay to the Indenture Trustee, for the benefit of the
Noteholders, the whole amount then due and payable on such Notes for principal
and/or interest, with interest upon the overdue principal and, to the extent
payment at such rate of interest shall be legally enforceable, upon overdue
installments

                                       26
<PAGE>

of interest at the rate borne by the Notes and in addition thereto such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee and its agents and counsel.

            (b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee shall at the direction of the Majority
Noteholders, subject to Section 5.06(c) institute a Proceeding for the
collection of the sums so due and unpaid, and may prosecute such Proceeding to
judgment or final decree, and may enforce the same against the Issuer or other
obligor upon such Notes and collect in the manner provided by law out of the
property of the Issuer or other obligor upon such Notes, wherever situated, the
moneys adjudged or decreed to be payable.

            (c) If an Event of Default occurs and is continuing, the Indenture
Trustee shall at the direction of the Majority Noteholders, as more particularly
provided in Section 5.04 hereof, subject to Section 5.06(c) hereof, proceed to
protect and enforce its rights and the rights of the Noteholders by such
appropriate Proceedings as the Indenture Trustee shall deem most effective to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in the Indenture Trustee by this Indenture or by law.

            (d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Collateral, Proceedings under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section 5.03, shall be
entitled and empowered by intervention in such Proceedings or otherwise:

            (i) to file and prove a claim or claims for the whole amount of
      principal and/or 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 its agents, attorneys and counsel, and for
      reimbursement of all expenses and liabilities incurred, and all advances
      made, by the Indenture Trustee and each predecessor Indenture Trustee,
      except as a result of negligence or bad faith) and of the Noteholders
      allowed in such Proceedings;

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

                                       27
<PAGE>

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

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

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

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

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

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

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

                                       28
<PAGE>

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

            (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 or the Noteholders; and

            (iv) sell the Collateral or any portion thereof or rights or
      interest therein in a commercially reasonable manner, 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 Collateral following an Event of Default, unless
      (A) the Holders of 100% Percentage Interests of the Outstanding Notes
      consent thereto, (B) the proceeds of such sale or liquidation
      distributable to the Noteholders are sufficient to discharge in full all
      amounts then due and unpaid upon such Notes for principal and/or interest
      or (C) the Indenture Trustee determines that the Collateral will not
      continue to provide sufficient funds for the payment of principal of and
      interest on the Notes as they would have become due if the Notes had not
      been declared due and payable, and the Indenture Trustee obtains the
      consent of Holders of not less than 66-2/3% Percentage Interests of the
      Outstanding Notes. In determining such sufficiency or insufficiency with
      respect to clause (B) and (C) of this subsection (a)(iv), the Indenture
      Trustee may, but need not, obtain and rely upon an opinion of an
      Independent investment banking or accounting firm of national reputation
      as to the feasibility of such proposed action and as to the sufficiency of
      the Collateral for such purpose.

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

            FIRST: in the following order of priority: (a) to the Indenture
      Trustee, an amount equal to all unreimbursed Indenture Trustee Fees and
      indemnities and any other amounts payable to the Indenture Trustee
      pursuant to the Basic Documents and to the Indenture Trustee or Sale
      Agents, as applicable, all reasonable fees and expenses incurred by them
      and their agents and representatives in connection with the enforcement of
      the remedies provided for in this Article V, (b) to the Custodian, an
      amount equal to all unpaid Custodian Fees and indemnities and any other
      amounts payable to the Custodian pursuant to the Basic Documents, (c) to
      the Servicer, an amount equal to (i) all unreimbursed Servicing
      Compensation and (ii) all unreimbursed Nonrecoverable Servicing Advances,
      and (d) to the Servicer, in trust for the Owner Trustee, an amount equal
      to the Owner Trustee Fee and all unpaid Owner Trustee Fees;

            SECOND: the Hedge Funding Requirement to the appropriate Hedging
      Counterparties;

            THIRD: to the Noteholders pro rata, all amounts in respect of
      interest due and owing under the Notes;

                                       29
<PAGE>

            FOURTH: to the Noteholders pro rata, all amounts in respect of
      unpaid principal of the Notes;

            FIFTH: to the Purchaser or any other Indemnified Party (as each such
      term is defined in the Note Purchase Agreement), amounts in respect of
      Issuer/Depositor Indemnities (as defined in the Trust Agreement) and to
      the Initial Noteholder, amounts in respect of Due Diligence Fees (as set
      forth in Section 11.15 of the Sale and Servicing Agreement) until such
      amounts are paid in full;

            SIXTH: to the Owner Trustee, for any amounts to be distributed pro
      rata to the holders of the Trust Certificates pursuant to the Trust
      Agreement.

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

            Section 5.05. Optional Preservation of the Collateral. If the Notes
have been declared to be due and payable under Section 5.02 hereof 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
maintain possession of the Collateral. It is the desire of the parties hereto
and the Noteholders that there be at all times sufficient funds for the payment
of principal of and interest on the Notes, and the Indenture Trustee shall take
such desire into account when determining whether or not to maintain possession
of the Collateral. In determining whether to maintain possession of the
Collateral, the Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Collateral for such purpose.

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

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

            (b) the Noteholders evidencing not less than 25% Percentage
Interests of the Outstanding Notes have made written request to the Indenture
Trustee to institute such Proceeding in respect of such Event of Default in its
own name as Indenture Trustee hereunder;

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

            (d) the Indenture Trustee for 30 days after its receipt of such
notice, request and offer of indemnity has failed to institute such Proceeding;
and

                                       30
<PAGE>

            (e) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 30-day period by the Majority
Noteholders.

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

            In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders,
neither of which evidences Percentage Interests of the Outstanding Notes greater
than 50%, the Indenture Trustee in its sole discretion may determine what
action, if any, shall be taken, notwithstanding any other provisions of this
Indenture and shall have no obligation or liability to any such group of
Noteholders for such action or inaction.

            Section 5.07. Unconditional Rights of Noteholders to Receive
Principal and/or Interest. Notwithstanding any other provisions in this
Indenture, any Noteholder shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Note on or after the applicable Maturity Date thereof expressed in such
Note or in this Indenture (or, in the case of redemption, on or after the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such 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, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.

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

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

                                       31
<PAGE>

            Section 5.11. Control by Noteholders. The Majority Noteholders 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,
however, that:

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

            (b) subject to the express terms of Section 5.04(a)(iv) hereof, any
direction to the Indenture Trustee to sell or liquidate the Collateral shall be
by Holders of Notes representing Percentage Interests of the Outstanding Notes
of not less than 100%;

            (c) if the conditions set forth in Section 5.05 hereof have been
satisfied and the Indenture Trustee elects to retain the Collateral pursuant to
such Section, then any direction to the Indenture Trustee by Holders of Notes
representing Percentage Interests of the Outstanding Notes of less than 100% to
sell or liquidate the Collateral shall be of no force and effect; and

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

            In connection with any sale of the Collateral in accordance with
paragraph (c) above, the Majority Noteholders may, in their sole discretion
appoint agents to effect the sale of the Collateral (such agents, "Sale
Agents"), which Sale Agents may be Affiliates of any Noteholder. The Sale Agents
shall be entitled to reasonable compensation in connection with such activities
from the proceeds of such sale.

            Notwithstanding the rights of the Noteholders set forth in this
Section 5.11. subject to Section 6.01 hereof, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to such
action.

            Section 5.12. Waiver of Past Defaults. The Majority Noteholders may
waive any past Default or Event of Default and its consequences, except a
Default (a) in the payment of principal of or interest on any of the Notes or
(b) in respect of a covenant or provision hereof that cannot be modified or
amended without the consent of each Noteholder. In the case of any such waiver,
the Issuer, the Indenture Trustee and Noteholders shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereto.

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

                                       32
<PAGE>

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

            Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.

            Section 5.15. 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 Collateral or
upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.04(b) hereof.

            Section 5.16. Performance and Enforcement of Certain Obligations.

            (a) Promptly following a request from the Indenture Trustee to do so
and at the Administrator's expense, the Issuer shall take all such lawful action
as the Indenture Trustee may request to compel or secure the performance and
observance by the Loan Originator and the Servicer, as applicable, of each of
their obligations to the Issuer under or in connection with the Sale and
Servicing Agreement or the Loan Purchase Agreement, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Sale and Servicing Agreement to the extent and in the
manner directed by the Indenture Trustee, including the transmission of notices
of default on the part of the Loan Originator or the Servicer thereunder

                                       33
<PAGE>

and the institution of legal or administrative actions or proceedings to compel
or secure performance by the Loan Originator or the Servicer of each of their
obligations under the Sale and Servicing Agreement and the Loan Purchase
Agreement.

            (b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in writing
or by telephone, confirmed in writing promptly thereafter) of the Majority
Noteholders shall, subject to Section 5.06(c) exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Loan Originator or the
Servicer under or in connection with the Sale and Servicing Agreement or the
Loan Purchase Agreement, including the right or power to take any action to
compel or secure performance or observance by the Loan Originator or the
Servicer, as the case may be, of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension, or waiver under the Sale and Servicing Agreement, and any right of
the Issuer to take such action shall be suspended.

                                   ARTICLE VI

                              THE INDENTURE TRUSTEE

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

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

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

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

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

            (i) this paragraph does not limit the effect of paragraph (b) of
      this Section 6.0l;

            (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;

                                       34
<PAGE>

            (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 hereof; and

            (iv) Reserved.

            (d) Reserved.

            (e) The Indenture Trustee shall not be liable for interest on any
money received by it and held in a Trust Account except as may be provided in
the Sale and Servicing Agreement or as the Indenture Trustee may agree in
writing with the Issuer.

            (f) Money held in trust by the Indenture Trustee shall be segregated
from other funds except to the extent permitted by law or the terms of this
Indenture or the Sale and Servicing Agreement.

            (g) 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; provided, however, that the Indenture Trustee
shall not refuse or fail to perform any of its duties hereunder solely as a
result of nonpayment of its normal fees and expenses and provided, further, that
nothing in this Section 6.01(g) shall be construed to limit the exercise by the
Indenture Trustee of any right or remedy permitted under this Indenture or
otherwise in the event of the Issuer's failure to pay the Indenture Trustee's
fees and expenses pursuant to Section 6.07 hereof.

            (h) 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 6.01.

            (i) The Indenture Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any Event of Default (other than an Event
of Default pursuant to Section 5.01(a) or (b) hereof) unless a Responsible
Officer of the Indenture Trustee shall have received written notice thereof or
otherwise shall have actual knowledge thereof. In the absence of receipt of
notice or such knowledge, the Indenture Trustee may conclusively assume that
there is no Event of Default.

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

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

                                       35
<PAGE>

            (c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee.

            (d) The Indenture Trustee shall not be liable for (i) any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that such action or omission by
the Indenture Trustee does not constitute willful misconduct, negligence or bad
faith; or (ii) any action or inaction on the part of the Custodian.

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

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

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

            Section 6.05. Notices of Default. If a Default occurs and is
continuing and if it is actually known to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall mail to each Noteholder and each party to
the Master Disposition Confirmation Agreement notice of the Default within two
Business Days after it receives actual notice of such occurrence.

            Section 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information specifically requested
by each Noteholder and in the Indenture Trustee's possession and as may be
reasonably required to enable such Noteholder to prepare its federal and state
income tax returns.

            Section 6.07. Compensation and Indemnity. As compensation for its
services hereunder, the Indenture Trustee shall be entitled to receive, on each
Payment Date, the Indenture Trustee's Fee pursuant to Section 8.02(c) hereof
(which compensation shall not be limited by any law on compensation of a trustee
of an express trust) and shall be entitled to reimbursement by the Servicer for
all reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Indenture Trustee's agents, counsel, accountants and experts.
The Issuer agrees to cause the Servicer to indemnify the Indenture Trustee, the
Paying Agent and their officers, directors, employees and agents against any and
all loss, liability or expense (including reasonable attorneys' fees) incurred
by it or them in

                                       36
<PAGE>

connection with the administration of this trust and the performance of its or
their duties under the Basic Documents. The Indenture Trustee shall notify the
Issuer and the Servicer promptly of any claim for which it may seek indemnity.
Failure by the Indenture Trustee so to notify the Issuer and the Servicer shall
not relieve the Issuer or the Servicer of its or their obligations hereunder.
The Issuer shall, or shall cause the Servicer to, defend any such claim;
provided, however, that if the defendants with respect to any such claim include
the Issuer and/or the Servicer and the Indenture Trustee, and the Indenture
Trustee shall have reasonably concluded that there may be legal defenses
available to it which are different from or in addition to those defenses
available to the Issuer or the Servicer, as the case may be, the Indenture
Trustee shall have the right, at the expense of the Servicer, to select separate
counsel to assert such legal defenses and to otherwise defend itself against
such claim. Neither the Issuer nor the Servicer need reimburse any expense or
indemnify against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee's own willful misconduct, negligence or
bad faith.

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

            Notwithstanding anything in this Section 6.07 to the contrary, all
amounts due the Indenture Trustee hereunder shall be payable in the first
instance by the Servicer and. if not paid by the Servicer within 60 days after
payment is requested from the Servicer by the Indenture Trustee, in accordance
with the priorities set forth in Section 5.01 of the Sale and Servicing
Agreement.

            Section 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee
may resign at any time by so notifying the Issuer. The Majority Noteholders may
remove the Indenture Trustee (with the consent of the Majority
Certificateholders, not to be unreasonably withheld) by so notifying the
Indenture Trustee and may appoint a successor Indenture Trustee; provided, that
all of the reasonable costs and expenses incurred by the Indenture Trustee in
connection with such removal shall be reimbursed to it prior to the
effectiveness of such removal. The Issuer shall remove the Indenture Trustee if:

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

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

            (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.

                                       37
<PAGE>

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

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

            If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Majority Noteholders 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 hereof,
any Noteholder may petition any court of competent jurisdiction for the removal
of the Indenture Trustee and the appointment of a successor Indenture Trustee.

            Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section 6.08. the Issuer's and the Administrator's obligations under
Section 6.07 hereof shall continue for the benefit of the retiring Indenture
Trustee.

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

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

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

            (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Collateral may

                                       38
<PAGE>

at the time be located, the Indenture Trustee shall have the power and may
execute and deliver all instruments to appoint one or more Persons to act as a
co-trustee or co-trustees, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity
and for the benefit of the Noteholders, such title to the Collateral, or any
part hereof, and, subject to the other provisions of this Section 6.10, 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 hereof and no notice to Noteholders of the appointment of any
co-trustee or separate trustee shall be required under Section 6.08 hereof.

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

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

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

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

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

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

                                       39
<PAGE>

            Section 6.11. Eligibility. The Indenture Trustee shall (i) have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition or (ii) otherwise be acceptable in
writing to the Majority Noteholders.

                                   ARTICLE VII

                         NOTEHOLDERS' LISTS AND REPORTS

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

            Section 7.02. Preservation of Information. 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 hereof and the names and addresses
of 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 7.01 upon receipt of a new list so furnished.

            Section 7.03. 144A Information. The Indenture Trustee, to the extent
it has any such information in its possession, shall provide to any Noteholder
and any prospective transferee designated by any such Noteholder information
regarding the Notes and the Loans and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
under the Securities Act for transfer of any such Note without registration
thereof under the Securities Act pursuant to the registration exemption provided
by Rule 144A under the Securities Act.

                                  ARTICLE VIII

                      ACCOUNTS, DISBURSEMENTS AND RELEASES

            Section 8.01. Collection of Money. General. 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 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 Collateral, 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

                                       40
<PAGE>

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 hereof.

            Section 8.02. Trust Accounts; Distributions. (a) On or prior to the
Closing Date, the Issuer shall cause the Servicer to establish and maintain, in
the name of the Indenture Trustee for the benefit of the Noteholders, or on
behalf of the Owner Trustee for the benefit of the Securityholders, the Trust
Accounts as provided in the Sale and Servicing Agreement. The Servicer shall
deposit amounts into each of the Trust Accounts in accordance with the terms
hereof, the Sale and Servicing Agreement and the Payment Statements.

            (b) Collection Account. With respect to the Collection Account, the
Paying Agent shall make such withdrawals and distributions as specified in
Section 5.01(c)(1) of the Sale and Servicing Agreement in accordance with the
terms thereof.

            (c) Distribution Account. With respect to the Distribution Account,
the Paying Agent shall make (i) such deposits as specified in Sections
5.01(c)(2)(A), 5.01(c)(2)(B), 5.05(e), 5.05(f), 5.05(g), and 5.05(h) of the Sale
and Servicing Agreement and (ii) such withdrawals and distributions as specified
in Section 5.01(c)(3) of the Sale and Servicing Agreement in accordance with the
terms thereof.

            (d) Transfer Obligation Account. With respect to the Transfer
Obligation Account, the Paying Agent shall make (i) such deposits as specified
in Section 5.01(c)(3)(vii) of the Sale and Servicing Agreement and (ii) such
withdrawals and distributions as specified in Sections 5.05(d), 5.05(e),
5.05(f), 5.05(g), 5.05(h), and 5.05 (i) of the Sale and Servicing Agreement in
accordance with the terms thereof.

            (e) Reserved.

            (f) Advance Account. With respect to the Advance Account, the Issuer
shall cause the Servicer to make such withdrawals specified in Section 2.06 of
the Sale and Servicing Agreement.

            Section 8.03. General Provisions Regarding Trust Accounts. (a) All
or a portion of the funds in the Collection Account and the Transfer Obligation
Account shall be invested in Permitted Investments in accordance with the
provisions of Section 5.03(b) of the Sale and Servicing Agreement. The Indenture
Trustee will not make any investment of any funds or sell any investment held in
the Collection Account or the Transfer Obligation Account (other than in
Permitted Investments in accordance with Section 5.03(b) of the Sale and
Servicing Agreement) unless the security interest Granted and perfected in such
account will continue to be perfected in such investment or the proceeds of such
sale, in either case without any further action by any Person, as evidenced by
an Opinion of Counsel delivered to the Indenture Trustee by the Initial
Noteholder or the Servicer, as the case may be.

            (b) Subject to Section 6.01 (c) hereof, the Indenture Trustee shall
not in any way be held liable by reason of any insufficiency in the Collection
Account or the Transfer Obligation Account resulting from any loss on any
Eligible Investment included therein.

                                       41
<PAGE>

            (c) If (i) the Initial Noteholder or the Servicer, as the case may
be, shall have failed to give investment directions for any funds on deposit in
the Collection Account or the Transfer Obligation Account to the Indenture
Trustee by 2:00 p.m. New York City time (or such other time as may be agreed by
the Issuer and Indenture Trustee) on any Business Day or (ii) a Default or Event
of Default shall have occurred and be continuing with respect to the Notes but
the Notes shall not have been declared due and payable pursuant to Section 5.02
hereof or (iii) if such Notes shall have been declared due and payable following
an Event of Default, amounts collected or receivable from the Collateral are
being applied in accordance with Section 5.05 hereof as if there had not been
such a declaration, then the Indenture Trustee shall, to the fullest extent
practicable, invest and reinvest funds in the Collection Account and the
Transfer Obligation Account in one or more Permitted Investments specified in
item (3) in the definition thereof.

            Section 8.04. The Paying Agent. The initial Paying Agent shall be
the Servicer. The Paying Agent may be removed by the Initial Noteholder in its
sole discretion at any time. Upon removal of the Paying Agent, the Initial
Noteholder will appoint a successor Paying Agent within 30 days; provided that
the Indenture Trustee will be the Paying Agent until such successor is
appointed. Upon receiving written notice from the Initial Noteholder that the
Paying Agent has been terminated, the Indenture Trustee will immediately
terminate the Paying Agent's access to any and all Trust Accounts.

            Section 8.05. Release of Collateral. (a) Subject to the payment of
its reasonable fees and expenses pursuant to Section 6.07 hereof, the Indenture
Trustee may, and when required by the provisions of this Indenture shall,
execute instruments acceptable to it and prepared and delivered to it by the
Issuer to release property from the lien of this Indenture, or convey the
Indenture Trustee's interest in the same, without recourse, representation or
warranty in a manner as provided in the Custodial Agreement and under
circumstances that are not inconsistent with the provisions of this Indenture
and the other Basic Documents. No party relying upon an instrument executed by
the Indenture Trustee as provided in this Article VIII shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any moneys.

            (b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due to the Noteholders (and their Affiliates), the
Initial Noteholder, the Sales Agents, the Indenture Trustee, the Owner Trustee
and the Custodian under the Basic Documents have been paid, release any
remaining portion of the Collateral that secured the Notes from the lien of this
Indenture and release to the Issuer or any other Person entitled thereto any
funds then on deposit in the Trust Accounts. The Indenture Trustee shall release
property from the lien of this Indenture pursuant to this subsection (b) only
upon receipt of an Issuer Request accompanied by an Officer's Certificate and an
Opinion of Counsel meeting the applicable requirements of Section 11.01 hereof.

            Section 8.06. Opinion of Counsel. Except to the extent specifically
permitted by the terms of the Basic Documents, the Indenture Trustee shall
receive at least seven Business Days' prior notice when requested by the Issuer
to take any action pursuant to Section 8.05(a) hereof, accompanied by copies of
any instruments involved, and the Indenture Trustee may also require, as a
condition to such action, an Opinion of Counsel, in form and substance
satisfactory to the Indenture Trustee, from the Issuer concluding that all
conditions precedent to the taking of such action have

                                       42
<PAGE>

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

                                   ARTICLE IX

                            SUPPLEMENTAL INDENTURES

            Section 9.01. Supplemental Indentures Without the Consent of the
Noteholders. Without the consent of any Noteholder but with prior notice to the
Majority Noteholders, the Issuer and the Indenture Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Indenture Trustee, for any of the following purposes:

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

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

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

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

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

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

            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.

                                       43
<PAGE>

            Section 9.02. Supplemental Indentures with Consent of Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also
may, with the consent of the Majority Noteholders, 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 provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of any Noteholder under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of each Noteholder affected thereby:

            (a) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal balance thereof, the interest rate
thereon or the Termination Price with respect thereto, change the provisions of
this Indenture relating to the application of collections on, or the proceeds of
the sale of, the Collateral to payment of principal of or interest on the Notes,
or change any place of payment where, or the coin or currency in which, any Note
or the interest thereon is payable, or impair the right to institute suit for
the enforcement of the provisions of this Indenture requiring the application of
funds available therefor, as provided in Article V hereof, to the payment of any
such amount due on the Notes on or after the respective due dates thereof (or,
in the case of redemption, on or after the Redemption Date);

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

            (c) modify or alter the provisions of the definition of the term
"Outstanding" or "percentage Interest";

            (d) reduce the Percentage Interest of the Outstanding Notes, the
consent of the Holders of which is required to direct the Indenture Trustee to
direct the Issuer to sell or liquidate the Collateral pursuant to Section 5.04
hereof;

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

            (f) modify any of the provisions of this Indenture in such manner as
to affect the calculation of the amount of any payment of interest or principal
due on any Note on any Payment Date (including the calculation of any of the
individual components of such calculation) or to adversely affect the rights of
the Noteholders to the benefit of any provisions for the mandatory redemption of
the Notes contained herein; or

            (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 Collateral or,
except as otherwise permitted or contemplated herein, terminate the lien of this
Indenture on any property at any time subject hereto or deprive any Noteholder
of the security provided by the lien of this Indenture.

                                       44
<PAGE>

            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 each Noteholder, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.

            In connection with requesting the consent of the Noteholders
pursuant to this Section 9.02, the Indenture Trustee shall mail to the Holders
of the Notes to which such amendment or supplemental indenture relates a notice
prepared by the Issuer setting forth in general terms the substance of such
supplemental indenture. It shall not be necessary for any Act of Noteholders
under this Section 9.02 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall approve the
substance thereof.

            Section 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02 hereof, 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 Indentures. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Holders of the Notes
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.

            Section 9.05. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.

                                    ARTICLE X

                        REDEMPTION OF NOTES; PUT OPTION

            Section 10.01. Redemption. The Servicer may, at its option, effect
an early redemption of the Notes on any Payment Date on or after the Clean-up
Call Date. The Servicer shall effect such early termination in the manner
specified in and subject to the provisions of Section 10.02 of the Sale and
Servicing Agreement.

                                       45
<PAGE>

            The Servicer shall furnish the Indenture Trustee with notice of any
such redemption in order to facilitate the Indenture Trustee's compliance with
its obligation to notify the Noteholders of such redemption in accordance with
Section 10.02 hereof.

            Section 10.02. Form of Redemption Notice. Notice of redemption under
Section 10.01 hereof shall be by first-class mail, postage prepaid, or by
facsimile mailed or transmitted not later than 10 days prior to the applicable
Redemption Date to each Noteholder, as of the close of business on the Record
Date preceding the applicable Redemption Date, at such Noteholder's address or
facsimile number appearing in the Note Register.

            All notices of redemption shall state:

            (i) the Redemption Date;

            (ii) that on the Redemption Date Noteholders shall receive the Note
      Redemption Amount; and

            (iii) the place where such Notes are to be surrendered for payment
      of the Termination Price (which shall be the office or agency of the
      Issuer to be maintained as provided in Section 3.02 hereof).

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

            Section 10.03. Notes Payable on Redemption Date. The Notes to be
redeemed shall following notice of redemption as required by Section 10.02
hereof (in the case of redemption pursuant to Section 10.01) hereof, on the
Redemption Date become due and payable at the Note Redemption Amount and (unless
the Issuer shall default in the payment of the Note Redemption Amount) no
interest shall accrue thereon for any period after the date to which accrued
interest is calculated for purposes of calculating the Note Redemption Amount.
The Issuer may not redeem the Notes unless all outstanding obligations under the
Notes have been paid in full.

            Section 10.04. Put Option. The Majority Noteholders may, at their
option, put all or any portion of the Note Principal Balance of the Notes to the
Issuer on any date upon giving notice in the manner set forth in Section 10.05.
On each Put Date, the Issuer shall purchase the Note Principal Balance in the
manner specified in and subject to the provisions of Section 10.04 of the Sale
and Servicing Agreement.

            Section 10.05. Form of Put Option Notice. Notice of exercise of a
Put Option under Section 10.04 hereof shall be given by the Majority Noteholders
(including to the Indenture Trustee) by first-class mail, postage prepaid, or by
facsimile mailed or transmitted not later than 5 days prior to the date on which
the Notes shall be repurchased by the Issuer.

                                       46
<PAGE>

            Section 10.06. Notes Payable on Put Date. The Note Principal Balance
to be put to the Issuer shall, following notice of the exercise of the Put
Option as required by Section 10.05 hereof, on the Put Date become due and
payable at the Note Redemption Amount and (unless the Issuer shall default in
the payment of the Note Redemption Amount) no interest shall accrue thereon for
any period after the date to which accrued interest is calculated for purposes
of calculating the Note Redemption Amount.

                                   ARTICLE XI

                                  MISCELLANEOUS

            Section 11.01. Compliance Certificates and Opinions, etc. Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture (except with respect to the Servicer's
servicing activity in the ordinary course of its business), 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.

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

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

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

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

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

            Section 11.02. 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.

                                       47
<PAGE>

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

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

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

            Section 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01 hereof) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section 11.03.

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

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

            (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

                                       48
<PAGE>

by the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.

            Section 11.04. Notices, etc., to Indenture Trustee and Issuer. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders or other documents provided or permitted by this Indenture shall be
in writing and if such request, demand, authorization, direction, notice,
consent, waiver or act of Noteholders is to be made upon, given or furnished to
or filed with:

            (i) the Indenture Trustee by any Noteholder or by the Issuer shall
      be sufficient for every purpose hereunder if made, given, furnished or
      filed in writing (including by facsimile) to or with the Indenture Trustee
      at its Corporate Trust Office, or

            (ii) the Issuer by the Indenture Trustee or by any Noteholder shall
      be sufficient for every purpose hereunder if in writing and made, given,
      furnished, filed or transmitted via facsimile to the Issuer at: Option One
      Owner Trust 2001-1A, c/o Wilmington Trust Company as Owner Trustee, One
      Rodney Square North. 1100 North Market Street, Wilmington. Delaware 19890,
      Attention: Corporate Trust Department, telecopy number: (302) 651-8882,
      telephone number: (302) 651-1000, or at any other address or facsimile
      number previously furnished in writing to the Indenture Trustee by the
      Issuer or the Administrator. The Issuer shall promptly transmit any notice
      received by it from the Noteholders to the Indenture Trustee.

            Section 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have duly been given.

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

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

                                       49
<PAGE>

            Section 11.06. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.

            Section 11.07. Successors and Assigns. All covenants and agreements
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.

            Section 11.08. Separability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

            Section 11.09. Benefits of Indenture. Nothing in this Indenture or
in the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder. and the Noteholders, and any
other party secured hereunder, and any other Person with an ownership interest
in any part of the Collateral, any benefit or any legal or equitable right,
remedy or claim under this Indenture.

            Section 11.10. Legal Holidays. In any case where the date on which
any payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.

            Section 11.11. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS. RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

            Section 11.12. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

            Section 11.13. 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; provided, however, that the
expense of such Opinion of Counsel shall in no event be an expense of 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 11.14. Trust 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

                                       50
<PAGE>

or, except as expressly provided for in Article VI hereof, 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, agent
or "control person" within the meaning of the Securities Act and the Exchange
Act, 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
expressly have agreed (it being understood that the Indenture Trustee and the
Owner Trustee have no such obligations in their individual capacity) and except
that any such partner, owner or beneficiary of the Issuer 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 VI, VII and VIII of the Trust Agreement.

            Section 11.15. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Depositor or the
Issuer, or join in any institution against the Depositor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or
similar law, in connection with any obligations relating to the Notes, this
Indenture or any of the Basic Documents.

            Section 11.16. Inspection. The Issuer agrees that, on reasonable
prior 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
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 reasonably be requested and at the
expense of the Servicer. The Indenture Trustee shall and shall cause its
representatives to hold in confidence all such information except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.

            Section 11.17. Limitation on Liability. It is expressly understood
and agreed by the parties hereto that (a) this Indenture is executed and
delivered by Wilmington Trust Company, not individually or personally, but
solely as Owner Trustee of Option One Owner Trust 2001-1A, in the exercise of
the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Issuer, (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company, individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
Person claiming by, through or under the parties hereto and (d) under no
circumstances shall Wilmington Trust Company be personally liable for the

                                       51
<PAGE>

payment of any indebtedness or expenses of the Issuer or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Issuer under this Indenture or any other related documents.

                                       52
<PAGE>

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

                                    OPTION ONE OWNER TRUST 2001-1A

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

                                    By: /s/ Mary Kay Pupillo
                                        ----------------------------------------
                                    Name: Mary Kay Pupillo
                                    Title: Senior  Financial Services Officer

                                    WELLS FARGO BANK MINNESOTA, NATIONAL
                                    ASSOCIATION, as Indenture Trustee

                                    By: /s/ Amy Doyle
                                        ----------------------------------------
                                    Name: Amy Doyle
                                    Title: Assistant Vice President
<PAGE>

STATE OF DELAWARE )

                  )SS.:

COUNTY OF  NEW CASTLE

            BEFORE ME, the undersigned authority, a Notary Public in and for
said county and state, on this day personally appeared Mary Kay Pupillo, known
to me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said
Wilmington Trust Company, a Delaware banking corporation, not in its individual
capacity, but solely as Owner Trustee on behalf of OPTION ONE OWNER TRUST 2001-1
A. a Delaware business trust, and that such person executed the same as the act
of said business trust for the purpose and consideration therein expressed, and
in the capacities therein stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 17th day of April, 2001.

                                                /s/ Susanne M. Gula
                                                --------------------------------
                                                Notary Public

                                                     SUSANNE M.GULA
(Seal)                                               NOTARY PUBLIC
                                         My Commission expires November 21, 2001
My commission expires:

_______________________

<PAGE>

STATE OF  Maryland )

                      )SS.:

COUNTY OF ____________)

            BEFORE ME, the undersigned authority, a Notary Public in and for
said county and state, on this day personally appeared Amy Doyle, known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of WELLS FARGO BANK
MINNESOTA, NATIONAL ASSOCIATION, and that such person executed the same as the
act of said corporation for the purpose and consideration therein stated.

            GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 18 day of April. 2001

                                    /s/ Joan M. Clark
                                    --------------------------------------------
                                    Notary Public

 (Seal)                            Joan M. Clark
                                  NOTARY PUBLIC
 My commission expires:        BALTIMORE CITY, MARYLAND
________________________________Comm. Exp. August 10, 2004

<PAGE>

                                    EXHIBIT A

                                  FORM OF NOTES

THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
MAXIMUM NOTE PRINCIPAL BALANCE SHOWN ON THE FACE HEREOF. ANY PURCHASER OF THIS
NOTE MAY ASCERTAIN THE OUTSTANDING PRINCIPAL AMOUNT HEREOF BY INQUIRY OF THE
INDENTURE TRUSTEE.

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "1933 ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION, UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.

THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH NOTE ONLY (A) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE 1933 ACT, (B) FOR SO LONG AS THIS NOTE IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE 1933 ACT, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE 1933 ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A OR (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
WITHIN THE MEANING OF SUBPARAGRAPH (A)(l), (2), (3) OR (7) OF RULE 501 UNDER THE
1933 ACT THAT IS ACQUIRING THE NOTE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE 1933 ACT, IN EACH CASE IN COMPLIANCE WITH THE REQUIREMENTS OF
THE INDENTURE AND APPLICABLE STATE SECURITIES LAWS.

THIS NOTE MAY NOT BE TRANSFERRED UNLESS THE INDENTURE TRUSTEE HAS RECEIVED A
CERTIFICATE FROM THE TRANSFEREE TO THE EFFECT THAT EITHER (I) THE TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT PLAN OR ARRANGEMENT SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (EACH, A "PLAN"),
AND IS NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (II) IF THE
TRANSFEREE IS A PLAN OR IS ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A
PLAN, THE CONDITIONS FOR EXEMPTIVE RELIEF UNDER AT LEAST ONE OF THE FOLLOWING
PROHIBITED TRANSACTION CLASS EXEMPTIONS HAVE BEEN SATISFIED: PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 96-23 (RELATING TO TRANSACTIONS EFFECTED BY
AN "IN-HOUSE ASSET

                                       A-1
<PAGE>

MANAGER"), PTCE 95-60 (RELATING TO TRANSACTIONS INVOLVING INSURANCE COMPANY
GENERAL ACCOUNTS), PTCE 91-38 (RELATING TO TRANSACTIONS INVOLVING BANK
COLLECTIVE INVESTMENT FUNDS), PTCE 90-1 (RELATING TO TRANSACTIONS INVOLVING
INSURANCE COMPANY POOLED SEPARATE ACCOUNTS) AND PTCE 84-14 (RELATING TO
TRANSACTIONS EFFECTED BY A "QUALIFIED PROFESSIONAL ASSET MANAGER").

                                       A-2
<PAGE>

Maximum Note Principal Balance: ($)__________________________
Initial Percentage Interest: ________%
No._

                         OPTION ONE OWNER TRUST 2001-1A

                              MORTGAGE-BACKED NOTES

            OPTION ONE OWNER TRUST 2001-1A, a Delaware business trust (the
"Issuer"). for value received, hereby promises to pay to_____________, or
registered assigns (the "Noteholder"), the principal sum of__________________
____________________________________________________($__________________) or so
much thereof as may be advanced and outstanding hereunder and to pay interest on
such principal sum or such part thereof as shall remain unpaid from time to
time, at the rate and at the times provided in the Sale and Servicing
Agreement and the Indenture. Principal of this Note is payable on each Payment
Date in an amount equal to the result obtained by multiplying (i) the Percentage
Interest of this Note by (ii) the principal amount distributed in respect of
such Payment Date.

            The Outstanding Note Principal Balance of this Note bears interest
at the Note Interest Rate. On each Payment Date amounts in respect of interest
on this Note will be paid in an amount equal to the result obtained by
multiplying (i) the Percentage Interest of this Note by (ii) the aggregate
amount paid in respect of interest on the Notes with respect to such Payment
Date.

            Capitalized terms used but not defined herein have the meanings set
forth in the Indenture (the "Indenture"), dated as of April 1, 2001 between the
Issuer and Wells Fargo Bank Minnesota. National Association, as Indenture
Trustee (the "Indenture Trustee") or, if not defined therein, the Sale and
Servicing Agreement (the "Sale and Servicing Agreement"), dated as of April 1,
2001 among the Issuer, the Depositor, the Servicer, the Loan Originator and the
Indenture Trustee on behalf of the Noteholders.

            By its acceptance of this Note, each Noteholder covenants and
agrees, until the earlier of (a) the termination of the Revolving Period and (b)
the Maturity Date, on each Transfer Date to advance amounts in respect of
Additional Note Principal Balance hereunder to the Issuer, subject to and in
accordance with the terms of the Indenture, the Sale and Servicing Agreement and
the Note Purchase Agreement.

            In the event of an advance of Additional Note Principal Balance by
the Noteholders as provided in Section 2.01(c) of the Sale and Servicing
Agreement, each Noteholder shall, and is hereby authorized to, record on the
schedule attached to its Note the date and amount of any Additional Note
Principal Balance advanced by it, and each repayment thereof; provided that
failure to make any such recordation on such schedule or any error in such
schedule shall not adversely affect any Noteholder's rights with respect to its
Additional Note Principal Balance and its right to receive interest payments in
respect of the Additional Note Principal Balance held by such Noteholder.

                                       A-3
<PAGE>

            Absent manifest error, the Note Principal Balance of each Note as
set forth in the notations made by the related Noteholder on such Note shall be
binding upon the Indenture Trustee and the Issuer; provided that failure by a
Noteholder to make such recordation on its Note or any error in such notation
shall not adversely affect any Noteholder's rights with respect to its Note
Principal Balance and its right to receive principal and interest payments in
respect thereof.

            The Servicer may, at its option, effect an early redemption of the
Notes for an amount equal to the Note Redemption Amount on any Payment Date on
or after the Clean-up Call Date. The Servicer shall effect such early
termination by providing notice thereof to the Indenture Trustee and Owner
Trustee and by purchasing all of the Loans at a purchase price, payable in cash,
equal to the Termination Price.

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

            The statements in the legend set forth above are an integral part of
the terms of this Note and by acceptance hereof each Holder of this Note agrees
to be subject to and bound by the terms and provisions set forth in such legend.

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

            THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED
WITHIN THE STATE OF NEW YORK AND WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PROVISIONS THEREOF.

                                       A-4
<PAGE>

            IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.

Date: April_______, 2001

                                   OPTION ONE OWNER TRUST 2001-1A

                                   By: Wilmington Trust Company, not in its
                                       individual capacity but solely as Owner
                                       Trustee under the Trust Agreement

                                   By: _________________________________________
                                                 Authorized Signatory

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Date: April_______, 2001

                                   WELLS FARGO BANK MINNESOTA. NATIONAL
                                   ASSOCIATION, not in its individual capacity
                                   but solely as Indenture Trustee

                                   By: _________________________________________
                                                 Authorized Signatory

                                       A-5
<PAGE>

                                [Reverse of Note]

            This Note is one of the duly authorized Notes of the Issuer,
designated as its Mortgage-Backed Notes (herein called the "Notes"), all issued
under the Indenture. Reference is hereby made to the Indenture and all
indentures supplemental thereto, and the Sale and Servicing Agreement for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Holders of the Notes. To the extent that any provision
of this Note contradicts or is inconsistent with the provisions of the Indenture
or the Sale and Servicing Agreement, the provisions of the Indenture or the Sale
and Servicing Agreement, as applicable, shall control and supersede such
contradictory or inconsistent provision herein. The Notes are subject to all
terms of the Indenture and the Sale and Servicing Agreement.

            The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied in accordance with the Indenture
and the Sale and Servicing Agreement.

            The entire unpaid principal amount of this Note shall be due and
payable on the earlier of the Maturity Date, the Redemption Date and the Final
Put Date, if any, pursuant to Articles X of the Sale and Servicing Agreement and
the Indenture. Notwithstanding the foregoing, the entire unpaid principal amount
of the Notes shall be due and payable on the date on which an Event of Default
shall have occurred and be continuing and the Indenture Trustee, at the
direction or upon the prior written consent of the Majority Noteholders, has
declared the Notes to be immediately due and payable in the manner provided in
Section 5.02 of the Indenture. All principal payments on the Notes shall be made
pro rata to the Holders of the Notes entitled thereto.

            The Collateral secures this Note and all other Notes equally and
ratably without prejudice, priority or distinction between any Note and any
other Note. The Notes are non-recourse obligations of the Issuer and are limited
in right of payment to amounts available from the Collateral, provided in the
Indenture. The Issuer shall not otherwise be liable for payments on the Notes,
and none of the owners, agents, officers, directors, employees, or successors or
assigns of the Issuer shall be personally liable for any amounts payable, or
performance due, under the Notes or the Indenture.

            Any installment of interest or principal on this Note shall be paid
on the applicable Payment Date to the Person in whose name this Note (or one or
more Predecessor Notes) is registered in the Note Register as of the close of
business on the related Record Date by wire transfer in immediately available
funds to the account specified in writing by the related Noteholder to the
extent provided by the Indenture and otherwise by check mailed to the
Noteholder.

            Any reduction in the principal amount of this Note (or any one or
more Predecessor Notes) effected by any payments made on any Payment Date shall
be binding upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. Any increase in the principal amount of this Note (or any
one or more Predecessor Notes) effected by payments to the Issuer of Additional
Note Principal Balances shall be binding upon the Issuer and shall inure to the
benefit of all future Holders of this

                                       A-6
<PAGE>

Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon.

            As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in the form attached hereto 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 Securities Transfer Agent's Medallion Program
("STAMP"), and thereupon one or more new Notes of authorized denominations and
in the same aggregate principal amount will be issued to the designated
transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the issuer may require
the Noteholder to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.

            Each Noteholder, by acceptance of a Note or a beneficial interest in
a Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under the Indenture or any certificate or
other writing delivered in connection therewith, against (i) the 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 "control person" within the meaning of the
1933 Act and the Exchange Act 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 Noteholder, by acceptance of a Note or a beneficial interest in
a Note, covenants and agrees by accepting the benefits of the Indenture that
such Noteholder will not at any time institute against the Issuer, or join in
any institution against the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes or the Basic Documents.

            The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness of the
Issuer secured by the Collateral. Each Noteholder, by acceptance of a Note,
agrees to treat the Notes for federal, state and local income, single business
and franchise tax purposes as indebtedness of the Issuer. Each Noteholder, by
its acceptance of a Note, represents and warrants that the number of ICA Owners
with respect to all of its Notes shall not exceed four.

            Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose

                                       A-7
<PAGE>

name this Note (as of the day of determination or as of such other date as may
be specified in the Indenture) is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and 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 rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Majority Noteholders. The Indenture
also contains provisions permitting the Holders of Notes representing specified
Percentage Interests of the Outstanding Notes, on behalf of all of the
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 Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of any Noteholder.

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

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

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

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

                                       A-8
<PAGE>

                                   ASSIGNMENT

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

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

________________________________________________________________________________
                         (name and address of assignee)

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

Dated:___________________________

                                                                              */
                                               _________________________________

                                                     Signature Guaranteed:

                                                                              */
                                               _________________________________

----------
*/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 STAMP.

                                       A-9
<PAGE>

                                Schedule to Note
                          dated as of April_______, 2001
                       of OPTION ONE OWNER TRUST 2001-1A

<TABLE>
<CAPTION>
Date of advance of  Amount of advance                                   Note Principal
 Additional Note    of Additional Note   Percentage   Aggregate Note      Balance of
Principal Balance   Principal Balance     Interest   Principal Balance       Note
------------------  ------------------  -----------  -----------------  --------------
<S>                 <C>                 <C>          <C>                <C>
                                           100%
------------------  ------------------  -----------  -----------------  --------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

------------------  ------------------  -----------  -----------------  --------------
</TABLE>

                                      A-10
<PAGE>

                                  EXHIBIT B-1

                    FORM OF RULE 144A TRANSFEROR CERTIFICATE

Wells Fargo Bank Minnesota, National Association
11000 Broken Land Parkway
Columbia, Maryland 21044

      Re: Option One Owner Trust 2001-1A

      Reference is hereby made to the Indenture dated as of April 1, 2001 (the
"INDENTURE") between Option One Owner Trust 2001-1A (the "TRUST") and Wells
Fargo Bank Minnesota, National Association (the "INDENTURE TRUSTEE").
Capitalized terms used but not defined herein shall have the meanings given to
them in the Sale and Servicing Agreement dated as of April 1, 2001 among the
Trust, Option One Loan Warehouse Corporation (the "DEPOSITOR"). Option One
Mortgage Corporation (the "SERVICER" and the "LOAN ORIGINATOR") and the
Indenture Trustee.

      The undersigned (the "TRANSFEROR") has requested a transfer of
$___________________ current principal balance Notes to [insert name of
transferee].

      In connection with such request, and in respect of such Notes, the
Transferor hereby certifies that such Notes are being transferred in accordance
with (i) the transfer restrictions set forth in the Indenture and the Notes and
(ii) Rule 144A under the Securities Act of 1933, as amended to a purchaser that
the Transferor reasonably believes is a "qualified institutional buyer" within
the meaning of Rule 144A purchasing for its own account or for the account of a
"qualified institutional buyer," which purchaser is aware that the sale to it is
being made in reliance upon Rule 144A, in a transaction meeting the requirements
of Rule 144A and in accordance with any applicable securities laws of any state
of the United States or any other applicable jurisdiction.

      This certificate and the statements contained herein are made for your
benefit and the benefit of the Depositor.

                                                ________________________________
                                                [Name of Transferor]

                                                By: ____________________________
                                                Name:
                                                Title:

Dated: _______________, ___________

                                      B-1-1
<PAGE>

                                   EXHIBIT B-2

                       FORM OF TRANSFEREE CERTIFICATE FOR
                       INSTITUTIONAL ACCREDITED INVESTOR

Wells Fargo Bank Minnesota, National Association
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust Services - Option One Owner Trust 2001-1A

      Re: Option One Owner Trust 2001-1A

      In connection with our proposed purchase of $___________ Note Principal
Balance Mortgage-Backed Notes (the "OFFERED NOTES") issued by Option One Owner
Trust 2001-1A, we confirm that:

(1)   We understand that the Offered Notes have not been, and will not be,
      registered under the Securities Act of 1933, as amended (the "1933 ACT")
      or any state securities laws, and may not be sold except as permitted in
      the following sentence. We agree, on our own behalf and on behalf of any
      accounts for which we are acting as hereinafter stated, that if we should
      sell any Offered Notes we will do so only (A) pursuant to a registration
      statement which has been declared effective under the 1933 Act, (B) for so
      long as the Offered Notes are eligible for resale pursuant to Rule 144A
      under the 1933 Act, to a Person we reasonably believe is a "qualified
      institutional buyer" as defined in Rule 144A that purchases for its own
      account or for the account of a qualified institutional buyer to whom
      notice is given that the transfer is being made in reliance on Rule 144A,
      (C) to an institutional "accredited investor" within the meaning of
      subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the 1933 Act (an
      "INSTITUTIONAL ACCREDITED INVESTOR") that is acquiring the Offered Notes
      for its own account, or for the account of such an Institutional
      Accredited Investor, for investment purposes and not with a view to, or
      for offer or sale in connection with, any distribution in violation of the
      1933 Act, in each case in compliance with the requirements of the
      Indenture dated as of April 1, 2001 between Option One Owner Trust 2001-1A
      and Wells Fargo Bank Minnesota. National Association, as Indenture
      Trustee, and applicable state securities laws: and we further agree, in
      the capacities stated above, to provide to any person purchasing any of
      the Offered Notes from us a notice advising such purchaser that resales of
      the Offered Notes are restricted as stated herein.

(2)   We understand that, in connection with any proposed resale of any Offered
      Notes to an Institutional Accredited Investor, we will be required to
      furnish to the Indenture Trustee and the Depositor a certification from
      such transferee as provided in Section 2.12 of the Indenture to confirm
      that the proposed sale is being made pursuant to an exemption from, or in
      a transaction not subject to, the registration requirements of the 1933
      Act and applicable state securities laws. We further understand that the
      Offered Notes purchased by us will bear a legend to the foregoing effect.

                                      B-2-1
<PAGE>

(3)   We are acquiring the Offered Notes for investment purposes and not with a
      view to or for offer or sale in connection with any distribution in
      violation of the 1933 Act. We have such knowledge and experience in
      financial and business matters as to be capable of evaluating the merits
      and risks of our investment in the Offered Notes, and we and any account
      for which we are acting are each able to bear the economic risk of such
      investment.

(4)   We are an Institutional Accredited Investor and we are acquiring the
      Offered Notes purchased by us for our own account or for one or more
      accounts (each of which is an Institutional Accredited Investor) as to
      each of which we exercise sole investment discretion.

(5)   We have received such information as we deem necessary in order to make
      our investment decision.

(6)   We either (i) are not, and are not acquiring the Offered Notes on behalf
      of or with the assets of, an employee benefit plan or other retirement
      plan or arrangement subject to Title I of ERISA or Section 4975 of the
      Code, or (b) are, or are acquiring the Offered Notes on behalf of or with
      the assets of, an employee benefit plan or other retirement plan or
      arrangement subject to Title 1 of ERISA of Section 4975 of the Code and
      the conditions for exemptive relief under at least one of the following
      prohibited transaction class exemptions have been satisfied: Prohibited
      Transaction Class Exemption ("PTCE") 96-23 (relating to transactions
      effected by an "in-house asset manager"), PTCE 95-60 (relating to
      transactions involving insurance company general accounts). PTCE 91-38
      (relating to transactions involving bank collective investment funds),
      PTCE 90-1 (relating to transactions involving insurance company pooled
      separate accounts), and PTCE 84-14 (relating to transactions effected by a
      "qualified professional asset manager").

      Terms used in this letter which are not otherwise defined herein have the
respective meanings assigned thereto in the Indenture.

      You and the Depositor are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.

                                                ________________________________
                                                [Name of Transferor]

                                                By: ____________________________
                                                Name:
                                                Title:

Dated:________________, ___________

                                      B-2-2
<PAGE>

                                   EXHIBIT B-3

                    FORM OF RULE 144A TRANSFEREE CERTIFICATE

Wells Fargo Bank Minnesota, National Association
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust Services - Option One Owner Trust 2001-1A

      Re: Option One Owner Trust 2001-1A

      1. The undersigned is the _________________ of ___________________ (the
"INVESTOR"), a [corporation duly organized] and existing under the laws
of ________________________ on behalf of which he makes this affidavit.

      2. The Investor either (i) is not, and is not acquiring the Offered Notes
on behalf of or with the assets of, an employee benefit plan or other retirement
plan or arrangement subject to Title I of ERISA or Section 4975 of the Code, or
(b) is, or is acquiring the Offered Notes on behalf of or with the assets of, an
employee benefit plan or other retirement plan or arrangement subject to Title I
of ERISA of Section 4975 of the Code and the conditions for exemptive relief
under at least one of the following prohibited transaction class exemptions have
been satisfied: Prohibited Transaction Class Exemption ("PTCE") 96-23 (relating
to transactions effected by an "in-house asset manager"). PTCE 95-60 (relating
to transactions involving insurance company general accounts), PTCE 91-38
(relating to transactions involving bank collective investment funds), PTCE 90-1
(relating to transactions involving insurance company pooled separate accounts),
and PTCE 84-14 (relating to transactions effected by a "qualified professional
asset manager").

      3. The Investor understands that the Offered Notes have not been, and will
not be, registered under the Securities Act of 1933, as amended (the "1933 ACT")
or any state securities laws, and may not be sold except as permitted in the
following sentence. The Investor agrees, on its own behalf and on behalf of any
accounts for which it is acting as hereinafter stated, that if it should sell
any Offered Notes it will do so only (A) pursuant to a registration statement
which has been declared effective under the 1933 Act, (B) for so long as the
Offered Notes are eligible for resale pursuant to Rule 144A under the 1933 Act,
to a Person it reasonably believes is a "qualified institutional buyer" as
defined in Rule 144A that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the transfer is being
made in reliance on Rule 144A, (C) to an institutional "accredited investor"
within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the
1933 Act (an "INSTITUTIONAL ACCREDITED INVESTOR") that is acquiring the Offered
Notes for its own account, or for the account of such an Institutional
Accredited Investor, for investment purposes and not with a view to, or for
offer or sale in connection with, any distribution in violation of the 1933 Act,
in each case in compliance with the requirements of the Indenture dated as of
April 1, 2001 between Option One Owner Trust 2001-1A and Wells Fargo Bank
Minnesota, National Association, as Indenture Trustee, and applicable state
securities laws; and the Investor further agrees, in the capacities stated
above, to provide to any person purchasing

                                      B-3-1
<PAGE>

any of the Offered Notes from it a notice advising such purchaser that resales
of the Offered Notes are restricted as stated herein.

                   [FOR TRANSFERS IN RELIANCE UPON RULE 144A]

      4. The Investor is a "qualified institutional buyer" (as such term is
defined under Rule 144A under the Securities Act of 1933, as amended (the "1933
ACT"), and is acquiring the Offered Notes for its own account or as a fiduciary
or agent for others (which others also are "qualified institutional buyers").
The Investor is familiar with Rule 144A under the 1933 Act, and is aware that
the transferor of the Offered Notes and other parties intend to rely on the
statements made herein and the exemption from the registration requirements of
the 1933 Act provided by Rule 144A.

                                                ________________________________
                                                [Name of Transferor]

                                                By: ____________________________
                                                Name:
                                                Title:

Dated: _________________, __________

                                      B-3-2
<PAGE>

                                    EXHIBIT C

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "1933 ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION, UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.

THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH NOTE ONLY (A) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE 1933 ACT, (B) FOR SO LONG AS THIS NOTE IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE 1933 ACT, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE 1933 ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A OR (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
1933 ACT THAT IS ACQUIRING THE NOTE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR." FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE 1933 ACT, IN EACH CASE IN COMPLIANCE WITH THE REQUIREMENTS OF
THE INDENTURE AND APPLICABLE STATE SECURITIES LAWS.

THIS NOTE MAY NOT BE TRANSFERRED UNLESS THE INDENTURE TRUSTEE HAS RECEIVED A
CERTIFICATE FROM THE TRANSFEREE TO THE EFFECT THAT EITHER (I) THE TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT PLAN OR ARRANGEMENT SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (EACH, A "PLAN"),
AND IS NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (II) IF THE
TRANSFEREE IS A PLAN, OR IS ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A
PLAN, THE CONDITIONS FOR EXEMPTIVE RELIEF UNDER AT LEAST ONE OF THE FOLLOWING
PROHIBITED TRANSACTION CLASS EXEMPTIONS HAVE BEEN SATISFIED: PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 96-23 (RELATING TO TRANSACTIONS EFFECTED BY
AN "IN-HOUSE ASSET MANAGER"), PTCE 95-60 (RELATING TO TRANSACTIONS INVOLVING
INSURANCE COMPANY GENERAL ACCOUNTS), PTCE 91-38 (RELATING TO TRANSACTIONS
INVOLVING BANK COLLECTIVE INVESTMENT FUNDS), PTCE 90-1 (RELATING TO TRANSACTIONS
INVOLVING INSURANCE COMPANY POOLED SEPARATE ACCOUNTS) AND PTCE 84-14 (RELATING
TO TRANSACTIONS EFFECTED BY A "QUALIFIED PROFESSIONAL ASSET MANAGER").

                                       C-1

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