Document:

<PAGE>   1
                                                                     Exhibit 4.2

                          SALE AND SERVICING AGREEMENT
                                 Dated as of [ ]

                                      among

                          [                           ]
                                    (Seller)

                       Fleet Home Equity Loan Corporation
                                   (Depositor)

                    [     ]HOME EQUITY LOAN TRUST 200_-_
                                     (Trust)

                                [              ]
                                   (Servicer)

                                       and

                                 [             ]
                               (Indenture Trustee)

                    [     ]HOME EQUITY LOAN TRUST 200_-_
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                 PAGE
<S>                                                                                                              <C>
                                   ARTICLE I.
                                   DEFINITIONS

         Section 1.01   Definitions ..........................................................................     2
         Section 1.02   Other Definitional Provisions ........................................................    17
         Section 1.03   Interest Calculations ................................................................    18

                                   ARTICLE II.
                        CONVEYANCE OF THE MORTGAGE LOANS

         Section 2.01   Conveyance of the Mortgage Loans .....................................................    19
         Section 2.02   Acceptance by Indenture Trustee ......................................................    23
         Section 2.03   Representations and Warranties Regarding the Seller and the Servicer..................    24
         Section 2.04   Representations and Warranties of the Seller Regarding the Mortgage Loans.............    26
         Section 2.05   Representations and Warranties of the Depositor.......................................    32
         Section 2.06   Substitution of Mortgage Loans........................................................    32
         Section 2.07   Tax Treatment.........................................................................    34

                                  ARTICLE III.
                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

         Section 3.01   The Servicer..........................................................................    35
         Section 3.02   Collection of Certain Mortgage Loan Payments..........................................    37
         Section 3.03   Withdrawals from the Collection Account...............................................    39
         Section 3.04   Maintenance of Hazard Insurance; Property Protection Expenses.........................    40
         Section 3.05   Maintenance of Mortgage Impairment Insurance Policy...................................    40
         Section 3.06   [Reserved]............................................................................    41
         Section 3.07   Management and Realization Upon Defaulted Mortgage Loans..............................    41
         Section 3.08   Indenture Trustee to Cooperate........................................................    42
         Section 3.09   Servicing Compensation; Payment of Certain Expenses by Servicer.......................    43
         Section 3.10   Annual Statement as to Compliance.....................................................    43
         Section 3.11   Annual Servicing Report...............................................................    43
         Section 3.12   Access to Certain Documentation and Information Regarding the Mortgage Loans..........    44
         Section 3.13   [Reserved]............................................................................    44
         Section 3.14   Reports to the Securities and Exchange Commission.....................................    44
         Section 3.15   Reports of Foreclosures and Abandonments of Mortgaged Properties, Returns
                        Relating to Mortgage Interest Received from Individuals and Returns Relating to
                        Cancellation of Indebtedness .........................................................    44
         Section 3.16   Advances by the Servicer..............................................................    44
         Section 3.17   [Reserved]............................................................................    45
         Section 3.18   Assumption Agreements.................................................................    45
</TABLE>

                                       i
<PAGE>   3
<TABLE>
<S>                                                                                                               <C>
         Section 3.19   Payment of Taxes, Insurance and Other Charges.........................................    45
         Section 3.20   Optional Purchase of Defaulted Mortgage Loans.........................................    45

                                   ARTICLE IV.
                                     INSURER

         Section 4.01   Claims upon the Insurance Policy......................................................    47
         Section 4.02   Effect of Payments by the Insurer; Subrogation........................................    48
         Section 4.03   [Reserved]............................................................................    48
         Section 4.04   [Reserved]............................................................................    48
         Section 4.05   Replacement Insurance Policy..........................................................    48

                                   ARTICLE V.
              PRIORITY OF DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS;
                              RIGHTS OF NOTEHOLDERS

         Section 5.01   Distributions.........................................................................    49
         Section 5.02   Calculation of the Class A Note Rate..................................................    50
         Section 5.03   Statements to Noteholders.............................................................    50
         Section 5.04   [Reserved]............................................................................    53
         Section 5.05   Distribution Account..................................................................    53
         Section 5.06   Investment of Accounts................................................................    54
         Section 5.07   Compensating Interest.................................................................    55

                                   ARTICLE VI.
                   THE SELLER, THE SERVICER AND THE DEPOSITOR

         Section 6.01   Liability of the Seller, the Servicer and the Depositor...............................    56
         Section 6.02   Merger or Consolidation of, or Assumption of the Obligations of, the Seller, the
                        Servicer or the Depositor. ...........................................................    56
         Section 6.03   Limitation on Liability of the Servicer and Others....................................    56
         Section 6.04   Servicer Not to Resign................................................................    57
         Section 6.05   Delegation of Duties..................................................................    57
         Section 6.06   Indemnification of the Trust by the Servicer..........................................    57

                                  ARTICLE VII.
                              SERVICING TERMINATION

         Section 7.01   Events of Servicing Termination.......................................................    59
         Section 7.02   Indenture Trustee to Act; Appointment of Successor....................................    61
         Section 7.03   Waiver of Defaults....................................................................    62
         Section 7.04   Notification to Class A Noteholders...................................................    62

                                  ARTICLE VIII.
                                   TERMINATION

         Section 8.01   Termination...........................................................................    63
</TABLE>

                                       ii
<PAGE>   4
<TABLE>
<S>                                                                                                               <C>
                                   ARTICLE IX.
                            MISCELLANEOUS PROVISIONS

         Section 9.01   Amendment.............................................................................    65
         Section 9.02   Recordation of Agreement..............................................................    66
         Section 9.03   Duration of Agreement.................................................................    66
         Section 9.04   Governing Law.........................................................................    66
         Section 9.05   Notices...............................................................................    66
         Section 9.06   Severability of Provisions............................................................    67
         Section 9.07   No Partnership........................................................................    67
         Section 9.08   Counterparts..........................................................................    67
         Section 9.09   Successors and Assigns................................................................    67
         Section 9.10   Headings..............................................................................    67
         Section 9.11   Indenture Trustee.....................................................................    67
         Section 9.12   Reports to Rating Agencies............................................................    67
         Section 9.13   Inconsistencies Among Transaction Documents...........................................    68
         Section 9.14   Rights of the Insurer to Exercise Rights of Noteholders...............................    68
</TABLE>

<TABLE>
<CAPTION>
                                    EXHIBITS
<S>                     <C>
EXHIBIT A               Mortgage Loan Schedule
EXHIBIT B               List of Servicing Officers
EXHIBIT C               Form of Monthly Statement to Noteholders
EXHIBIT D               Form of Servicing Certificate
EXHIBIT E               Letter of Depositor to Indenture Trustee Re: Exchange Act Reports
EXHIBIT F               Form of Liquidation Report
EXHIBIT G               Form of Class A Notes
EXHIBIT H               Form of Mortgage Note
EXHIBIT I               Form of Mortgage
EXHIBIT J               Form of Request for Release
EXHIBIT K               Specimen of the Insurance Policy
EXHIBIT L               Custodial Fee Letter
</TABLE>

                                      iii
<PAGE>   5
         This Sale and Servicing Agreement (the "Agreement") is entered into
effective as of [ ], among [ ] HOME EQUITY LOAN TRUST 200_-_, a Delaware
business trust (the "Trust"), [ ], a [ ], as seller (the "Seller"), Fleet Home
Equity Loan Corporation, a Delaware Corporation, as depositor (the "Depositor"),
[ ], a [ ] corporation, as servicer (the "Servicer"), and [Indenture Trustee], a
[ ] banking corporation, as Indenture Trustee on behalf of the Class A
Noteholders (in such capacity, the "Indenture Trustee").

                              PRELIMINARY STATEMENT

         WHEREAS, the Trust desires to purchase from the Depositor a pool of
Mortgage Loans which were originated by the Seller in the ordinary course of
business of the Seller;

         WHEREAS, the Depositor, concurrently with the execution of this
Agreement, purchased the Mortgage Loans from the Seller pursuant to the Mortgage
Loan Purchase Agreement (the "Mortgage Loan Purchase Agreement");

         WHEREAS, the Servicer is willing to service such Mortgage Loans in
accordance with the terms of this Agreement;

         NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto hereby agree as follows:
<PAGE>   6
                                   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.

         Account:  Any of the Distribution Account or the Collection Account.

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

         Agreement: This Sale and Servicing Agreement and all amendments hereof
and supplements hereto.

         Appraised Value: The appraised value of the Mortgaged Property based
upon the appraisal made by or for the originator at the time of the origination
of the related Mortgage Loan.

         Assignment Event:  [          ].

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

         Available Funds: As to any Payment Date, the sum of (A) the sum of all
amounts described in clauses (i) through (vii) inclusive, of Section 3.02(b)
received by the Servicer (including any amounts paid by the Servicer and the
Seller, and excluding (a) any amounts not required to be deposited in the
Collection Account pursuant to Section 3.02(b), and (b) any amounts paid to the
Servicer or withdrawn by the Servicer pursuant to Sections 3.03(ii), (iii),
(iv), (v), (vi) and (vii) in respect of the Mortgage Loans) during the related
Due Period and deposited into the Collection Account as of the Determination
Date, (B) Insured Payments, if any, and (C) any Termination Price with respect
to the Mortgage Loans deposited to the Distribution Account pursuant to Section
8.01(b). No amount included in this definition by virtue of being described by
any component of the definition thereof shall be included twice by virtue of
also being described by any other component or otherwise.

         Base O/C Amount: With respect to any Payment Date, an amount equal to
the product of (x) the Base O/C Percentage and (y) the Cut-Off Date Pool
Principal Balance.

         Base O/C Percentage: [     ]%.

                                        2
<PAGE>   7
         BIF: The Bank Insurance Fund, as from time to time constituted, created
under the Financial Institutions Reform, Recovery and Enhancement Act of 1989,
or if at any time after the execution of this instrument the Bank Insurance Fund
is not existing and performing duties now assigned to it, the body performing
such duties on such date.

         Book-Entry Note: Any Class A Note registered in the name of the
Depository or its nominee, ownership of which is reflected on the books of the
Depository or on the books of a Person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).

         Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which the Insurer or banking institutions in the States of New York, New
Jersey or the state in which the corporate trust office of the Indenture Trustee
is located are required or authorized by law to be closed.

         Civil Relief Act Interest Shortfalls: As to any Payment Date, any
shortfalls in Interest Collections on the Mortgage Loans during the prior Due
Period that are attributable to the application of the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended.

         Class A Monthly Principal Distributable Amount:  [          ].

         Class A Note: Any Class A Note executed by the Trust and authenticated
by the Indenture Trustee substantially in the form set forth in Exhibit G
hereto.

         Class A Note Owner: The Person who is the beneficial owner of a
Book-Entry Note.

         Class A Note Principal Balance: With respect to any date of
determination, (a) the Original Class A Note Principal Balance less (b) the
aggregate of amounts distributed as principal to the Class A Noteholders on
previous Payment Dates.

         Class A Note Rate: [          ].

         Class A Noteholder or Holder: The Person in whose name a Class A Note
is registered in the Note Register, except that, solely for the purpose of
giving any consent, direction, waiver or request pursuant to this Agreement, (x)
any Class A Note registered in the name of the Seller or the Depositor, or any
Person actually known to a Responsible Officer to be an Affiliate of the Seller
or the Depositor (y) any Class A Note for which the Seller or the Depositor, or
any Person actually known to a Responsible Officer to be an Affiliate of the
Seller or the Depositor is the Class A Note Owner shall be deemed not to be
outstanding (unless to the actual knowledge of a Responsible Officer (i) the
Seller or the Depositor, or such Affiliate, is acting as trustee or nominee for
a Person who is not an Affiliate of the Seller or the Depositor and who makes
the voting decision with respect to such Class A Note or (ii) the Seller or the
Depositor, or such Affiliate, is the Class A Note Owner of all the Class A
Notes) and the Percentage Interest evidenced thereby shall not be taken into
account in determining whether the requisite amount of Percentage Interests
necessary to effect any such consent, direction, waiver or request has been
obtained and (z) the Insurer shall be deemed to be the owner of 100% of the
Class A Notes so long as no Insurer Default is then continuing.

                                       3
<PAGE>   8
         Class A Principal Distribution: [          ]

         Closing Date: [          ].

         Code: The Internal Revenue Code of 1986, as amended from time to time,
and Treasury Regulations promulgated thereunder.

         Collection Account: The custodial account or accounts created and
maintained for the benefit of the Class A Noteholders, the Ownership Interest
and the Insurer pursuant to Section 3.02(b). The Collection Account shall be an
Eligible Account.

         Combined Loan-to-Value Ratio or CLTV: With respect to any Mortgage
Loan, the sum of the original principal balance of such Mortgage Loan and the
outstanding principal balance of the First Lien, if any, as of the date of
origination of the Mortgage Loan, divided by the Appraised Value.

         Compensating Interest: As to any Payment Date, the amount calculated
pursuant to Section 5.07.

         Corporate Trust Office: The principal office of the Indenture Trustee
at which at any particular time its corporate business shall be administered,
which office on the Closing Date is located at [ ], Attention: Indenture Trust
Administration.

         Curtailment: With respect to a Mortgage Loan, any payment of principal
received during a Due Period as part of a payment that is in excess of the
amount of the Monthly Payment due for such Due Period and which is not intended
to satisfy the Mortgage Loan in full, nor is intended to cure a delinquency or
to be applied for subsequent Monthly Payments as and when the same come due
pursuant to directions from the Mortgagor to such effect.

         Custodial Fee: The fees and expenses as set forth in the fee letter
between [          ] and [          ], as of [          ], attached as Exhibit
L hereto.

         Cut-Off Date: As to a Mortgage Loan, the close of business on
[          ].

         Cut-Off Date Principal Balance: With respect to any Mortgage Loan, the
unpaid principal balance thereof as of the Cut-Off Date (or as of the applicable
date of substitution with respect to an Eligible Substitute Mortgage Loan
pursuant to Section 2.02 or 2.06).

         Cut-Off Date Pool Principal Balance:  $[          ].

         Defective Mortgage Loan: Any Mortgage Loan subject to repurchase or
substitution by the Seller pursuant to Section 2.02 or 2.04 or purchase by the
Servicer pursuant to Section 3.20.

         Definitive Notes:  As defined in the Indenture.

         Delinquency Amount: The product of the Delinquency Percentage and the
Pool Principal Balance as of the end of the related Due Period.

                                       4
<PAGE>   9
         Delinquency Percentage: [          ].

         Deposit Event: [          ].

         Depositor: Fleet Home Equity Loan Corporation, a Delaware corporation.

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

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

         Determination Date: With respect to any Payment Date, the eighteenth
day of the month in which such Payment Date occurs (or if such day is not a
Business Day, the Business Day immediately succeeding such eighteenth day).

         Distributable Excess Spread: As to any Payment Date, the lesser of (i)
the Excess Spread for such Payment Date and (ii) the excess, if any, of the
Specified O/C Amount for such Payment Date over the O/C Amount on such date
before giving effect to the application of Distributable Excess Spread on such
Payment Date.

         Distribution Account: The account established by the Indenture Trustee
pursuant to Section 5.05. The Distribution Account shall be an Eligible Account.

         Due Date: With respect to any Mortgage Loan and any Monthly Payment,
the date on which such Monthly Payment is due from the related Mortgagor.

         Due Period: As to any Determination Date or Payment Date, the calendar
month immediately preceding such Determination Date or Payment Date.

         Eligible Account: [          ].

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

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

                  (ii) repurchase agreements on obligations specified in clause
         (i) maturing not more than three months from the date of acquisition
         thereof, provided that the short-term unsecured debt obligations of the
         party agreeing to repurchase such obligations are at the time rated by
         a Rating Agency in its highest short-term rating category (which is
         "A-1+" for Standard & Poor's and "P-1" for Moody's);

                                       5
<PAGE>   10
                  (iii) certificates of deposit, time deposits and bankers'
         acceptances (which, if Moody's is a Rating Agency, shall each have an
         original maturity of not more than 90 days and, in the case of bankers'
         acceptances, shall in no event have an original maturity of more than
         365 days) of any U.S. depository institution or trust company
         incorporated under the laws of the United States or any state thereof
         and subject to supervision and examination by federal and/or state
         banking authorities, provided that the unsecured short-term debt
         obligations of such depository institution or trust company at the date
         of acquisition thereof have been rated by either Moody's or Standard &
         Poor's in its highest unsecured short-term debt rating category;

                  (iv) commercial paper (having original maturities of not more
         than 90 days) of any corporation incorporated under the laws of the
         United States or any state thereof which on the date of acquisition has
         been rated by Standard & Poor's or Moody's in their highest short-term
         rating categories;

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

                  (vi) interests in any money market fund which at the date of
         acquisition of the interests in such fund and throughout the time as
         the interest is held in such fund has a rating of "Aaa" by Moody's or
         either "AAAm" or "AAAm-G" by Standard & Poor's; and

                  (vii) other obligations or securities that are acceptable to
         each Rating Agency and the Insurer as an Eligible Investment hereunder
         and will not result in a reduction in the then current rating of the
         Class A Notes, as evidenced by a letter to such effect from such Rating
         Agency and the Insurer and with respect to which the Servicer has
         received confirmation that, for tax purposes, the investment complies
         with each proviso set forth below in the last clause of this
         definition;

         provided that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provided a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations;
and provided, further, that no instrument described hereunder may be purchased
at a price greater than par if such instrument may be prepaid or called at a
price less than its purchase price prior to its stated maturity.]

         Eligible Substitute Mortgage Loan: A Mortgage Loan substituted by the
Seller for a Defective Mortgage Loan which must, on the date of such
substitution, (i) have an outstanding Principal Balance (or in the case of a
substitution of more than one Mortgage Loan for a Defective Mortgage Loan, an
aggregate Principal Balance) that is no greater than the Principal Balance of
the Defective Mortgage Loan and no more than % less than the Principal Balance
of the Defective Mortgage Loan; (ii) have an original principal balance that is
a Conforming

                                       6
<PAGE>   11
Original Principal Balance; (iii) have a Loan Rate not less than the Loan Rate
of the Defective Mortgage Loan and not more than % in excess of the Loan Rate of
such Defective Mortgage Loan; (iv) have a remaining term to maturity not more
than months earlier and not later than the remaining term to maturity of the
Defective Mortgage Loan; (v) be of the same type of Mortgaged Property as the
Defective Mortgage Loan or a detached single family residence; (vi) have a
Mortgage of the same or higher level of priority as the Mortgage relating to the
Defective Mortgage Loan at the time such Mortgage was transferred to the Trust;
(vii) comply with each representation and warranty set forth in Section 2.04
(deemed to be made as of the date of substitution); and (viii) have an original
Combined Loan-to-Value Ratio [not greater] than that of the Defective Mortgage
Loan. More than one Eligible Substitute Mortgage Loan may be substituted for a
Defective Mortgage Loan if such Eligible Substitute Mortgage Loans meet the
foregoing attributes in the aggregate and such substitution is approved in
writing in advance by the Insurer.

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

         Event of Servicing Termination: As defined in Section 7.01.

         Excess O/C Amount: As to any Payment Date, the amount by which (i) the
O/C Amount for such Payment Date exceeds (ii) the Specified O/C Amount for such
Payment Date.

         Excess Spread: With respect to any Payment Date, the positive excess,
if any, of (a) Available Funds for such Payment Date over (b) the aggregate of
amounts required to be distributed pursuant to subclauses (i) through (iv) of
Section 5.01(a) herein on such Payment Date.

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

         Fidelity Bond: As defined in Section 3.06.

         Final Payment Date:  The Payment Date in [          ].

         First Lien: With respect to any Mortgage Loan that is a second priority
lien, the mortgage loan or mortgage loans relating to the corresponding
Mortgaged Property having a first priority lien to such Mortgage Loan.

         Fiscal Agent: As defined in the Insurance Policy.

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

         Grant: As defined in the Indenture.

         Guaranteed Principal Distribution Amount: (i) With respect to any
Payment Date other than the Final Payment Date, the amount, if any, by which the
Class A Note Principal Balance

                                       7
<PAGE>   12
exceeds the [Pool Principal Balance] as of the end of the related Due Period
(after giving effect to all payments of principal on the Class A Notes on such
Payment Date pursuant to Section 5.01 hereof). With respect to the Final Payment
Date, the outstanding Class A Note Principal Balance (after giving effect to all
payments of principal on the Class A Notes on such Final Payment Date pursuant
to Section 5.01(a) hereof).

         Indenture:  The Indenture, dated as of [          ], between the
Issuer and the Indenture Trustee.

         Indenture Trustee:  [          ], a [ ] banking corporation, as
Indenture Trustee under the Indenture or any successor indenture trustee under
the Indenture appointed in accordance with such agreement.

         Indenture Trustee Fee: With respect to any Payment Date, the greater of
(i) 1/12 of the sum of (a) the product of (1) the Indenture Trustee Fee Rate and
(2) the Pool Principal Balance of the Mortgage Loans as of the end of the second
preceding Due Period (or in the case of the first Payment Date, as of the Cut
Off Date) and (b) any Custodial Fees to the extent not paid by the Servicer, or
(ii) $[ ].

         Indenture Trustee Fee Rate: The per annum rate at which the Indenture
Trustee Fee is calculated, which is an amount equal to [    ]% per annum.

         Indenture Trustee's Statement to Noteholders: As defined in Section
5.03.

         Insurance and Reimbursement Agreement: The Insurance and Reimbursement
Agreement dated as of [    ] among the Indenture Trustee, the Seller, the
Servicer, [    ] and the Insurer, including any amendments and supplements
thereto in accordance with the terms thereof.

         Insurance Policy: The Financial Guaranty Insurance Policy (No. [    ])
with respect to the Class A Notes and the Senior Interest Participation and all
endorsements thereto, if any, dated the Closing Date, issued by the Insurer for
the benefit of the Holders of the Class A Notes and the Senior Interest
Participation, a copy of which is attached hereto as Exhibit K.

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

         Insured Payment: With respect to any Payment Date, an amount equal to
the sum of the (i) the Guaranteed Principal Distribution Amount and (ii) the
amount, if any, by which the aggregate of the Interest Distributions with
respect to the Class A Notes for such Payment Date exceeds the amount on deposit
in the Distribution Account available to be distributed therefor on such Payment
Date.

                                       8
<PAGE>   13
         Insurer: [          ], a stock insurance company organized and created
under the laws of the State of [          ], or any successor thereto.

         Insurer Default: [          ].

         Interest Carryover Shortfall: With respect to any Payment Date, the
Class A Notes, the amount by which the related Interest Distribution for such
Class A Notes for the preceding Payment Date exceeded the amount of interest
that was actually distributed to such Class A Notes on such preceding Payment
Date.

         Interest Distribution: With respect to any Payment Date, the Class A
Notes, the sum of (a) the related Monthly Interest Distributable Amount for such
Class A Notes for such Payment Date, and (b) any related Outstanding Interest
Carryover Shortfall for such Class A Notes for such Payment Date.

         Interest Period: [          ].

         Issuer: [          ] Home Equity Loan Trust 200_-_.

         LIBOR: [          ].

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

         Liquidated Mortgage Loan: As to any Payment Date, any Mortgage Loan in
respect of which the Servicer has determined, in accordance with the servicing
procedures specified herein, as of the end of the preceding Due Period, that all
Liquidation Proceeds which it expects to recover with respect to the disposition
of such Mortgage Loan or the related REO Property have been recovered.

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

         Liquidation Report: With respect to each Liquidated Mortgage Loan, the
report prepared by the Servicer in the form attached hereto as Exhibit F.

         Loan Rate: With respect to any Mortgage Loan as of any day, the
interest rate applicable under the related Mortgage Note.

         Majority Class A Noteholder: The Holder or Holders of Class A Notes
representing at least 51% of the aggregate Class A Note Principal Balance.

         Monthly Advance: An advance made by the Servicer pursuant to Section
3.16.

         Monthly Interest Distributable Amount: [          ].

                                       9
<PAGE>   14
         Monthly Payment: With respect to a Mortgage Loan, the scheduled monthly
payment of principal and/or interest required to be made by a Mortgagor on such
Mortgage Loan.

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

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

         Mortgage File: The mortgage documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.

         Mortgage Loans: The mortgage loans that are transferred and assigned to
the Trust pursuant to Sections 2.01 and 2.06, together with the Related
Documents, exclusive of Mortgage Loans that are transferred to the Seller, from
time to time pursuant to Sections 2.02 and 2.06, or to the Servicer pursuant to
Section 3.20, as from time to time are held as a part of the Trust, such
mortgage loans originally so held being identified in the Mortgage Loan Schedule
delivered on the Closing Date.

         Mortgage Loan Purchase Agreement:  The mortgage loan purchase
agreement, dated as of [        ], between the Depositor, as purchaser, and
[        ], as seller, relating to the sale of the Mortgage Loans from [      ]
to the Depositor.

         Mortgage Loan Schedule: With respect to any date, the schedule of
Mortgage Loans constituting assets of the Trust. The Mortgage Loan Schedule is
the schedule set forth herein as Exhibit A, which schedule sets forth as to each
Mortgage Loan: (i) the Cut-Off Date Principal Balance, (ii) the account number,
(iii) the original principal amount, (iv) the CLTV as of the date of the
origination of the related Mortgage Loan, (v) the Due Date, (vi) the Loan Rate
as of the Cut-Off Date, (vii) the first date on which a Monthly Payment is or
was due under the Mortgage Note, (viii) the original stated maturity date of the
Mortgage Note and if the Mortgage Loan is a Balloon Loan, the amortization
terms, (ix) the remaining number of months to maturity as of the Cut-Off Date,
(x) the state in which the related Mortgaged Property is situated, (xi) the type
of property and (xii) the lien status. The Mortgage Loan Schedule will be
amended from time to time to reflect the substitution of an Eligible Substitute
Mortgage Loan for a Defective Mortgage Loan from time to time hereunder.

         Mortgage Note: With respect to a Mortgage Loan, the promissory note
pursuant to which the related Mortgagor agrees to pay the indebtedness evidenced
thereby which is secured by the related Mortgage.

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

         Mortgagee: With respect to any Mortgage Loan as of any date of
determination, the holder of the related Mortgage Note and any related Mortgage
as of such date.

                                       10
<PAGE>   15
         Mortgagor: With respect to any Mortgage Loan, the obligor or obligors
under the related Mortgage Note.

         Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan,
Liquidation Proceeds net of unreimbursed Servicing Fees, Servicing Advances and
Monthly Advances with respect thereto.

         Net Loan Rate: With respect to any Mortgage Loan, the Loan Rate less
the Servicing Fee Rate.

         Nonrecoverable Advances: With respect to any Mortgage Loan, (i) any
Servicing Advance or Monthly Advance previously made and not reimbursed pursuant
to Section 3.03(ii) or (ii) a Servicing Advance or Monthly Advance proposed to
be made in respect of a Mortgage Loan or REO Property which, in the good faith
business judgment of the Servicer, as evidenced by an Officer's Certificate
delivered to the Insurer, the Seller and the Indenture Trustee promptly
following such determination, would not be ultimately recoverable pursuant to
Sections 3.03(ii) or 3.03(vii).

         Note Register and Note Registrar: As defined in the Indenture.

         O/C Amount: As to any Payment Date, the excess, if any, of (a) the
[Pool Principal Balance] as of the close of business on the last day of the
related Due Period over (b) the Class A Note Principal Balance (after giving
effect to amounts available in respect of the Class A Monthly Principal
Distributable Amount for such Payment Date).

         O/C Reduction Amount: As to any Payment Date, an amount equal to the
lesser of (i) the Excess O/C Amount for such Payment Date and (ii) the Principal
Remittance Amount for such Payment Date.

         Officer's Certificate: A certificate signed by the President, an
Executive Vice President, a Senior Vice President, a Vice President, an
Assistant Vice President, the Treasurer, Assistant Treasurer, Controller or
Assistant Controller of the Servicer, the Seller or the Depositor, as the case
may be, and delivered to the Indenture Trustee and the Insurer.

         Opinion of Counsel: A written opinion of counsel reasonably acceptable
to the Indenture Trustee, who may be in-house counsel for the Servicer (or its
affiliate) or the Seller (or its affiliate)(except that any opinion pursuant to
Section 2.01 or 6.04 or relating to taxation or otherwise as required by the
Insurer must be an opinion of independent outside counsel) and who, in the case
of opinions delivered to the Insurer and the Rating Agency, is reasonably
acceptable to each of them.

         Original Class A Note Principal Balance:  $[          ].

         Optional Termination Date: Any Payment Date on or after the Pool
Principal Balance has been reduced to an amount less than or equal to [ ]% of
the Cut-Off Date Pool Principal Balance.

                                       11
<PAGE>   16
         Outstanding Interest Carryover Shortfall: With respect to any Payment
Date, the Class A Notes and the Senior Interest Participation, the amount of
related Interest Carryover Shortfall for such Payment Date and Class A Notes or
Senior Interest Participation, as applicable, plus one month's interest thereon,
at the Class A Note Rate or Senior Interest Participation Rate, as applicable,
to the extent permitted by law.

         Owner Trustee: [     ], as owner trustee under the Trust Agreement,
and any successor owner trustee under the Trust Agreement appointed in
accordance with the terms thereof.

         Owner Trustee Fee: A monthly fee equal to 1/12 of $[          ].

         Ownership Interest: The Transferor Interest.

         Paying Agent: Any paying agent appointed pursuant to the Indenture.

         Payment Date:  The [    ] day of each month or, if such day is not a
Business Day, then the next Business Day, beginning in [     ].

         Percentage Interest: As to the Class A Notes and any date of
determination, the percentage obtained by dividing the principal denomination of
such Class A Note by the aggregate of the principal denominations of all Class A
Notes.

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

         Pool Factor: With respect to the Class A Notes and to any Payment Date,
the percentage, carried to seven places, obtained by dividing the Class A Note
Principal Balance for such Payment Date by the Original Class A Note Principal
Balance.

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

         Preference Event: As defined in Section 4.01(c).

         Premium Amount: The premium payable to the Insurer pursuant to the
Insurance Agreement.

         Prepayment Interest Shortfall: With respect to any Payment Date, for
each Mortgage Loan that was the subject during the related Due Period of a
Principal Prepayment in full an amount equal to the excess, if any, of (i) 30
days' interest on the Principal Balance of such Mortgage Loan at the Net Loan
Rate (or at such lower rate as may be in effect for such Mortgage Loan pursuant
to application of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended) over (ii) the amount of interest actually remitted by the Mortgagor in
connection with such Principal Prepayment less the Servicing Fee for such
Mortgage Loan in such month.

                                       12
<PAGE>   17
         Principal Balance: As to any Mortgage Loan and any day, other than a
Liquidated Mortgage Loan, the Cut-Off Date Principal Balance, minus all
collections credited against the Principal Balance of any such Mortgage Loan in
accordance with the related Mortgage Note. For purposes of this definition, a
Liquidated Mortgage Loan shall be deemed to have a Principal Balance equal to
the Principal Balance of the related Mortgage Loan immediately prior to the
final recovery of related Liquidation Proceeds and a Principal Balance of zero
as of the end of the Due Period in which such Mortgage Loan becomes a Liquidated
Mortgage Loan.

         Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan equal to the outstanding principal balance thereof, received in
advance of the final scheduled Due Date which is intended to satisfy a Mortgage
Loan in full.

         Principal Remittance Amount: With respect to any Payment Date, the
amount equal to the sum of the following amounts (without duplication) with
respect to the immediately preceding Due Period: (i) that portion of all Monthly
Payments allocable to principal on Mortgage Loans, including all full and
partial principal prepayments received during the related Due Period, (ii) the
Net Liquidation Proceeds allocable to principal actually collected by the
Servicer during the related Due Period, (iii) the portion of the Purchase Price
allocable to principal of all Defective Mortgage Loans that were repurchased
during the related Due Period and (iv) any Substitution Adjustments for Mortgage
Loans, deposited to the Distribution Account pursuant to Section 2.06 on or
prior to the related Determination Date and not previously distributed.

         Prospectus: The base prospectus of the Depositor dated [    ].

         Prospectus Supplement: The prospectus supplement dated [    ],
relating to the offering of the Class A Notes.

         Purchase Price: As to any Mortgage Loan repurchased on any date
pursuant to Section 2.02, 2.04 or 3.20 an amount equal to the sum of (i) the
unpaid Principal Balance thereof, (ii) the greater of (a) all unpaid accrued
interest thereon to the end of the Due Period preceding the Payment Date on
which such Purchase Price is included in Available Funds and (b) 30 days'
interest thereon, computed at the applicable Loan Rate; provided, however, that
if at the time of repurchase the Seller is the Servicer, the amount described in
clause (ii) shall be computed at the Net Loan Rate, (iii) (x) if the Servicer is
not the Seller, any unreimbursed Servicing Advances with respect to such
Mortgage Loan and (y) expenses reasonably incurred or to be incurred by the
Servicer or the Indenture Trustee in respect of the breach or defect giving rise
to the purchase obligation and (iv) the amount of any penalties, fines,
forfeitures, legal fees and related costs, judgments and any other costs, fees
and expenses incurred by or imposed on the Depositor, the Indenture Trustee, the
Insurer or the Trust or with respect to which any of them are liable arising
from a breach by the Seller of its representations and warranties in Section
2.04.

         Purchaser: The Depositor in its capacity as purchaser under the
Mortgage Loan Purchase Agreement.

         Rating Agency: Any statistical credit rating agency, or its successor,
that rated the Class A Notes and the Senior Interest Participation at the
request of the Seller at the time of the initial

                                       13
<PAGE>   18
issuance of the Class A Notes. If such agency or a successor is no longer in
existence, "Rating Agency" shall be such statistical credit rating agency, or
other comparable Person, designated by the Seller and the Insurer, notice of
which designation shall be given to the Indenture Trustee. References herein to
the highest short term unsecured rating category of a Rating Agency shall mean
A-1+ or better in the case of Standard & Poor's and P-1 or better in the case of
Moody's and in the case of any other Rating Agency shall mean the ratings such
other Rating Agency deems equivalent to the foregoing ratings. References herein
to the highest long-term rating category of a Rating Agency shall mean "AAA" in
the case of Standard & Poor's and "Aaa" in the case of Moody's and in the case
of any other Rating Agency, the rating such other Rating Agency deems equivalent
to the foregoing ratings.

         Ratings: The ratings initially assigned to the Class A Notes and the
Senior Interest Participation by the Rating Agencies, as evidenced by letters
from the Rating Agencies.

         Record Date: The Business Day immediately preceding such Payment Date;
provided, however, that if any Class A Notes becomes a Definitive Note, the
record date for such Class A Notes will be the last Business Day of the month
immediately preceding the month in which the related Payment Date occurs.

         Reference Bank Rate: [          ].

         Reference Banks: Three major banks that are engaged in the London
interbank market, selected by the Seller after consultation with the Indenture
Trustee.

         Related Documents: As defined in Section 2.01.

         Released Mortgaged Property Proceeds: As to any Mortgage Loan, proceeds
received by the Servicer in connection with (a) a taking of an entire Mortgaged
Property by exercise of the power of eminent domain or condemnation or (b) any
release of part of the Mortgaged Property from the lien of the related Mortgage,
whether by partial condemnation, sale or otherwise, which are not released to
the Mortgagor in accordance with (i) applicable law, (ii) mortgage servicing
standards employed by the Servicer in servicing mortgage loans for its own
account and (iii) the Sale and Servicing Agreement.

         REO Property: A Mortgaged Property that is acquired by the Trust in
foreclosure or by deed in lieu of foreclosure.

         Responsible Officer: With respect to the Indenture Trustee, any officer
assigned to the corporate trust group (or any successor thereto), including any
vice president, assistant vice president, trust officer, assistant secretary or
any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Agreement. When used with
respect to the Seller or Servicer, the President or any Vice President,
Assistant Vice President, Treasurer, Assistant Treasurer or any Secretary or
Assistant Secretary.

         SAIF: The Savings Association Insurance Fund, as from time to time
constituted, created under the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, or if at any

                                       14
<PAGE>   19
time after the execution of this instrument the Savings Association Insurance
Fund is not existing and performing duties now assigned to it, the body
performing such duties on such date.

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

         Second Lien: With respect to any Mortgage Loan that is a third priority
lien the mortgage loan or loans relating to the corresponding Mortgage Property
having a second lien priority to such Mortgage Loan.

         Seller: [          ], as Seller under the Mortgage Loan Purchase
Agreement.

         Servicer:  [          ]as Servicer, or any successor hereunder
appointed in accordance with the terms hereof.

         Servicing Advances: All reasonable and customary unanticipated "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property, including reasonable fees paid
to any independent contractor in connection therewith, (iv) compliance with the
obligations under Sections 3.04, 3.07 or 3.19 hereunder, and (v) in connection
with the liquidation of a Mortgage Loan, expenditures relating to the purchase
or maintenance of the First Lien pursuant to Section 3.17, all of which
reasonable and customary unanticipated out-of-pocket costs and expenses are
reimbursable to the Servicer to the extent provided in Sections 3.03(ii),
3.03(vii) and 3.07.

         Servicing Certificate: A certificate completed and executed by a
Servicing Officer on behalf of the Servicer.

         Servicing Fee: With respect to any Payment Date, the product of (i) the
Servicing Fee Rate and (ii) the aggregate Principal Balance of the Mortgage
Loans as of the end of the second preceding Due Period (or at the Cut-Off Date
with respect to the first Payment Date).

         Servicing Fee Rate: [    ]% per annum (or if [          ]is no longer
the Servicer, [    ]% per annum).

         Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Indenture Trustee (with a copy to the Insurer) by the Servicer on the
Closing Date, as such list may be amended from time to time, initially set forth
in Exhibit B hereto.

         Specified O/C Amount: With respect to any Payment Date prior to the
Step Down Date the greater of (i) the Base O/C Amount and (ii) [ ]% of the
Delinquency Amount and, with respect to any Payment Date occurring on or after
the Step Down Date, the greatest of:

                  (i) two times the product of the Base O/C Percentage and the
         [Pool Principal Balance] as of the close of business on the last day of
         the related Due Period;

                                       15
<PAGE>   20
                  (ii) [    ]% of the Delinquency Amount; and

                  (iii) the sum of (a) the product of (x) [    ]% and (y) the
         Cut-Off Date Pool Principal Balance and (b) the aggregate Principal
         Balance of the three largest Mortgage Loans as of the end of the
         related Due Period;

provided, however, that with respect to any Payment Date occurring on or after
the Step Down Date, if the Delinquency Percentage exceeds [    ]%, the
Specified O/C Amount shall not be less than the Specified O/C Amount as of the
immediately preceding Payment Date; and provided, further, that the Insurer may
reduce the Specified O/C Amount so long as such reduction will not result in a
downgrade, qualification or withdrawal of the then current ratings of the Class
A Notes, without regard to the Insurance Policy, as evidenced in writing by each
Rating Agency.

         Standard & Poor's: Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc., or any successor thereto.

         Step Down Date: The later to occur of (A) the first Payment Date on
which the Pool Principal Balance is less than the product of [   ]% and the
Cut-Off Date Pool Principal Balance and (B) the [          ] Payment Date.

         Subservicer: Any Person with whom the Servicer has entered into a
Subservicing Agreement and who satisfies the requirements set forth in Section
3.01(a) in respect of the qualification of a Subservicer.

         Subservicing Agreement: Any agreement between the Servicer and any
Subservicer relating to subservicing and/or administration of certain Mortgage
Loans as provided in Section 3.01, a copy of which shall be delivered, along
with any modifications thereto, to the Indenture Trustee and the Insurer.

         Substitution Adjustment: As to any date on which a substitution occurs
pursuant to Section 2.06, the sum of (a) the excess of (i) the aggregate
Principal Balances of all Defective Mortgage Loans to be replaced by Eligible
Substitute Mortgage Loans (after application of principal payments received on
or before the date of substitution of any Eligible Substitute Mortgage Loans as
of the date of substitution) over (ii) the Principal Balance of such Eligible
Substitute Mortgage Loans and (b) the greater of (x) accrued and unpaid interest
(accruing at the Loan Rate for such Defective Mortgage Loan) on such excess
through the Due Period relating to the Payment Date for which such Substitution
Adjustment will be included as part of Available Funds and (y) 30 days' interest
on such excess calculated on a 360-day year in each case at the Loan Rate (or
Net Loan Rate if the Seller is the Servicer) and (c) if the Servicer is not the
Seller, the amount of any unreimbursed Servicing Advances made by the Servicer
with respect to such Defective Mortgage Loan and (d) the amounts referred to in
clauses (iii)(y) and (iv) of the definition of Purchase Price in respect of such
Defective Mortgage Loan.

                                       16
<PAGE>   21
         Supplemental Mortgage Loan Schedule: As defined in Section 2.06(b).

         Telerate Screen Page 3750: The display designated as page 3750 on the
Telerate Service (or such other page as may replace page 3750 on that service
for the purpose of displaying London interbank offered rates of major banks).

         Termination Price: As defined in Section 8.01(b).

         Transaction Documents: This Agreement, the Mortgage Loan Purchase
Agreement, the Insurance Agreement, the Administration Agreement, the Trust
Agreement and the Indenture.

         Transferor: [          ],  or any such permitted holder of the
Ownership Interest.

         Transferor Interest: As defined in the Trust Agreement.

         Trigger Event: As defined in Section 6.01 of the Insurance and
Reimbursement Agreement.

         Trust: The trust created by the Trust Agreement, the corpus of which
consists of the Mortgage Loans and Mortgage Files, such other assets as shall
from time to time be identified as deposited in the Collection Account and the
Distribution Account in accordance with this Agreement, property that secured a
Mortgage Loan and that has become REO Property, the interest of the Seller in
certain hazard insurance policies (including any Insurance Proceeds) maintained
by the Mortgagors or the Servicer in respect of the Mortgage Loans, the
Insurance Policy, and Depositor's rights under the Mortgage Loan Purchase
Agreement and all proceeds of each of the foregoing.

         Trust Agreement:  The Trust Agreement dated as of [          ], among
[          ], as Seller, the Depositor and the Owner Trustee.

         UCC: The Uniform Commercial Code, as amended from time to time, as in
effect in any specified jurisdiction.

         Underwriters: [          ], [          ], and [          ], as
underwriters of the [           ]Home Equity Loan Asset-Backed Notes, Series
200_-_.

         Section 1.02. Other Definitional Provisions.

         (a) Capitalized terms used herein and not otherwise defined herein have
the meanings assigned to them in the Indenture and the Trust Agreement, as
applicable.

         (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

                                       17
<PAGE>   22
any such certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such certificate or other
document shall control.

         (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 genders of such terms.

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

         Section 1.03. Interest Calculations.

         All calculations of interest that are made in respect of the Principal
Balance of a simple interest Mortgage Loan shall be made on the basis of a
365-day year and the actual number of days elapsed. The Monthly Interest
Distributable Amount in respect of the Class A Notes, and the Premium Amount
shall be calculated on the basis of a 360-day year and the actual number of days
elapsed. The Senior Interest Participation Rate shall be calculated on the basis
of a 360-day year consisting of twelve 30-day months. The calculation of the
Servicing Fee, the Indenture Trustee Fee and the Owner Trustee Fee shall be made
on the basis of a 360-day year consisting of twelve 30-day months. All dollar
amounts calculated hereunder shall be rounded to the nearest penny with one-half
of one penny being rounded down.

                                       18
<PAGE>   23
                                  ARTICLE II.

                        CONVEYANCE OF THE MORTGAGE LOANS

         Section 2.01 Conveyance of the Mortgage Loans.

         (a) The Depositor, concurrently with the execution and delivery of this
Agreement, does hereby transfer, assign, set over and otherwise convey to the
Trust without recourse (subject to Sections 2.02 and 2.04) all of its right,
title and interest in and to (i) each Mortgage Loan and the related Mortgage
File, including its Cut-Off Date Principal Balance and all collections in
respect of interest and principal received after the Cut-Off Date; (ii) property
that secured a Mortgage Loan that is acquired by foreclosure or deed in lieu of
foreclosure; (iii) its rights under the insurance policies in respect of the
Mortgage Loans (including any Insurance Proceeds); (iv) amounts on deposit in
the Collection Account and the Distribution Account; (v) its rights under the
Mortgage Loan Purchase Agreement (excluding its rights to indemnification under
the indemnification provisions thereof); (vi) all other assets included or to be
included in the Trust for the benefit of the Class A Noteholders, the Transferor
and the Insurer and (vii) any and all proceeds of the foregoing. In addition, on
or prior to the Closing Date, the Seller shall cause the Insurer to deliver the
Insurance Policy to the Indenture Trustee for the benefit of the Class A
Noteholders.

         In connection with such transfer, assignment, sale and conveyance by
the Depositor, the Depositor shall, within ___ days of an Assignment Event,
cause the Seller to deliver to, and deposit with, the Indenture Trustee (or its
designee), on or before the Closing Date, the following documents or instruments
with respect to each Mortgage Loan (the "Related Documents") and the Mortgage
Loan Schedule in computer readable format:

                  (i) the original Mortgage Note, endorsed in blank, with all
         intervening endorsements showing a complete chain of title from the
         originator of such Mortgage Loan to the Seller;

                  (ii) the original Mortgage, with evidence of recording
         thereon, provided that if the original Mortgage has been delivered for
         recording to the appropriate public recording office of the
         jurisdiction in which the Mortgaged Property is located but has not yet
         been returned to the Seller by such recording office, the Seller shall
         deliver to the Indenture Trustee a certified true copy of such original
         Mortgage so certified by the Seller, together with a certificate of the
         Seller certifying that such original Mortgage has been so delivered to
         such recording office; in all such instances, the Seller shall deliver
         or cause to be delivered the original recorded Mortgage to the
         Indenture Trustee promptly upon receipt of the original recorded
         Mortgage;

                  (iii) the original Assignment of Mortgage, from the Seller to
         "[          ], as Indenture Trustee for [           ]Home Equity Loan
         Trust 200_-_", which assignment shall be in form and substance
         acceptable for recording;

                  (iv) the original attorney's opinion of title or the original
         policy of title insurance, provided that if any such original policy of
         title insurance has not yet been received by

                                       19
<PAGE>   24
         the Seller, the Seller may have delivered to the Indenture Trustee a
         copy of such policy or a title insurance binder or commitment for the
         issuance of such policy;

                  (v) originals of all intervening assignments of Mortgage, with
         evidence of recording thereon, showing a complete chain of title from
         the originator to the Seller, provided that if any such original
         intervening assignment of Mortgage has been delivered for recording to
         the appropriate public recording office of the jurisdiction in which
         the Mortgaged Property is located but has not yet been returned to the
         Seller by such recording office, the Seller shall have delivered to the
         Indenture Trustee a certified true copy of such original assignment of
         Mortgage so certified by the Seller, together with a certificate of the
         Seller certifying that such original assignment of Mortgage has been so
         delivered to such recording office; in all such instances, the Seller
         shall deliver or cause to be delivered any such original assignments to
         the Indenture Trustee promptly upon receipt thereof; and

                  (vi) originals of all assumption and modification agreements,
         if any.

         The Seller hereby confirms to the Owner Trustee, the Indenture Trustee
and the Insurer that it has made the appropriate entries in its general
accounting records, to indicate that such Mortgage Loans have been transferred
to the Trust and constitute part of the Trust in accordance with the terms of
the Trust. The Servicer hereby confirms to the Owner Trustee, the Indenture
Trustee and the Insurer that it has clearly and unambiguously made appropriate
entries in its general accounting records indicating that such Mortgage Loans
constitute part of the Trust and are serviced by it on behalf of the Trust in
accordance with the terms hereof.

         Except as herein provided the Seller shall, as custodian for the
benefit of the Owner Trustee, Indenture Trustee and the Issuer be entitled to
maintain possession of the foregoing documents and instruments discussed above
and shall not be required to deliver any of them to the Indenture Trustee. In
the event, however, that possession of any such documents or instruments is
required by any Person (including the Indenture Trustee) acting as successor
Servicer pursuant to Section 7.02 in order to carry out the duties of the
Servicer hereunder, then such successor Servicer shall be entitled to request
delivery at the expense of the Servicer of such documents or instruments by the
Servicer and to retain such documents or instruments for servicing purposes;
provided that the Indenture Trustee or such successor Servicer shall maintain
such documents at such offices as may be required by any regulatory body having
jurisdiction over such Mortgage Loan.

         Within days of an Assignment Event, the Seller, at its expense, shall
with respect to each Mortgage Loan with respect to which the related Mortgaged
Property is located in ______, either (a) send or cause to be sent for recording
the Assignments of Mortgage in favor of the Indenture Trustee in the appropriate
real property or other records (which may be a blanket assignment if permitted
by applicable law), or (b) provide to the Indenture Trustee and the Insurer, an
Opinion of Counsel in a form reasonably acceptable to the Indenture Trustee and
the Insurer, to the effect that, as to any Mortgage Loan with respect to which
the related Mortgaged Property is located in such state, recordation of an
Assignment of Mortgage in such state is not necessary to transfer title to the
related Mortgage Note to the Trust or to pledge to the Indenture Trustee the
Trust's rights under such Mortgage Note in respect of which the Mortgaged
Property

                                       20
<PAGE>   25
is located in such state. In the event that any such Assignment of Mortgage is
lost or returned unrecorded because of a defect therein, the Seller, at its own
expense, shall promptly prepare a substitute Assignment of Mortgage or cure such
defect, as the case may be, and thereafter the Seller shall be required to
submit each such Assignment of Mortgage for recording. With respect to any
non-recordation state, the Seller may. Any failure of the Seller to comply with
this Section shall result in the obligation of the Seller to purchase such
Mortgage Loans pursuant to the provisions of Section 2.02 or substitute for the
related Mortgage Loans pursuant to the provisions of Section 2.06.

         It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans and the other property described above by the Depositor to
the Trust, as provided in this Agreement, be, and be construed as, a sale of all
of the Depositor's right, title and interest in the Mortgage Loans and the other
property described above by the Depositor to the Trust. It is, further, not the
intention of the parties that such conveyance be deemed a pledge of the Mortgage
Loans and the other property described above by the Depositor to the Trust to
secure a debt or other obligation of the Depositor. However, in the event, that
notwithstanding the intent of the parties, the Mortgage Loans and the other
property described above are held to be property of the Depositor, or if for any
reason this Agreement is held or deemed to create a security interest in the
Mortgage Loans and the other property described above, then, (a) this Agreement
shall also be deemed to be a security agreement within the meaning of Articles 8
and 9 of the Uniform Commercial Code in effect in the applicable state; and (b)
the Depositor hereby grants to the Trust a security interest in and to all of
the Depositor's right, title, and interest, whether now owned or hereafter
acquired, in and to:

                           (I) All accounts, contract rights, general
                  intangibles, chattel paper, instruments, documents, money,
                  deposit accounts, certificates of deposit, goods, letters of
                  credit, advices of credit, certificated securities and
                  uncertificated securities consisting of, arising from or
                  relating to any of the property described in (A) through (F)
                  below: (A) each Mortgage Loan, including (a) the Mortgage
                  File, including the Mortgage Note and the related Mortgage and
                  (b) its Principal Balance and all collections in respect
                  thereof received after the Cut-Off Date, identified on the
                  Mortgage Loan Schedule, including all Eligible Substitute
                  Mortgage Loans; (B) its rights under the Mortgage Loan
                  Purchase Agreement and the Support Agreement; (C) property
                  that secured a Mortgage Loan that is acquired by foreclosure
                  or deed in lieu of foreclosure; (D) its rights under the
                  insurance policies in respect of the Mortgage Loans (including
                  any Insurance Proceeds); (E) amounts on deposit in the
                  Collection Account and the Distribution Account; and (F) all
                  other assets included or to be included in the Trust for the
                  benefit of the Class A Noteholders, the Transferor in respect
                  of the Senior Interest Participation and the Insurer; and

                           (II) All proceeds of the collateral described in (I);

         (b) The possession by the Indenture Trustee or its designee, of
Mortgage Files, including the Mortgage Notes and the Mortgages and such other
goods, letters of credit, advices of credit, instruments, money, documents,
chattel paper or certificated securities shall be deemed to be "possession by
the secured party," or possession by a purchaser or a person designated by

                                       21
<PAGE>   26
him or her, for purposes of perfecting the security interest pursuant to the UCC
(including, without limitation, Sections 9-305, 8-313 or 8-321 thereof) as in
force in the relevant jurisdiction; and notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed to be notifications to, or acknowledgments,
receipts or confirmations from, financial intermediaries, bailees or agents (as
applicable) of the Indenture Trustee or its designee for the purpose of
perfecting such security interest under applicable law. The Seller, the
Servicer, the Depositor and the Indenture Trustee, shall, to the extent
consistent with this Agreement, take such actions as may be necessary to ensure
that, if this Agreement were deemed to create a security interest in the
Mortgage Loans and the proceeds thereof, such security interest would be deemed
to be a perfected security interest of first priority under applicable law and
will be maintained as such throughout the term of the Agreement. In connection
herewith, the Trust shall have all of the rights and remedies of a secured party
and creditor under the Uniform Commercial Code as in force in the relevant
jurisdiction.

         (c) The Indenture Trustee agrees to execute and deliver upon delivery
to it of the Mortgage Files following an Assignment Event an acknowledgment of
receipt of, for each Mortgage Loan, the items required to be delivered by the
Seller pursuant to Section 2.01(a) (i) through (vi). The Indenture Trustee
agrees, for the benefit of Class A Noteholders, and the Insurer, within     days
after such delivery, to review the Mortgage Files to ascertain that all required
documents set forth in paragraphs (i) through (vi) of Section 2.01(a) have been
executed and received, and that such documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule and that the Mortgage Notes have been
endorsed as set forth in Section 2.01(a), and in so doing the Indenture Trustee
may rely on the purported due execution and genuineness of any signature
thereon. If within such  -day period the Indenture Trustee finds any document
constituting a part of a Mortgage File not to have been executed or received or
to be unrelated to the Mortgage Loans identified in said Mortgage Loan Schedule
or, if in the course of its review, the Indenture Trustee determines that such
Mortgage File is otherwise defective in any material respect, the Indenture
Trustee shall promptly upon the conclusion of such review notify the Seller, the
Depositor and the Insurer, and the Seller shall have a period of days after such
notice within which to correct or cure any such defect; provided, however, that
if such defect shall not have been corrected or cured within such  -day period
due primarily to the failure of the related office of real property or other
records to return any document constituting a part of a Mortgage File, the
Seller shall so notify the Indenture Trustee and the Insurer in writing and the
period during which such defect may be corrected or cured shall be extended
until such time as any such documents are returned from such related office (in
no event, however, will such period extend beyond one (1) year from the date of
discovery of such defect); provided that prior to any such extension the Seller
shall deliver to the Indenture Trustee a true copy of such document certified by
the Seller to be a true and correct copy, the original of which has been
transmitted for recordation.

         The Indenture Trustee shall have no responsibility for reviewing any
Mortgage File except as expressly provided in this Section 2.01. In reviewing
any Mortgage File pursuant to this Section, the Indenture Trustee shall have no
responsibility for determining whether any document is valid and binding,
whether the text of any assignment or endorsement is in proper or recordable
form (except, if applicable, to determine if the Indenture Trustee is the
assignee or

                                       22
<PAGE>   27
endorsee), whether any document has been recorded in accordance with the
requirements of any applicable jurisdiction, or whether a blanket assignment is
permitted in any applicable jurisdiction, whether any Person executing any
document is authorized to do so or whether any signature thereon is genuine, but
shall only be required to determine whether a document has been executed, that
it appears to be what it purports to be, and, where applicable, that it purports
to be recorded.

         Section 2.02 Acceptance by Indenture Trustee.

         (a) The Indenture Trustee hereby acknowledges its receipt of the
Insurance Policy and the sale and assignment of the Mortgage Loans, and, subject
to the review and period for delivery provided for in Section 2.01, the Mortgage
Files, and declares that the Indenture Trustee will hold such documents and all
amounts received by it under the Indenture in trust, upon the terms herein set
forth, for the use and benefit of all present and future Class A Noteholders and
the Insurer.

         (b) If the Seller is given notice under Section 2.01(c) and if the
Seller does not correct or cure such omission or defect within the  -day period
specified in Section 2.01(c), the Seller shall purchase such Mortgage Loan from
the Trust or substitute an Eligible Substitute Mortgage Loan for such Mortgage
Loan on the Determination Date in the month following the month in which such
  -day period expired at the Purchase Price of such Mortgage Loan or, in the
case of a substitution, in accordance with Section 2.06. The Purchase Price and
any Substitution Adjustments for the purchased Mortgage Loan shall be deposited
in the Collection Account on the Determination Date immediately following such
  -day period; provided that the Indenture Trustee shall remit to the Depositor
or the Insurer, as applicable, the portion of the amount, if any, of the
Purchase Price referred to in clause (iv) of the definition thereof to the
extent such amount is incurred by or imposed on the Depositor or the Insurer
and, upon receipt by the Indenture Trustee of written notification of such
deposit signed by an officer of the Seller, the Indenture Trustee shall release
to the Seller the related Mortgage File and the Indenture Trustee shall execute
and deliver such instruments of transfer or assignment, prepared by and at the
expense of the Seller, in each case without recourse, representation or warranty
as shall be necessary to vest in the Seller or its designee any Mortgage Loan
released pursuant hereto. It is understood and agreed that the obligation of the
Seller to purchase any Mortgage Loan or substitute an Eligible Substitute
Mortgage Loan for such Mortgage Loan as to which a material defect in or
omission of a constituent document exists shall constitute the sole remedy
against the Seller respecting such defect or omission available to the Insurer,
the Noteholders, the Indenture Trustee, the Owner Trustee or the Transferor.

         The Servicer, promptly following the transfer of (i) a Defective
Mortgage Loan from or (ii) an Eligible Substitute Mortgage Loan to the Trust
pursuant to this Section and Section 2.06, as the case may be, shall amend the
Mortgage Loan Schedule and make appropriate entries in its general account
records to reflect such transfer and the addition of any Eligible Substitute
Mortgage Loan, if applicable.

                                       23
<PAGE>   28
         Section 2.03 Representations and Warranties Regarding the Seller and
the Servicer. The Seller and Servicer each represent and warrant each as to
itself that, as of the Closing Date:

                  (i) Each of the Seller and the Servicer is a national banking
         association, validly existing and in good standing under the laws of
         the United States and has the power and authority to own its assets and
         to transact the business in which it is currently engaged. Each of the
         Seller and the Servicer is duly qualified to do business and is in good
         standing in each jurisdiction in which the character of the business
         transacted by it or properties owned or leased by it requires such
         qualification and in which the failure so to qualify would have a
         material adverse effect on (a) its business, properties, assets or
         condition (financial or other), (b) its performance of its obligations
         under this Agreement, (c) the value or marketability of the Mortgage
         Loans or (d) the ability to foreclose on the related Mortgaged
         Properties;

                  (ii) Each of the Seller and the Servicer has the power and
         authority to make, execute, deliver and perform this Agreement and to
         consummate all of the transactions contemplated under this Agreement,
         and has taken all necessary action to authorize the execution, delivery
         and performance of this Agreement. When executed and delivered, this
         Agreement will constitute its legal, valid and binding obligation
         enforceable in accordance with its terms, except as enforcement of such
         terms may be limited by bankruptcy, insolvency, reorganization,
         receivership, moratorium or similar laws affecting the enforcement of
         creditors' rights generally and by the availability of equitable
         remedies;

                  (iii) Each of the Seller and the Servicer holds all necessary
         licenses, certificates and permits from all government authorities
         necessary for conducting its business as it is presently conducted. It
         is not required to obtain the consent of any other party or any
         consent, license, approval or authorization from, or registration or
         declaration with, any governmental authority, bureau or agency in
         connection with the execution, delivery, performance, validity or
         enforceability of this Agreement, except for such consents, licenses,
         approvals or authorizations, or registrations or declarations, as shall
         have been obtained or filed, as the case may be, prior to the Closing
         Date;

                  (iv) The execution, delivery and performance of this Agreement
         by it will not conflict with or result in a breach of, or constitute a
         default under, any provision of any existing law or regulation or any
         order or decree of any court applicable to the Seller or the Servicer
         or any of its properties or any provision of its Articles of
         Incorporation or Bylaws, or constitute a material breach of, or result
         in the creation or imposition of any lien, charge or encumbrance upon
         any of its properties pursuant to, any mortgage, indenture, contract or
         other agreement to which it is a party or by which it may be bound;

                  (v) No certificate of an officer, statement furnished in
         writing or report delivered pursuant to the terms hereof by the Seller
         or the Servicer contains any untrue statement of a material fact or
         omits to state any material fact necessary to make the certificate,
         statement or report not misleading;

                                       24
<PAGE>   29
                  (vi) The transactions contemplated by this Agreement are in
         the ordinary course of the Seller's and the Servicer's business;

                  (vii) Neither the Seller nor the Servicer is insolvent, nor
         will the Seller or the Servicer be made insolvent by the transfer of
         the Mortgage Loans, nor is the Seller or the Servicer aware of any
         pending insolvency;

                  (viii) [Reserved]

                  (ix) There are no actions or proceedings against, or
         investigations of it, pending or, to its knowledge, threatened, before
         any court, administrative agency or other tribunal (A) that, if
         determined adversely, would prohibit the Seller or the Servicer from
         entering into this Agreement, (B) seeking to prevent the consummation
         of any of the transactions contemplated by this Agreement or (C) that,
         if determined adversely, would prohibit or materially and adversely
         affect the Seller's and the Servicer's performance of any of their
         respective obligations under, or the validity or enforceability of,
         this Agreement;

                  (x) The Servicer represents and warrants that the collection
         practices used by the Servicer with respect to the Mortgage Loans have
         been, in all material respects, legal, proper, prudent and customary in
         the home equity mortgage servicing business;

                  (xi) The Servicer represents and warrants that it believes
         that the Servicing Fee Rate provides a reasonable level of base
         compensation to the Servicer for servicing the Mortgage Loans on the
         terms set forth herein;

                  (xii) The Seller represents and warrants that it did not sell
         the Mortgage Loans to the Depositor as Purchaser under the Mortgage
         Loan Purchase Agreement with any intent to hinder, delay or defraud any
         of its creditors; and the Seller will not be rendered insolvent as a
         result of the sale of the Mortgage Loans to the Depositor as Purchaser
         under the Mortgage Loan Purchase Agreement;

                  (xiii) The Seller represents and warrants that it acquired
         title to the Mortgage Loans in good faith, without notice of any
         adverse claim; and

                  (xiv) The Seller represents and warrants that the transfer,
         assignment and conveyance of the Mortgage Notes and the Mortgages by
         the Seller pursuant to the Mortgage Loan Purchase Agreement and this
         Agreement are not subject to the bulk transfer laws or any similar
         statutory provisions in effect in any applicable jurisdiction.

         (b) The representations and warranties set forth in this Section 2.03
shall survive the sale and assignment of the Mortgage Loans to the Trust. Upon
discovery of a breach of any representations and warranties which materially and
adversely affects the interests of the Indenture Trustee, the Class A
Noteholders or the Insurer, the Person discovering such breach shall give prompt
written notice to the other parties and to the Insurer. Within 60 days of its
discovery or its receipt of notice of breach, or, with the prior written consent
of a Responsible Officer of the Indenture Trustee and the Insurer, such longer
period specified in such consent, the Seller or the Servicer, as appropriate,
shall cure such breach in all material respects.

                                       25
<PAGE>   30
         Section 2.04 Representations and Warranties of the Seller Regarding the
Mortgage Loans. (a) The Seller hereby represents and warrants to the Trust,
Indenture Trustee, on behalf of the Class A Noteholders and the Insurer as
follows as of the Closing Date, unless otherwise specifically set forth herein:

                  (i) The information with respect to each Mortgage Loan set
         forth in the Mortgage Loan Schedule is complete, true and correct in
         all material respects as of the Cut-Off Date;

                  (ii) As of the Closing Date, for each Mortgage Loan, the
         related Mortgage File contains each of the documents and instruments
         specified to be included therein;

                  (iii) Each Mortgaged Property is improved by a residential
         dwelling, which does not include cooperatives or mobile homes and does
         not constitute other than real property under state law;

                  (iv) Each Mortgage Loan is being serviced by the Servicer or
         one or more Subservicers;

                  (v) Each Mortgage Loan is a [closed-end] [revolving] home
         equity loan and all amounts due under the related Mortgage Note have
         been advanced. Each Mortgage Note provides for Monthly Payments which,
         if timely paid on the Due Date therefor, are sufficient to fully
         amortize the principal balance of such Mortgage Note on or before its
         maturity date;

                  (vi) The Mortgage Note related to each Mortgage Loan bears a
         [fixed] [variable] Loan Rate and there is only one original of each
         Mortgage Note;

                  (vii) [Reserved]

                  (viii) Each Mortgage is a valid and subsisting first, second
         or third lien of record on the Mortgaged Property subject, in the case
         of any second or third Mortgage Loan, only to a First Lien or to a
         First Lien and a Second Lien respectively on such Mortgaged Property
         and subject in all cases to the exceptions to title set forth in the
         title insurance policy with respect to the related Mortgage Loan, which
         exceptions are generally acceptable to second mortgage lending
         companies, and such other exceptions to which similar properties are
         commonly subject and which do not individually, or in the aggregate,
         materially and adversely affect the benefits of the security intended
         to be provided by such Mortgage;

                  (ix) Except with respect to liens released immediately prior
         to the transfer herein contemplated, each Mortgage Note and related
         Mortgage have not been assigned or pledged and immediately prior to the
         transfer and assignment herein contemplated, the Seller held good,
         marketable and indefeasible title to, and was the sole owner and holder
         of, each Mortgage Loan subject to no liens, charges, mortgages, claims,
         participation interests, equities, pledges or security interests of any
         nature, encumbrances or rights of others (collectively, a "Lien"); the
         Seller has full right and authority under all

                                       26
<PAGE>   31
         governmental and regulatory bodies having jurisdiction over the Seller,
         subject to no interest or participation of, or agreement with, any
         party, to sell and assign the same pursuant to this Agreement; and
         immediately upon the transfer and assignment herein contemplated, the
         Seller shall have transferred all of its right, title and interest in
         and to each Mortgage Loan to the Purchaser (or its assignee) and the
         Purchaser (or its assignee) will hold good, and equitable title, to,
         and be the sole owner of, each Mortgage Loan subject to no Liens;

                  (x) None of the Mortgage Loans was or more days delinquent as
         of the Cut-Off Date;

                  (xi) [Reserved]

                  (xii) No Mortgage Loan is subject to any right of rescission,
         set-off, counterclaim or defense, including the defense of usury, nor
         will the operation of any of the terms of any Mortgage Note or
         Mortgage, or the exercise of any right thereunder, render either the
         Mortgage Note or the Mortgage unenforceable in whole or in part, or
         subject to any right of rescission, set-off, counterclaim or defense,
         including the defense of usury, and no such right of rescission,
         set-off, counterclaim or defense has been asserted with respect
         thereto;

                  (xiii) There is no mechanics' lien or claim for work, labor or
         material affecting any Mortgaged Property which is or may be a lien
         prior to, or equal or coordinate with, the lien of the related
         Mortgage, and no rights are outstanding that under law could give rise
         to such a lien except those which are insured against by the title
         insurance policy referred to in paragraph (xv) below;

                  (xiv) Each Mortgage Loan at the time it was made complied
         with, and each Mortgage Loan at all times was serviced in compliance
         with, in each case, in all material respects, applicable state and
         federal laws and regulations, including, without limitation, usury,
         equal credit opportunity, consumer credit, truth-in-lending and
         disclosure laws;

                  (xv) With respect to each Mortgage Loan, either (a) a lender's
         title insurance policy, issued in standard American Land Title
         Association or California Land Title Association form, or other form
         acceptable in a particular jurisdiction, by a title insurance company
         authorized to transact business in the state in which the related
         Mortgaged Property is situated, together with a condominium
         endorsement, if applicable, in an amount at least equal to the original
         principal balance of such Mortgage Loan insuring the Seller and its
         successor's and assignees' interest under the related Mortgage Loan as
         the holder of a valid first or second mortgage lien of record on the
         real property described in the Mortgage, subject only to the exceptions
         of the character referred to in paragraph (viii) above, was valid and
         in full force and effect on the date of the origination of such
         Mortgage Loan or (b) an attorney's opinion of title was prepared in
         connection with the origination of such Mortgage Loan;

                                       27
<PAGE>   32
                  (xvi)   The improvements upon each Mortgaged Property are
         covered by a valid and existing hazard insurance policy with a
         generally acceptable carrier that provides for fire and extended
         coverage representing coverage described in Sections 3.04 and 3.05;

                  (xvii)  A flood insurance policy is in effect with respect to
         each Mortgaged Property with a generally acceptable carrier in an
         amount representing coverage described in Sections 3.04 or 3.05, if and
         to the extent required by Sections 3.04 or 3.05;

                  (xviii) Each Mortgage and Mortgage Note is the legal, valid
         and binding obligation of the related Mortgagor and is enforceable in
         accordance with its terms, except only as such enforcement may be
         limited by bankruptcy, insolvency, reorganization, moratorium or other
         similar laws affecting the enforcement of creditors' rights generally
         and by general principles of equity (whether considered in a proceeding
         or action in equity or at law), and all parties to each Mortgage Loan
         and the Mortgagee had full legal capacity to execute all Mortgage Loan
         documents and to convey the estate therein purported to be conveyed.
         The Mortgagor is a natural person who is a party to the Mortgage Note
         and the Mortgage in an individual capacity, and not in the capacity of
         a trustee or otherwise;

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

                  (xx)    As of the Cut-Off Date, no more than [    ]% of the
         Mortgage Loans (by the Cut-Off Date Pool Principal Balance) are secured
         by Mortgaged Properties located within any single zip code area. As of
         the Cut-Off Date, at least [    ]% of the Cut-Off Date Pool Principal
         Balance is secured by Mortgaged Properties that are owner-occupied
         residences, based on representations by the related Mortgagors;

                  (xxi)   The terms of the Mortgage Note and the Mortgage have
         not been impaired, altered or modified in any material respect, except
         by a written instrument which has been recorded or is in the process of
         being recorded, if necessary, to protect the interests of the Trust,
         the Indenture Trustee on behalf of the Class A Noteholders, and the
         Insurer and which has been or will be delivered to the Indenture
         Trustee. The substance of any such alteration or modification is
         reflected on the related Mortgage Loan Schedule and was approved, if
         required, by the related primary mortgage guaranty insurer, if any.
         Each original Mortgage was recorded, and all subsequent assignments of
         the original Mortgage have been recorded in the appropriate
         jurisdictions wherein such recordation is necessary to perfect the lien
         thereof as against creditors of the Seller, or are in the process of
         being recorded;

                  (xxii)  No instrument of release or waiver has been executed
         in connection with the Mortgage Loan, and no Mortgagor has been
         released, in whole or in part;

                  (xxiii) Other than delinquencies as described in paragraph (x)
         above, there are no defaults in complying with the terms of the
         Mortgage.

                                       28
<PAGE>   33
                  (xxiv) There is no proceeding pending or threatened for the
         total or partial condemnation of any Mortgaged Property, nor is such a
         proceeding currently occurring;

                  (xxv) To the best of the Seller's knowledge, all of the
         improvements which were included for the purpose of determining the
         appraised value of the Mortgaged Property lie wholly within the
         boundaries and building restriction lines of such property, and no
         improvements on adjoining properties encroach upon the Mortgaged
         Property;

                  (xxvi) To the best of the Seller's knowledge, no improvement
         located on or being part of the Mortgaged Property is in violation of
         any applicable zoning law or regulation. All inspections, licenses and
         certificates required to be made or issued with respect to all occupied
         portions of the Mortgaged Property and, with respect to the use and
         occupancy of the same, including but not limited to certificates of
         occupancy and fire underwriting certificates, have been made or
         obtained from the appropriate authorities and the Mortgaged Property is
         lawfully occupied under applicable law;

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

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

                  (xxix) No Mortgage Loan is subject to the Home Ownership and
         Equity Protection Act of 1994;

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

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

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

                  (xxxiii) The related First Lien, if any, requires equal
         monthly payments, unless such First Lien bears an adjustable interest
         rate, the monthly payments for the related First Lien may be adjusted
         no more frequently than monthly;

                                       29
<PAGE>   34
                  (xxxiv) Either (i) no consent for the Mortgage Loan is
         required by the holder of the related First Lien or (ii) such consent
         has been obtained and is contained in the Mortgage File;

                  (xxxv) To the best of the Seller's knowledge, no Mortgaged
         Property was, as of the Cut-Off Date, located within a one-mile radius
         of any site listed in the National Priorities List as defined under the
         Comprehensive Environmental Response, Compensation and Liability Act of
         1980, as amended, or on any similar state list of hazardous waste sites
         which are known to contain any hazardous substance or hazardous waste;

                  (xxxvi) No Mortgage Loan provides for negative amortization;

                  (xxxvii) All parties which have had any interest in the
         Mortgage Loan, whether as originator, mortgagee, assignee, pledgee,
         servicer or otherwise, are (or, during the period in which they held
         and disposed of such interest, were) (1) in compliance with any and all
         applicable licensing requirements of the laws of the state wherein the
         Mortgaged Property is located, and (2)(A) organized under the laws of
         such state, or (B) qualified to do business in such state, or (C)
         federal savings and loan associations or national banks having
         principal offices in such state, or (D) not doing business in such
         state so as to require qualification or licensing;

                  (xxxviii)The Mortgage contains a customary provision for the
         acceleration of the payment of the unpaid principal balance of the
         Mortgage Loan in the event the related security for the Mortgage Loan
         is sold without the prior consent of the mortgagee thereunder;

                  (xxxix) Except as set forth in clause (x) above, there is no
         default, breach, violation or event of acceleration existing under any
         Mortgage or the related Mortgage Note and no event which, with the
         passage of time or with notice and the expiration of any grace or cure
         period, would constitute a default, breach, violation or event of
         acceleration; and the Seller has not waived any default, breach,
         violation or event of acceleration;

                  (xl) All parties to the Mortgage Note and the Mortgage had
         legal capacity to execute the Mortgage Note and the Mortgage and each
         Mortgage Note and Mortgage have been duly and properly executed by such
         parties;

                  (xli) All of the Mortgage Loans were originated in accordance
         with the underwriting criteria set forth in the Prospectus Supplement;

                  (xlii) Each Mortgage Loan conforms, and all such Mortgage
         Loans in the aggregate conform in all material respects to the
         description thereof set forth in the Prospectus Supplement; each
         Mortgage Note and Mortgage is in substantially one of the forms
         attached as Exhibit H and Exhibit I hereto;

                  (xliii) The Mortgage Loans were not selected by the Seller for
         inclusion in the Trust on any basis intended to adversely affect the
         Trust or the Insurer;

                                       30
<PAGE>   35
                  (xliv) Each hazard insurance policy required to be maintained
         under Section 3.04 with respect to the Mortgage Loan is a valid,
         binding, enforceable and subsisting insurance policy of its respective
         kind and is in full force and effect;

                  (xlv) As of the Cut-Off Date, no Mortgage Loan had a Combined
         Loan-to-Value Ratio at the time of origination of more than [    ]%;

                  (xlvi) As of the Cut-Off Date, no more than [    ]% of the
         Mortgage Loans (by Cut-Off Date Pool Principal Balance), are secured by
         Mortgaged Properties that are non-owner occupied properties. The
         Mortgaged Property is lawfully occupied under applicable law;

                  (xlvii) [Reserved]

                  (xlviii) As of the Closing Date, the Seller has not received a
         notice of default of a First Lien which has not been cured;

                  (xlix) None of the Mortgage Loans are subject to a bankruptcy
         proceeding; and

                  (l) Each of the documents and instruments included in a
         Mortgage File is duly executed and in due and proper form and each such
         document or instrument is in a form generally acceptable to prudent
         institutional mortgage lenders that regularly originate or purchase
         mortgage loans similar to the Mortgage Loans.

         With respect to the representations and warranties set forth in this
Section that are made to the best of the Seller's knowledge or as to which the
Seller has no knowledge, if it is discovered by the Depositor, the Seller, the
Owner Trustee, the Servicer, the Insurer or the Indenture Trustee that the
substance of such representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the value of the related Mortgage Loan then,
notwithstanding the Seller's lack of knowledge with respect to the substance of
such representation and warranty being inaccurate at the time the representation
or warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty and with respect to any breach of such representation
or warranty or of any other representation or warranty, the Seller shall cure,
repurchase or substitute in accordance with this Agreement.

         It is understood and agreed that the representations and warranties set
forth in this Section shall survive delivery of the respective Mortgage Files to
the Indenture Trustee and the termination of the rights and obligations of the
Servicer pursuant to Section 6.04 or 7.01 herein. Upon discovery by the
Depositor, the Seller, the Servicer, the Insurer, the Indenture Trustee or the
Owner Trustee of a breach of any of the foregoing representations and
warranties, without regard to any limitation set forth therein concerning the
knowledge of the Seller as to the facts stated therein, which materially and
adversely affects the value of the related Mortgage Loan or the interests of the
Trust, the Class A Noteholders, the Transferor in respect of the Senior Interest
Participation or the Insurer in the related Mortgage Loan, the party discovering
such breach shall give prompt written notice to the other parties and the
Insurer. Within days of its discovery or its receipt of notice of breach, the
Seller shall use all reasonable efforts to cure such breach in all material
respects and if such breach is not cured by the end of such  -day period, the
Seller shall

                                       31
<PAGE>   36
purchase such Mortgage Loan from the Trust or substitute an Eligible Substitute
Mortgage Loan, as provided in Section 2.06 below, for such Mortgage Loan. Any
such purchase by the Seller shall be at the Purchase Price and in each case
shall be accomplished in the manner set forth in Section 2.02 herein. It is
understood and agreed that the obligation of the Seller to cure, substitute or
purchase any Mortgage Loan as to which a breach has occurred and is continuing
shall constitute the sole remedy against the Seller respecting such breach
available to Class A Noteholders, the Senior Interest Participation, the Owner
Trustee, the Insurer and the Indenture Trustee on behalf of Class A Noteholders
and the Transferor in respect of the Ownership Interest.

         Section 2.05 Representations and Warranties of the Depositor. The
Depositor represents and warrants to the Trust and the Indenture Trustee on
behalf of the Class A Noteholders and the Insurer as follows:

                  (i) This Agreement constitutes a legal, valid and binding
         obligation of the Depositor, enforceable against the Depositor in
         accordance with its terms, except as enforceability may be limited by
         applicable bankruptcy, insolvency, reorganization, moratorium or other
         similar laws now or hereafter in effect affecting the enforcement of
         creditors' rights in general and except as such enforceability may be
         limited by general principles of equity (whether considered in a
         proceeding at law or in equity);

                  (ii) Immediately prior to the transfer by the Depositor to the
         Trust of each Mortgage Loan, the Depositor had good and equitable title
         to each Mortgage Loan (insofar as such title was conveyed to it by the
         Seller) subject to no prior lien, claim, participation interest,
         mortgage, security interest, pledge, charge or other encumbrance or
         other interest of any nature;

                  (iii) As of the Closing Date, the Depositor has transferred
         all right, title and interest in the Mortgage Loans to the Trust;

                  (iv) The Depositor has not transferred the Mortgage Loans to
         the Trust with any intent to hinder, delay or defraud any of its
         creditors; and

                  (v) The Depositor has been duly incorporated and is validly
         existing as a corporation in good standing under the laws of Delaware,
         with full corporate power and authority to own its assets and conduct
         its business as presently being conducted.

         Section 2.06 Substitution of Mortgage Loans. (a) On a Determination
Date which is on or before the date on which the Seller would otherwise be
required to repurchase a Mortgage Loan under Section 2.02 or 2.04, the Seller
may deliver to the Indenture Trustee one or more Eligible Substitute Mortgage
Loans in substitution for any one or more of the Defective Mortgage Loans which
the Seller would otherwise be required to repurchase pursuant to Sections 2.02
or 2.04. In connection with any such substitution, the Seller shall calculate
the Substitution Adjustment, if any, and shall deposit such amount to the
Collection Account by 12:00 p.m. New York City time on the third Business Day
prior to the Payment Date in the month succeeding the calendar month in which
the related cure period expired.

                                       32
<PAGE>   37
         (b) The Seller shall notify the Servicer, the Insurer and the Indenture
Trustee in writing not less than five Business Days before the related
Determination Date which is on or before the date on which the Seller would
otherwise be required to repurchase such Mortgage Loan pursuant to Section 2.02
or 2.04 of its intention to effect a substitution under this Section 2.06. On
such Determination Date (the "Substitution Date"), the Seller shall deliver to
the Insurer and the Indenture Trustee (1) the Eligible Substitute Mortgage Loans
to be substituted for the Defective Mortgage Loans, (2) a list of the Defective
Mortgage Loans to be substituted for by such Eligible Substitute Mortgage Loans,
(3) an Officer's Certificate (A) stating that no Event of Servicing Termination
shall have occurred and be continuing, (B) stating that the aggregate Principal
Balance of all Eligible Substitute Mortgage Loans (determined with respect to
each Eligible Substitute Mortgage Loan as of the Determination Date on which it
was substituted) including the principal balance of Eligible Substitute Mortgage
Loans being substituted on such Determination Date does not exceed an amount
equal to % of the Cut-Off Date Pool Principal Balance, (C) stating that all
conditions precedent to such substitution specified in subsection (a) have been
satisfied and attaching as an exhibit a supplemental Mortgage Loan schedule (the
"Supplemental Mortgage Loan Schedule") setting forth the same type of
information as appears on the Mortgage Loan Schedule and representing as to the
accuracy thereof and (D) confirming that the representations and warranties
contained in Section 2.04 are true and correct in all material respects with
respect to the Eligible Substitute Mortgage Loans on and as of such
Determination Date, provided that remedies for the inaccuracy of such
representations are limited as set forth in Sections 2.02, 2.04 and this Section
2.06 and (4) a certificate stating that cash in the amount of the related
Substitution Adjustment, if any, has been deposited to the Collection Account;
provided that the Indenture Trustee shall remit to the Depositor or the Insurer,
as applicable, the portion of the amount, if any, of the Substitution Adjustment
referred to in clause (d) of the definition thereof to the extent such amount is
incurred by or imposed on the Depositor or the Insurer. Upon receipt of the
foregoing, the Indenture Trustee shall release such Defective Mortgage Loans to
the Seller without recourse, representation or warranty.

         (c) Concurrently with the satisfaction of the conditions set forth in
Sections 2.06(a) and (b) above and the transfer of such Eligible Substitute
Mortgage Loans to the Indenture Trustee on behalf of the Trust pursuant to
Section 2.06(a), Exhibit A to this Agreement shall be deemed to be amended to
exclude all Mortgage Loans being replaced by such Eligible Substitute Mortgage
Loans and to include the information set forth on the Supplemental Mortgage Loan
Schedule with respect to such Eligible Substitute Mortgage Loans, and all
references in this Agreement to Mortgage Loans shall include such Eligible
Substitute Mortgage Loans and be deemed to be made on or after the related
substitution date, as the case may be, as to such Eligible Substitute Mortgage
Loans.

         (d) As to any Eligible Substitute Mortgage Loan or Loans, the Seller
shall cause to be delivered to the Indenture Trustee with respect to such
Eligible Substitute Mortgage Loan or Loans such documents and agreements as are
required to be held by the Indenture Trustee in accordance with Section 2.01.
For any Due Period during which the Seller purchases one or more Defective
Mortgage Loans, the Servicer shall determine the amount that shall be deposited
by the Seller in the Collection Account at the time of substitution. Any amounts
received in respect of the Eligible Substitute Mortgage Loan or Loans during the
Due Period in which the circumstances giving rise to such substitution occur
shall not be a part of the Trust and shall not

                                       33
<PAGE>   38
be deposited by the Servicer in the Collection Account. All amounts received by
the Servicer during the Due Period in which the circumstances giving rise to
such substitution occur in respect of any Defective Mortgage Loan so removed by
the Indenture Trustee shall be deposited by the Servicer in the Collection
Account. Upon such substitution, the Eligible Substitute Mortgage Loan or Loans
shall be subject to the terms of this Agreement in all respects, and the Seller
shall be deemed to have made with respect to such Eligible Substitute Mortgage
Loan or Loans, as of the date of substitution, the covenants, representations
and warranties set forth in Section 2.04. The procedures applied by the Seller
in selecting each Eligible Substitute Mortgage Loan shall not be materially
adverse to the interests of the Indenture Trustee, the Class A Noteholders, the
Transferor in respect of the Senior Interest Participation or the Insurer.

         Section 2.07 Tax Treatment. It is the intention of the Seller and the
Class A Noteholders that the Class A Notes will be indebtedness for federal,
state and local income and franchise tax purposes and for purposes of any other
tax imposed on or measured by income. The terms of this Agreement shall be
interpreted to further the intent of the parties hereto. The Seller, the
Indenture Trustee and each Class A Noteholder (or Class A Note Owner) by
acceptance of its Class A Note (or, in the case of a Class A Note Owner, by
virtue of such Class A Note Owner's acquisition of a beneficial interest
therein) agrees to treat the Class A Note (or beneficial interest therein), for
purposes of federal, state and local income or franchise taxes and any other tax
imposed on or measured by income, as indebtedness secured by the Trust Estate
and to report the transactions contemplated by this Agreement on all applicable
tax returns in a manner consistent with such treatment. Each Class A Noteholder
agrees that it will cause any Class A Note Owner acquiring an interest in a
Class A Note through it to comply with this Agreement as to treatment of the
Class A Notes as indebtedness for federal, state and local income and franchise
tax purposes and for purposes of any other tax imposed on or measured by income.
The Indenture Trustee will prepare and file all tax reports required hereunder
on behalf of the Trust.

                                       34
<PAGE>   39
                                  ARTICLE III.

                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

         Section 3.01 The Servicer.

         (a) The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans and shall have full power and authority, acting
alone, to do any and all things in connection with such servicing and
administration which the Servicer may deem necessary or desirable and consistent
with the terms of this Agreement. The Servicer may enter into Subservicing
Agreements for any servicing and administration of Mortgage Loans with any
institution which (i) is in compliance with the laws of each state necessary to
enable it to perform its obligations under such Subservicing Agreement, (ii) (x)
has been designated an approved Seller-Servicer by the Federal Home Loan
Mortgage Corporation ("FHLMC") or the Federal National Mortgage Association
("FNMA") for first and second mortgage loans or (y) is an affiliate of the
Servicer or (z) is otherwise approved by the Insurer. The Servicer shall give
written notice to the Insurer, and the Indenture Trustee prior to the
appointment of any Subservicer. Any such Subservicing Agreement shall be
consistent with and not violate the provisions of this Agreement and shall be in
form and substance acceptable to the Insurer and the Indenture Trustee. The
Servicer shall be entitled to terminate any Subservicing Agreement in accordance
with the terms and conditions of such Subservicing Agreement and either itself
directly service the related Mortgage Loans or enter into a Subservicing
Agreement with a successor subservicer which qualifies hereunder.

         (b) Notwithstanding any Subservicing Agreement or any of the provisions
of this Agreement relating to agreements or arrangements between the Servicer
and a Subservicer or reference to actions taken through a Subservicer or
otherwise, the Servicer shall remain obligated and primarily liable for the
servicing and administering of the Mortgage Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such Subservicing Agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Mortgage Loans. For purposes of this Agreement, the Servicer shall be deemed
to have received payments on Mortgage Loans when the Subservicer has received
such payments. The Servicer shall be entitled to enter into any agreement with a
Subservicer for indemnification of the Servicer by such Subservicer, and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.

         (c) Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such and not as an originator shall be deemed to be between
the Subservicer and the Servicer alone, and the Indenture Trustee, the Owner
Trustee and Class A Noteholders and the Transferor in respect of the Ownership
Interest shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Subservicer except as set
forth in Section 3.01(d) herein. The Servicer shall be solely liable for all
fees owed by it to any Subservicer irrespective of whether the Servicer's
compensation pursuant to this Agreement is sufficient to pay such fees.

                                       35
<PAGE>   40
         (d) In the event the Servicer shall for any reason no longer be the
Servicer (including by reason of an Event of Servicing Termination), the
Indenture Trustee or its designee approved by the Insurer shall thereupon assume
all of the rights and obligations of the Servicer under each Subservicing
Agreement that the Servicer may have entered into, unless the Indenture Trustee
or designee approved by the Insurer elects to terminate any Subservicing
Agreement in accordance with the terms of such Subservicing Agreement. Each
Subservicing Agreement shall include the provision that such agreement may be
immediately terminated by the Insurer or the Indenture Trustee in the event that
the Servicer shall, for any reason, no longer be the Servicer (including
termination due to an Event of Servicing Termination). In no event shall any
Subservicing Agreement require the Insurer or the Indenture Trustee as Successor
Servicer to pay compensation to a Subservicer or order the termination of such
Subservicer. Any fee payable or expense incurred in connection with such a
termination will be payable by the outgoing Servicer. If the Indenture Trustee
does not terminate a Subservicing Agreement, the Indenture Trustee, its designee
or the successor servicer for the Indenture Trustee shall be deemed to have
assumed all of the Servicer's interest therein and to have replaced the Servicer
as a party to each Subservicing Agreement to the same extent as if the
Subservicing Agreements had been assigned to the assuming party, except that the
Servicer shall not thereby be relieved of any liability or obligations under the
Subservicing Agreements with regard to events that occurred prior to the date
the Servicer ceased to be the Servicer hereunder. The Servicer, at its expense
and without right of reimbursement therefor, shall, upon the request of the
Indenture Trustee, deliver to the assuming party all documents and records
relating to each Subservicing Agreement and the Mortgage Loans then being
serviced and an accounting of amounts collected and held by it and otherwise use
its best efforts to effect the orderly and efficient transfer of the
Subservicing Agreements to the assuming party.

         (e) Consistent with the terms of this Agreement, the Servicer may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Servicer's determination such waiver,
modification, postponement or indulgence is not materially adverse to the
interests of the Class A Noteholders, the Transferor in respect of the Ownership
Interest and the Insurer. No costs incurred by the Servicer or any Subservicer
in respect of Servicing Advances shall, for the purposes of distributions to
Class A Noteholders, be added to the amount owing under the related Mortgage
Loan. Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered to execute and deliver on
behalf of the Indenture Trustee and each Class A Noteholder, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments with respect to the Mortgage Loans and with respect
to the Mortgaged Properties. If reasonably required by the Servicer and
requested in writing, the Indenture Trustee shall furnish the Servicer and, if
directed by the Servicer, any Subservicer with any powers of attorney and other
documents necessary or appropriate to enable the Servicer and any such
Subservicer to carry out its servicing and administrative duties under this
Agreement.

         Notwithstanding anything to the contrary contained herein, the
Servicer, in servicing and administering the Mortgage Loans, shall employ or
cause to be employed procedures (including collection, foreclosure and REO
management procedures) and exercise the same care that it customarily employs
and exercises in servicing and administering mortgage loans for its own

                                       36
<PAGE>   41
account, in accordance with accepted mortgage servicing practices of prudent
lending institutions servicing mortgage loans similar to the Mortgage Loans and
giving due consideration to the Insurer's and the Trust's reliance on the
Servicer.

         (f) On and after such time as the Indenture Trustee receives the
resignation of, or notice of the removal of, the Servicer from its rights and
obligations under this Agreement, and with respect to resignation pursuant to
Section 6.04 herein, after receipt by the Indenture Trustee and the Insurer of
the Opinion of Counsel required pursuant to Section 6.04, the Indenture Trustee,
if it so elects, and with the consent of the Insurer, shall assume all of the
rights and obligations of the Servicer, subject to Section 7.02 herein. The
Servicer shall, upon request of the Indenture Trustee, but at the expense of the
Servicer, deliver to the Indenture Trustee, all documents and records relating
to the Mortgage Loans and an accounting of amounts collected and held by the
Servicer and otherwise use its best efforts to effect the orderly and efficient
transfer of servicing rights and obligations to the assuming party.

         (g) The Servicer shall deliver a list of Servicing Officers to the
Indenture Trustee and the Insurer on or before the Closing Date and shall revise
such list from time to time, as appropriate, and shall deliver all revisions
promptly to the Indenture Trustee and the Insurer.

         (h) Consistent with the terms of this Agreement, the Servicer may
consent to the placing of a lien senior to that of the Mortgage on the related
Mortgaged Property; provided that such senior lien secures a mortgage loan that
refinances a First Lien and the combined loan-to-value ratio of the related
Mortgage Loan immediately following the refinancing (based on the outstanding
principal balance of the Mortgage Loan and the original principal balance of
such refinanced mortgage loan) is not greater than the Combined Loan-to-Value
Ratio of such Mortgage Loan as of date such Mortgage Loan was originated.

         Section 3.02 Collection of Certain Mortgage Loan Payments.

         (a) The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans and shall, to
the extent such procedures shall be consistent with this Agreement, follow such
collection procedures as it follows with respect to mortgage loans in its
servicing portfolio comparable to the Mortgage Loans. Consistent with the
foregoing, and without limiting the generality of the foregoing, the Servicer
may in its discretion (i) waive any prepayment penalty or late payment charge or
any assumption fees or other fees which may be collected in the ordinary course
of servicing such Mortgage Loan and (ii) arrange with a Mortgagor a schedule for
the payment of interest due and unpaid; provided that such arrangement is
consistent with the Servicer's policies with respect to the mortgage loans it
owns or services; provided, further, that notwithstanding such arrangement such
Mortgage Loans will be included in the monthly information delivered by the
Servicer to the Indenture Trustee pursuant to Section 5.03 herein.

         (b) The Servicer shall establish and maintain with [indenture trustee],
a separate trust account (the "Collection Account") entitled "[ ], as Indenture
Trustee, in trust for the registered holders of [ ] Home Equity Loan Asset-
Backed Notes and as Paying Agent for the Transferor in respect of the Ownership
Interest, as their interests may appear, Series 200_-_ Collection Account." The
Collection Account shall be an Eligible Account. The Servicer shall on the

                                       37
<PAGE>   42
Closing Date deposit any amounts representing payments on and any collections in
respect of the Mortgage Loans received after the Cut-Off Date and prior to the
Closing Date, and thereafter, subject to Section 3.02(d), deposit within two
Business Days following receipt thereof, the following payments and collections
received or made by it (without duplication) to the Collection Account:

                  (i) all payments received after the Cut-Off Date on account of
         principal on the Mortgage Loans and all Principal Prepayments and
         Curtailments collected after the Cut-Off Date;

                  (ii) all payments received after the Cut-Off Date on account
         of interest on the Mortgage Loans;

                  (iii) all Net Liquidation Proceeds net of related Foreclosure
         Profits;

                  (iv) all Insurance Proceeds;

                  (v) any amounts payable in connection with the repurchase of
         any Mortgage Loan and the amount of any Substitution Adjustment
         pursuant to Sections 2.02, 2.04 and 2.06;

                  (vi) all Released Mortgaged Property Proceeds; and

                  (vii) any amount required to be deposited therein pursuant to
         Sections 3.02(c), 3.05, 3.07, 3.16, 3.20, 5.06(e) and 5.07 herein;

provided, however, that with respect to each Due Period, the Servicer shall be
permitted to retain (x) from payments in respect of interest on the Mortgage
Loans, the Servicing Fee for such Due Period and (y) from payments from
Mortgagors, Liquidation Proceeds, Insurance Proceeds and Released Mortgaged
Property Proceeds, any unreimbursed Servicing Advances and Monthly Advances
related thereto. The foregoing requirements respecting deposits to the
Collection Account are exclusive, it being understood that, without limiting the
generality of the foregoing, the Servicer need not deposit in the Collection
Account amounts representing Foreclosure Profits, fees (including annual fees)
or late charge penalties payable by Mortgagors or amounts received by the
Servicer for the accounts of Mortgagors for application toward the payment of
taxes, insurance premiums, assessments and similar items.

         (c) All funds in the Collection Account shall be held (i) uninvested or
(ii) invested at the direction of the Servicer in Eligible Investments. Any
investments of funds in the Collection Account shall mature or be withdrawable
at par on or prior to three Business Days preceding the immediately succeeding
Payment Date. Any investment earnings on funds held in the Collection Account
shall be for the account of the Servicer and may be withdrawn from the
Collection Account by the Servicer at any time. Any investment losses on funds
held in the Collection Account shall be for such account of the Servicer and
promptly upon the realization of such loss shall be contributed by the Servicer
to the Collection Account. Any references herein to amounts on deposit in the
Collection Account shall refer to amounts net of such investment earnings.

                                       38
<PAGE>   43
         (d) Notwithstanding anything contained in Section 3.02(b) to the
contrary, the Servicer shall be permitted to remit the collections specified in
Section 3.02(b), net of any amount permitted to be retained by the Servicer as
set forth in the proviso to such Section, to the Collection Account in
immediately available funds no later than 12:00 p.m. New York City time on the
second Business Day prior to each Payment Date but only for so long as (a) (i)
the Servicer shall be[ ], (ii) [ ] has a rating with respect to short-term
deposit obligations of at least "A-1" by S&P and "P-1" by Moody's, and (iii) no
Event of Servicing Termination shall have occurred and be continuing.

         If the Servicer shall fail to make the deposit pursuant to this Section
3.02(d), the Indenture Trustee shall immediately notify, but in any event no
later than 12:00 p.m. New York City time on the third Business Day prior to the
Payment Date, by facsimile or telephone, [ ] and the Insurer of such failure by
the Servicer.

         Section 3.03 Withdrawals from the Collection Account. The Indenture
Trustee shall withdraw or cause to be withdrawn funds from the Collection
Account for the following purposes:

                  (i) on each Payment Date, to deposit the portion of the
         Available Funds then in the Collection Account to the Distribution
         Account;

                  (ii) to reimburse the Servicer for any accrued and unpaid
         Servicing Fees and for unreimbursed Monthly Advances and Servicing
         Advances. The Servicer's right to reimbursement for such unpaid
         Servicing Fees and unreimbursed Servicing Advances shall be limited to
         late collections on the related Mortgage Loan, including Liquidation
         Proceeds, Insurance Proceeds and such other amounts as may be collected
         by the Servicer from the related Mortgagor or otherwise relating to the
         Mortgage Loan in respect of which such reimbursed amounts are owed. The
         Servicer's right to reimbursement for unreimbursed Monthly Advances
         shall be limited to late collections of interest on the related
         Mortgage Loan and to Liquidation Proceeds and Insurance Proceeds on
         related Mortgage Loans;

                  (iii) to withdraw any amount received from a Mortgagor that is
         recoverable and sought to be recovered as a voidable preference by a
         trustee in bankruptcy pursuant to the United States Bankruptcy Code in
         accordance with a final, nonappealable order of a court having
         competent jurisdiction;

                  (iv) subject to Section 5.06 hereof, to make investments in
         Eligible Investments and to pay to the Servicer interest earned in
         respect of Eligible Investments or on funds deposited in the Collection
         Account;

                  (v) to withdraw any funds deposited in the Collection Account
         that were not required to be deposited therein or were deposited
         therein in error and to pay such funds to the appropriate Person;

                                       39
<PAGE>   44
                  (vi) to pay the Servicer the servicing compensation for the
         related Due Period that it is entitled to receive pursuant to Section
         3.09 herein to the extent not retained or paid pursuant to Section
         3.02(b) or Section 3.02(d) hereof;

                  (vii) to reimburse the Servicer for Nonrecoverable Advances
         that are not, with respect to the aggregate Servicing Advances on any
         single Mortgage Loan or REO Property, in excess of the Principal
         Balance thereof;

                  (viii) to withdraw funds necessary for the conservation and
         disposition of REO Property pursuant to Section 3.07 to the extent not
         advanced by the Servicer; and

                  (ix) to clear and terminate the Collection Account upon the
         termination of this Agreement and to pay any amounts remaining therein
         to the Transferor.

         Section 3.04 Maintenance of Hazard Insurance; Property Protection
Expenses. The Servicer shall cause to be maintained for each Mortgage Loan fire
and hazard insurance naming the Servicer or its designee as loss payee
thereunder providing extended coverage in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan from time to time, (ii) the combined principal balance owing on
such Mortgage Loan and any mortgage loan senior to such Mortgage Loan and (iii)
the minimum amount required to compensate for damage or loss on a replacement
lost basis. The Servicer shall also maintain on property acquired upon
foreclosure, or by deed in lieu of foreclosure, fire and hazard insurance with
extended coverage in an amount which is at least equal to the lesser of (i) the
maximum insurable value from time to time of the improvements which are a part
of such property, (ii) the combined principal balance owing on such Mortgage
Loan and any mortgage loan senior to such Mortgage Loan at the time of such
foreclosure, or deed in lieu of foreclosure plus accrued interest and the
good-faith estimate of the Servicer of related Servicing Advances to be incurred
in connection therewith. Amounts collected by the Servicer under any such
policies shall be deposited in the Collection Account to the extent called for
by Section 3.02. In cases in which any Mortgaged Property is located in an area
identified in a federally designated flood area, the hazard insurance to be
maintained for the related Mortgage Loan shall include flood insurance to the
extent such flood insurance is available and the Servicer has determined such
insurance to be necessary in accordance with accepted mortgage servicing
practices of prudent lending institutions. All such flood insurance shall be in
amounts not less than the lesser of (A) the amount in clause (i) above, (B) the
amount in clause (ii) above and (C) the maximum amount of insurance available
under the National Flood Insurance Act of 1968, as amended. The Servicer shall
be under no obligation to require that any Mortgagor maintain earthquake or
other additional insurance and shall be under no obligation itself to maintain
any such additional insurance on property acquired in respect of a Mortgage
Loan, other than pursuant to such applicable laws and regulations as shall at
any time be in force and as shall require such additional insurance.

         Section 3.05 Maintenance of Mortgage Impairment Insurance Policy. In
the event that the Servicer shall obtain and maintain a blanket insurance policy
consistent with prudent industry standards, insuring against fire and hazards of
extended coverage on all of the Mortgage Loans, then, to the extent such
insurance policy names the Servicer or its designee as loss payee and provides
coverage in an amount equal to the aggregate unpaid principal balance on the
Mortgage

                                       40
<PAGE>   45
Loans without coinsurance, and otherwise complies with the requirements of
Section 3.04, the Servicer shall be deemed conclusively to have satisfied its
obligations with respect to fire and hazard insurance coverage under Section
3.04, it being understood and agreed that such blanket insurance policy may
contain a deductible clause, in which case the Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property an
insurance policy complying with Section 3.04, and there shall have been a loss
which would have been covered by such insurance policy, deposit in the
Collection Account the difference, if any, between the amount that would have
been payable under an insurance policy complying with Section 3.04 and the
amount paid under such blanket insurance policy. Upon the request of the Insurer
or the Indenture Trustee, the Servicer shall cause to be delivered to the
Insurer or the Indenture Trustee, as the case may be, a certified true copy of
such insurance policy. In connection with its activities as administrator and
servicer of the Mortgage Loans, the Servicer agrees to prepare and present, on
behalf of itself, the Indenture Trustee, the Insurer and the Trust, claims under
any such insurance policy in a timely fashion in accordance with the terms of
such insurance policy.

         Section 3.06 [Reserved]

         Section 3.07 Management and Realization Upon Defaulted Mortgage Loans.
The Servicer shall manage, conserve, protect and operate each REO Property for
the Trust solely for the purpose of its prudent and prompt disposition and sale.
The Servicer shall, either itself or through an agent selected by the Servicer,
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Servicer shall attempt to sell the same (and
may temporarily rent the same) on such terms and conditions as the Servicer
deems to be in the best interest of the Insurer and the Trust.

         The Servicer shall cause to be deposited, within the time period
specified in Section 3.02(b) or 3.02(d), as applicable, in the Collection
Account, all revenues received with respect to the related REO Property and
shall retain, or cause the Indenture Trustee to withdraw therefrom, funds
necessary for the proper operation, management and maintenance of the REO
Property and the fees of any managing agent acting on behalf of the Servicer.

         The disposition of REO Property shall be carried out by the Servicer
for cash at such price, and upon such terms and conditions, as the Servicer
deems to be in the best interest of the Trust and, as soon as practicable
thereafter, the expenses of such sale shall be paid. The cash proceeds of sale
of the REO Property shall be promptly deposited in the Collection Account,
pursuant to Section 3.02(b) or 3.02(d), as applicable, net of Foreclosure
Profits and of any related unreimbursed Servicing Advances, accrued and unpaid
Servicing Fees and unreimbursed Monthly Advances payable to the Servicer in
accordance with Section 3.03, for distribution to the Class A Noteholders and
the Transferor in respect of the Senior Interest Participation in accordance
with Section 5.01 herein.

         The Servicer shall foreclose upon or otherwise comparably convert to
ownership Mortgaged Properties securing such of the Mortgage Loans as come into
and continue in default either when no satisfactory arrangements can be made for
collection of delinquent payments

                                       41
<PAGE>   46
pursuant to Section 3.01, subject to the provisions contained in the second
succeeding paragraph of this Section 3.07.

         In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Indenture Trustee or its nominee on behalf of the Trust
and the Insurer.

         If the Servicer has actual knowledge that a Mortgaged Property which
the Servicer is contemplating acquiring in foreclosure or by deed in lieu of
foreclosure is located within a 1 mile radius of any site with environmental or
hazardous waste risks, the Servicer will notify the Insurer prior to acquiring
the Mortgaged Property and shall not take any action without prior written
approval of the Insurer.

         On each Payment Date, the Servicer shall provide to the Insurer the
Liquidation Report with respect to each Mortgage Loan that became a Liquidated
Mortgage Loan during the preceding Due Period.

         Section 3.08 Indenture Trustee to Cooperate. Upon any principal
prepayment in full, the Servicer is authorized to execute, pursuant to the
authorization contained in Section 3.01(e), if the related Assignment of
Mortgage has been recorded as required hereunder, an instrument of satisfaction
regarding the related Mortgage, which instrument of satisfaction shall be
recorded by the Servicer if required by applicable law and be delivered to the
Person entitled thereto. It is understood and agreed that no expenses incurred
in connection with such instrument of satisfaction or transfer shall be
reimbursed from amounts deposited in the Collection Account. If the Indenture
Trustee is holding the Mortgage Files, from time to time and as appropriate for
the servicing or foreclosure of any Mortgage Loan, the Indenture Trustee shall,
upon request of the Servicer and delivery to the Indenture Trustee of a Request
for Release, in the form attached hereto as Exhibit J, signed by a Servicing
Officer, release the related Mortgage File to the Servicer, and the Indenture
Trustee shall execute such documents, at the expense of and in the forms
provided by the Servicer, as shall be necessary for the prosecution of any such
proceedings or the taking of other servicing actions. Such Request for Release
shall obligate the Servicer to return the Mortgage File to the Indenture Trustee
when the need therefor by the Servicer no longer exists unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that hereinabove specified, a copy of the Request for Release
shall be released by the Indenture Trustee to the Servicer.

         In order to facilitate the foreclosure of the Mortgage securing any
Mortgage Loan that is in default following recordation of the related Assignment
of Mortgage in accordance with the provisions hereof, the Indenture Trustee
shall, if so requested in writing by the Servicer execute an appropriate
assignment in the form provided to the Indenture Trustee by the Servicer to
assign such Mortgage Loan for the purpose of collection to the Servicer (any
such assignment shall unambiguously indicate that the assignment is for the
purpose of collection only) and, upon such assignment, such assignee for
collection will thereupon bring all required actions in its own name and
otherwise enforce the terms of the Mortgage Loan and deposit or credit the Net
Liquidation Proceeds, exclusive of Foreclosure Profits, received with respect
thereto in the Collection Account. In the event that all delinquent payments due
under any such Mortgage Loan are paid by the Mortgagor and any other defaults
are cured then the assignee for collection

                                       42
<PAGE>   47
shall promptly reassign such Mortgage Loan to the Indenture Trustee and return
it to the place where the related Mortgage File was being maintained.

         Section 3.09 Servicing Compensation; Payment of Certain Expenses by
Servicer. Subject to Section 5.07 herein the Servicer shall be entitled to
retain the Servicing Fee in accordance with Section 3.02 as compensation for its
services in connection with servicing the Mortgage Loans. Moreover, additional
servicing compensation in the form of prepayment penalties or late payment
charges or other receipts not required to be deposited in the Collection
Account, including, without limitation, Foreclosure Profits and, subject to
Section 3.02(b) above, investment income on the Collection Account or the
Distribution Account shall be retained by the Servicer. The Servicer shall be
required to pay all expenses incurred by it in connection with its activities
hereunder (including payment of all other fees and expenses not expressly stated
hereunder to be for the account of the Trust) and shall not be entitled to
reimbursement therefor except as specifically provided herein.

         Section 3.10 Annual Statement as to Compliance.

         (a) The Servicer will deliver to the Indenture Trustee, the Insurer,
the Depositor and the Rating Agencies, on or before the last day of the fifth
month following the end of the Servicer's fiscal year, beginning in 200_, an
Officer's Certificate stating that (i) a review of the activities of the
Servicer during the preceding fiscal year (or such shorter period as is
applicable in the case of the first report) and of its performance under this
Agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Servicer has fulfilled all
its material obligations under this Agreement throughout such fiscal year or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officer and the nature and status thereof. The
Servicer shall promptly notify the Insurer, the Seller, the Indenture Trustee
and the Rating Agencies in writing upon any change in the basis on which its
fiscal year is determined.

         (b) The Servicer shall deliver to the Indenture Trustee, the Insurer,
the Depositor, the Seller and each of the Rating Agencies, promptly after having
obtained knowledge thereof, but in no event later than five Business Days
thereafter, written notice by means of an Officer's Certificate of any event
which, with the giving of notice or the lapse of time or both, would become an
Event of Servicing Termination.

         Section 3.11 Annual Servicing Report. On or before the last day of the
fifth month following the end of the Servicer's fiscal year, beginning in [ ],
the Servicer, at its expense, shall cause a firm of independent public
accountants reasonably acceptable to the Depositor, the Trust and the Insurer to
furnish a letter or letters to the Insurer, the Seller, the Indenture Trustee,
the Depositor, the Trust and the Rating Agencies to the effect that such firm
has, with respect to the Servicer's overall servicing operations, examined such
operations in accordance with the requirements of the Uniform Single Attestation
Program for Mortgage Bankers, and stating such firm's conclusions relating
thereto. In the event such firm requires the Indenture Trustee or the Trust to
agree to the procedures performed by such firm, the Servicer shall direct the
Indenture Trustee or the Trust in writing to so agree; it being understood and
agreed that the Indenture Trustee or the Trust will deliver such letter of
agreement in conclusive reliance upon the direction of the Servicer, and the
Indenture Trustee or the Trust will make no independent

                                       43
<PAGE>   48
inquiry or investigation as to, and shall have no obligation or liability in
respect of, the sufficiency, validity or correctness of such procedures.

         Section 3.12 Access to Certain Documentation and Information Regarding
the Mortgage Loans. The Servicer shall provide to the Indenture Trustee, the
Insurer, Class A Noteholders which are federally insured savings and loan
associations, the Office of Thrift Supervision, the FDIC and the supervisory
agents and examiners of the Office of Thrift Supervision access to the
documentation regarding the Mortgage Loans required by applicable regulations of
the Office of Thrift Supervision and the FDIC (acting as operator of the SAIF or
the BIF), such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices of the Servicer. Nothing
in this Section 3.12 shall derogate from the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Servicer to provide access as provided in this
Section 3.12 as a result of such obligation shall not constitute a breach of
this Section 3.12.

         Section 3.13 [Reserved]

         Section 3.14 Reports to the Securities and Exchange Commission. The
Indenture Trustee shall, on behalf of the Trust, cause to be filed with the
Securities and Exchange Commission any periodic reports required to be filed
under the provisions of the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Securities and Exchange Commission thereunder. Upon
the request of the Indenture Trustee, each of the Depositor, the Seller and the
Servicer shall cooperate with the Indenture Trustee in the preparation of any
such report and shall provide to the Indenture Trustee in a timely manner all
such information or documentation within their control as the Indenture Trustee
may reasonably request in connection with the performance of its duties and
obligations under this Section 3.14.

         Section 3.15 Reports of Foreclosures and Abandonments of Mortgaged
Properties, Returns Relating to Mortgage Interest Received from Individuals and
Returns Relating to Cancellation of Indebtedness. The Servicer shall make
reports of foreclosures and abandonments of any Mortgaged Property for each year
beginning in [ ]. The Servicer shall file reports relating to each instance
occurring during the previous calendar year in which the Servicer (i) on behalf
of the Indenture Trustee acquires an interest in any Mortgaged Property through
foreclosure or other comparable conversion in full or partial satisfaction of a
Mortgage Loan or (ii) knows or has reason to know that any Mortgaged Property
has been abandoned. The reports from the Servicer shall be in form and substance
sufficient to meet the reporting requirements imposed by Sections 6050J, 6050H
and 6050P of the Code.

         Section 3.16 Advances by the Servicer. (a) Not later than 12:00 p.m.
New York City time on the second Business Day prior to each Payment Date, the
Servicer shall remit to the Indenture Trustee for deposit in the Distribution
Account an amount to be distributed on such Payment Date pursuant to Section
5.01 herein, equal to the interest due on each Mortgage Loan through the related
Due Date for such Mortgage Loan, but not received by the Servicer as of the
close of business on the last day of the related Due Period (net of the
Servicing Fee); such amount being defined herein as the "Monthly Advance." The
Servicer may fund all or a portion of the Monthly Advance with respect to the
Mortgage Loans by instructing the Indenture Trustee

                                       44
<PAGE>   49
on such Determination Date to use funds deposited in the Collection Account
which are not part of Available Funds for the related Payment Date; provided
that if such funds are so used the Servicer shall replace such funds on or
before any subsequent Determination Date on which such funds are required to be
part of the Available Funds.

         (b) Notwithstanding anything herein to the contrary, no Servicing
Advance or Monthly Advance shall be required to be made hereunder if the
Servicer determines, and provides the Indenture Trustee with a Servicing
Certificate to the effect, that such Servicing Advance or Monthly Advance would,
if made, constitute a Nonrecoverable Advance.

         Section 3.17 [Reserved]

         Section 3.18 Assumption Agreements. When a Mortgaged Property has been
or is about to be conveyed by the Mortgagor, the Servicer shall, to the extent
it has knowledge of such conveyance or prospective conveyance, exercise its
right to accelerate the maturity of the related Mortgage Loan under any
"due-on-sale" clause contained in the related Mortgage or Mortgage Note;
provided, however, that the Servicer shall not exercise any such right if the
"due-on-sale" clause, in the reasonable belief of the Servicer, is not
enforceable under applicable law. In such event, the Servicer shall enter into
an assumption and modification agreement with the person to whom such property
has been or is about to be conveyed, pursuant to which such person shall become
liable under the Mortgage Note and, unless prohibited by applicable law, the
Mortgagor shall remain liable thereon. The Servicer, in accordance with accepted
mortgage loan servicing standards for mortgage loans similar to the Mortgage
Loans, is also authorized to enter into a substitution of liability whereby such
person is substituted as mortgagor and becomes liable under the Mortgage Note.
The Servicer shall notify the Indenture Trustee and the Insurer in writing that
any such substitution or assumption agreement has been completed, and forward to
the Indenture Trustee the original of such substitution or assumption agreement,
which original shall be added by the Indenture Trustee to the related Mortgage
File and shall, for all purposes, be considered a part of such Mortgage File to
the same extent as all other documents and instruments constituting a part
thereof. In connection with any assumption or substitution agreement entered
into pursuant to this Section 3.18, the Servicer shall not change the Loan Rate
or the Monthly Payment, defer or forgive the payment of principal or interest,
reduce the outstanding principal amount or extend the final maturity date on
such Mortgage Loan.

         Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.

         Section 3.19 Payment of Taxes, Insurance and Other Charges. With
respect to each Mortgage Loan, the Servicer shall not be required to maintain
records relating to payment of taxes or insurance (including hazard insurance).

         Section 3.20 Optional Purchase of Defaulted Mortgage Loans. The
Servicer, in its sole discretion, shall have the right to elect (by written
notice sent to the Indenture Trustee and the Insurer) to purchase for its own
account from the Trust any Mortgage Loan which is 90 days or

                                       45
<PAGE>   50
more delinquent in the manner and at the price specified in Section 2.02. The
Purchase Price for any Mortgage Loan purchased hereunder shall be deposited in
the Collection Account pursuant to Section 3.02(b) or 3.02(d), as applicable,
provided that the Indenture Trustee shall remit to the Depositor or the Insurer,
as applicable, the portion of the amount, if any, of the Purchase Price referred
to in clause (iv) of the definition thereof to the extent such amount is
incurred by or imposed on the Depositor or the Insurer. The Indenture Trustee,
upon receipt of such deposit, shall release or cause to be released to the
purchaser of such Mortgage Loan the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment prepared by the purchaser of
such Mortgage Loan, in each case without recourse, as shall be necessary to vest
in the purchaser of such Mortgage Loan any Mortgage Loan released pursuant
hereto and the purchaser of such Mortgage Loan shall succeed to all the Trust's
right, title and interest in and to such Mortgage Loan and all security and
documents related thereto. Such assignment shall be an assignment outright and
not for security. The purchaser of such Mortgage Loan shall thereupon own such
Mortgage Loan, and all security and documents, free of any further obligation to
the Indenture Trustee, the Insurer or the Noteholders or the holders of the
Senior Interest Participation with respect thereto.

         Notwithstanding the foregoing, unless the Insurer consents, the
Servicer may only exercise its option pursuant to this Section 3.20 with respect
to the Mortgage Loan or Mortgage Loans that have been delinquent for the longest
period at the time of such repurchase. Any request by the Servicer to the
Insurer for consent to repurchase Mortgage Loans that are not the most
delinquent shall be accompanied by a description of the Mortgage Loans that have
been delinquent longer than the Mortgage Loan or Mortgage Loans which the
Servicer proposes to repurchase.

                                       46
<PAGE>   51
                                   ARTICLE IV.

                                     INSURER

         Section 4.01 Claims upon the Insurance Policy. (a) As soon as possible,
and in no event later than 10:00 a.m. New York City time on the second Business
Day immediately preceding the Payment Date, the Indenture Trustee shall furnish
the Insurer, the Fiscal Agent and the Servicer with a completed notice in the
form set forth as Exhibit A to the Insurance Policy (the "Notice for Payment")
in the event that the Insured Payment for such Payment Date is equal to an
amount greater than zero. The Notice for Payment shall specify the amount of
Insured Payment and shall constitute a claim for an Insured Payment pursuant to
the Insurance Policy. Upon receipt of an Insured Payment on behalf of the
Holders of the Class A Notes under the Insurance Policy, the Indenture Trustee
shall deposit such Insured Payment in the Distribution Account and shall
distribute such Insured Payments pursuant to Section 5.01.

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

         (c) If a payment to the Class A Noteholders which is guaranteed
pursuant to the Insurance Policy is voided (a "Preference Event") under any
applicable bankruptcy, insolvency, receivership or similar law in an Insolvency
Proceeding (as defined in the Insurance Policy), and, as a result of such a
Preference Event, the Indenture Trustee is required to return such voided
payment, or any portion of such voided payment, made in respect of the Class A
Notes (an "Avoided Payment"), the Indenture Trustee shall furnish to the Insurer
(w) a certified copy of a final order of a court exercising jurisdiction in such
Insolvency Proceeding to the effect that the Indenture Trustee is required to
return any such payment or portion thereof during the term of the Insurance
Policy because such payment was voided under applicable law, with respect to
which order the appeal period has expired without an appeal having been filed
(the "Final Order"), (x) an Opinion of Counsel satisfactory to the Insurer that
such order is final and not subject to appeal, (y) an assignment, in form
reasonably satisfactory to the Insurer, irrevocably assigning to the Insurer all
rights and claims of the Indenture Trustee relating to or arising under such
Avoided Payment and (z) a Notice for Payment appropriately completed and
executed by the Indenture Trustee. Such payment shall be disbursed to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Final Order and not to the Indenture Trustee directly (unless a Class A
Noteholder has previously paid such amount to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Final Order in which
case such payment shall be disbursed to the Beneficiary for distribution to such
Class A Noteholder upon proof of such payment reasonably satisfactory to
Insurer). The Indenture Trustee is not permitted to make a claim on the Trust or
on any Class A Noteholder for payments made to any Class A Noteholder which are
characterized as preference payments by any bankruptcy court having jurisdiction
over any bankrupt Mortgagor unless ordered to do so by such bankruptcy court.

                                       47
<PAGE>   52
         (d) Any amounts received by the Indenture Trustee pursuant to the
Insurance Policy in respect of the Class A Notes shall be deposited to the
Distribution Account.

         Section 4.02 Effect of Payments by the Insurer; Subrogation. Anything
herein to the contrary notwithstanding, any payment with respect to principal of
or interest on any of the Class A Notes which are made with moneys received
pursuant to the terms of the Insurance Policy shall not be considered payment of
such Class A Notes, as applicable, from the Trust and shall not result in the
payment of or the provision for the payment of the principal of or interest on
such Class A Notes, as applicable, within the meaning of Section 5.01 herein.
The Seller, the Servicer and the Indenture Trustee acknowledge, and each Holder
by its acceptance of a Class A Note agrees, that without the need for any
further action on the part of the Insurer, the Seller, the Servicer, the
Indenture Trustee or the Note Registrar (a) to the extent the Insurer makes
payments, directly or indirectly, on account of principal of or interest on any
Class A Notes to the Holders of such Class A Notes, the Insurer will be fully
subrogated to the rights of such Holders to receive such principal and interest,
as applicable, from the Trust and (b) the Insurer shall be paid such principal
and interest but only from the sources and in the manner provided herein and in
the Insurance Agreement for the payment of such principal and interest.

         The Indenture Trustee and the Servicer shall cooperate in all respects
with any reasonable request by the Insurer for action to preserve or enforce the
Insurer's rights or interests under this Agreement without limiting the rights
or affecting the interests of the Holders of the Class A Notes as otherwise set
forth herein.

         Section 4.03 [Reserved]

         Section 4.04 [Reserved]

         Section 4.05 Replacement Insurance Policy. In the event of a default by
the Insurer under the Insurance Policy or if the claims paying ability rating of
the Insurer is downgraded and such downgrade results in a downgrading of the
then current rating of the Class A Notes (in each case, a "Replacement Event"),
the Seller may, in accordance with and upon satisfaction of the conditions set
forth in the Insurance Policy and the Insurance and Reimbursement Agreement and
payment in full of all amounts owed to the Insurer, but shall not be required
to, substitute a new insurance policy or insurance policies for the existing
Insurance Policy, or may arrange for any other form of credit enhancement;
provided, however, that in each case the Class A Notes shall be rated no lower
than the rating assigned by each Rating Agency to the Class A Notes immediately
prior to such Replacement Event. It shall be a condition to substitution of any
new credit enhancement that there be delivered to the Indenture Trustee (i) a
legal opinion, acceptable in form and substance to the Indenture Trustee, from
counsel to the provider of such new credit enhancement with respect to the
enforceability thereof and such other matters as the Indenture Trustee may
require and (ii) an Opinion of Counsel to the effect that such substitution
would not have a materially adverse tax effect on the Trust. Upon receipt of the
items referred to above and the taking of physical possession of the new credit
enhancement, the Indenture Trustee shall, within five Business Days following
receipt of such items and such taking of physical possession, deliver the
replaced Insurance Policy to the Insurer.

                                       48
<PAGE>   53
                                   ARTICLE V.

                    PRIORITY OF DISTRIBUTIONS; STATEMENTS TO
                       NOTEHOLDERS; RIGHTS OF NOTEHOLDERS

         Section 5.01 Distributions.

         (a) Distributions of Interest and Principal Proceeds. Pursuant to
Section 5.4(b) of the Indenture, on each Payment Date, the Indenture Trustee,
with respect to the Class A Notes, and the Paying Agent, with respect to the
Ownership Interest, shall distribute out of the Distribution Account, to the
extent of Available Funds (except that amounts paid under the Insurance Policy
shall only be available for distribution to Class A Noteholders), the following
amounts and in the following order of priority to the following Persons (based
on the information set forth in the Servicing Certificate):

                  (i) to the Indenture Trustee, the Indenture Trustee Fee for
         such Payment Date, to the Owner Trustee, the Owner Trustee Fee for such
         Payment Date, and to the Insurer, the Premium Amount;

                  (ii) to the holders of the Class A Notes, an amount equal to
         the Interest Distribution for the Class A Notes for such Payment Date;

                  (iii) to the holders of the Class A Notes, the Class A
         Principal Distribution for such Payment Date (other than the portion
         constituting Distributable Excess Spread);

                  (iv) to the Insurer, the amount owing to the Insurer under the
         Insurance Agreement for reimbursement for prior draws made on the
         Insurance Policy;

                  (v) to the holders of the Class A Notes, to the extent of
         Available Funds remaining, the Distributable Excess Spread for such
         Payment Date;

                  (vi) to the Servicer, the amount of any accrued and unpaid
         Servicing Fee;

                  (vii) to the Servicer, the amount of Nonrecoverable Advances
         not previously reimbursed and any amounts payable to the Servicer
         pursuant to Section 7.03;

                  (viii) to the Insurer, any other amounts owing to the Insurer
         under the Insurance Agreement; and

                  (ix) to the Transferor in respect of the Ownership Interest,
         the balance.

         (b) Method of Distribution. The Indenture Trustee shall make
distributions in respect of a Payment Date to each Class A Noteholder of record
on the related Record Date (other than as provided in Section 8.01 respecting
the final distribution) by check or money order mailed to such Class A
Noteholder at the address appearing in the Note Register, or upon written
request by a Class A Noteholder delivered to the Indenture Trustee at least five
Business Days prior to such Record Date, by wire transfer (but only if such
Class A Noteholder is the Depository or

                                       49
<PAGE>   54
such Class A Noteholder owns of record one or more Class A Notes having
principal denominations aggregating at least $[1,000,000]), or by such other
means of payment as such Class A Noteholder and the Indenture Trustee shall
agree. Distributions among Class A Noteholders shall be made in proportion to
the Percentage Interests evidenced by the Class A Notes held by such Class A
Noteholders. The Indenture Trustee, acting in its capacity as Paying Agent,
shall make distributions in respect of a Payment Date to the Transferor of
record on the related Record Date, in respect of the Senior Interest
Participation by wire transfer or by such other means of payment as the
Transferor and the Paying Agent shall agree.

         (c) Distributions on Book-Entry Notes. Each distribution with respect
to a Book-Entry Note shall be paid to the Depository, which shall credit the
amount of such distribution to the accounts of its Depository Participants in
accordance with its normal procedures. Each Depository Participant shall be
responsible for disbursing such distribution to the Class A Note Owners that it
represents and to each indirect participating brokerage firm (a "brokerage firm"
or "indirect participating firm") for which it acts as agent. Each brokerage
firm shall be responsible for disbursing funds to the Class A Note Owners that
it represents. All such credits and disbursements with respect to a Book-Entry
Note are to be made by the Depository and the Depository Participants in
accordance with the provisions of the Class A Notes. None of the Indenture
Trustee, the Paying Agent, the Note Registrar, the Seller, the Insurer, the
Trust or the Servicer shall have any responsibility therefor except as otherwise
provided by applicable law.

         Section 5.02 Calculation of the Class A Note Rate. With respect to the
Class A Notes, on the second LIBOR Business Day immediately preceding each
Payment Date (or as of the fourth LIBOR Business Day prior to the Closing Date,
in the case of the first Payment Date), the Indenture Trustee shall determine
LIBOR for the Interest Period commencing on such Payment Date and inform the
Servicer (at the facsimile number given to the Indenture Trustee in writing) of
such rates. On or prior to each Determination Date, the Indenture Trustee shall
determine the applicable Class A Note Rate for the related Payment Date.

         Section 5.03 Statements to Noteholders. (a) Not later than 12:00 noon,
New York time, on each Determination Date, the Servicer shall deliver to the
Indenture Trustee, the Depositor and the Underwriters a computer tape (or such
other report in a form and format mutually agreeable to the Servicer and the
Indenture Trustee) (the "Servicing Certificate") containing the information set
forth in Exhibit D hereto with respect to the Mortgage Loans on an aggregate
basis as of the end of the preceding Due Period and such other information as
the Indenture Trustee shall reasonably require. Not later than 12:00 noon, New
York time, on the Business Day preceding the Payment Date, the Indenture Trustee
shall deliver to the Depositor, the Servicer, the Transferor and to the Insurer,
by telecopy, with a hard copy thereof to be delivered on such Payment Date, a
statement (the "Indenture Trustee's Statement to Noteholders") (based solely on
the information contained on the computer tape provided by the Servicer)
containing the information set forth below with respect to such Payment Date:

                  (i) The Available Funds and the Class A Note Rate for the
         related Payment Date;

                  (ii) The Class A Note Principal Balance, the Pool Principal
         Balance as reported in the prior Indenture Trustee's Statement to
         Noteholders or, in the case of the first

                                       50
<PAGE>   55
         Determination Date, the Original Class A Note Principal Balance and the
         Cut-Off Date Pool Principal Balance;

                  (iii) The aggregate amount of collections received on the
         Mortgage Loans on or prior to such Determination Date in respect of the
         preceding Due Period, separately stating the amounts received in
         respect of principal and interest;

                  (iv) The number and Principal Balances of all Mortgage Loans
         that were the subject of Principal Prepayments during the related Due
         Period;

                  (v) The amount of all Curtailments that were received during
         the Due Period;

                  (vi) The principal portion of all Monthly Payments received
         during the Due Period;

                  (vii) The interest portion of all Monthly Payments received on
         the Mortgage Loans during the Due Period;

                  (viii) The amount required to be paid by the Seller (reported
         separately) pursuant to Sections 2.02, 2.04 or 2.06;

                  (ix) The amount of the Monthly Advances and the Compensating
         Interest payment to be made with respect to such Payment Date;

                  (x) The Class A Principal Distribution to be distributed on
         the Class A Notes, and the Interest Distribution for the related
         Payment Date to be distributed on the Class A Notes and the Senior
         Interest Participation;

                  (xi) The amount, if any, of the Outstanding Interest Carryover
         Shortfall after giving effect to the distributions on the related
         Payment Date;

                  (xii) The amount of the Insured Payments, if any, to be made
         on the related Payment Date;

                  (xiii) The amount to be distributed to the Transferor in
         respect of the Senior Interest Participation pursuant to 5.01(a)(ii)
         and the Transferor Interest for the related Payment Date pursuant to
         Section 5.01(a)(ix);

                  (xiv) The Class A Note Principal Balance after giving effect
         to the distribution to be made on the related Payment Date;

                  (xv) The weighted average remaining term to maturity of the
         Mortgage Loans and the weighted average Loan Rate;

                  (xvi) The Servicing Fee to be paid to the Servicer pursuant to
         Section 5.01(a)(vi) and the amounts to be paid to the Insurer,
         separately stated, pursuant to Sections 5.01(a)(iv) and 5.01(a)(viii);

                                       51
<PAGE>   56
                  (xvii) The Premium Amount to be paid to the Insurer pursuant
         to Section 5.01;

                  (xviii) The amount of all payments or reimbursements to the
         Servicer pursuant to Section 3.03;

                  (xix) The O/C Amount, the O/C Reduction Amount, the Excess O/C
         Amount and the Specified O/C Amount for the Payment Date and the Excess
         Spread for such Payment Date;

                  (xx) The amount of Distributable Excess Spread to be
         distributed to the Class A Noteholders on such Payment Date pursuant to
         Section 5.01(a)(v) on such Payment Date;

                  (xxi) The number of Mortgage Loans outstanding at the
         beginning and at the end of the related Due Period;

                  (xxii) The Pool Principal Balance as of the end of the Due
         Period related to such Payment Date;

                  (xxiii) The number and aggregate Principal Balances of
         Mortgage Loans (w) as to which the Monthly Payment is delinquent for
         30-59 days, 60-89 days and 90 or more days, respectively, (x) that have
         become REO Properties, in each case as of the end of the preceding Due
         Period, (y) that are in foreclosure and (z) the Mortgagor of which is
         the subject of any bankruptcy or insolvency proceeding;

                  (xxiv) The unpaid principal amount of all Mortgage Loans that
         became Liquidated Mortgage Loans during such Due Period;

                  (xxv) The Net Liquidation Proceeds received during such Due
         Period;

                  (xxvi) The cumulative losses on the Mortgage Loans;

                  (xxvii) The book value (within the meaning of 12
         C.F.R.Section 571.13 or comparable provision) of any real estate
         acquired through foreclosure or grant of a deed in lieu of foreclosure;
         and

                  (xxviii) The Delinquency Percentage in respect of such Payment
         Date.

         In the case of information furnished pursuant to clauses (ii), (x) and
(xiv) above, the amounts shall be expressed, in a separate section of the
report, as a dollar amount for each Class A Note for each $1,000 original dollar
amount as of the Cut-Off Date.

         In addition, the Indenture Trustee shall forward the Indenture
Trustee's Statement to Noteholders to each Class A Noteholder, the Rating
Agencies, Bloomberg (at 499 Park Avenue, New York, New York 10022, Attention:
[           ]) and Intex Solutions (at 35 Highland Circle, Needham,
Massachusetts 02144, Attention: [           ]) on the related Payment Date. The
Indenture Trustee may fully and conclusively rely upon and shall have no
liability with respect to information provided by the Servicer.

                                       52
<PAGE>   57
         To the extent that there are inconsistencies between the telecopy of
the Indenture Trustee's Statement to Noteholders and the hard copy thereof, the
Servicer may rely upon the latter.

         (b) The Indenture Trustee shall prepare or cause to be prepared (in a
manner consistent with the treatment of the Class A Notes as indebtedness of the
Trust, or as may be otherwise required by Section 3.15 herein) Internal Revenue
Service Form 1099 (or any successor form) and any other tax forms required to be
filed or furnished to Class A Noteholders in respect of distributions by the
Indenture Trustee (or the Paying Agent) on the Class A Notes and shall file and
distribute such forms as required by law.

         (c) The Servicer and the Indenture Trustee shall furnish to each Class
A Noteholder and to the Insurer (if requested in writing), during the term of
this Agreement, such periodic, special or other reports or information, whether
or not provided for herein, as shall be necessary, reasonable or appropriate
with respect to the Class A Noteholder or the Insurer, as the case may be, or
otherwise with respect to the purposes of this Agreement, all such reports or
information to be provided by and in accordance with such applicable
instructions and directions (if requested in writing) as the Class A Noteholder
or the Insurer, as the case may be, may reasonably require; provided that the
Servicer and the Indenture Trustee shall be entitled to be reimbursed by such
Class A Noteholder or the Insurer, as the case may be, for their respective fees
and actual expenses associated with providing such reports, if such reports are
not generally produced in the ordinary course of their respective businesses or
readily obtainable.

         (d) Reports and computer tapes furnished by the Servicer pursuant to
this Agreement shall be deemed confidential and of a proprietary nature, and
shall not be copied or distributed except to the extent provided in this
Agreement and to the extent required by law or to the Rating Agencies, the
Depositor, the Insurer's reinsurers, parent, regulators, liquidity providers and
auditors and to the extent the Seller instructs the Indenture Trustee in writing
to furnish information regarding the Trust or the Mortgage Loans to third-party
information providers. No Person entitled to receive copies of such reports or
tapes or lists of Class A Noteholders shall use the information therein for the
purpose of soliciting the customers of the Seller or for any other purpose
except as set forth in this Agreement.

         Section 5.04 [Reserved]

         Section 5.05 Distribution Account. The Indenture Trustee shall
establish an account (the "Distribution Account") titled "[ ], as Indenture
Trustee, in trust for the registered holders of [ ]Home Equity Loan Asset-Backed
Notes and the Insurer, and as Paying Agent for the Transferor in respect of the
Ownership Interest, as their interests may appear, Series 200_-_ Distribution
Account." The Distribution Account shall be an Eligible Account. The Indenture
Trustee shall deposit any amounts representing payments on and any collections
in respect of the Mortgage Loans received by it immediately following receipt
thereof to the Distribution Account including, without limitation, all amounts
(i) withdrawn by the Servicer from the Collection Account pursuant to Section
3.03 herein for deposit to the Distribution Account, and (ii) drawn under the
Insurance Policy in respect of an Insured Payment. Amounts on deposit in the
Distribution Account may be invested in Eligible Investments pursuant to Section
5.06 below.

                                       53
<PAGE>   58
         Section 5.06 Investment of Accounts.

         (a) So long as no Event of Servicing Termination shall have occurred
and be continuing, and consistent with any requirements of the Code, all or a
portion of any Account held by the Indenture Trustee shall be invested and
reinvested by the Indenture Trustee, as directed in writing by the Servicer, in
one or more Eligible Investments bearing interest or sold at a discount. If an
Event of Servicing Termination shall have occurred and be continuing or if the
Servicer does not provide investment directions, the Indenture Trustee shall
invest all Accounts in Eligible Investments described in paragraph (vi) of the
definition of Eligible Investments. No such investment in any Account shall
mature later than the Business Day immediately preceding the next Payment Date
(except that (i) if such Eligible Investment is (a) an investment described in
item (vi) of Eligible Investments or (b) an obligation of the Indenture Trustee,
then such Eligible Investment shall mature not later than such Payment Date and
(ii) any other date as may be approved by the Rating Agencies and the Insurer).

         (b) If any amounts are needed for disbursement from any Account held by
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 such Account.

         (c) The Indenture Trustee shall not in any way be held liable for the
selection of Eligible Investments or by reason of any investment loss or charge
or any insufficiency in any Account held by the Indenture Trustee resulting from
any investment loss on any Eligible Investment included therein unless the
Indenture Trustee's failure to perform in accordance with this Section is the
cause of such loss or charge (except to the extent that the Indenture Trustee is
the obligor and has defaulted thereon or as provided in subsection (b) of this
Section). The Indenture Trustee shall have no liability in respect of losses
incurred as a result of the liquidation of any Eligible Investment prior to its
stated maturity or the failure of the Servicer to provide timely written
investment direction. In the absence of written investment direction, the
Indenture Trustee shall invest funds in the Accounts in the Eligible Investment
described in clause (vi) of the definition thereof.

         (d) The Indenture Trustee shall invest and reinvest funds in the
Accounts held by the Indenture Trustee, to the fullest extent practicable, in
such manner as the Servicer shall from time to time direct as set forth in
Section 5.06(a), but only in one or more Eligible Investments.

         (e) So long as no Event of Servicing Termination shall have occurred
and be continuing, all net income and gain realized from investment of, and all
earnings on, funds deposited in the Collection Account and the Distribution
Account shall be for the benefit of the Servicer as servicing compensation (in
addition to the Servicing Fee), and shall be subject to withdrawal on or before
the first Business Day of the month following the month in which such income or
gain is received. The Servicer shall deposit in the Collection Account or the
Distribution Account, as the case may be, the amount of any loss incurred in
respect of any Eligible Investment held therein which is in excess of the income
and gain thereon immediately upon realization of such loss from its own funds,
without any right to reimbursement therefore.

                                       54
<PAGE>   59
         Section 5.07 Compensating Interest. Not later than 12:00 p.m., New York
City time on the third Business Day prior to each Payment Date, the Servicer
shall remit to the Indenture Trustee for deposit to the Collection Account, an
amount equal to the lesser of (A) the aggregate of the Prepayment Interest
Shortfalls for the related Payment Date resulting from Principal Prepayments
during the related Due Period and (B) its aggregate Servicing Fees received in
the related Due Period. The Servicer shall not have the right to reimbursement
for any amount deposited to the Collection Account pursuant to this Section
5.07.

                                       55
<PAGE>   60
                                  ARTICLE VI.

                   THE SELLER, THE SERVICER AND THE DEPOSITOR

         Section 6.01 Liability of the Seller, the Servicer and the Depositor.
The Seller and the Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the Seller
or Servicer, as the case may be, herein. The Depositor shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by the Depositor.

         Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Seller, the Servicer or the Depositor. Any corporation into
which the Seller, the Servicer or Depositor may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller, the Servicer or the Depositor shall be a party, or any corporation
succeeding to the business of the Seller, the Servicer or the Depositor shall be
the successor of the Seller, the Servicer or the Depositor, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor Servicer shall satisfy
all the requirements of Section 7.02 with respect to the qualifications of a
successor Servicer, and shall be approved by the Insurer [(which approval shall
not be unreasonably withheld)].

         Section 6.03 Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors or officers or employees or agents
of the Servicer shall be under any liability to the Trust or the Class A
Noteholders for any action taken or for refraining from the taking of any action
by the Servicer in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Servicer
or any such Person against any liability which would otherwise be imposed by
reason of its willful misfeasance, bad faith or gross negligence in the
performance of duties of the Servicer or by reason of its reckless disregard of
its obligations and duties of the Servicer hereunder; provided, further, that
this provision shall not be construed to entitle the Servicer to indemnity in
the event that amounts advanced by the Servicer to retire any senior lien exceed
Net Liquidation Proceeds realized with respect to the related Mortgage Loan. The
Servicer and any director or officer or employee or agent of the Servicer may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Servicer
and any director or officer or employee or agent of the Servicer shall be
indemnified by the Trust and held harmless against any loss, liability or
expense incurred in connection with any legal action relating to this Agreement
or the Notes, other than any loss, liability or expense related to any specific
Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) and any loss,
liability or expense incurred by reason of its willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of its
reckless disregard of obligations and duties hereunder; and such amounts shall
be payable only pursuant to Section 5.01(a)(vii). The Servicer may with the
consent of the Insurer (which consent shall not be unreasonably withheld)
undertake any such action which it may deem necessary or desirable in respect of
this Agreement, and the rights and duties of the parties hereto and the
interests of the

                                       56
<PAGE>   61
Class A Noteholders hereunder. In such event, the reasonable legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust and the Servicer shall be entitled to be
reimbursed therefor only pursuant to Section 5.01(a)(vii). The Servicer's right
to indemnity or reimbursement pursuant to this Section 6.03 shall survive any
resignation or termination of the Servicer pursuant to Section 6.04 or 7.01
below with respect to any losses, expenses, costs or liabilities arising prior
to such resignation or termination (or arising from events that occurred prior
to such resignation or termination). This paragraph shall apply to the Servicer
solely in its capacity as Servicer hereunder and in no other capacities.

         Section 6.04 Servicer Not to Resign. Subject to the provisions of
Section 6.02 above, the Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that the performance
of its obligations or duties hereunder are no longer permissible under
applicable law or are in material conflict by reason of applicable law with any
other activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Servicer so causing such a conflict being of a type and nature
carried on by the Servicer or its subsidiaries or Affiliates at the date of this
Agreement or (ii) upon satisfaction of the following conditions: (a) the
Servicer has proposed a successor servicer to the Indenture Trustee in writing
and such proposed successor servicer is reasonably acceptable to the Indenture
Trustee; (b) each Rating Agency shall have delivered a letter to the Indenture
Trustee prior to the appointment of the successor servicer stating that the
proposed appointment of such successor servicer as Servicer hereunder will not
result in the reduction or withdrawal of the then current rating of the Class A
Notes; and (c) such proposed successor servicer is reasonably acceptable to the
Insurer, as evidenced by a letter to the Indenture Trustee; provided, however,
that no such resignation by the Servicer shall become effective until such
successor servicer or, in the case of (i) above, the Indenture Trustee shall
have assumed the Servicer's responsibilities and obligations hereunder or the
Indenture Trustee shall have designated a successor servicer in accordance with
Section 7.02 below. Any such resignation shall not relieve the Servicer of
responsibility for any of the obligations specified in Sections 7.01 and 7.02
below as obligations that survive the resignation or termination of the
Servicer. Any such determination permitting the resignation of the Servicer
pursuant to clause (i) above shall be evidenced by an Opinion of Counsel to such
effect delivered to the Indenture Trustee and the Insurer.

         Section 6.05 Delegation of Duties. In the ordinary course of business,
the Servicer at any time may delegate any of its duties hereunder to any Person,
including any of its Affiliates, who agrees to conduct such duties in accordance
with standards comparable to those set forth in Section 3.01 herein. Such
delegation shall not relieve the Servicer of its liabilities and
responsibilities with respect to such duties and shall not constitute a
resignation within the meaning of Section 6.04 above. The Servicer shall provide
the Insurer and the Indenture Trustee with written notice prior to the
delegation of any of its duties to any Person other than any of the Servicer's
Affiliates or their respective successors and assigns, and the Insurer shall
have consented to the appointment of any Subservicer (which consent shall not
have been unreasonably withheld).

         Section 6.06 Indemnification of the Trust by the Servicer. The Servicer
shall indemnify and hold harmless the Owner Trustee, the Trust and the Indenture
Trustee and its officers, directors, agents and employees from and against any
loss, liability, expense, damage or injury suffered or sustained by reason of
the Servicer's willful misfeasance, bad faith or gross

                                       57
<PAGE>   62
negligence in the performance of its activities in servicing or administering
the Mortgage Loans pursuant to this Agreement, including, but not limited to,
any judgment, award, settlement, reasonable fees of, counsel of its selection
and other costs or expenses incurred in connection with the defense of any
actual or threatened action, proceeding or claim related to the Servicer's
misfeasance, bad faith or gross negligence. Any such indemnification shall not
be payable from the assets of the Trust. The provisions of this indemnity shall
run directly to and be enforceable by an injured party subject to the
limitations hereof. The provisions of this Section 6.06 shall survive
termination of the Agreement or the earlier of the resignation or removal of the
Owner Trustee or the Indenture Trustee, as the case may be. In addition, the
Servicer agrees to indemnify the Indenture Trustee pursuant to Section 6.7 of
the Indenture.

                                       58
<PAGE>   63
                                  ARTICLE VII.

                              SERVICING TERMINATION

         Section 7.01 Events of Servicing Termination.

         If any one of the following events ("Events of Servicing Termination")
shall occur and be continuing:

                  (i) (A) the failure by the Servicer to make any required
         Monthly Advance when due; or (B) any other failure by the Servicer to
         deposit in the Collection Account or the Distribution Account any
         deposit required to be made under the terms of this Agreement which
         continues unremedied for a period of two Business Days after the date
         upon which written notice of such failure shall have been given to the
         Servicer by the Indenture Trustee or to the Servicer and the Indenture
         Trustee by the Insurer or by the Holders of Class A Notes representing
         not less than 25% of the aggregate Class A Note Principal Balance; or

                  (ii) the failure by the Servicer to make any required
         Servicing Advance which failure continues unremedied for a period of 30
         days, or, except as otherwise described in subclause (vi) below, the
         failure by the Servicer duly to observe or perform, in any material
         respect, any other covenants, obligations or agreements of the Servicer
         as set forth in this Agreement, which failure adversely affects the
         interests of the Class A Noteholders or the Insurer and continues
         unremedied for a period of 30 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 the Indenture Trustee or to the Servicer
         and the Indenture Trustee by the Insurer or by the Holders of Class A
         Notes representing not less than 25% of the aggregate Class A Note
         Principal Balance; or

                  (iii) the entry against the Servicer of a decree or order by a
         court or agency or supervisory authority having jurisdiction in the
         premises for the appointment of a trustee, conservator, receiver or
         liquidator in any insolvency, conservatorship, receivership,
         readjustment of debt, marshalling of assets and liabilities or similar
         proceedings, or for the winding up or liquidation of its affairs, and
         the continuance of any such decree or order unstayed and in effect for
         a period of 60 consecutive days; or

                  (iv) the Servicer shall voluntarily go into liquidation,
         consent to the appointment of a conservator or receiver or liquidator
         or similar person in any insolvency, readjustment of debt, marshalling
         of assets and liabilities or similar proceedings of or relating to the
         Servicer or of or relating to all or substantially all of its property,
         or a decree or order of a court or agency or supervisory authority
         having jurisdiction in the premises for the appointment of a
         conservator, receiver, liquidator or similar person in any insolvency,
         readjustment of debt, marshalling of assets and liabilities or similar
         proceedings, or for the winding-up or liquidation of its affairs, shall
         have been entered against the Servicer and such decree or order shall
         have remained in force undischarged, unbonded or unstayed for a period
         of 60 days; or the Servicer shall admit in writing its

                                       59
<PAGE>   64
         inability to pay its debts generally as they become due, file a
         petition to take advantage of any applicable insolvency or
         reorganization statute, make an assignment for the benefit of its
         creditors or voluntarily suspend payment of its obligations; or

                  (v) so long as the Seller is the Servicer, any failure of the
         Seller to repurchase or substitute Eligible Substitute Mortgage Loans
         for Defective Mortgage Loans as required pursuant to the Mortgage Loan
         Purchase Agreement or this Agreement; or

                  (vi) Any breach by the Servicer of a representation or
         warranty made in Section 2.03 herein, which breach materially and
         adversely affects the interests of the Class A Noteholders or the
         Insurer and continues unremedied for a period of 30 days after the
         giving of written notice of such failure to the Servicer by the
         Indenture Trustee, or to the Servicer and the Indenture Trustee by the
         Insurer or Holders of Class A Notes evidencing Percentage Interests
         aggregating not less than 25% of the aggregate Class A Note Principal
         Balance [(or such longer period[, with the consent of the Insurer
         (which consent shall not be unreasonably withheld),] as may be
         reasonably necessary to remedy such breach, provided that the Servicer
         has commenced and diligently pursues such remedy to completion)]; or

                  (vii) [Reserved];

         then, and in each and every such case, so long as an Event of Servicing
         Termination shall not have been remedied within the applicable grace
         period, (x) subject to the succeeding paragraph, with respect solely to
         clause (i)(A) above, if such Monthly Advance is not made by 4:00 P.M.,
         New York time, on the second Business Day following written notice to
         the Servicer of such event the Indenture Trustee shall terminate all of
         the rights and obligations of the Servicer under this Agreement and the
         Indenture Trustee, or any other successor servicer appointed in
         accordance with Section 7.02 below, shall immediately make such Monthly
         Advance and assume, pursuant to Section 7.02, the duties of a successor
         Servicer and (y) in the case of (i)(B), (ii), (iii), (iv), (v), (vi)
         and (vii) above, the Indenture Trustee shall, at the direction of the
         Insurer or the Holders of Class A Notes representing not less than 51%
         of the Class A Note Principal Balance (with the consent of the Insurer,
         so long as no Insurer Default exists), by notice then given in writing
         to the Servicer (and to the Indenture Trustee if given by Holders of
         Class A Notes), terminate all of the rights and obligations of the
         Servicer as servicer under this Agreement. Any such notice to the
         Servicer shall also be given to each Rating Agency, [ ], the Depositor,
         the Trust and the Insurer. On or after the receipt by the Servicer of
         such written notice, all authority and power of the Servicer under this
         Agreement, whether with respect to the Class A Notes or the Mortgage
         Loans or otherwise, shall pass to and be vested in the Indenture
         Trustee pursuant to and under this Section 7.01; and, without
         limitation, the Indenture Trustee is hereby authorized and empowered to
         execute and deliver, on behalf of the Servicer, as attorney-in-fact or
         otherwise, any and all documents and other instruments, and to do or
         accomplish all other acts or things necessary or appropriate to effect
         the purposes of such notice of termination, whether to complete the
         transfer and endorsement of each Mortgage Loan and related documents or
         otherwise. The Servicer agrees to cooperate with the Indenture Trustee
         in effecting the termination of the responsibilities and rights of the
         Servicer hereunder, including, without limitation,

                                       60
<PAGE>   65
         the transfer to the Indenture Trustee for the administration by it of
         all cash amounts that shall at the time be held by the Servicer and to
         be deposited by it in the Collection Account, or that have been
         deposited by the Servicer in the Collection Account or thereafter
         received by the Servicer with respect to the Mortgage Loans. All
         reasonable costs and expenses (including attorneys' fees) incurred in
         connection with transferring the Mortgage Files to the successor
         Servicer and amending this Agreement to reflect such succession as
         Servicer pursuant to this Section 7.01 shall be paid by the predecessor
         Servicer (or if the predecessor Servicer is the Indenture Trustee, the
         initial Servicer) upon presentation of reasonable documentation of such
         costs and expenses.

         In addition, upon the occurrence of any Trigger Event, as provided in
         the Insurance and Reimbursement Agreement, and upon the direction of
         the Insurer in connection therewith, the Indenture Trustee shall
         terminate the rights and responsibilities of the Servicer hereunder and
         shall appoint a successor Servicer in accordance with the provisions of
         Section 7.02.

         Section 7.02 Indenture Trustee to Act; Appointment of Successor.

         (a) On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 or resigns pursuant to 6.04 herein, the Indenture
Trustee or a previously agreed upon successor Servicer shall be the successor in
all respects to the Servicer in its capacity as servicer under this Agreement
and the transactions set forth or provided for herein and shall be subject to
all the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof. As compensation therefor, the
Indenture Trustee shall be entitled to such compensation as the Servicer would
have been entitled to hereunder if no such notice of termination had been given.
Notwithstanding the above, (i) if the Indenture Trustee is unwilling to act as
successor Servicer, or (ii) if the Indenture Trustee is legally unable so to
act, the Indenture Trustee shall appoint or petition a court of competent
jurisdiction to appoint, any established housing and home finance institution,
bank or other mortgage loan or home equity loan servicer having a net worth of
not less than $50,000,000 as the successor to the Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer hereunder; provided that any such successor Servicer shall be
acceptable to the Insurer, as evidenced by the Insurer's prior written consent
(which consent shall not be unreasonably withheld); and provided, further, that
the appointment of any such successor Servicer will not result in the
qualification, reduction or withdrawal of the ratings assigned to the Class A
Notes by the Rating Agencies. Pending appointment of a successor to the Servicer
hereunder, unless the Indenture Trustee is prohibited by law from so acting, the
Indenture Trustee shall act in such capacity as hereinabove provided.
Notwithstanding anything herein or in the Indenture to the contrary, in no event
shall the Indenture Trustee be held liable for any Servicing Fee or for any
differential in the amount necessary to induce any successor servicer to act as
successor servicer under this Agreement and the transactions set forth or
provided for therein. In connection with such appointment and assumption, the
successor shall be entitled to receive compensation out of payments on Mortgage
Loans in an amount equal to the compensation which the Servicer would otherwise
have received pursuant to Section 3.09 herein (or such lesser compensation as
the Indenture Trustee and such successor shall agree). The appointment of a
successor Servicer shall not affect any liability of the predecessor Servicer
which may have arisen under this Agreement prior to its termination as Servicer
to pay any deductible under an insurance policy pursuant to

                                       61
<PAGE>   66
Section 3.05 herein or to indemnify the Trust and the Indenture Trustee pursuant
to Section 6.06), nor shall any successor Servicer be liable for any acts or
omissions of the predecessor Servicer or for any breach by such Servicer of any
of its representations or warranties contained herein or in any related document
or agreement. The Indenture Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.

         (b) Any successor, including the Indenture Trustee, to the Servicer as
servicer shall during the term of its service as servicer (i) continue to
service and administer the Mortgage Loans for the benefit of the Trust, and (ii)
maintain in force an insurance policy or policies of insurance covering errors
and omissions in the performance of its obligations as Servicer hereunder and a
fidelity bond in respect of its officers, employees and agents to the same
extent as the Servicer is so required pursuant to Section 3.06 herein. No
successor servicer shall have the right to retain and commingle payments on, and
collections in respect of, the Mortgage Loans with its own funds pursuant to
Section 3.02(d) unless (i) consented to in writing by the Insurer and (ii) such
commingling will not result in a downgrade, qualification or withdrawal of the
then current ratings of the Class A Notes, without regard to the Insurance
Policy, as evidenced in writing by each Rating Agency.

         Section 7.03 Waiver of Defaults. The Insurer or the Majority
Noteholders with the consent of the Insurer (which consent shall not be
unreasonably withheld) may, on behalf of all Class A Noteholders, waive any
events permitting removal of the Servicer as servicer pursuant to this Article
VIII, provided, however, that the Insurer and the Majority Noteholders may not
waive a default in making a required distribution on a Class A Note without the
consent of the Holder of such Class A Note. Upon any waiver of a past default,
such default shall cease to exist and any Event of Servicing Termination 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.
Notice of any such waiver shall be given by the Indenture Trustee to the Rating
Agencies.

         Section 7.04 Notification to Class A Noteholders. Upon any termination
or appointment of a successor to the Servicer pursuant to this Article VII or
Section 6.04 above, the Indenture Trustee shall give prompt written notice
thereof to the Class A Noteholders at their respective addresses appearing in
the Class A Note Register, the Insurer and each Rating Agency.

                                       62
<PAGE>   67
                                  ARTICLE VIII.

                                   TERMINATION

         Section 8.01 Termination.

         (a) The respective obligations and responsibilities of the Depositor,
the Seller, the Servicer, the Trust and the Indenture Trustee created hereby
(other than the obligation of the Indenture Trustee to make certain payments to
Class A Noteholders after the Final Payment Date and the obligation of the
Servicer to send certain notices as hereinafter set forth) shall terminate upon
notice to the Indenture Trustee of the later of (A) payment in full of all
amounts owing to the Insurer unless the Insurer shall otherwise consent and (B)
the earliest of (i) the final payment or other liquidation of the last Mortgage
Loan remaining in the Trust; (ii) the optional purchase by the Servicer of the
Mortgage Loans as described below and (iii) the Payment Date in [ ].
Notwithstanding the forgoing, in no event shall the trust created hereby
continue beyond the expiration of 21 years from the date of the last survivor of
the descendants of Joseph P. Kennedy, the late ambassador of the United States
to the Court of St. James, living on the date hereof.

         (b) The Servicer may, at its option, terminate this Agreement on any
Payment Date on or after the Payment Date on which the aggregate Pool Principal
Balance is less than or equal to [ ] of the Cut-Off Date Pool Principal Balance
by purchasing, on the next succeeding Payment Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the sum of the outstanding
Pool Principal Balance and accrued and unpaid interest thereon at the weighted
average of the Loan Rates through the end of the Due Period preceding the final
Payment Date together with all amounts due and owing to the Insurer (the
"Termination Price").

         In connection with any such purchase pursuant to the preceding
paragraph, the Servicer shall deposit in the Distribution Account all amounts
then on deposit in the Collection Account (less amounts permitted to be
withdrawn by the Servicer pursuant to Section 3.03), which deposit shall be
deemed to have occurred immediately preceding such purchase.

         Any such purchase shall be accomplished by deposit into the
Distribution Account on the Determination Date before such Payment Date of the
Termination Price.

         (c) Notice of any termination, specifying the Payment Date (which shall
be a date that would otherwise be a Payment Date) upon which the Class A
Noteholders may surrender their Class A Notes to the Indenture Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Indenture Trustee (upon receipt of written directions from the Servicer, if
the Servicer is exercising its right to transfer of the Mortgage Loans, given
not later than the first day of the month preceding the month of such final
distribution) to the Insurer and to the Servicer by letter to the Class A
Noteholders mailed not earlier than the 15th day and not later than the 25th day
of the month next preceding the month of such final distribution specifying (i)
the Payment Date upon which final distribution of the Class A Notes will be made
upon presentation and surrender of Class A Notes at the office or agency of the
Indenture Trustee therein designated, (ii) the amount of any such final
distribution and (iii) that

                                       63
<PAGE>   68
the Record Date otherwise applicable to such Payment Date is not applicable,
distributions being made only upon presentation and surrender of the Class A
Notes at the office or agency of the Indenture Trustee therein specified.

         (d) Upon presentation and surrender of the Class A Notes, the Indenture
Trustee shall cause to be distributed to the Holders of the Class A Notes on the
Payment Date for such final distribution, in proportion to the Percentage
Interests of their respective Class A Notes and to the extent that funds are
available for such purpose, an amount equal to the amount required to be
distributed to Class A Noteholders pursuant to Section 5.01 for such Payment
Date. On the final Payment Date prior to having made the distributions called
for above, the Indenture Trustee shall, based upon the information set forth in
the Servicing Certificate for such Payment Date, withdraw from the Distribution
Account and remit to the Insurer the lesser of (x) the amount available for
distribution on such final Payment Date, net of any portion thereof necessary to
pay the Class A Noteholders and the Transferor in respect of the Senior Interest
Participation pursuant to Section 5.01(a) and any amounts owing to the Indenture
Trustee in respect of the Indenture Trustee Fee and (y) the unpaid amounts due
and owing to the Insurer pursuant to the Insurance Agreement.

         (e) In the event that all of the Class A Noteholders shall not
surrender their Class A Notes for final payment and cancellation on or before
such final Payment Date, the Indenture Trustee shall promptly following such
date cause all funds in the Distribution Account not distributed in final
distribution to Class A Noteholders and the holder of the Transferor Interest in
respect of the Senior Interest Participation, to be withdrawn therefrom and
credited to the remaining Class A Noteholders and the holder of the Transferor
Interest in respect of the Senior Interest Participation, as applicable, by
depositing such funds in a separate escrow account for the benefit of such Class
A Noteholders and holder of the Transferor Interest in respect of the Senior
Interest Participation, and the Servicer (if the Servicer has exercised its
right to purchase the Mortgage Loans) or the Indenture Trustee (in any other
case) shall give a second written notice to the remaining Class A Noteholders to
surrender their Class A Notes for cancellation and receive the final
distribution with respect thereto. If within nine months after the second notice
all the Class A Notes shall not have been surrendered for cancellation, the
Transferor Interest will be entitled to all unclaimed funds and other assets
which remain subject hereto and the Indenture Trustee upon transfer of such
funds shall be discharged of any responsibility for such funds and the
Noteholders shall look to the holder of the Transferor Interest for payment.

         (f) Upon payment of all amounts owed under the Insurance Policy and
cancellation of the Class A Notes, the Indenture Trustee shall provide the
Insurer notice of cancellation of the Class A Notes and surrender the Insurance
Policy to the Insurer.

                                       64
<PAGE>   69
                                  ARTICLE IX.

                            MISCELLANEOUS PROVISIONS

         Section 9.01 Amendment.

         (a) This Agreement may be amended from time to time by the Depositor,
the Seller, the Servicer, the Trust and the Indenture Trustee by written
agreement, without the consent of any of the Class A Noteholders, but only with
the consent of the Insurer (which consent shall not be unreasonably withheld)
(i) to cure any ambiguity, (ii) to correct any defective provisions or to
correct or supplement any provisions herein that may be inconsistent with any
other provisions herein, (iii) to add to the duties of the Servicer, (iv) to add
any other provisions with respect to matters or questions arising under this
Agreement or the Insurance Policy, as the case may be, which shall not be
inconsistent with the provisions of this Agreement, (v) to add or amend any
provisions of this Agreement as required by any Rating Agency or any other
nationally recognized statistical rating agency in order to maintain or improve
any rating of the Class A Notes (it being understood that, after obtaining the
ratings in effect on the Closing Date, neither the Indenture Trustee, the
Seller, the Depositor nor the Servicer is obligated to obtain, maintain or
improve any such rating), or (vi) to amend the definition of Specified O/C
Amount; provided, however, that as evidenced by an Opinion of Counsel (at the
expense of the party requesting such amendment) in each case such action shall
not, (1) have any material adverse tax consequence with respect to such Class A
Noteholder, the Insurer or the Trust or (2) adversely affect in any material
respect the interest of any Class A Noteholder or the Insurer, provided,
further, that the amendment shall not be deemed to adversely affect in any
material respect the interests of the Class A Noteholder or the Insurer, and no
Opinion of Counsel to that effect shall be required by this clause (2) if the
Person requesting the amendment obtains a letter from the Rating Agency stating
that the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Class A Notes without regard to the
Insurance Policy.

         (b) This Agreement also may be amended from time to time by the Seller,
the Servicer, the Depositor, the Trust and the Indenture Trustee, with the
consent of the Holders of Class A Notes representing not less than 51% of the
Class A Note Principal Balance, and with the consent of the Insurer (which
consent shall not be unreasonably withheld), 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 Class A
Noteholders or the Transferor in respect of the Ownership Interest; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments on the Class A Notes or Senior Interest
Participation or distributions or payments under the Insurance Policy which are
required to be made on the Class A Notes or Senior Interest Participation
without the consent of the Holder of such Class A Notes or Senior Interest
Participation or (ii) reduce the aforesaid percentage required to consent to any
such amendment, without the consent of the Holders of all Class A Notes then
outstanding.

         Prior to the execution of any such amendments, the Indenture Trustee
shall furnish written notification of the substance of such amendment to each
Rating Agency. In addition, promptly after the execution of any such amendment
made with the consent of the Class A

                                       65
<PAGE>   70
Noteholders, the Indenture Trustee shall furnish written notification of the
substance of such amendment to each Class A Noteholder and fully executed
original counterparts of the instruments effecting such amendment to the
Insurer.

         (c) It shall not be necessary for the consent of Class A Noteholders
under this Section 9.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Class A Noteholders shall be subject
to such reasonable requirements as the Indenture Trustee may prescribe.

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

         Section 9.02 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
Properties are situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Servicer at the Class A
Noteholders' expense on direction of the Indenture Trustee or the Majority Class
A Noteholders, but only when accompanied by an opinion of counsel to the effect
that such recordation materially and beneficially affects the interests of the
Class A Noteholders or is necessary for the administration or servicing of the
Mortgage Loans.

         Section 9.03 Duration of Agreement.

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

         Section 9.04 Governing Law.

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

         Section 9.05 Notices.

         All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by overnight mail, certified

                                       66
<PAGE>   71
mail or registered mail, postage prepaid, to: (i) in the case of the Seller, the
Trust or the Servicer, [         ], (ii) in the case of the Indenture Trustee,
at the Corporate Trust Office, (iii) in the case of the Insurer, [          ],
Attention: [         ], (iv) in the case of Moody's, 99 Church Street, 6th
Floor, New York, New York 10007 Attention: Residential Mortgage Monitoring, (v)
in the case of Standard & Poor's, 26 Broadway, New York, New York 10004, (vi) in
the case of the Depositor, [          ], (vii) in the case of [          ] and
(viii) in the case of the Class A Noteholders, as set forth in the Note
Register. Any such notices shall be deemed to be effective with respect to any
party hereto upon the receipt of such notice by such party, except that notices
to the Class A Noteholders shall be effective upon mailing or personal delivery.

         Section 9.06 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 9.07 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 9.08 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.

         Section 9.09 Successors and Assigns.

         This Agreement shall inure to the benefit of and be binding upon the
Servicer, the Seller, the Trust, the Indenture Trustee and the Class A
Noteholders and their respective successors and permitted assigns. The Insurer
is an express third party beneficiary of this Agreement.

         Section 9.10 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 9.11 Indenture Trustee.

         All privileges, rights and immunities given to the Indenture Trustee in
the Indenture are hereby extended to and applicable to the Indenture Trustee's
obligations hereunder.

         Section 9.12 Reports to Rating Agencies.

                                       67
<PAGE>   72
         The Indenture Trustee shall provide to each Rating Agency copies of
statements, reports and notices, to the extent received or prepared by the
Servicer hereunder, as follows:

                  (i) copies of amendments to this Agreement;

                  (ii) notice of any substitution or repurchase of any Mortgage
         Loans;

                  (iii) notice of any termination, replacement, succession,
         merger or consolidation of either the Servicer or the Trust;

                  (iv) notice of final payment on the Class A Notes;

                  (v) notice of any Event of Servicing Termination;

                  (vi) copies of the annual independent auditor's report
         delivered pursuant to Section 3.11 herein, and copies of any compliance
         reports delivered by the Servicer hereunder including Section 3.10
         herein; and

                  (vii) copies of any Servicing Certificate pursuant to Section
         5.03 herein.

         Section 9.13 Inconsistencies Among Transaction Documents.

         In the event certain provisions of a Transaction Document conflict with
the provisions of this Sale and Servicing Agreement, the parties hereto agree
that the provisions of this Sale and Servicing Agreement shall be controlling.

         Section 9.14 Rights of the Insurer to Exercise Rights of Noteholders.

         By accepting its Class A Note, each Class A Noteholder agrees that
unless an Insurer Default exists, the Insurer shall have the right to exercise
all rights of the Class A Noteholders as specified under this Agreement without
any further consent of the Class A Noteholders. Any right conferred to the
Insurer hereunder shall be suspended and shall run to the benefit of the Class A
Noteholders during any period in which there exists an Insurer Default.

                                       68
<PAGE>   73
         IN WITNESS WHEREOF, the following 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 Sale and Servicing Agreement.

                               [         ]HOME EQUITY LOAN TRUST 200_-_,
                               By:   [                ], not in its individual
                               capacity but solely as Owner Trustee

                               By:_____________________________________________
                                  Name:
                                  Title:

                               [                         ],
                                       as Seller and Servicer

                               By:_____________________________________________
                                  Name:
                                  Title:

                               Fleet Home Equity Loan Corporation,
                                       as Depositor

                               By:_____________________________________________
                                  Name:
                                  Title:

                               [                                  ],
                                       as Indenture Trustee

                               By:_____________________________________________
                                  Name:
                                  Title:
<PAGE>   74
THE STATE OF ___________    )
                            )
COUNTY OF ___________       )

         BEFORE ME, on [         ], the undersigned authority, a Notary Public,
on this day personally appeared [________________________], known to me to be a
person and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of the said [               ]not
in its individual capacity but in its capacity as Owner Trustee of [          ]
HOME EQUITY LOAN TRUST 200_-_, as the Trust, and that he executed the same as
the act of such corporation for the purpose and consideration therein expressed,
and in the capacity therein stated.

                                              _________________________________
                                              Notary Public, State of ________

                                       2
<PAGE>   75
THE STATE OF ___________    )
                            )
COUNTY OF ___________       )

         BEFORE ME, on [         ], the undersigned authority, a Notary Public,
on this day personally appeared ______________________________, known to me to
be a person and officer whose name is subscribed to the foregoing instrument
and acknowledged to me that the same was the act of the said [            ], as
the Seller and the Servicer, and that he executed the same as the act of such
corporation for the purpose and consideration therein expressed, and in the
capacity therein stated.

                                              _________________________________
                                              Notary Public, State of ________

                                       3
<PAGE>   76
THE STATE OF ___________    )
                            )
COUNTY OF ___________       )

         BEFORE ME, on [         ], the undersigned authority, a Notary Public,
on this day personally appeared ______________________________, known to me to
be a person and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of the said [                ], as
the Depositor, and that he executed the same as the act of such corporation for
the purpose and consideration therein expressed, and in the capacity therein
stated.

                                              _________________________________
                                              Notary Public, State of ________

                                       4
<PAGE>   77
THE STATE OF ___________    )
                            )
COUNTY OF ___________       )

         BEFORE ME, on [          ], the undersigned authority, a Notary
Public, on this day personally appeared ______________________________, 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
[______________________________ ], as Indenture Trustee, and that he executed
the same as the act of such corporation for the purposes and consideration
therein expressed, and in the capacity therein stated.

                                              _________________________________
                                              Notary Public, State of ________

                                       5
<PAGE>   78
THE STATE OF ___________    )
                            )
COUNTY OF ___________       )

         BEFORE ME, on [         ] the undersigned authority, a Notary Public,
on this day personally appeared [                ], 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 [                   ],
and that he executed the same as the act of such corporation for the purposes
and consideration therein expressed, and in the capacity therein stated.

                                              _________________________________
                                              Notary Public, State of ________

                                       6
<PAGE>   79
                                                                       EXHIBIT A

                             MORTGAGE LOAN SCHEDULE

                                      A-1
<PAGE>   80
                                                                       EXHIBIT B

                           LIST OF SERVICING OFFICERS

                                      B-1
<PAGE>   81
                                                                       EXHIBIT C

                    FORM OF MONTHLY STATEMENT TO NOTEHOLDERS

                                      C-1
<PAGE>   82
                                                                       EXHIBIT D

                          FORM OF SERVICING CERTIFICATE

                                      D-1
<PAGE>   83
                                                                       EXHIBIT E

        LETTER OF DEPOSITOR TO INDENTURE TRUSTEE RE: EXCHANGE ACT REPORTS

                                                             [DATE]

[Address]
[Address]
[Address]

                 Re:    [ ] Home Equity Loan Trust ____-_,
                        [ ] Home Equity Loan Asset-Backed Notes,
                        Series _____-_
                        -------------------------------------------------------

Ladies and Gentlemen:

         Pursuant to and in reference to Section 3.14 of the Sale and Servicing
Agreement dated as of [          ] relating to the above referenced Notes,
please note the following:

         (a)      CIK Number for [ ] Home Equity Loan Trust ____-_ (the
                  "Trust"): ____________.

         (b)      CCC for the Trust should be applied for at your earliest
                  convenience and reported to our attention.

         In order to comply with the reporting obligations for the Trust under
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), the
Indenture Trustee must file within 15 days following each Payment Date a copy of
the report distributed by the Indenture Trustee to the Noteholders in a current
report on Form 8-K. Such reports provide all current information ordinarily of
interest to the Noteholders. The Indenture Trustee must also report on a current
report on Form 8-K any significant occurrences during the reporting period that
would be reportable under Item 1, Item 2, Item 4 and Item 5. In addition, the
Indenture Trustee should cause the filing of an annual report on Form 10-K
within 90 days following the end of the Trust's fiscal year containing the
following information:

                                      E-1
<PAGE>   84
         Part I, Item 3.      A description of any material pending litigation;
         Part I, Item 4.      A description of any submission matters to vote
                              of Noteholders;
         Part II, Item 5.     A statement of the number of Noteholders and the
                              principal market, if any, in which the Notes
                              trade;
         Part II, Item 9.     A  statement as to any changes in or
                              disagreements with the independent public
                              accounts for the Trust;
         Part IV, Item 14.    A copy of the annual certificate of compliance by
                              an officer of the Master Servicer, and any
                              Subservicer and the audit of the servicing by the
                              independent accounting firm.

Promptly after filing the Form 10-K, the Indenture Trustee should file a Form 15
in accordance with Section 3.14 of the Sale and Servicing Agreement,
deregistering the Trust and terminating the reporting obligations under the
Exchange Act. All filings must be made through the Edgar System and all
acceptance slips from the filings should be saved as they will be needed for the
annual certificate.

                                                   [                  ]

                                                   By: ________________________
                                                   Name:
                                                   Title:

                                      E-2
<PAGE>   85
                                                                       EXHIBIT F

                           FORM OF LIQUIDATION REPORT

                                      F-1
<PAGE>   86
                                                                       EXHIBIT G

                              FORM OF CLASS A NOTES

                                      G-1
<PAGE>   87
                                                                       EXHIBIT H

                              FORM OF MORTGAGE NOTE

                                      H-1
<PAGE>   88
                                                                       EXHIBIT I

                                FORM OF MORTGAGE

                                      I-1
<PAGE>   89
                                                                       EXHIBIT J

                           FORM OF REQUEST FOR RELEASE

                                                              [DATE]

[Address]
[Address]
[Address]

Attention:

                  Re:    [ ] Home Equity Loan Asset-Backed Notes, Series ____-_

Gentlemen:

         In connection with the administration of the Mortgage Loans held by you
as Indenture Trustee under the Sale and Servicing Agreement dated as of
[         ], among [         ], as Seller and Servicer, [         ] Home Equity
Loan Trust ____-_, [         ], as Depositor, and you, as Indenture Trustee
(the "Sale and Servicing Agreement"), we hereby request a release of the
Mortgage File held by you as Indenture Trustee with respect to the following
described Mortgage Loan for the reason indicated below.

Loan No.:

Reason for requesting file:

______   1.       Mortgage Loan paid in full. (The Servicer hereby certifies
         that all amounts received in connection with the payment in full of the
         Mortgage Loan which are required to be deposited in the Collection
         Account pursuant to Section 3.02 of the Sale and Servicing Agreement
         have been so deposited).

______   2.       The Mortgage Loan is being foreclosed.

______   3.       The Mortgage Loan is being re-financed by another depository
         institution. (The Servicer hereby certifies that all amounts received
         in connection with the payment in full of the Mortgage Loan which are
         required to be deposited in the Collection Account pursuant to Section
         3.02 of the Sale and Servicing Agreement have been so deposited).

______   4.       Other (Describe).

         The undersigned acknowledges that the above Mortgage File will be held
by the undersigned in accordance with the provisions of the Sale and Servicing
Agreement and will

                                      J-1
<PAGE>   90
promptly be returned to the Indenture Trustee when the need therefor by the
Servicer no longer exists unless the Mortgage Loan has been liquidated.

         Capitalized terms used herein shall have the meanings ascribed to them
in the Sale and Servicing Agreement.

                                            [                   ]

                                            By:________________________________
                                                Name:
                                                Title:  Servicing Officer

                                      J-2
<PAGE>   91
                                                                       EXHIBIT K

                        SPECIMEN OF THE INSURANCE POLICY

                                      K-1
<PAGE>   92
                                                                       EXHIBIT L

                              CUSTODIAL FEE LETTER

                                      L-1<PAGE>   1
                                                                     Exhibit 4.3

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

                                 TRUST AGREEMENT

                                      among

                             [                    ]
                                   as Seller,

                       Fleet Home Equity Loan Corporation
                                  as Depositor,

                                       and

                             [                    ],
                                as Owner Trustee

                           Dated as of [            ]

                        [ ] HOME EQUITY LOAN TRUST 200_-_
               Home Equity Loan Asset-Backed Notes, Series 200_-_

--------------------------------------------------------------------------------
<PAGE>   2
                                Table of Contents

<TABLE>
<CAPTION>
                                                                                                              Page
                                                                                                              ----
<S>                                                                                                           <C>
                                    ARTICLE I
                                   DEFINITIONS

    Section 1.1           Capitalized Terms.................................................................    1
    Section 1.2           Other Definitional Provisions.....................................................    4

                                   ARTICLE II
                                  ORGANIZATION

    Section 2.1           Name..............................................................................    5
    Section 2.2           Office............................................................................    5
    Section 2.3           Purposes and Powers...............................................................    5
    Section 2.4           Appointment of Owner Trustee......................................................    6
    Section 2.5           Initial Capital Contribution of Owner Trust Estate................................    6
    Section 2.6           Declaration of Trust..............................................................    6
    Section 2.7           Title to Trust Property...........................................................    6
    Section 2.8           Situs of Trust....................................................................    6
    Section 2.9           Representations and Warranties of the Depositor...................................    7
    Section 2.10          Federal Income Tax Allocations....................................................    8

                                   ARTICLE III
           OWNERSHIP INTEREST AND TRANSFERS OF THE OWNERSHIP INTEREST

    Section 3.1           Initial Ownership.................................................................    9
    Section 3.2           The Ownership Interest............................................................    9
    Section 3.3           [Reserved]........................................................................    9
    Section 3.4           Registration of Transfer and Exchange of Ownership Interest.......................    9
    Section 3.5           [Reserved]........................................................................    9
    Section 3.6           Persons Deemed Transferors........................................................    9
    Section 3.7           [Reserved]........................................................................    9
    Section 3.8           Maintenance of Office or Agency...................................................    9
    Section 3.9           Appointment of Paying Agent.......................................................   10
    Section 3.10          [Reserved]........................................................................   10
    Section 3.11          [Reserved]........................................................................   10
    Section 3.12          [Reserved]........................................................................   10
    Section 3.13          Restrictions on Transfers of Ownership Interest...................................   10

                                   ARTICLE IV
                            ACTIONS BY OWNER TRUSTEE

    Section 4.1           Prior Notice to the Transferor and the Insurer with Respect to Certain Matters....   13
</TABLE>

                                       i
<PAGE>   3
<TABLE>
<S>                                                                                                           <C>
    Section 4.2           [Reserved]........................................................................   15
    Section 4.3           Action by Transferor with Respect to Bankruptcy...................................   15
    Section 4.4           Restrictions on Transferor's Power................................................   15

                                    ARTICLE V
                   APPLICATION OF TRUST FUNDS; CERTAIN DUTIES

    Section 5.1           Establishment of Trust Account....................................................   16
    Section 5.2           Application Of Trust Funds........................................................   16
    Section 5.3           Method of Payment.................................................................   16
    Section 5.4           [Reserved]........................................................................   16
    Section 5.5           Accounting and Reports to the Transferor, the Internal Revenue Service and Others.   16
    Section 5.6           Signature on Returns..............................................................   17

                                   ARTICLE VI
                      AUTHORITY AND DUTIES OF OWNER TRUSTEE

    Section 6.1           General Authority.................................................................   18
    Section 6.2           General Duties....................................................................   18
    Section 6.3           Action upon Instruction...........................................................   18
    Section 6.4           No Duties Except as Specified in this Agreement, the Transaction Documents or in
                          Instructions......................................................................   19
    Section 6.5           No Action Except Under Specified Documents or Instructions........................   20
    Section 6.6           Restrictions......................................................................   20

                                   ARTICLE VII
                          CONCERNING THE OWNER TRUSTEE

    Section 7.1           Acceptance of Trusts and Duties...................................................   21
    Section 7.2           Furnishing of Documents...........................................................   22
    Section 7.3           Representations and Warranties....................................................   22
    Section 7.4           Reliance; Advice of Counsel.......................................................   23
    Section 7.5           Not Acting in Individual Capacity.................................................   23
    Section 7.6           Owner Trustee Not Liable for the Ownership Interest or the Mortgage Loans.........   24
    Section 7.7           Owner Trustee May Own the Ownership Interest and the Notes........................   24
    Section 7.8           Licenses..........................................................................   24

                                  ARTICLE VIII
                          COMPENSATION OF OWNER TRUSTEE

    Section 8.1           Owner Trustee's Fees and Expenses.................................................   25
    Section 8.2           Indemnification...................................................................   25
</TABLE>

                                       ii
<PAGE>   4
<TABLE>
<S>                                                                                                           <C>
    Section 8.3           Payments to the Owner Trustee.....................................................   25

                                   ARTICLE IX
                         TERMINATION OF TRUST AGREEMENT

    Section 9.1           Termination of Trust Agreement....................................................   26

                                    ARTICLE X
             SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

    Section 10.1          Eligibility Requirements for Owner Trustee........................................   28
    Section 10.2          Resignation or Removal of Owner Trustee...........................................   28
    Section 10.3          Successor Owner Trustee...........................................................   29
    Section 10.4          Merger or Consolidation of Owner Trustee..........................................   29
    Section 10.5          Appointment of Co-Owner Trustee or Separate Owner Trustee.........................   29

                                   ARTICLE XI
                                  MISCELLANEOUS

    Section 11.1          Supplements and Amendments........................................................   32
    Section 11.2          No Legal Title to Owner Trust Estate in Transferor................................   33
    Section 11.3          Limitations on Rights of Others...................................................   33
    Section 11.4          Notices...........................................................................   33
    Section 11.5          Severability......................................................................   33
    Section 11.6          Separate Counterparts.............................................................   34
    Section 11.7          Successors and Assigns............................................................   34
    Section 11.8          No Petition.......................................................................   34
    Section 11.9          [Reserved]........................................................................   34
    Section 11.10         No Recourse.......................................................................   34
    Section 11.11         Headings..........................................................................   34
    Section 11.12         GOVERNING LAW.....................................................................   34
    Section 11.13         Inconsistencies with Sale and Servicing Agreement.................................   35
    Section 11.14         Third Party Beneficiary...........................................................   35

EXHIBIT A         Certificate of Trust......................................................................  A-1
EXHIBIT B         Form of Transfer Certificate..............................................................  B-1
</TABLE>

                                      iii
<PAGE>   5
         TRUST AGREEMENT, dated as of [     ], among [     ], Fleet Home Equity
Loan Corporation, as depositor (the "Depositor") and [the Owner Trustee], a
Delaware banking corporation, as owner trustee (the "Owner Trustee").

                                   ARTICLE I

                                   DEFINITIONS

         Section 1.1 Capitalized Terms. For all purposes of this Agreement, the
following terms shall have the meanings set forth below:

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

         "Bankruptcy Action" shall have the meaning assigned to such term in
Section 4.1.

         "Benefit Plan" shall have the meaning assigned to such term in Section
3.13.

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

         "Certificate" shall mean the Ownership Interest.

         "Certificate of Trust" shall mean the Certificate of Trust in the form
of Exhibit A to be filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.

         "Code" shall mean the Internal Revenue Code of 1986, as amended.

         "Corporate Trust Office" shall mean, (i) with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee, which office
at date of execution of this Agreement, is located at [___________], Attention:
Corporate Trust Administration; or at such other address in the State of
Delaware as the Owner Trustee may designate by notice to the Transferor and the
Trust, or the principal corporate trust office of any successor Owner Trustee
(the address (which shall be in the State of Delaware) of which the successor
owner trustee will notify the Transferor and the Trust); or (ii) with respect to
the Indenture Trustee, the principal corporate trust office of the Indenture
Trustee, which office at date of execution of this Agreement, is located at
[__________], Attention: Indenture Trust Administration, or at such other
address as the Indenture Trustee may designate by notice to the Transferor and
the Trust, or the principal corporate trust office of any successor Indenture
Trustee (the address (which shall be in the State of [ ]) of which the successor
indenture trustee will notify the Transferor and the Trust.

         "Depositor" shall mean Fleet Home Equity Loan Corporation or its
successors.

         "Distribution Account" shall have the meaning assigned to such term in
the Sale and Servicing Agreement.
<PAGE>   6
         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

         "Expenses" shall have the meaning assigned to such term in Section 8.2.

         "Indenture" shall mean the Indenture, dated as of [____________], by
and between the Trust and the Indenture Trustee.

         "Indenture Trustee" shall mean [____________], as Indenture Trustee
under the Indenture.

         "Initial Note Principal Balance" shall mean with respect to the Class A
Notes, $[____________].

         "Insurance Agreement" shall mean the Insurance and Reimbursement
Agreement dated as of [____________] among the Indenture Trustee, the Depositor,
the Seller, the Servicer and the Insurer, including any amendments and
supplements thereto.

         "Non-permitted Foreign Owner" shall have the meaning set forth in
Exhibit B hereto.

         "Non-U.S. Person" shall mean any Person other than (i) a citizen or
resident of the United States, (ii) an entity treated for United States federal
income tax purposes as a corporation or partnership created or organized in or
under the laws of the United States or any state thereof, including the District
of Columbia, (iii) an estate that is subject to U.S. federal income tax
regardless of the source of its income, (iv) a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States trustees have authority to control all
substantial decisions of the trust, or (v) certain trusts in existence on August
20, 1996 and treated as United States persons on such date that elect to
continue to be so treated.

          "Owner Trust Estate" shall mean the contribution of $1 referred to in
Section 2.5 and the Trust Estate.

         "Owner Trustee" shall mean [____________], a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
this Agreement, and any successor owner trustee hereunder.

         "Ownership Interest" shall have the meaning specified in Section 3.2.

         "Prospective Transferor" shall mean any prospective purchaser or
prospective transferee of the Ownership Interest.

         "Rating Agency Condition" shall mean, with respect to certain actions
requiring Rating Agency consent, that each Rating Agency shall have been given
10 days (or such shorter period as is acceptable to each Rating Agency) prior
notice thereof and that each of the Rating Agencies shall have notified the
Depositor, the Seller, the Owner Trustee, the Insurer and the Trust in writing
that such action will not result in a reduction or withdrawal of the then
current rating of the Notes, without regard to the Insurance Policy.

                                       2
<PAGE>   7
         "Record Date" shall mean the last Business Day preceding the related
Payment Date; provided, however, that following the date on which Definitive
Notes are available pursuant to Section 2.2 of the Indenture, the Record Date
shall be the last day of the calendar month preceding the month in which the
related Payment Date occurs.

         "Register" shall mean a register kept by the Registrar in which,
subject to such reasonable regulations as it may prescribe, the Registrar shall
provide for the registration of the Certificate and the registration of
transfers of the Certificate. The location of the Registrar shall be the same as
that of the Corporate Trust Office of the Indenture Trustee.

         "Registrar" shall mean the [indenture trustee] as Registrar hereunder.

         "Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement dated as of the date hereof, among the Trust, the Depositor, the
Seller, the Indenture Trustee and the Servicer.

         "Secretary of State" shall mean the Secretary of State of the State of
Delaware.

         "Seller" shall mean [____________] or its successors.

         "Servicer" shall mean [____________], or any successor servicer
appointed pursuant to the Sale and Servicing Agreement.

         "Transaction Documents" shall mean each of the Indenture, the Sale and
Servicing Agreement, the Insurance Agreement and this Agreement.

         "Transferor" shall mean the owner of the Ownership Interest.

         "Transferor Interest" shall have the meaning specified in Section 3.2.

         "Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.

         "Trust" shall mean [ ] Home Equity Loan Trust 200_-_, the Delaware
business trust created pursuant to this Agreement.

         "Trust Estate" shall mean the assets subject to the Sale and Servicing
Agreement, the Mortgage Loan Purchase Agreement, this Trust Agreement and the
Indenture, assigned to the Indenture Trustee, which assets consist of: (i) each
Mortgage Loan and the related Mortgage File, including its Principal Balance and
all collections in respect thereof received after the Cut-Off Date; (ii)
property that secured a Mortgage Loan that is acquired by foreclosure or deed in
lieu of foreclosure; (iii) the Seller's rights under any insurance policies
relating to the Mortgage Loans (including any Insurance Proceeds); (iv) amounts
on deposit in the Collection Account

                                       3
<PAGE>   8
and Distribution Account; (v) the Depositor's rights under the Purchase
Agreement and (vi) any proceeds of any of the foregoing and (vii) all other
assets included or to be included in the Trust for the benefit of Noteholders
and the Insurer. In addition, on or prior to the Closing Date, the Seller shall
cause the Insurer to deliver the Insurance Policy to the Indenture Trustee for
the benefit of the Noteholders.

         "Underwriter" shall mean [____________].

         Section 1.2 Other Definitional Provisions.

                  (a) Capitalized terms used herein and not otherwise defined
herein have the meanings assigned to them in the Sale and Servicing Agreement
or, if not defined therein, in the Indenture.

                  (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 generally accepted accounting principles. To the extent that
the definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this
Agreement or in any such certificate or other document shall control.

                  (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; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."

                  (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.

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

                                       4
<PAGE>   9
                                   ARTICLE II
                                  ORGANIZATION

         Section 2.1 Name. The Trust created hereby shall be known as "[ ] Home
Equity Loan Trust 200_-_," in which name the Owner Trustee may conduct the
business of the Trust and make and execute contracts and other instruments on
behalf of the Trust and the Trust may sue and be sued.

         Section 2.2 Office. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in the
State of Delaware as the Owner Trustee may designate by written notice to the
Transferor.

         Section 2.3 Purposes and Powers.

                  (a) The purpose of the Trust is to engage in the following
activities:

                  (i) to issue the Notes pursuant to the Indenture and the
         Ownership Interest pursuant to this Agreement and to sell such Notes
         and Ownership Interest;

                  (ii) with the proceeds of the sale of the Notes and the
         Ownership Interest, to fund start-up and transactional expenses of the
         Trust and to pay the balance to the Depositor, or at the direction of
         the Depositor, to pay the Seller, as its interests may appear pursuant
         to the Sale and Servicing Agreement;

                  (iii) to assign, grant, transfer, pledge, mortgage and convey
         the Trust Estate pursuant to the Indenture and to hold, manage and
         distribute to the Transferor pursuant to the terms of the Sale and
         Servicing Agreement any portion of the Trust Estate released from the
         lien of, and remitted to the Trust pursuant to, the Indenture;

                  (iv) to enter into and perform its obligations under the
         Transaction Documents to which it is to be a party;

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

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

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

                                       5
<PAGE>   10
         Section 2.4 Appointment of Owner Trustee. The Depositor hereby appoints
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein.

         Section 2.5 Initial Capital Contribution of Owner Trust Estate. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Trust,
as of the date hereof, the sum of $1. The Owner Trustee hereby acknowledges
receipt in trust from the Depositor, as of the date hereof, of the foregoing
contribution, which shall constitute the initial Owner Trust Estate and shall be
deposited in the Distribution Account. The Depositor shall pay organizational
expenses of the Trust as they may arise or shall, upon the request of the Owner
Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the
Owner Trustee.

         Section 2.6 Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Transferor, subject
to the obligations of the Trust under the Transaction Documents. It is the
intention of the parties hereto that the Trust constitute a business trust under
the Business Trust Statute and that this Agreement constitute the governing
instrument of such business trust. It is the intention of the parties hereto
that, solely for income and franchise tax purposes, the Trust shall be treated
as a security arrangement, with the assets of the Trust being the Trust Estate
and the Transferor being the owner of the Ownership Interest. The parties agree
that, unless otherwise required by appropriate tax authorities, the Trust will
file or cause to be filed annual or other necessary returns, reports and other
forms, if any, consistent with the characterization of the Trust as provided in
the preceding sentence for such tax purposes. Effective as of the date hereof,
the Owner Trustee shall have all rights, powers and duties set forth herein and
in the Business Trust Statute with respect to accomplishing the purposes of the
Trust. The Owner Trustee has filed the Certificate of Trust with the Secretary
of State of the State of Delaware.

         Section 2.7 Title to Trust Property.

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

                  (b) The Transferor shall not have legal title to any part of
the Owner Trust Estate. No transfer by operation of law or otherwise of any
interest of the Transferor shall operate to terminate this Agreement or the
trusts hereunder or entitle any transferee to an accounting or to the transfer
to it of any part of the Owner Trust Estate.

         Section 2.8 Situs of Trust. The Trust will be located and administered
in the State of Delaware. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware or the State of
[____________]. The Trust shall not have any employees; provided, however, that
nothing herein shall restrict or prohibit the Owner Trustee

                                       6
<PAGE>   11
from having employees within or without the State of Delaware. Payments will be
received by the Trust only in Delaware or [____________], and payments will be
made by the Trust only from Delaware or [____________]. The only office of the
Trust will be at the Corporate Trust Office in Delaware.

         Section 2.9 Representations and Warranties of the Depositor.

         The Depositor hereby represents and warrants to the Owner Trustee and
the Insurer that:

                  (a) The Depositor is a [____________]. The Depositor has the
power and authority to execute and deliver this Agreement and to perform in
accordance herewith; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by the Depositor and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
action of the Depositor; this Agreement evidences the valid, binding and
enforceable obligation of the Depositor; and all requisite action has been taken
by the Depositor to make this Agreement valid, binding and enforceable upon the
Depositor in accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally or the application of equitable principles
in any proceeding, whether at law or in equity.

                  (b) The consummation of the transactions contemplated by this
Agreement will not result in (i) the breach of any terms or provisions of the
Articles of Incorporation or Bylaws of the Depositor, (ii) the breach of any
term or provision of, or conflict with or constitute a default under or result
in the acceleration of any obligation under, any material agreement, indenture
or loan or credit agreement or other material instrument to which the Depositor,
or its property is subject, or (iii) the violation of any law, rule, regulation,
order, judgment or decree to which the Depositor or its respective property is
subject.

                  (c) The Depositor is not in default with respect to any order
or decree of any court or any order, regulation or demand of any federal, state,
municipal or other governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or
otherwise) or operations of the Depositor or its properties or might have
consequences that would materially and adversely affect its performance
hereunder.

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

                                       7
<PAGE>   12
         Section 2.10 Federal Income Tax Allocations. Net income of the Trust
for any month, as determined for Federal income tax purposes (and each item of
income, gain, loss and deduction entering into the computation thereof), shall
be allocated to the Transferor.

                                       8
<PAGE>   13
                                  ARTICLE III

           OWNERSHIP INTEREST AND TRANSFERS OF THE OWNERSHIP INTEREST

         Section 3.1 Initial Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.5, the Transferor shall be
the sole owner of the Trust.

         Section 3.2 The Ownership Interest. The Ownership Interest (as defined
below) shall be uncertificated and shall represent the entire beneficial
ownership interest in the assets of the Trust Estate, subject to the debt
represented by the Notes (the "Ownership Interest" or "Transferor Interest").
The Ownership Interest may be assigned by the Transferor as provided in Section
3.13.

         A transferee of the Ownership Interest shall become the Transferor, and
shall be entitled to the rights and subject to the obligations of the Transferor
hereunder, upon such transferee's acceptance of the Ownership Interest duly
registered in such transferee's name pursuant to Section 3.4 below.

         Section 3.3 [Reserved].

         Section 3.4 Registration of Transfer and Exchange of Ownership
Interest. The Owner Trustee hereby appoints [____________] as Registrar under
this Agreement. The Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 3.8, a Register in which, subject to such
reasonable regulations as it may prescribe, the Register shall provide for the
registration of the Ownership Interest and of transfer and exchange of the
Ownership Interest as herein provided. The Registrar, subject to Section 3.13
hereof, on behalf of the Trust shall note on the Register the transfer of the
Ownership Interest.

         Section 3.5 [Reserved].

         Section 3.6 Persons Deemed Transferors. Prior to due assignment of the
Ownership Interest for registration of transfer, the Depositor, the Seller, the
Owner Trustee, the Indenture Trustee, the Insurer and the Registrar may treat
the Person in whose name the Ownership Interest shall be registered in the
Register as the owner thereof for the purpose of receiving distributions
pursuant to Section 5.2 hereof and for all other purposes whatsoever, and none
of the Depositor, the Seller, the Owner Trustee, the Indenture Trustee, the
Insurer or the Registrar shall be bound by any notice to the contrary.

         Section 3.7 [Reserved]

         Section 3.8 Maintenance of Office or Agency. The Indenture Trustee
shall maintain an office or offices or agency or agencies (initially, the
Corporate Trust Office of the Indenture Trustee) where instructions for the
transfer of the Ownership Interest may be delivered for registration of transfer
[or exchange] pursuant to Section 3.4 and where notices and demands to or upon
the Registrar in respect of the Ownership Interest and the Transaction Documents
may

                                       9
<PAGE>   14
be served. The Indenture Trustee shall give prompt written notice to the Seller,
the Insurer, the Owner Trustee and the Transferor of any change in the location
of the Register or any such office or agency.

         Section 3.9 Appointment of Paying Agent. The Owner Trustee hereby
appoints the Indenture Trustee as Paying Agent under this Agreement. The Paying
Agent shall make distributions to the Transferor from the Distribution Account
pursuant to Section 5.2 hereof and Section 5.01 of the Sale and Servicing
Agreement and shall report the amounts of such distributions to the Owner
Trustee. The Paying Agent shall have the revocable power to withdraw funds from
the Distribution Account for the purpose of making the distributions referred to
above. In the event that the Indenture Trustee shall no longer be the Paying
Agent hereunder, the Owner Trustee shall appoint a successor to act as Paying
Agent (which shall at all times be a corporation duly incorporated and validly
existing under the laws of the United States of America or any state thereof,
authorized under such laws to exercise corporate trust powers and subject to
supervision or examination by federal or state authorities). The Owner Trustee
shall cause such successor Paying Agent or any additional Paying Agent appointed
by the Owner Trustee to execute and deliver to the Owner Trustee an instrument
in which such successor Paying Agent or additional Paying Agent shall agree with
the Owner Trustee that as Paying Agent, such successor Paying Agent or
additional Paying Agent will hold all sums, if any, held by it for payment to
the Transferor in trust for the benefit of the Transferor until such sums shall
be paid to the Transferor. The Paying Agent shall return all unclaimed funds to
the Owner Trustee, and upon removal of a Paying Agent, such Paying Agent shall
also return all funds in its possession to the Owner Trustee. Any reference in
this Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.

         Section 3.10 [Reserved].

         Section 3.11 [Reserved].

         Section 3.12 [Reserved].

         Section 3.13 Restrictions on Transfers of Ownership Interest. The
Ownership Interest shall not be sold, pledged, transferred or assigned, except
as provided below.

                  (a) The Ownership Interest may not be acquired by or for the
account of (i) an employee benefit plan (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")) that is
subject to the provisions of Title I of ERISA, (ii) a plan described in Section
4975(e)(1) of the Code, or (iii) any entity, including an insurance company
separate account or general account, whose underlying assets include plan assets
by reason of a plan's investment in the entity (each, a "Benefit Plan"). Each
Prospective owner of the Ownership Interest, other than the Seller or an
affiliate of the Seller, shall represent and warrant, in writing, to the Owner
Trustee and the Registrar and any of their respective successors that:

                                       10
<PAGE>   15
                  (i) Such Person is (A) a "qualified institutional buyer" as
         defined in Rule 144A under the Securities Act of 1933, as amended (the
         "Securities Act"), and is aware that the seller of such Ownership
         Interest may be relying on the exemption from the registration
         requirements of the Securities Act provided by Rule 144A and is
         acquiring such Ownership Interest for its own account or for the
         account of one or more qualified institutional buyers for whom it is
         authorized to act, (B) an "accredited investor" as defined in Rule
         501(a) under the Securities Act , or (C) a Person involved in the
         organization or operation of the Trust or an affiliate of such Person
         within the meaning of Rule 3a-7 of the 1940 Act, as amended (including,
         but not limited to, the Seller or the Transferor).

                  (ii) Such Person understands that such Ownership Interest has
         not been and will not be registered under the Securities Act and may be
         offered, sold, pledged or otherwise transferred only to a person whom
         the seller reasonably believes is (A) a "qualified institutional
         buyer," (B) "an accredited investor" or (C) a Person involved in the
         organization or operation of the Trust or an affiliate of such Person,
         in each case in a transaction meeting the requirements of Rule 144A
         under the Securities Act or that is otherwise exempt from registration
         under the Securities Act and in accordance with any applicable
         securities laws of any state of the United States.

                  (iii) Such Person shall comply with the provisions of Section
         3.13(b), as applicable, relating to the ERISA restrictions with respect
         to the acceptance or acquisition of such Ownership Interest .

                  (b) Each Prospective Transferor, other than the Transferor or
an affiliate of the Transferor, shall either:

                  (i) represent and warrant, in writing, to the Owner Trustee
         and the Registrar and any of their respective successors, in accordance
         with Exhibit B hereto, that the Prospective Transferor is not (A) an
         "employee benefit plan" within the meaning of Section 3(3) of the
         Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
         or (B) a "plan" within the meaning of Section 4975(e)(1) of the Code
         (any such plan or employee benefit plan, a "Plan") or (C) any entity,
         including an insurance company separate account or general account,
         whose underlying assets include plan assets by reason of a plan's
         investment in the entity and is not directly or indirectly purchasing
         such Ownership Interest on behalf of, as investment manager of, as
         named fiduciary of, as trustee of, or with assets of a Plan; or

                  (ii) furnish to the Owner Trustee and the Registrar and any of
         their respective successors an opinion of counsel acceptable to such
         persons that (A) the proposed issuance or transfer of such Ownership
         Interest to such Prospective Transferor will not cause any assets of
         the Trust to be deemed assets of a Plan, and (B) the proposed holding
         or transfer of such Ownership Interest will not cause the Owner Trustee
         or the Registrar or any of their respective successors to be a
         fiduciary of a Plan within the meaning of

                                       11
<PAGE>   16
         Section 3(21) of ERISA and will not give rise to a transaction
         described in Section 406 of ERISA or Section 4975(c)(1) of the Code for
         which a statutory or administrative exemption is unavailable.

                  (c) [Reserved].

                  (d) The Prospective Transferor, other than the Transferor or
an affiliate of the Transferor, shall obtain an Opinion of Counsel to the effect
that, as a matter of federal income tax law, such Prospective Transferor is
permitted to accept the transfer of the Ownership Interest.

                  (e) The Ownership Interest may not be pledged or transferred
without delivery to the Registrar of an Opinion of Counsel to the effect that
such transfer would not jeopardize the tax treatment of the Trust, would not
subject the Trust to an entity-level tax, and would not jeopardize the status of
the Notes as debt for all purposes.

                  (f) No pledge or transfer of the Ownership Interest shall be
effective unless such purchase or transfer is (i) to a single beneficial owner
and (ii) accompanied by an opinion of counsel satisfactory to the Owner Trustee,
which Opinion of Counsel shall not be an expense of the Trust, the Registrar,
the Servicer or the Seller, to the effect such pledge or transfer will not cause
the Trust to be treated for federal income tax purposes as a taxable mortgage
pool, association or a publicly traded partnership taxable as a corporation.

                  (g) Transfer of the Ownership Interest shall be made only if
accompanied by an opinion of counsel satisfactory to the Owner Trustee, which
opinion of counsel shall not be an expense of the Trust, the Owner Trustee, the
Servicer or the Seller, to the effect such transfer will not cause the Trust to
be treated for federal income tax purposes as an association, a taxable mortgage
pool or a publicly traded partnership taxable as a corporation.

                                       12
<PAGE>   17
                                   ARTICLE IV

                            ACTIONS BY OWNER TRUSTEE

         Section 4.1 Prior Notice to the Transferor and the Insurer with Respect
to Certain Matters. With respect to the following matters, the Owner Trustee
shall not take action, and neither the Transferor nor the Insurer shall direct
the Owner Trustee to take any action, unless (i) the Insurer has provided its
written consent and (ii) at least 30 days before the taking of such action, the
Owner Trustee shall have notified the Transferor in writing of the proposed
action and neither the Transferor nor the Insurer shall have notified the Owner
Trustee in writing prior to the 30th day after such notice is given that the
Transferor has withheld consent or the Transferor or the Insurer have provided
alternative direction:

                  (a) the initiation of any claim or lawsuit by the Trust
(except claims or lawsuits brought in connection with the collection of the
Mortgage Loans) and the compromise of any action, claim or lawsuit brought by or
against the Trust (except with respect to the aforementioned claims or lawsuits
for collection of the Mortgage Loans);

                  (b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under the
Business Trust Statute);

                  (c) the amendment or other change to this Agreement or any
Transaction Document in circumstances where the consent of any Noteholder or the
Insurer is required;

                  (d) the amendment or other change to this Agreement or any
Transaction Document in circumstances where the consent of any Noteholder or the
Insurer is not required and such amendment materially adversely affects the
interest of the Transferor;

                  (e) the appointment pursuant to the Indenture of a successor
Note Registrar, Paying Agent or Indenture Trustee, or the consent to the
assignment by the Note Registrar, Paying Agent or Indenture Trustee of its
obligations under the Indenture;

                  (f) the consent to the calling or waiver of any default of any
Transaction Document;

                  (g) the consent to the assignment by the Indenture Trustee or
the Seller of their respective obligations under any Transaction Document;

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

                  (i) merge or consolidate the Trust with or into any other
entity, or, except as contemplated by the Sale and Servicing Agreement, convey
or transfer all or substantially all of the Trust's assets to any other entity;

                                       13
<PAGE>   18
                  (j) cause the Trust to incur, assume or guaranty any
indebtedness other than the Notes, as set forth in this Agreement;

                  (k) do any act that conflicts with any other Transaction
Document;

                  (l) do any act which would make it impossible to carry on the
ordinary business of the Trust;

                  (m) confess a judgment against the Trust;

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

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

         In addition, except as specifically contemplated by the Transaction
Documents, the Trust shall not commingle its assets with those of any other
entity. The Trust shall maintain its financial and accounting books and records
separate from those of any other entity. Except as expressly set forth herein,
the Trust shall pay its indebtedness, operating expenses from its own funds, and
the Trust shall not pay the indebtedness, operating expenses and liabilities of
any other Person. The Trust shall maintain appropriate minutes or other records
of all appropriate actions and shall maintain its office separate from the
offices of the Depositor or the Seller, and any of their respective affiliates.
This Agreement and the Transaction Documents shall be the only agreements among
the parties hereto with respect to the creation, operation and termination of
the Trust. For accounting purposes, the Trust shall be treated as an entity
separate and distinct from the Transferor. The pricing and other material terms
of all transactions and agreements to which the Trust is a party shall be
intrinsically fair to all parties thereto.

         The Owner Trustee shall not have the power, except upon the direction
of the Transferor and with the consent of the Insurer (which consent shall not
be unreasonably withheld), and to the extent otherwise consistent with the
Transaction Documents, to (i) remove or replace the Seller or the Indenture
Trustee, (ii) institute proceedings to have the Trust declared or adjudicated a
bankrupt or insolvent, (iii) consent to the institution of bankruptcy or
insolvency proceedings against the Trust, (iv) file a petition or consent to a
petition seeking reorganization or relief on behalf of the Trust under any
applicable federal or state law relating to bankruptcy, (v) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or any
similar official) of the Trust or a substantial portion of the property of the
Trust, (vi) make any assignment for the benefit of the Trust's creditors, (vii)
cause the Trust to admit in writing its inability to pay its debts generally as
they become due, or (viii) take any action, or cause the Trust to take any
action, in furtherance of any of the foregoing (any of the above, a "Bankruptcy
Action"). So long as the Indenture remains in effect, the Transferor shall not
have the power to take, and shall not take, any Bankruptcy Action with respect
to the Trust or direct the Owner Trustee to take any Bankruptcy Action with
respect to the Trust.

                                       14
<PAGE>   19
         Section 4.2 [Reserved].

         Section 4.3 Action by Transferor with Respect to Bankruptcy. The Owner
Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the prior consent and approval of (i)
the Insurer; (ii) the Transferor; (iii) the Owner Trustee; and (iv) the
Indenture Trustee, and the delivery to the Owner Trustee by the Transferor of a
certificate certifying that such Transferor reasonably believes that the Trust
is insolvent. The terms of this Section 4.3 shall survive for one year and one
day following the termination of this Agreement.

Section 4.4 Restrictions on Transferor's Power. The Transferor shall not direct
the Owner Trustee to take or refrain from taking any action if such action or
inaction would be contrary to any obligation of the Trust or the Owner Trustee
under this Agreement or any of the Transaction Documents or would be contrary to
Section 2.3 hereof, nor shall the Owner Trustee be obligated to follow any such
direction, if given.

                                       15
<PAGE>   20
                                   ARTICLE V

                   APPLICATION OF TRUST FUNDS; CERTAIN DUTIES

         Section 5.1 Establishment of Trust Account. The Owner Trustee shall
cause the Indenture Trustee to establish and maintain with the Indenture Trustee
for the benefit of the Owner Trustee one or more Eligible Accounts in accordance
with the Indenture.

         Section 5.2 Application Of Trust Funds.

                  (a) On each Payment Date, the Paying Agent shall make the
distributions and payments set forth in Section 5.01 of the Sale and Servicing
Agreement from amounts on deposit in the Distribution Account.

                  (b) On or before the third Business Day following each Payment
Date, the Paying Agent shall send to DTC the statement provided to the Paying
Agent by the Indenture Trustee pursuant to Section 5.03 of the Sale and
Servicing Agreement with respect to such Payment Date.

                  (c) In the event that any withholding tax is imposed on the
Trust's payment (or allocations of income) to the Transferor, such tax shall
reduce the amount otherwise distributable to the Transferor in accordance with
this Section 5.2. The Paying Agent is hereby authorized and directed to retain
from amounts otherwise distributable to the Transferor sufficient funds for the
payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Paying Agent from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed with
respect to the Transferor shall be treated as cash distributed to the Transferor
at the time it is withheld by the Trust and remitted to the appropriate taxing
authority. If there is a possibility that withholding tax is payable with
respect to a distribution (such as a distribution to a non-U.S. Transferor), the
Paying Agent may in its sole discretion withhold such amounts in accordance with
this paragraph (c). In the event that the Transferor wishes to apply for a
refund of any such withholding tax, the Owner Trustee and the Paying Agent shall
reasonably cooperate with the Transferor in making such claim so long as the
Transferor agrees to reimburse the Owner Trustee and the Paying Agent for any
out-of-pocket expenses incurred.

         Section 5.3 Method of Payment. Distributions required to be made to the
Transferor on any Payment Date shall be made to the Transferor of record on the
preceding Record Date in the manner set forth in Section 5.01 of the Sale and
Servicing Agreement.

         Section 5.4 [Reserved].

         Section 5.5 Accounting and Reports to the Transferor, the Internal
Revenue Service and Others. The Owner Trustee shall deliver to the Transferor
such information, reports or statements as may be required by the Code and
applicable Treasury Regulations and as may be

                                       16
<PAGE>   21
required to enable the Transferor to prepare its respective federal and state
income tax returns. Consistent with the Trust's characterization for tax
purposes as a security arrangement for the issuance of non-recourse debt, no
federal income tax return shall be filed on behalf of the Trust unless either
(a) the Trust or the Transferor shall receive an Opinion of Counsel based on a
change in applicable law occurring after the date hereof that the Code requires
such a filing or (b) the Internal Revenue Service shall determine that the Trust
is required to file such a return. In the event that the Trust is required to
file tax returns, the Owner Trustee shall elect under Section 1278 of the Code
to include in income currently any market discount that accrues with respect to
the Mortgage Loans. The Owner Trustee shall prepare or shall cause to be
prepared any tax returns required to be filed by the Trust and shall remit such
returns to the Transferor at least five days before such returns are due to be
filed. The Transferor, or any other such party required by law, shall promptly
sign such returns and deliver such returns after signature to the Owner Trustee
and such returns shall be filed by, or at the direction of, the Owner Trustee
with the appropriate tax authorities. In no event shall the Transferor be liable
for any liabilities, costs or expenses of the Trust arising out of the
application of any tax law, including federal, state, foreign or local income or
excise taxes or any other tax imposed on or measured by income (or any interest,
penalty or addition with respect thereto or arising from a failure to comply
therewith), except for any such liability, cost or expense attributable to the
Transferor's breach of its obligations under this Agreement.

         Section 5.6 Signature on Returns.

         The Owner Trustee shall sign on behalf of the Trust the tax returns of
the Trust, if any, unless applicable law requires a Transferor to sign such
documents, in which case such documents shall be signed by the Transferor.

                                       17
<PAGE>   22
                                   ARTICLE VI

                      AUTHORITY AND DUTIES OF OWNER TRUSTEE

         Section 6.1 General Authority. The Owner Trustee is authorized and
directed to execute and deliver or cause to be executed and delivered the Notes,
and the Transaction Documents to which the Trust is to be a party and each
certificate or other document attached as an exhibit to or contemplated by the
Transaction Documents to which the Trust is to be a party and any amendment or
other agreement or instrument described in Article III, in each case, in such
form as the Owner Trustee shall approve, as evidenced conclusively by the Owner
Trustee's execution thereof, and, on behalf of the Trust, to direct the
Indenture Trustee to authenticate and deliver the Class A Notes in an aggregate
principal amount equal to $[ ]. In addition to the foregoing, the Owner Trustee
is authorized, but shall not be obligated, to take all actions required of the
Trust pursuant to the Transaction Documents.

         Section 6.2 General Duties. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the Transaction Documents to which the Trust is
a party and to administer the Trust in the interest of the Transferor, subject
to the Transaction Documents and in accordance with the provisions of this
Agreement. Notwithstanding the foregoing, the Owner Trustee shall be deemed to
have discharged its duties and responsibilities hereunder and under the
Transaction Documents to the extent the Administrator has agreed in the
Administration Agreement to perform any act or to discharge any duty of the
Owner Trustee hereunder or under any Transaction Document, and the Owner Trustee
shall not be held liable for the default or failure of the Administrator to
carry out their respective obligations under the Administration Agreement.

         Section 6.3 Action upon Instruction.

                  (a) Subject to Article IV herein and in accordance with the
terms of the Transaction Documents, the Transferor may by written instruction
direct the Owner Trustee in the management of the Trust but only to the extent
consistent with the limited purpose of the Trust. Such direction may be
exercised at any time by written instruction of the Transferor pursuant to
Article IV.

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

                  (c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or under any Transaction Document, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate under the circumstances) to
the Transferor and the Insurer (so long as no Insurer Default exists) requesting
instruction from the Transferor and the Insurer (so long as no Insurer Default
exists)

                                       18
<PAGE>   23
as to the course of action to be adopted, and to the extent the Owner Trustee
acts in good faith in accordance with any written instruction of the Transferor
or the Insurer received, the Owner Trustee shall not be liable on account of
such action to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the Transaction
Documents, as it shall deem to be in the best interest of the Transferor, and
shall have no liability to any Person for such action or inaction.

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

         Section 6.4 No Duties Except as Specified in this Agreement, the
Transaction Documents or in Instructions. The Owner Trustee shall not have any
duty or obligation to manage, make any payment with respect to, register,
record, sell, dispose of, or otherwise deal with the Owner Trust Estate, or to
otherwise take or refrain from taking any action under, or in connection with,
any document contemplated hereby to which the Owner Trustee or the Trust is a
party, except as expressly provided by the terms of this Agreement, any
Transaction Document or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.3; and no implied duties or obligations
shall be read into this Agreement or any Transaction Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at anytime or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Securities and Exchange Commission filing
for the Trust or to record this Agreement or any Transaction Document. The Owner
Trustee nevertheless agrees that it will, at its own cost and expense, promptly
take all action as may be necessary to discharge any liens on any part of the
Owner Trust Estate that result from actions by, or claims against, the Owner
Trustee that are not related to the ownership or the administration of the Owner
Trust Estate.

                                       19
<PAGE>   24
         Section 6.5 No Action Except Under Specified Documents or Instructions.
The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise
deal with any part of the Owner Trust Estate except (i) in accordance with the
powers granted to and the authority conferred upon the Owner Trustee pursuant to
this Agreement, (ii) in accordance with the Transaction Documents and (iii) in
accordance with any document or instruction delivered to the Owner Trustee
pursuant to Section 6.3 above.

         Section 6.6 Restrictions. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in Section 2.3
hereof or (b) that, to the actual knowledge of the Owner Trustee, would result
in the Trust's becoming taxable as a corporation for Federal income tax
purposes. The Transferor shall not direct the Owner Trustee to take action that
would violate the provisions of this Section 6.6.

                                       20
<PAGE>   25
                                  ARTICLE VII

                          CONCERNING THE OWNER TRUSTEE

         Section 7.1 Acceptance of Trusts and Duties. The Owner Trustee accepts
the trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of this Agreement and the
Transaction Documents. The Owner Trustee also agrees to disburse all moneys
actually received by it constituting part of the Owner Trust Estate upon the
terms of the Transaction Documents and this Agreement. The Owner Trustee shall
not be answerable or accountable hereunder or under any Transaction Document
under any circumstances, except (i) for its own willful misconduct, bad faith or
negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.3 below expressly made by the Owner Trustee. In
particular, but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):

                  (a) the Owner Trustee shall not be liable for any error of
judgment made by a responsible officer of the Owner Trustee;

                  (b) the execution, delivery, authentication and performance by
the Owner Trustee of this Agreement will not require the authorization, consent
or approval of, the giving of notice to, the filing or registration with, or the
taking of any other action with respect to, any governmental authority or
agency;

                  (c) no provision of this Agreement or any Transaction Document
shall require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers hereunder
or under any Transaction Document if the Owner Trustee shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it;

                  (d) under no circumstances shall the Owner Trustee be liable
for indebtedness evidenced by or arising under any of the Transaction Documents,
including the principal of and interest on the Notes;

                  (e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Depositor or the Seller or for the form, character,
genuineness, sufficiency, value or validity of any of the Owner Trust Estate or
for or in respect of the validity or sufficiency of the Transaction Documents,
other than the certificate of authentication on the Ownership Interest, and the
Owner Trustee shall in no event assume or incur any liability, duty, or
obligation to any Noteholder, to the Transferor or other than as expressly
provided for herein and in the Transaction Documents;

                  (f) the Owner Trustee shall not be liable for the default or
misconduct of the Seller, the Indenture Trustee, or the Servicer under any of
the Transaction Documents or otherwise and the Owner Trustee shall have no
obligation or liability to perform the obligations of the Trust under this
Agreement or the Transaction Documents that are required to be

                                       21
<PAGE>   26
performed by the Indenture Trustee under the Indenture, the Servicer under the
Sale and Servicing Agreement, the Administrator or [ ] under the Administration
Agreement or the Registrar or any Paying Agent hereunder;

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

                  (h) The Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the instructions of
the Insurer, the Depositor or any Owner to the extent such action or direction
is permitted by the Transaction Documents.

         Section 7.2 Furnishing of Documents. The Owner Trustee shall furnish
(a) to the Transferor promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Transaction Documents and (b) to Noteholders and the Insurer promptly
upon written request therefor, copies of the Sale and Servicing Agreement and
this Agreement.

         Section 7.3 Representations and Warranties.

         [Owner Trustee] hereby represents and warrants to the Depositor, for
the benefit of the Transferor and the Insurer, that:

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

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

                  (c) Neither the execution nor the delivery by it of this
Agreement nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will contravene any
Federal or Delaware law, governmental rule or regulation governing the banking
or trust powers of the Owner Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound;

                                       22
<PAGE>   27
                  (d) This Agreement has been duly authorized, executed and
delivered by the Owner Trustee and constitutes a valid, legal and binding
obligation of the Owner Trustee, enforceable against it in accordance with the
terms hereof, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
generally and to general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law;

                  (e) The Owner Trustee is not in default with respect to any
order or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or other) or
operations of the Owner Trustee or its properties or might have consequences
that would materially adversely affect its performance hereunder; and

                  (f) No litigation is pending or, to the best of the Owner
Trustee's knowledge, threatened against the Owner Trustee which would prohibit
its entering into this Agreement or performing its obligations under this
Agreement.

         Section 7.4 Reliance; Advice of Counsel.

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

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

         Section 7.5 Not Acting in Individual Capacity. Except as provided in
this Article VII, in accepting the trusts hereby created, [Owner Trustee] acts
solely as Owner Trustee hereunder and not in its individual capacity and all
Persons having any claim against the Owner Trustee by

                                       23
<PAGE>   28
reason of the transactions contemplated by this Agreement or any Transaction
Document shall look only to the Owner Trust Estate for payment or satisfaction
thereof.

         Section 7.6 Owner Trustee Not Liable for the Ownership Interest or the
Mortgage Loans. The recitals contained herein and in the Ownership Interest
(other than the signature of the Owner Trustee on the Certificate) shall be
taken as the statements of the Seller, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, of any
Transaction Document or of the Ownership Interest (other than the signature of
the Owner Trustee on the Certificate and as specified in Section 7.3 hereof) or
the Notes, or of any Mortgage Loans or related documents. The Owner Trustee
shall at no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Mortgage Loan, or the perfection
and priority of any security interest created by any Mortgage Loan or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Owner Trust Estate or its ability to generate the payments to
be distributed to the Transferor under this Agreement or to the Noteholders
under the Indenture, including, without limitation: the existence, condition and
ownership of any Mortgaged Property; the existence and enforceability of any
insurance thereon; the existence and contents of any Mortgage Loan on any
computer or other record thereof; the validity of the assignment of any Mortgage
Loan to the Trust or of any intervening assignment; the completeness of any
Mortgage Loan; the performance or enforcement of any Mortgage Loan; the
compliance by the Depositor, the Seller or the Servicer with any warranty or
representation made under any Transaction Document or in any related document or
the accuracy of any such warranty or representation or any action of the
Depositor, the Seller, the Indenture Trustee, the Administrator or the Servicer
or any subservicer taken in the name of the Owner Trustee.

         Section 7.7 Owner Trustee May Own the Ownership Interest and the Notes.
The Owner Trustee in its individual or any other capacity may become the owner
or pledgee of the Ownership Interest or the Notes and may deal with the
Depositor, the Seller, the Indenture Trustee, the Administrator and the Servicer
in banking transactions with the same rights as it would have if it were not
Owner Trustee.

         Section 7.8 Licenses. The Owner Trustee shall cause the Trust to use
its best efforts to obtain and maintain the effectiveness of any licenses
required in connection with this Agreement and the Transaction Documents and the
transactions contemplated hereby and thereby until such time as the Trust shall
terminate in accordance with the terms hereof.

                                       24
<PAGE>   29
                                  ARTICLE VIII

                          COMPENSATION OF OWNER TRUSTEE

         Section 8.1 Owner Trustee's Fees and Expenses. The Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Seller and the Owner
Trustee, and the Owner Trustee shall be entitled to be reimbursed by [ ] for its
other reasonable expenses hereunder, including the reasonable compensation,
expenses and disbursements of such agents, representatives, experts and counsel
as the Owner Trustee may employ in connection with the exercise and performance
of its rights and its duties hereunder.

         Section 8.2 Indemnification. [_______] shall be liable as primary
obligor for, and shall indemnify the Owner Trustee and its successors, assigns,
agents and servants (collectively, the "Indemnified Parties") from and against,
any and all liabilities, obligations, losses, damages, taxes, claims, actions
and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any Indemnified Party in any way relating
to or arising out of this Agreement, the Transaction Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee hereunder, except only that [_______] shall not be liable
for or required to indemnify an Indemnified Party from and against Expenses
arising or resulting from any of the matters described in the third sentence of
Section 7.1 hereof. The indemnities contained in this Section 8.2 shall survive
the resignation or termination of the Owner Trustee or the termination of this
Agreement. In the event of any claim, action or proceeding for which indemnity
will be sought pursuant to this Section 8.2, the Owner Trustee's choice of legal
counsel shall be subject to the approval of the Seller, which approval shall not
be unreasonably withheld.

         Section 8.3 Payments to the Owner Trustee. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.

                                       25
<PAGE>   30
                                   ARTICLE IX

                         TERMINATION OF TRUST AGREEMENT

         Section 9.1 Termination of Trust Agreement.

                  (a) This Agreement (other than Article VIII) and the Trust
shall terminate pursuant to the Business Trust Statute and be of no further
force or effect on the earlier of (i) the satisfaction and discharge of the
Indenture pursuant to Section 4.1 of the Indenture and the termination of the
Sale and Servicing Agreement and (ii) the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy (the late
ambassador of the United States to the Court of St. James's) alive on the date
hereof. The bankruptcy, liquidation, dissolution, death or incapacity of the
Transferor shall not (x) operate to terminate this Agreement or the Trust, nor
(y) entitle such Transferor's legal representatives or heirs to claim an
accounting or to take any action or proceeding in any court for a partition or
winding-up of all or any part of the Trust or Owner Trust Estate nor (z)
otherwise affect the rights, obligations and liabilities of the parties hereto.

                  (b) The Ownership Interest shall be subject to an early
redemption or termination at the option of the Servicer in the manner and
subject to the provisions of Section 8.01 of the Sale and Servicing Agreement.

                  (c) Except as provided in Sections 9.1(a) and (b) above, none
of the Depositor, the Seller, the Administrator, or the Transferor shall be
entitled to revoke or terminate the Trust.

                  (d) Notice of any termination of the Trust, specifying the
Payment Date upon which the Transferor shall surrender their Ownership Interest
to the Paying Agent for payment of the final distributions and cancellation,
shall be given by the Registrar to the Transferor, the Insurer and the Rating
Agencies mailed within five Business Days of receipt by the Registrar of notice
of such termination pursuant to (a) or (b) above, which notice given by the
Owner Trustee shall state (i) the Payment Date upon or with respect to which
final payment of the Registrar shall be made upon presentation and surrender of
the Ownership Interest at the office of the Paying Agent therein designated,
(ii) the amount of any such final payment and (iii) that the Record Date
otherwise applicable to such Payment Date is not applicable, payments being made
only upon submission of a claim for and acknowledgment of final distribution
under the Ownership Interest at the office of the Paying Agent therein
specified. The Registrar shall give such notice to the Owner Trustee and the
Paying Agent at the time such notice is given to the Transferor. Upon
presentation of such submission of a claim for and acknowledgment of final
distribution under the Ownership Interest, the Paying Agent shall cause to be
distributed to the Transferor amounts distributable on such Payment Date
pursuant to Section 5.01 of the Sale and Servicing Agreement.

                  In the event that the Transferor shall not have submitted
claim for and acknowledgment of final distribution under the Ownership Interest
for cancellation within six

                                       26
<PAGE>   31
months after the date specified in the above mentioned written notice, the
Registrar shall give a second written notice to the Transferor with respect
thereto. If within one year after such second notice, the Registrar may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the Transferor concerning the final distribution, and the cost thereof shall be
paid out of the funds and other assets that shall remain subject to this
Agreement.

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

                                       27
<PAGE>   32
                                   ARTICLE X

             SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

         Section 10.1 Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation satisfying the provisions of the
Business Trust Statute; authorized to exercise corporate powers; having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by Federal or state authorities; and having (or having a parent
which has) a long-term rating of at least "A" (or its equivalent) by each of
Standard & Poor's, and Fitch and being acceptable to the Insurer. If such
corporation shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section 10.1, the Owner Trustee shall resign immediately in the manner and
with the effect specified in Section 10.2.

         Section 10.2 Resignation or Removal of Owner Trustee. The Owner Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Trust, the Indenture Trustee, the Rating
Agencies, the Insurer and the Seller. Upon receiving such notice of resignation,
the Indenture Trustee shall promptly appoint a successor Owner Trustee with the
consent of the Insurer, which consent shall not be unreasonably withheld, by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Owner Trustee and one copy to the successor Owner
Trustee. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee or the Insurer may petition any court
of competent jurisdiction for the appointment of a successor Owner Trustee.

         If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 above and shall fail to resign
after written request therefor by the Indenture Trustee, or if at any time the
Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Indenture Trustee may, and, at the
direction of the Insurer, shall, remove the Owner Trustee. If the Indenture
Trustee shall remove the Owner Trustee under the authority of the immediately
preceding sentence, the Indenture Trustee shall promptly appoint a successor
Owner Trustee acceptable to the Insurer by written instrument in duplicate, one
copy of which instrument shall be delivered to the outgoing Owner Trustee so
removed and one copy to the successor Owner Trustee and payment of all fees owed
to the outgoing Owner Trustee.

         Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section 10.2
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 10.3, written

                                       28
<PAGE>   33
approval by the Insurer and payment of all fees and expenses owed to the
outgoing Owner Trustee. The Indenture Trustee shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.

         Section 10.3 Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Indenture Trustee, the Insurer and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become effective
and such successor Owner Trustee (if acceptable to the Insurer), without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties, and obligations of its predecessor under this Agreement, with
like effect as if originally named as Owner Trustee. The predecessor Owner
Trustee shall upon payment of its fees and expenses deliver to the successor
Owner Trustee all documents and statements and monies held by it under this
Agreement; and the Indenture Trustee and the predecessor Owner Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for fully and certainly vesting and confirming in the successor
Owner Trustee all such rights, powers, duties, and obligations.

         No successor Owner Trustee shall accept appointment as provided in this
Section 10.3 unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.1 above.

         Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section 10.3, the Indenture Trustee shall mail notice of the successor of
such Owner Trustee to the Transferor, the Noteholders, the Insurer and the
Rating Agencies. If the Indenture Trustee fails to mail such notice within 10
days after acceptance of appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Indenture Trustee.

         Section 10.4 Merger or Consolidation of Owner Trustee. Any corporation
into which the Owner Trustee may be merged or converted or with which either may
be consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee, as the case may be,
hereunder, provided such corporation shall be eligible pursuant to Section 10.1
above, without the execution or filing of any instrument or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided further that the Owner Trustee, shall mail notice of
such merger or consolidation to the Depositor, the Seller, the Rating Agencies
and the Insurer.

         Section 10.5 Appointment of Co-Owner Trustee or Separate Owner Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Mortgaged Property may at the time be located,
the Owner Trustee (with the consent of the

                                       29
<PAGE>   34
Insurer, which consent shall not be unreasonably withheld) shall have the power
and shall execute and deliver all instruments to appoint one or more Persons to
act as co-owner trustee, jointly with the Owner Trustee, or separate owner
trustee or separate owner trustees, of all or any part of the Owner Trust
Estate, and to vest in such Person, in such capacity, such title to the Trust,
or any part thereof, and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Owner Trustee may consider
necessary or desirable. No co-owner trustee or separate trustee under this
Section 10.5 shall be required to meet the terms of eligibility as a successor
Owner Trustee pursuant to Section 10.1 above and no notice of the appointment of
any co-owner trustee or separate trustee shall be required pursuant to Section
10.3 above.

         The Owner Trustee hereby appoints the Indenture Trustee for the purpose
of establishing and maintaining the Distribution Account and making the
distributions therefrom to the Persons entitled thereto pursuant to Section 5.01
of the Sale and Servicing Agreement.

         Each separate trustee and co-owner trustee shall, to the extent
permitted by law, be appointed and act subject to the following provision and
conditions:

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

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

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

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

                                       30
<PAGE>   35
         Any separate trustee or co-owner trustee may at any time appoint the
Owner Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any owner trustee or co-owner
trustee shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Owner Trustee, to the extent permitted by law, without the appointment of
a new or successor trustee.

                                       31
<PAGE>   36
                                   ARTICLE XI

                                  MISCELLANEOUS

         Section 11.1 Supplements and Amendments. This Agreement may be amended
by the Depositor, the Seller and the Owner Trustee with prior written notice to
the Rating Agencies and the Indenture Trustee and with the consent of the
Insurer (which consent shall not be unreasonably withheld), but without the
consent of any of the Noteholders, the Transferor or the Indenture Trustee, to
cure any ambiguity, to correct or supplement any provisions in this Agreement or
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of the Noteholders or the Transferor; provided, however, that
such action shall not adversely affect in any material respect the interests of
any Noteholder, the Transferor or the Insurer. An amendment described above
shall be deemed not to adversely affect in any material respect the interests of
any Noteholder, the Transferor or the Insurer if (i) an Opinion of Counsel is
obtained to such effect, (ii) the party requesting the amendment satisfies the
Rating Agency Condition with respect to such amendment.

         This Agreement may also be amended from time to time by the Seller and
the Owner Trustee, with the prior written consent of the Rating Agencies, the
Insurer and the Indenture Trustee, the Noteholders evidencing more than 50% of
the Percentage Interests in the Notes and the Transferor, 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
Noteholders or the Transferor; provided, however, that no such amendment shall
(a) increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on the Mortgage Loans or distributions that
shall be required to be made for the benefit of the Noteholders or the
Transferor or (b) reduce the aforesaid Percentage Interests required to consent
to any such amendment, without the consent of the holders of all the outstanding
Notes. The Depositor shall join in any such amendment approved as provided in
the preceding sentence so long as such amendment is not adverse to the interests
of the Depositor.

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

         It shall not be necessary for the consent of the Transferor, the
Noteholders or the Indenture Trustee pursuant to this Section 11.1 to approve
the particular form of any proposed amendment, but it shall be sufficient if
such consent shall approve the substance thereof. The manner of obtaining such
consents (and any other consents of the Transferor provided for in this
Agreement or in any other Transaction Document) and of evidencing the
authorization of the execution thereof by the Transferor and the Noteholders
shall be subject to such reasonable requirements as the Owner Trustee may
prescribe.

                                       32
<PAGE>   37
         Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.

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

         Section 11.2 No Legal Title to Owner Trust Estate in Transferor. The
Transferor shall not have legal title to any part of the Owner Trust Estate. The
Transferor shall be entitled to receive distributions with respect to their
undivided ownership interest therein only in accordance with Articles V and IX
herein. No transfer, by operation of law or otherwise, of any right, title, or
interest of the Transferor to and in its Ownership Interest shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.

         Section 11.3 Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Owner Trustee, the Seller, the
Trust, the Insurer, the Transferor and, to the extent expressly provided herein,
the Indenture Trustee, the Insurer and the Noteholders, and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Owner Trust Estate
or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.

         Section 11.4 Notices.

                  (a) Unless otherwise expressly specified or permitted by the
terms hereof, all notices shall be in writing and shall be deemed given upon
receipt by the intended recipient or three Business Days after mailing if mailed
by certified mail, postage prepaid (except that notice to the Owner Trustee
shall be deemed given only upon actual receipt by the Owner Trustee), at the
following addresses: (i) if to the Owner Trustee, its Corporate Trust Office;
(ii) if to the Depositor, [_______], [_______]; (iii) if to the Insurer,
[_______]; (iv) if to the Indenture Trustee, its Corporate Trust Office; (v) if
to the Transferor, [_______]; (vi) if to the Seller, [_______]; or, as to each
such party, at such other address as shall be designated by such party in a
written notice to each other party.

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

         Section 11.5 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such

                                       33
<PAGE>   38
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.

         Section 11.6 Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

         Section 11.7 Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of the Seller,
the Owner Trustee, the Insurer and its successors and the Transferor and its
successors and permitted assigns, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by the Transferor shall
bind the successors and assigns of the Transferor.

         Section 11.8 No Petition. The Owner Trustee, by entering into this
Agreement, the Transferor, by accepting the Ownership Interest, and the
Indenture Trustee and each Noteholder by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Transferor or the Trust, or join in any institution against the
Transferor, or the Trust of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or law in connection with any obligations
relating to the Ownership Interest and the Notes, this Agreement or any of the
Transaction Documents.

         Section 11.9 [Reserved].

         Section 11.10 No Recourse. The Transferor by accepting the Ownership
Interest acknowledges that the Transferor's Ownership Interest represents a
beneficial interest in the Trust only and does not represent an interest in or
an obligation of the Servicer, the Seller, the Owner Trustee or any Affiliate
thereof and no recourse may be had against such parties or their assets, except
as may be expressly set forth or contemplated in this Agreement, the Ownership
Interest or the Transaction Documents.

         Section 11.11 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

         Section 11.12 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                                       34
<PAGE>   39
         Section 11.13 Inconsistencies with Sale and Servicing Agreement.

         In the event certain provisions of this Agreement conflict with the
provisions of the Sale and Servicing Agreement, the parties hereto agree that
the provisions of the Sale and Servicing Agreement shall be controlling.

         Section 11.14 Third Party Beneficiary.

         The parties hereto acknowledge that the Insurer is an express third
party beneficiary hereof entitled to enforce the provisions hereof as if it were
actually a party hereto. Nothing in this Section 11.14 however shall be
construed to mitigate in any way, the fiduciary responsibilities of the Owner
Trustee to the beneficiaries of the Trust.

                                       35
<PAGE>   40
         IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective officers hereunto duly authorized, as of
the day and year first above written.

                                      [                 ]
                                      as Owner Trustee

                                      By:__________________________________
                                          Name:
                                          Title:

                                      [                 ],
                                        as Depositor

                                           By:__________________________________
                                              Name:
                                              Title:

                                      [                 ],
                                        as Seller

                                           By:__________________________________
                                              Name:
                                              Title:
<PAGE>   41
                                    EXHIBIT A

                             CERTIFICATE OF TRUST OF
                         [ ] HOME EQUITY LOAN TRUST [ ]

         THIS Certificate of Trust of [ ] HOME EQUITY LOAN TRUST [       ] (the
"Trust"), is being duly executed and filed by [          ], a Delaware banking
corporation, as trustee, to form a business trust under the Delaware Business
Trust Act (12 Del. Code, Section 3801 et seq.)(the "Act").

         1. Name. The name of the business trust formed hereby is [ ] HOME
EQUITY LOAN TRUST [    ].

         2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is [           ]. Attention: Corporate Trust
Administration Department.

         IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust in accordance with Section 3811(a)
of the Act.

                                    [      ], not in its individual capacity but
                                    solely as Owner Trustee under a Trust
                                    Agreement dated as of [         ].

                                    By: ________________________________________
                                        Name:
                                        Title:

                                      A-1
<PAGE>   42
                                    EXHIBIT B

                              TRANSFER CERTIFICATE

[Owner Trustee]
________________________________

________________________________

________________________________

Attention: [____________________]

                  Re:      Trust Agreement, dated as of [             ], among
                           [ ] Home Equity Loan Trust 200_-_, [
                                       ] and [                      ], as Owner
                           Trustee; [ ] Home Equity Loan Trust 200_-_, Home
                           Equity Loan Asset-Backed Notes, Series 200_-_

Ladies and Gentlemen:

         The undersigned (the "Transferee") has agreed to purchase from
_________________________ (the "Transferor") the Ownership Interest:

                  A. Rule 144A "Qualified Institutional Buyers" should complete
this section

                  I. The Transferee is (check one):

                  --       (i) An insurance company, as defined in Section 2(13)
                           of the Securities Act of 1933, as amended (the
                           "Securities Act"), (ii) an investment company
                           registered under the Investment Company Act of 1940,
                           as amended (the "Investment Company Act"), (iii) a
                           business development company as defined in Section
                           2(a)(48) of the Securities Act, (iv) a Small Business
                           Investment Company licensed by the U.S. Small
                           Business Administration under Section 301(c) or (d)
                           of the Small Business Investment Act of 1958, (v) a
                           plan established and maintained by a state, its
                           political subdivisions, or any agency or
                           instrumentality of a state or its political
                           subdivisions, for the benefit of its employees, (vi)
                           an employee benefit plan within the meaning of Title
                           I of the Employee Retirement Income Security Act of
                           1974, as amended ("ERISA"), (vii) a business
                           development company as defined in Section 202(a)(22)
                           of the Investment Advisors Act of 1940, (viii) an
                           organization described in Section 501(c)(3) of the
                           Internal Revenue Code, corporation (other than a bank
                           as defined in Section 3(a)(2) of the Securities Act
                           or a savings and loan association or

                                       B-1
<PAGE>   43
                           other institution referenced in Section 3(a)(2) of
                           the Securities Act or a foreign bank or savings and
                           loan association or equivalent institution),
                           partnership, or Massachusetts or similar business
                           trust; or (ix) an investment advisor registered under
                           the Investment Advisors Act of 1940, which, for each
                           of (i) through (ix), owns and invests on a
                           discretionary basis at least $100 million in
                           securities other than securities of issuers
                           affiliated with the Transferee, securities issued or
                           guaranteed by the United States or a person
                           controlled or supervised by and acting as an
                           instrumentality of the government of the United
                           States pursuant to authority granted by the Congress
                           of the United States, bank deposit notes and
                           certificates of deposit, loan participations,
                           repurchase agreements, securities owned but subject
                           to a repurchase agreement, and currency, interest
                           rate and commodity swaps (collectively, "Excluded
                           Securities");

                  --       a dealer registered pursuant to Section 15 of the
                           Securities Exchange Act of 1934, as amended (the
                           "Exchange Act") that in the aggregate owns and
                           invests on a discretionary basis at least $10 million
                           of securities other than Excluded Securities and
                           securities constituting the whole or part of an
                           unsold allotment to, or subscription by, Transferee
                           as a participant in a public offering;

                  --       an investment company registered under the Investment
                           Company Act that is part of a family of investment
                           companies (as defined in Rule 144A of the Securities
                           and Exchange Commission) which own in the aggregate
                           at least $100 million in securities other than
                           Excluded Securities and securities of issuers that
                           are part of such family of investment companies;

                  --       an entity, all of the equity owners of which are
                           entities described in this Paragraph A(I);

                  --       a bank as defined in Section 3(a)(2) of the
                           Securities Act, any savings and loan association or
                           other institution as referenced in Section 3(a)(5)(A)
                           of the Securities Act, or any foreign bank or savings
                           and loan association or equivalent institution that
                           in the aggregate owns and invests on a discretionary
                           basis at least $100 million in securities other than
                           Excluded Securities and has an audited net worth of
                           at least $25 million as demonstrated in its latest
                           annual financial statements, as of a date not more
                           than 16 months preceding the date of transfer of the
                           Ownership Interest to the Transferee in the case of a
                           U.S. Bank or savings and loan association, and not
                           more than 18 months preceding such date in the case
                           of a foreign bank or savings association or
                           equivalent institution.

                  II. The Transferee is acquiring such Ownership Interest solely
for its own account, for the account of one or more others, all of which are
"Qualified Institutional Buyers"

                                      B-2
<PAGE>   44
within the meaning of Rule 144A, or in its capacity as a dealer registered
pursuant to Section 15 of the Exchange Act acting in a riskless principal
transaction on behalf of a "Qualified Institutional Buyer". The Transferee is
not acquiring such Ownership Interest with a view to or for the resale,
distribution, subdivision or fractionalization thereof which would require
registration of the Ownership Interest under the Securities Act.

                  B.  "Accredited Investors" should complete this Section

                  I.  The Transferee is (check one):

                           a bank within the meaning of Section 3(a)(2) of the
                  -----    Securities Act;

                           a savings and loan association or other institution
                  -----    defined in Section 3(a)(5) of the Securities Act;

                           a broker or dealer registered pursuant to the
                  -----    Exchange Act;

                           an insurance company within the meaning of Section
                  -----    2(13) of the Securities Act;

                           an investment company registered under the Investment
                  -----    Company Act;

                           an employee benefit plan within the meaning of Title
                  -----    I of ERISA, which has total assets in excess of
                           $5,000,000;

                           another entity which is an "accredited investor"
                  -----    within the meaning of paragraph     (fill in) of
                           subsection (a) of Rule 501 of the Securities and
                           Exchange Commission.

                  II. The Transferee is acquiring such Ownership Interest solely
for its own account, for investment, and not with a view to or for the resale,
distribution, subdivision or fractionalization thereof which would require
registration of the Ownership Interest under the Securities Act.

                  C. If the Transferee is unable to complete one of paragraph
A(I) or paragraph B(I) above, the Transferee must furnish an opinion in form and
substance satisfactory to the Trustee of counsel satisfactory to the Trustee to
the effect that such purchase will not violate any applicable federal or state
securities laws.

                  D. The Transferee represents that it is not (A) an "employee
benefit plan" within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or (B) a "plan" within the
meaning of Section 4975(e)(1) of the Code (any such plan or employee benefit
plan, a "Plan") or (C) any entity, including an insurance company separate
account or general account, whose underlying assets include plan assets by
reason of a

                                      B-3
<PAGE>   45
plan's investment in the entity and is not directly or indirectly purchasing
such Trust Security on behalf of, as investment manager of, as named fiduciary
of, as trustee of, or with assets of a Plan.

                  (iii) the Transferee is an "accredited investor" as defined in
Rule 501(a) of Regulation D pursuant to the Securities Act.

                                         Very truly yours,
                                         [NAME OF PURCHASER]

                                         By: ___________________________________
                                         Title:_________________________________

Dated:

THE FOREGOING IS ACKNOWLEDGED THIS ____ DAY OF __________, 199_.

[NAME OF SELLER]
By: ___________________________________
Title:_________________________________

                                      B-4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}]]