Document:

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                                                                     Exhibit 4.3

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                              ROYAL BANK OF CANADA

                                       TO

                              THE BANK OF NEW YORK

                                     Trustee

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

                                    INDENTURE

                         Dated as of _____________, 2006

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

                          SUBORDINATED DEBT SECURITIES

                           (SUBORDINATED INDEBTEDNESS)

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                                TABLE OF CONTENTS
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PARTIES..................................................................................................   1

RECITALS OF THE BANK.....................................................................................   1

                                                  ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..................................................   1

Section 101.      Definitions............................................................................   1
Section 102.      Compliance Certificates and Opinions...................................................   8
Section 103.      Form of Documents Delivered to Trustee.................................................   8
Section 104.      Acts of Holders; Record Dates..........................................................   9
Section 105.      Notices, Etc., to Trustee and Bank.....................................................  11
Section 106.      Notice to Holders; Waiver..............................................................  11
Section 107.      Conflict with Trust Indenture Act......................................................  11
Section 108.      Effect of Headings and Table of Contents...............................................  11
Section 109.      Successors and Assigns.................................................................  12
Section 110.      Separability Clause....................................................................  12
Section 111.      Benefits of Indenture..................................................................  12
Section 112.      Governing Law..........................................................................  12
Section 113.      Legal Holidays.........................................................................  12

                                                  ARTICLE TWO

SECURITY FORMS...........................................................................................  12

Section 201.      Forms Generally........................................................................  12
Section 202.      Form of Face of Security...............................................................  13
Section 203.      Form of Reverse of Security............................................................  15
Section 204.      Form of Legend for Global Securities...................................................  18
Section 205.      Form of Trustee's Certificate of Authentication........................................  19

                                                 ARTICLE THREE

THE SECURITIES...........................................................................................  19

Section 301.      Amount Unlimited; Issuable in Series...................................................  19
Section 302.      Denominations..........................................................................  22
Section 303.      Execution, Authentication, Delivery and Dating.........................................  22
Section 304.      Temporary Securities...................................................................  23
Section 305.      Registration, Registration of Transfer and Exchange....................................  24
Section 306.      Mutilated, Destroyed, Lost and Stolen Securities.......................................  25
Section 307.      Payment of Interest; Interest Rights Preserved.........................................  26
Section 308.      Persons Deemed Owners..................................................................  27
Section 309.      Cancellation...........................................................................  27
Section 310.      Computation of Interest................................................................  27
Section 311.      CUSIP Numbers..........................................................................  28
Section 312.      Original Issue Discount................................................................  28
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                                                 ARTICLE FOUR

SATISFACTION AND DISCHARGE...............................................................................  28

Section 401.      Satisfaction and Discharge of Indenture................................................  28
Section 402.      Application of Trust Money.............................................................  29

                                                 ARTICLE FIVE

REMEDIES.................................................................................................  29

Section 501.      Events of Default......................................................................  29
Section 502.      Acceleration of Maturity; Rescission and Annulment.....................................  30
Section 503.      Collection of Indebtedness and Suits for Enforcement by Trustee........................  31
Section 504.      Trustee May File Proofs of Claim.......................................................  31
Section 505.      Trustee May Enforce Claims Without Possession of Securities............................  32
Section 506.      Application of Money Collected.........................................................  32
Section 507.      Limitation on Suits....................................................................  32
Section 508.      Unconditional Right of Holders to Receive Principal, Premium and Interest..............  33
Section 509.      Restoration of Rights and Remedies.....................................................  33
Section 510.      Rights and Remedies Cumulative.........................................................  33
Section 511.      Delay or Omission Not Waiver...........................................................  33
Section 512.      Control by Holders.....................................................................  34
Section 513.      Waiver of Past Defaults................................................................  34
Section 514.      Undertaking for Costs..................................................................  34
Section 515.      Waiver of Usury, Stay or Extension Laws................................................  34

                                                  ARTICLE SIX

THE TRUSTEE..............................................................................................  35

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

                                                 ARTICLE SEVEN

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND BANK...........................................................  42

Section 701.      Bank to Furnish Trustee Names and Addresses of Holders.................................  42
Section 702.      Preservation of Information; Communications to Holders.................................  43
Section 703.      Reports by Trustee.....................................................................  43
Section 704.      Reports by Bank........................................................................  43
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                                                 ARTICLE EIGHT

CONSOLIDATION, AMALGAMATION, MERGER, CONVEYANCE, TRANSFER OR  LEASE......................................  44

Section 801.      Bank May Consolidate, Etc., Only on Certain Terms......................................  44
Section 802.      Successor Substituted..................................................................  44

                                                 ARTICLE NINE

SUPPLEMENTAL INDENTURES..................................................................................  45

Section 901.      Supplemental Indentures Without Consent of Holders.....................................  45
Section 902.      Supplemental Indentures With Consent of Holders........................................  46
Section 903.      Execution of Supplemental Indentures...................................................  47
Section 904.      Effect of Supplemental Indentures......................................................  47
Section 905.      Conformity with Trust Indenture Act....................................................  47
Section 906.      Reference in Securities to Supplemental Indentures.....................................  47

                                                  ARTICLE TEN

COVENANTS................................................................................................  47

Section 1001.     Payment of Principal, Premium and Interest.............................................  47
Section 1002.     Maintenance of Office or Agency........................................................  48
Section 1003.     Money for Securities Payments to Be Held in Trust......................................  48
Section 1004.     Statement by Officers as to Default....................................................  49
Section 1005.     Existence..............................................................................  49
Section 1006.     Waiver of Certain Covenants............................................................  49

                                                ARTICLE ELEVEN

REDEMPTION OF SECURITIES.................................................................................  50

Section 1101.     Applicability of Article...............................................................  50
Section 1102.     Election to Redeem; Notice to Trustee..................................................  50
Section 1103.     Selection by Trustee of Securities to Be Redeemed......................................  50
Section 1104.     Notice of Redemption...................................................................  51
Section 1105.     Deposit of Redemption Price............................................................  51
Section 1106.     Securities Payable on Redemption Date..................................................  52
Section 1107.     Securities Redeemed in Part............................................................  52

                                                ARTICLE TWELVE

PURCHASE OR REPAYMENT OF SECURITIES BY THE BANK AT THE OPTION OF THE HOLDER..............................  52

Section 1201.     Applicability of Article...............................................................  52
Section 1202.     Notice of Repayment Date...............................................................  53
Section 1203.     Deposit of Repayment Price.............................................................  53
Section 1204.     Securities Payable on Repayment Date...................................................  53
Section 1205.     Securities Repaid in Part..............................................................  54
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                                               ARTICLE THIRTEEN

SINKING FUNDS............................................................................................  54

Section 1301.     Applicability of Article...............................................................  54
Section 1302.     Satisfaction of Sinking Fund Payments with Securities..................................  54
Section 1303.     Redemption of Securities for Sinking Fund..............................................  55

                                               ARTICLE FOURTEEN

DEFEASANCE AND COVENANT DEFEASANCE.......................................................................  55

Section 1401.     Bank's Option to Effect Defeasance or Covenant Defeasance..............................  55
Section 1402.     Defeasance and Discharge...............................................................  55
Section 1403.     Covenant Defeasance....................................................................  56
Section 1404.     Conditions to Defeasance or Covenant Defeasance........................................  56
Section 1405.     Deposited Money and U.S. Government Obligations to Be Held in Trust;
                  Miscellaneous Provisions...............................................................  58
Section 1406.     Reinstatement..........................................................................  58

                                                ARTICLE FIFTEEN

SUBORDINATION OF SECURITIES..............................................................................  59

Section 1501.     Securities Subordinate to Deposit Liabilities and Other Indebtedness...................  59
Section 1502.     Further Assurances of Subordination....................................................  60
Section 1503.     Reliance on Judicial Order or Certificate of Liquidating Agent.........................  60
Section 1504.     Trustee's Compensation Not Prejudiced..................................................  61

                                                ARTICLE SIXTEEN

MISCELLANEOUS PROVISIONS.................................................................................  61

Section 1601.     Consent to Jurisdiction and Service of Process.........................................  61
Section 1602.     Indenture and Securities Solely Corporate Obligations..................................  62
Section 1603.     Execution in Counterparts..............................................................  62
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      INDENTURE, dated as of _______________, 2006, between Royal Bank of
Canada, a Canadian chartered bank (herein called the "BANK"), having its
corporate headquarters located at Royal Bank Plaza, 200 Bay Street, Toronto,
Ontario, Canada M5J 2J5 and its head office located at 1 Place Ville Marie,
Montreal, Quebec, Canada H3C 3A9, and The Bank of New York, as Trustee (herein
called the "TRUSTEE").

                              RECITALS OF THE BANK

      The Bank has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its unsecured subordinated
indebtedness (herein called the "Securities"), to be issued in one or more
series as provided in this Indenture.

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

      NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                   ARTICLE ONE

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

Section 101. Definitions.

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

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

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

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

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

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

            (6) all references to dollars and $ shall mean U.S. dollars unless
      otherwise indicated.

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

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

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

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

      "BANK REQUEST" or "BANK ORDER" means a written request or order signed in
the name of the Bank by any one of its President and Chief Executive Officer,
Vice-Chairman, Senior Executive Vice-Presidents, Executive Vice-Presidents or
Senior Vice-Presidents, or any two Vice-Presidents acting together, and
delivered to the Trustee.

      "BOARD OF DIRECTORS" means either the board of directors of the Bank or
any duly authorized committee of that board.

      "BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Bank to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Trustee.

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

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

      "CORPORATE TRUST OFFICE" means the principal corporate trust office of the
Trustee in New York, New York at which at any particular time its corporate
trust business shall be administered.

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

      "COVENANT DEFEASANCE" has the meaning specified in Section 1403.

      "DEBENTURES UNDER THE 1984 INDENTURE" means the debentures of the Bank
issued and certified under the trust indenture made as of October 1, 1984 and
indentures supplemental to such trust indenture between the Bank and Montreal
Trust Company of Canada and subsequently assigned to Computershare Trust Company
of Canada and for the time being outstanding.

      "DEBENTURES UNDER THE 1986 INDENTURE" means the debentures of the Bank
issued and certified under the trust indenture made as of June 6, 1986 and
indentures supplemental to such trust indenture between the Bank and Montreal
Trust Company of Canada and subsequently assigned to Computershare Trust Company
of Canada and for the time being outstanding.

      "DEBENTURES UNDER THE 1994 INDENTURE" means the debentures of the Bank
issued and certified under the trust indenture made as of November 14, 1994 and
indentures supplemental to such trust indenture between the Bank and Montreal
Trust Company of Canada and subsequently assigned to Computershare Trust Company
of Canada and for the time being outstanding.

      "DEBENTURES UNDER THE 1997 INDENTURE" means the debentures of the Bank
issued and certified under the trust indenture made as of May 21, 1997 and
indentures supplemental to such trust indenture between the Bank and Montreal
Trust Company of Canada and subsequently assigned to Computershare Trust Company
of Canada and for the time being outstanding.

      "DEBENTURES UNDER THE PROGRAMME FOR THE ISSUANCE OF NOTES" means the
debentures of the Bank issued under the Programme for the Issuance of Notes
originally approved by the Board of Directors on July 8, 1997 as amended or
modified from time to time.

      "DEBENTURES EVIDENCING THE BANK'S US$300 MILLION AGGREGATE PRINCIPAL
AMOUNT OF SUBORDINATED NOTES DUE OCTOBER 24, 2011" means the debentures of the
Bank issued under the Fiscal Agency Agreement between the Bank and Chase
Manhattan Bank dated November 25, 1996.

      "DEFAULTED INTEREST" has the meaning specified in Section 307.

      "DEFEASANCE" has the meaning specified in Section 1402.

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

      "EVENT OF DEFAULT" has the meaning specified in Section 501.

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

      "EXPIRATION DATE" has the meaning specified in Section 104.

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

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

      "INDEBTEDNESS" at any time means:

            (1) the deposit liabilities of the Bank at such time; and

            (2) all other liabilities and obligations of the Bank to third
      parties (other than fines or penalties which pursuant to the Bank Act
      (Canada) are a last charge on the assets of a bank in the case of
      insolvency of such bank and obligations to shareholders of the Bank, as
      such) which would entitle such third parties to participate in a
      distribution of the Bank's assets in the event of the insolvency or
      winding-up of the Bank.

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

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

      "INTEREST PAYMENT DATE", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.

      "MATURITY", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, exercise of a Holder's option
to require the Bank to purchase or repay the Security or otherwise.

      "OFFICERS' CERTIFICATE" means a certificate signed by the Bank's Chief
Executive Officer or Vice-Chairman and Chief Financial Officer.

      "OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Bank, and who shall be acceptable to the Trustee.

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

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

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

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

            (3) Securities as to which Defeasance has been effected pursuant to
      Section 1402; and

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

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security that shall be deemed to be Outstanding shall be the amount of
the principal thereof that would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated
in one or more foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date in
the manner provided as contemplated by Section 301, of the principal amount of
such Security (or, in the case of a Security described in Clause (A) or (B)
above, of the amount determined as provided in such Clause), and (D) Securities
owned by the Bank or any other obligor upon the Securities or any Affiliate of
the Bank or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent, waiver or other action, only Securities that a Responsible Officer of
the Trustee knows to be so owned shall be so disregarded.

      "PAYING AGENT" means any Person authorized by the Bank to pay the
principal of or any premium or interest on any Securities on behalf of the Bank
and may be the Bank in such capacity.

      "PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization or government or
any agency or political subdivision thereof.

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

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

      "RECORD DATE" means any Regular Record Date or Special Record Date.

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

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

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

      "REPAYMENT DATE", when used with respect to Securities of any series the
terms of which provide each Holder an option to require the Bank to purchase or
repay the Securities held by such Holder, means the date, if any, fixed for such
purchase or repayment pursuant to this Indenture.

      "REPAYMENT PRICE", when used with respect to Securities of any series the
terms of which provide each Holder an option to require the Bank to purchase or
repay the Securities held by such Holder, means the price, if any, at which such
purchase or repayment is to occur pursuant to this Indenture.

      "RESPONSIBLE OFFICER" when used with respect to the Trustee, means any
officer of the Trustee with direct responsibility for administration of this
Indenture, and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of such person's
knowledge of and familiarity with the particular subject.

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

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

      "SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective meanings
specified in Section 305.

      "SENIOR INDEBTEDNESS" means any Indebtedness other than Subordinated
Indebtedness, including any Indebtedness to which Securities are expressly
subordinated to pursuant to Article Fifteen.

      "SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.

      "STATED MATURITY", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on

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which the principal of such Security or such installment of principal or
interest is due and payable.

      "SUBORDINATED INDEBTEDNESS" at any time means:

            (1) the liability of the Bank in respect of the principal of and
      premium, if any, and interest on the Securities, the debentures under the
      1984 Indenture, the debentures under the 1986 Indenture, the debentures
      under the 1994 Indenture, the debentures under the 1997 Indenture, the
      debentures under the Programme for the Issuance of Notes and the
      debentures evidencing the Bank's US$300 million aggregate principal amount
      of Subordinated Notes due October 24, 2011;

            (2) any Indebtedness which ranks equally with and not prior to the
      Securities, the debentures under the 1984 Indenture, the debentures under
      the 1986 Indenture, the debentures under the 1994 Indenture, the
      debentures under the 1997 Indenture, the debentures under the Programme
      for the Issuance of Notes or the debentures evidencing the Bank's US$300
      million aggregate principal amount of Subordinated Notes due October 24,
      2011, in right of payment in the event of the insolvency or winding-up of
      the Bank and which, pursuant to the terms of the instrument evidencing or
      creating the same, is expressed to be subordinate in right of payment to
      all Indebtedness to which the Securities are subordinate in right of
      payment to at least the same extent as the Securities are subordinate
      thereto under the provisions of Article Fifteen; and

            (3) any Indebtedness which ranks subordinate to and not equally with
      or prior to the Securities, the debentures under the 1984 Indenture, the
      debentures under the 1986 Indenture, the debentures under the 1994
      Indenture, the debentures under the 1997 Indenture, the debentures under
      the Programme for the Issuance of Notes or the debentures evidencing the
      Bank's US$300 million aggregate principal amount of Subordinated Notes due
      October 24, 2011, in right of payment in the event of the insolvency or
      winding-up of the Bank and which, pursuant to the terms of the instrument
      evidencing or creating the same, is expressed to be subordinate in right
      of payment to all Indebtedness to which the Securities are subordinate in
      right of payment to at least the same extent as the Securities are
      subordinate thereto under the provisions of Article Fifteen.

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

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

      "U.S. GOVERNMENT OBLIGATION" has the meaning specified in Section 1404.

                                       7
<PAGE>

      "VICE-PRESIDENT", when used with respect to the Bank or the Trustee, means
any vice-president, whether or not designated by a number or a word or words
added before or after the title "vice-president."

Section 102. Compliance Certificates and Opinions.

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

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

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

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

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

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

Section 103. Form of Documents Delivered to Trustee.

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

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

                                       8
<PAGE>

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

Section 104. Acts of Holders; Record Dates.

      Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Bank. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Bank, if made in the manner provided in this Section.

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

      For the purposes of this Indenture, the ownership of Securities shall be
proved by the Security Register.

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

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

                                       9
<PAGE>

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

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

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

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

                                       10
<PAGE>

Section 105. Notices, Etc., to Trustee and Bank.

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

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

            (2) the Bank by the Trustee or by any Holder shall be sufficient for
      every purpose hereunder (unless otherwise herein expressly provided) if in
      writing and mailed, first-class postage prepaid, to the Bank addressed to
      it at the address of its corporate headquarters specified in the preamble
      to this Indenture, Attention Executive Vice-President, Corporate Treasury,
      or at any other address previously furnished in writing to the Trustee by
      the Bank.

Section 106. Notice to Holders; Waiver.

      Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his or her address as it appears in the Security Register, not
later than the latest date (if any), and not earlier than the earliest date (if
any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.

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

Section 107. Conflict with Trust Indenture Act.

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

Section 108. Effect of Headings and Table of Contents.

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

                                       11
<PAGE>

Section 109. Successors and Assigns.

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

Section 110. Separability Clause.

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

Section 111. Benefits of Indenture.

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

Section 112. Governing Law.

      This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York, except for Sections 1501,
1502, 1503 and 1504, which shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.

Section 113. Legal Holidays.

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

                                   ARTICLE TWO

                                 SECURITY FORMS

Section 201. Forms Generally.

      The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary

                                       12
<PAGE>

therefor or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution thereof. If the form
of Securities of any series is established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be certified by
the Secretary or an Assistant Secretary of the Bank and delivered to the Trustee
at or prior to the delivery of the Bank Order contemplated by Section 303 for
the authentication and delivery of such Securities. If all the Securities of any
series established by action taken pursuant to a Board Resolution are not to be
issued at one time, it shall not be necessary to deliver a record of such action
at the time of issuance of each Security of such series, but an appropriate
record of such action shall be delivered at or before the time of issuance of
the first Security of such series.

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

Section 202.  Form of Face of Security

      [Insert any legend required by Section 204]

      [Insert any legend required by the Internal Revenue Code and the Income
Tax Act (Canada) and the regulations thereunder.]

                              ROYAL BANK OF CANADA

                          [Insert title of Securities]

                            Subordinated Indebtedness

        This security will not constitute a deposit that is insured under
             the Canada Deposit Insurance Corporation Act or by the
              United States Federal Deposit Insurance Corporation.

No. .........                                               CUSIP No. ..........

Issue Date .......                                     Stated Maturity: ........

      Royal Bank of Canada, a Schedule I bank under the Bank Act (Canada)
(herein called the "Bank", which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to ..............................................., or registered assigns, the
principal sum of ...................................... Dollars on .............
......................................................... [if the Security is to
bear interest prior to Maturity, insert -- , and to pay interest thereon from
.............. or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, [semi-annually] on ............ and
............. in each year, commencing ........., at the rate of ....% per annum,
until the principal hereof is paid or made available for payment, [if
applicable, insert-- ; provided that any overdue principal, if any, premium and
any overdue installment of interest shall bear interest at the rate of .....%
per annum (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand]. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor

                                       13
<PAGE>

Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the ....... or ....... (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.]

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

      Payment of the principal of (and premium, if any) and [if applicable,
insert - any such] interest on this Security will be made at the office or
agency of the Bank maintained for that purpose in ............, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts [if applicable, insert -- ;
provided, however, that at the option of the Bank payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register].

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

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

      IN WITNESS WHEREOF, the Bank has caused this instrument to be duly
executed.

Dated:

                                     Royal Bank of Canada

                                     By
                                        ---------------------------------------

                                     By
                                        ---------------------------------------

                                       14
<PAGE>

Section 203.  Form of Reverse of Security

      This Security is one of a duly authorized issue of securities of the Bank
(herein called the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of ................, 2006 (herein called the
"Indenture," which term shall have the meaning assigned to it in such
instrument), between the Bank and The Bank of New York, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Bank, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [if applicable,
insert -- , [initially] limited in aggregate principal amount to $...........,
provided that the Bank may, without the consent of any Holder, at any time and
from time to time, increase the initial principal amount.]

      [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on ........... in any year commencing with the year ...... and ending with
the year ...... through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [if
applicable, insert -- on or after .........., ..], as a whole or in part, at the
election of the Bank, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [if applicable, insert -- on
or before ..............., ...%, and if redeemed] during the 12-month period
beginning ............. of the years indicated,

                         Redemption                       Redemption
            Year            Price            Year            Price
                         ----------                       ----------

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

      [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ............ in
any year commencing with the year .... and ending with the year .... through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [if
applicable, insert -- on or after ............], as a whole or in part, at the
election of the Bank, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below: If redeemed during the 12-month period
beginning ............ of the years indicated,

                                       15
<PAGE>

                       Redemption Price
                        For Redemption                   Redemption Price For
                       Through Operation                 Redemption Otherwise
                            of the                      Than Through Operation
  Year                    Sinking Fund                    of the Sinking Fund
  ----                 -----------------                ----------------------

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

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

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

      [If applicable, insert reference to any other right of the Bank to redeem
a Security of this series.]

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

      [If applicable, insert provisions with respect to the option of Holders to
require purchase or repayment of Securities of this series by the Bank at the
option of the Holder and the issuance of Securities in lieu of Securities
purchased or repaid by the Bank at the option of the Holder.]

      [If applicable, insert provisions requiring an adjustment to the interest
rate in certain circumstances.]

      The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all Indebtedness, other than Subordinated Indebtedness, and this
Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to

                                       16
<PAGE>

and shall be bound by such provisions, (b) authorizes and directs the Trustee on
his or her behalf to take such actions as may be necessary or appropriate to
effectuate the subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, waives all notice of the acceptance of the subordination
provisions contained herein and in the Indenture by each holder of Indebtedness,
other than Subordinated Indebtedness, whether now outstanding or hereafter
created, incurred, assumed or guaranteed, and waives reliance by each such
holder upon said provisions.

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

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

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

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

                                       17
<PAGE>

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

      For disclosure purposes under the Interest Act (Canada), whenever in the
Securities of this series or the Indenture interest at a specified rate is to be
calculated on the basis of a period less than a calendar year, the yearly rate
of interest to which such rate is equivalent is such rate multiplied by the
actual number of days in the relevant calendar year and divided by the number of
days in such period.

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

      The Securities of this series are issuable only in registered form without
coupons in denominations of $....... and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

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

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

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

Section 204. Form of Legend for Global Securities.

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

      THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN

                                       18
<PAGE>

THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

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

      Subject to Section 614, each of the Trustee's certificates of
authentication shall be in substantially the following form:

      This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.

Dated:                                                     The Bank of New York,
                                                                      As Trustee

                                         By
                                            -----------------------------------
                                                     Authorized Officer

                                 ARTICLE THREE

                                 THE SECURITIES

Section 301. Amount Unlimited; Issuable in Series.

      The aggregate principal amount of Securities that may be authenticated and
delivered under this Indenture is unlimited.

      The Securities are unsecured subordinated indebtedness of the Bank. The
Securities may be issued in one or more series. There shall be established in or
pursuant to a Board Resolution and, subject to Section 303, set forth, or
determined in the manner provided, in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series,

            (1) the title of the Securities of the series (which shall
      distinguish the Securities of the series from all other securities);

            (2) any limit upon the aggregate principal amount of the Securities
      of the series which may be authenticated and delivered under this
      Indenture (except for Securities authenticated and delivered upon
      registration of transfer of, or in exchange for, or in lieu of, other
      Securities of the series pursuant to Section 304, 305, 306, 906, 1107 or
      1303 and except for any Securities which, pursuant to Section 303, are
      deemed never to have been authenticated and delivered hereunder);

            (3) the Person to whom any interest on a Security of the series
      shall be payable, if other than the Person in whose name that Security (or
      one or more Predecessor Securities) is registered at the close of business
      on the Regular Record Date for such interest;

                                       19
<PAGE>

            (4) the date or dates on which the principal of any Securities of
      the series is payable;

            (5) the rate or rates at which any Securities of the series shall
      bear interest, if any, the date or dates from which any such interest
      shall accrue, the Interest Payment Dates on which any such interest shall
      be payable and the Regular Record Date for any such interest payable on
      any Interest Payment Date;

            (6) the place or places where the principal of and any premium and
      interest on any Securities of the series shall be payable, the place or
      places where the Securities of such series may be presented for
      registration of transfer or exchange, any restrictions that may be
      applicable to any such transfer or exchange in addition to or in lieu of
      those set forth herein, and the place or places where notices and demands
      to or upon the Bank in respect of the Securities of such series may be
      made;

            (7) the period or periods within which, the price or prices at which
      and the terms and conditions upon which any Securities of the series may
      be redeemed, in whole or in part, at the option of the Bank and, if other
      than by a Board Resolution, the manner in which any election by the Bank
      to redeem the Securities shall be evidenced;

            (8) the obligation, if any, of the Bank to redeem or purchase any
      Securities of the series pursuant to any sinking fund or analogous
      provisions or at the option of the Holder thereof and the period or
      periods within which, the price or prices at which and the terms and
      conditions upon which any Securities of the series shall be redeemed or
      purchased, in whole or in part, pursuant to such obligation;

            (9) if other than denominations of $1,000 and any integral multiple
      thereof, the denominations in which any Securities of the series shall be
      issuable;

            (10) if the amount of principal of or any premium or interest on any
      Securities of the series may be determined with reference to an index or
      pursuant to a formula, the manner in which such amounts shall be
      determined;

            (11) if other than the currency of the United States of America, the
      currency, currencies or currency units in which the principal of or any
      premium or interest on any Securities of the series shall be payable and
      the manner of determining the equivalent thereof in the currency of the
      United States of America for any purpose, including for purposes of the
      definition of "Outstanding" in Section 101;

            (12) if the principal of or any premium or interest on any
      Securities of the series is to be payable, at the election of the Bank or
      the Holder thereof, in one or more currencies or currency units other than
      that or those in which such Securities are stated to be payable, the
      currency, currencies or currency units in which the principal of or any
      premium or interest on such Securities as to which such election is made
      shall be payable, the periods within which and the terms and conditions
      upon which such election is to be made and the amount so payable (or the
      manner in which such amount shall be determined);

                                       20
<PAGE>

            (13) if other than the entire principal amount thereof, the portion
      of the principal amount of any Securities of the series which shall be
      payable upon declaration of acceleration of the Maturity thereof pursuant
      to Section 502;

            (14) if the principal amount payable at the Stated Maturity of any
      Securities of the series will not be determinable as of any one or more
      dates prior to the Stated Maturity, the amount which shall be deemed to be
      the principal amount of such Securities as of any such date for any
      purpose thereunder or hereunder, including the principal amount thereof
      which shall be due and payable upon any Maturity other than the Stated
      Maturity or which shall be deemed to be Outstanding as of any date prior
      to the Stated Maturity (or, in any such case, the manner in which such
      amount deemed to be the principal amount shall be determined);

            (15) if applicable, that the Securities of the series, in whole or
      any specified part, shall be defeasible pursuant to Section 1402 or
      Section 1403 or both such Sections and, if other than by a Board
      Resolution, the manner in which any election by the Bank to defease such
      Securities shall be evidenced;

            (16) if applicable, that any Securities of the series shall be
      issuable in whole or in part in the form of one or more Global Securities
      and, in such case, the respective Depositaries for such Global Securities,
      the form of any legend or legends which shall be borne by any such Global
      Security in addition to or in lieu of that set forth in Section 204 and
      any circumstances in addition to or in lieu of those set forth in Clause
      (2) of the last paragraph of Section 305 in which any such Global Security
      may be exchanged in whole or in part for registered Securities, and any
      transfer of such Global Security in whole or in part may be registered, in
      the name or names of Persons other than the Depositary for such Global
      Security or a nominee thereof and any other provisions governing exchanges
      or transfers of any such Global Security;

            (17) any addition to or change in the Events of Default which
      applies to any Securities of the series and any change in the right of the
      Trustee or the requisite Holders of such Securities to declare the
      principal amount thereof due and payable pursuant to Section 502;

            (18) any addition to, deletion from or change in the covenants set
      forth in Article Ten which applies to Securities of the series; and

            (19) any other terms of the series (which terms shall not be
      inconsistent with the provisions of this Indenture, except as permitted by
      Section 901(5)).

      All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto. All Securities of any one
series need not be issued at one time and, unless otherwise provided in or
pursuant to the Board Resolution referred to above and (subject to Section 303)
set forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto with respect to a
series of Securities, additional Securities of a series may be

                                       21
<PAGE>

issued, at the option of the Bank, without the consent of any Holder, at any
time and from time to time.

      If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Bank and delivered
to the Trustee at or prior to the delivery of the Officers' Certificate setting
forth the terms of the series.

Section 302. Denominations.

      The Securities of each series shall be issuable only in registered form
without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.

Section 303. Execution, Authentication, Delivery and Dating.

      The Securities shall be executed on behalf of the Bank by its President
and Chief Executive Officer or a Vice-Chairman (or any Person designated by one
of them in writing as authorized to execute and deliver Securities), and by its
Executive Vice-President, RBC Corporate Treasury, Senior Vice-President, RBC
Corporate Treasury, Vice-President, Securitization and Term Funding (or any
Person designated by one of them in writing as authorized to execute and deliver
Securities). The signature of any of these officers on the Securities may be
manual or facsimile.

      Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Bank shall bind the Bank,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

      At any time and from time to time after the execution and delivery of this
Indenture, the Bank may deliver Securities of any series executed by the Bank to
the Trustee for authentication, together with a Bank Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Bank Order shall authenticate and deliver such Securities. If the form
or terms of the Securities of the series have been established by or pursuant to
one or more Board Resolutions as permitted by Sections 201 and 301, in
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,

            (1) if the form of such Securities has been established by or
      pursuant to Board Resolution as permitted by Section 201, that such form
      has been established in conformity with the provisions of this Indenture;

            (2) if the terms of such Securities have been established by or
      pursuant to Board Resolution as permitted by Section 301, that such terms
      have been established in conformity with the provisions of this Indenture;
      and

                                       22
<PAGE>

            (3) that such Securities, when authenticated and delivered by the
      Trustee and issued by the Bank in the manner and subject to any conditions
      specified in such Opinion of Counsel, will constitute valid and legally
      binding obligations of the Bank enforceable in accordance with their
      terms, subject to bankruptcy, insolvency, fraudulent transfer,
      reorganization, moratorium and similar laws of general applicability
      relating to or affecting creditors' rights and to general equity
      principles.

      If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.

      Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, including in the event that the size of a series of Outstanding Securities
is increased as contemplated by Section 301, it shall not be necessary to
deliver the Officers' Certificate otherwise required pursuant to Section 301 or
the Bank Order and Opinion of Counsel otherwise required pursuant to such
preceding paragraph at or prior to the authentication of each Security of such
series if such documents are delivered at or prior to the authentication upon
original issuance of the first Security of such series to be issued.

      Each Security shall be dated the date of its authentication.

      No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Bank, and the Bank shall deliver such Security
to the Trustee for cancellation as provided in Section 309, for all purposes of
this Indenture such Security shall be deemed never to have been authenticated
and delivered hereunder and shall never be entitled to the benefits of this
Indenture.

Section 304. Temporary Securities.

      Pending the preparation of definitive Securities of any series, the Bank
may execute, and upon Bank Order the Trustee shall authenticate and deliver,
temporary Securities that are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.

      If temporary Securities of any series are issued, the Bank will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Bank in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series, the Bank shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more definitive Securities
of the same series, of any authorized denominations and of like tenor and

                                       23
<PAGE>

aggregate principal amount. Until so exchanged, the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series and tenor.

Section 305. Registration, Registration of Transfer and Exchange.

      The Bank shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Bank in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Bank shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.

      Upon surrender for registration of transfer of any Security of a series at
the office or agency of the Bank in a Place of Payment for that series, the Bank
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the same
series, of any authorized denominations and of like tenor and aggregate
principal amount.

      At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Bank shall execute, and the Trustee shall authenticate and
deliver, the Securities that the Holder making the exchange is entitled to
receive.

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

      Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Bank or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Bank and the Security Registrar duly executed, by the Holder thereof or his
attorney duly authorized in writing.

      No service charge shall be made for any registration of transfer or
exchange of Securities, but the Bank or the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906, 1107 or 1303 not involving any
transfer.

      If the Securities of any series (or of any series and specified tenor) are
to be redeemed in part, the Bank shall not be required (A) to issue, register
the transfer of or exchange any Securities of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of any
such Securities selected for redemption under Section 1103 and ending at the
close of business on the day of such mailing, or (B) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.

                                       24
<PAGE>

      The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:

            (1) Each Global Security authenticated under this Indenture shall be
      registered in the name of the Depositary designated for such Global
      Security or a nominee thereof and delivered to such Depositary or a
      nominee thereof or custodian therefor, and each such Global Security shall
      constitute a single Security for all purposes of this Indenture.

            (2) Notwithstanding any other provision in this Indenture, no Global
      Security may be exchanged in whole or in part for registered Securities,
      and no transfer of a Global Security in whole or in part may be
      registered, in the name of any Person other than the Depositary for such
      Global Security or a nominee thereof unless (A) such Depositary has
      notified the Bank that it is unwilling or unable or no longer permitted
      under applicable law to continue as Depositary for such Global Security,
      (B) there shall have occurred and be continuing an Event of Default with
      respect to such Global Security, (C) the Bank so directs the Trustee by a
      Bank Order or (D) there shall exist such circumstances, if any, in
      addition to or in lieu of the foregoing as have been specified for this
      purpose as contemplated by Section 301.

            (3) Subject to Clause (2) above, any exchange of a Global Security
      for other Securities may be made in whole or in part, and all Securities
      issued in exchange for a Global Security or any portion thereof shall be
      registered in such names as the Depositary for such Global Security shall
      direct.

            (4) Every Security authenticated and delivered upon registration of
      transfer of, or in exchange for or in lieu of, a Global Security or any
      portion thereof, whether pursuant to this Section, Section 304, 306, 906,
      1107 or 1303 or otherwise, shall be authenticated and delivered in the
      form of, and shall be, a Global Security, unless such Security is
      registered in the name of a Person other than the Depositary for such
      Global Security or a nominee thereof.

Section 306. Mutilated, Destroyed, Lost and Stolen Securities.

      If any mutilated Security is surrendered to the Trustee, the Bank shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.

      If there shall be delivered to the Bank and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the Bank
or the Trustee that such Security has been acquired by a protected purchaser,
the Bank shall execute and the Trustee shall authenticate and deliver, in lieu
of any such destroyed, lost or stolen Security, a new Security of the same
series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

      In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Bank in its discretion may, instead
of issuing a new Security, pay such Security.

                                       25
<PAGE>

      Upon the issuance of any new Security under this Section, the Bank may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.

      Every new Security of any series issued pursuant to this Section in lieu
of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Bank, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series duly issued
hereunder.

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

Section 307. Payment of Interest; Interest Rights Preserved.

      Except as otherwise provided as contemplated by Section 301 with respect
to any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.

      Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Bank, at its election in each case,
as provided in Clause (1) or (2) below:

            (1) The Bank may elect to make payment of any Defaulted Interest to
      the Persons in whose names the Securities of such series (or their
      respective Predecessor Securities) are registered at the close of business
      on a Special Record Date for the payment of such Defaulted Interest, which
      shall be fixed in the following manner. The Bank shall notify the Trustee
      in writing of the amount of Defaulted Interest proposed to be paid on each
      Security of such series and the date of the proposed payment, and at the
      same time the Bank shall deposit with the Trustee an amount of money equal
      to the aggregate amount proposed to be paid in respect of such Defaulted
      Interest or shall make arrangements satisfactory to the Trustee for such
      deposit prior to the date of the proposed payment, such money when
      deposited to be held in trust for the benefit of the Persons entitled to
      such Defaulted Interest as in this Clause provided. Thereupon the Trustee
      shall fix a Special Record Date for the payment of such Defaulted Interest
      which shall be not more than 15 days and not less than 10 days prior to
      the date of the proposed payment and not less than 10 days after the
      receipt by the Trustee of the notice of the proposed payment. The Trustee
      shall promptly notify the Bank of such Special Record Date and, in the
      name and at the expense of the Bank, shall cause notice of the proposed
      payment of such Defaulted Interest and the Special Record Date therefor to
      be given to each Holder of Securities of such series in the manner set
      forth in Section 106, not less than 10 days prior to such Special Record
      Date. Notice of the proposed payment of such Defaulted Interest and the
      Special Record Date therefor having been so mailed, such Defaulted

                                       26
<PAGE>

      Interest shall be paid to the Persons in whose names the Securities of
      such series (or their respective Predecessor Securities) are registered at
      the close of business on such Special Record Date and shall no longer be
      payable pursuant to the following Clause (2).

            (2) The Bank may make payment of any Defaulted Interest on the
      Securities of any series in any other lawful manner not inconsistent with
      the requirements of any securities exchange on which such Securities may
      be listed, and upon such notice as may be required by such exchange, if,
      after notice given by the Bank to the Trustee of the proposed payment
      pursuant to this Clause, such manner of payment shall be deemed
      practicable by the Trustee.

      Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.

Section 308. Persons Deemed Owners.

      Prior to due presentment of a Security for registration of transfer, the
Bank, the Trustee and any agent of the Bank or the Trustee may treat the Person
in whose name such Security is registered as the owner of such Security for the
purpose of receiving payment of principal of and any premium and (subject to
Section 307) any interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Bank, the
Trustee nor any agent of the Bank or the Trustee shall be affected by notice to
the contrary.

Section 309. Cancellation.

      All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Bank may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Bank may have acquired in any manner whatsoever, and may
deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Bank
has not issued and sold, and all Securities so delivered shall be promptly
cancelled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Securities held by the
Trustee shall be disposed of in accordance with its customary procedures.

Section 310. Computation of Interest.

      Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months. For disclosure
purposes under the Interest Act (Canada), whenever in this Indenture or any
Securities issued hereunder interest at a specified rate is to be calculated on
the basis of a period less than a calendar year, the yearly rate of interest to
which such rate is equivalent is such rate multiplied by the actual number of
days in the relevant calendar year and divided by the number of days in such
period.

                                       27
<PAGE>

Section 311. CUSIP Numbers.

      The Bank in issuing any series of the Securities may use CUSIP numbers, if
then generally in use, and thereafter with respect to such series, the Trustee
may use such numbers in any notice of redemption with respect to such series,
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities of that series
or as contained in any notice of a redemption and that reliance may be placed
only on the other identification numbers printed on the Securities of that
series, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Bank shall promptly notify the Trustee in writing
of any change of such CUSIP numbers.

Section 312. Original Issue Discount.

      If any of the Securities is an Original Issue Discount Security, the Bank
shall file with the Trustee promptly at the end of each calendar year (i) a
written notice specifying the amount of original issue discount (including daily
rates and accrual periods) accrued on such Outstanding Original Issue Discount
Securities as of the end of such year and (ii) such other specific information
relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

Section 401. Satisfaction and Discharge of Indenture.

      This Indenture shall upon Bank Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Bank, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

            (1) either

                  (A) all Securities theretofore authenticated and delivered
            (other than (i) Securities which have been mutilated, destroyed,
            lost or stolen and which have been replaced or paid as provided in
            Section 306 and (ii) Securities for whose payment money has
            theretofore been deposited in trust or segregated and held in trust
            by the Bank and thereafter repaid to the Bank or discharged from
            such trust, as provided in Section 1003) have been delivered to the
            Trustee for cancellation; or

                  (B) all such Securities not theretofore delivered to the
            Trustee for cancellation

                        (i) have become due and payable, or

                        (ii) will become due and payable at their Stated
                  Maturity within one year, or

                                       28
<PAGE>

                        (iii) are to be called for redemption within one year
                  under arrangements satisfactory to the Trustee for the giving
                  of notice of redemption by the Trustee in the name, and at the
                  expense, of the Bank,

      and the Bank, in the case of (i), (ii) or (iii) above, has deposited or
      caused to be deposited with the Trustee as trust funds in trust for the
      purpose money in an amount sufficient to pay and discharge the entire
      indebtedness on such Securities not theretofore delivered to the Trustee
      for cancellation, for principal and any premium and interest to the date
      of such deposit (in the case of Securities which have become due and
      payable) or to the Stated Maturity or Redemption Date, as the case may be;

            (2) the Bank has paid or caused to be paid all other sums payable
      hereunder by the Bank; and

            (3) the Bank has delivered to the Trustee an Officers' Certificate
      and an Opinion of Counsel, each stating that all conditions precedent
      herein provided for relating to the satisfaction and discharge of this
      Indenture have been complied with.

      Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Bank to the Trustee under Section 607, and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.

Section 402. Application of Trust Money.

      Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Bank acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.

                                  ARTICLE FIVE

                                    REMEDIES

Section 501. Events of Default.

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

            (1) if the Bank shall become insolvent or bankrupt or subject to the
      provisions of the Winding-Up and Restructuring Act of Canada, or go into
      liquidation either voluntarily or under an order of a court of competent
      jurisdiction, or otherwise acknowledge its insolvency (provided that a
      resolution or order for winding-up the Bank, with a view to its
      consolidation, amalgamation or merger with another bank or the

                                       29
<PAGE>

      transfer of its assets as an entirety to such other bank, as provided in
      Article Eight, shall not constitute an event of default under this Section
      501 if such last-mentioned bank shall, as a part of such consolidation,
      amalgamation, merger or transfer, and, within 90 days from the passing of
      the resolution or the date of the order for the winding-up or liquidation
      of the Bank or within such further period of time as may be allowed by the
      Trustee, comply with the conditions to that end stated in Article Eight);
      or

            (2) any other Event of Default provided with respect to Securities
      of that series.

Section 502. Acceleration of Maturity; Rescission and Annulment.

      If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount of all the Securities
of that series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) to be due and payable immediately, by a notice
in writing to the Bank (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable.

      At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Bank and the
Trustee, may rescind and annul such declaration and its consequences if:

            (1) the Bank has paid or deposited with the Trustee a sum sufficient
      to pay

                  (A) all overdue interest on all Securities of that series,

                  (B) the principal of (and premium, if any, on) any Securities
            of that series that have become due otherwise than by such
            declaration of acceleration and any interest thereon at the rate or
            rates prescribed therefor in such Securities,

                  (C) to the extent that payment of such interest is lawful,
            interest upon overdue interest at the rate or rates prescribed
            therefor in such Securities, and

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

            and

            (2) all Events of Default with respect to Securities of that series,
      other than the non-payment of the principal of Securities of that series
      that have become due solely by such declaration of acceleration, have been
      cured or waived as provided in Section 513.

                                       30
<PAGE>

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

Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

      The Bank covenants that if:

            (1) default is made in the payment of any interest on any Security
      when such interest becomes due and payable and such default continues for
      a period of 30 days, or

            (2) default is made in the payment of the principal of (or premium,
      if any, on) any Security at the Maturity thereof and such default
      continues for a period of five days,

the Bank will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.

      If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.

Section 504. Trustee May File Proofs of Claim.

      In case of any judicial proceeding relative to the Bank (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.

      No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a

                                       31
<PAGE>

trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.

Section 505. Trustee May Enforce Claims Without Possession of Securities.

      All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.

Section 506. Application of Money Collected.

      Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:

            FIRST: To the payment of all amounts due the Trustee under Section
      607; and

            SECOND: To the payment of the amounts then due and unpaid for
      principal of and any premium and interest on the Securities in respect of
      which or for the benefit of which such money has been collected, ratably,
      without preference or priority of any kind, according to the amounts due
      and payable on such Securities for principal and any premium and interest,
      respectively.

Section 507. Limitation on Suits.

      No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless:

            (1) such Holder has previously given written notice to the Trustee
      of a continuing Event of Default with respect to the Securities of that
      series;

            (2) the Holders of not less than 25% in principal amount of the
      Outstanding Securities of that series shall have made written request to
      the Trustee to institute proceedings in respect of such Event of Default
      in its own name as Trustee hereunder;

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

            (4) the Trustee for 90 days after its receipt of such notice,
      request and offer of indemnity has failed to institute any such
      proceeding; and

            (5) no direction inconsistent with such written request has been
      given to the Trustee during such 90-day period by the Holders of a
      majority in principal amount of the Outstanding Securities of that series;

                                       32
<PAGE>

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.

Section 508. Unconditional Right of Holders to Receive Principal, Premium and
             Interest.

      Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 307)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption or repayment, on the Redemption Date or
date for repayment, as the case may be) and to institute suit for the
enforcement of any such payment and such rights shall not be impaired without
the consent of such Holder.

Section 509. Restoration of Rights and Remedies.

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

Section 510. Rights and Remedies Cumulative.

      Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

Section 511. Delay or Omission Not Waiver.

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

                                       33
<PAGE>

Section 512. Control by Holders.

      The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that:

            (1) such direction shall not be in conflict with any rule of law or
      with this Indenture, and

            (2) the Trustee may take any other action deemed proper by the
      Trustee which is not inconsistent with such direction.

Section 513. Waiver of Past Defaults.

      Subject to Section 502, the Holders of not less than a majority in
principal amount of the Outstanding Securities of any series may on behalf of
the Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, except a default:

            (1) in the payment of the principal of or any premium or interest on
      any Security of such series, or

            (2) in respect of a covenant or provision hereof which under Article
      Nine cannot be modified or amended without the consent of the Holder of
      each Outstanding Security of such series affected.

      Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.

Section 514. Undertaking for Costs.

      In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess reasonable
costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act; provided that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the Bank.

Section 515. Waiver of Usury, Stay or Extension Laws.

      The Bank covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any usury, stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Bank (to the extent that it may lawfully
do so) hereby expressly waives all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee,

                                       34
<PAGE>

but will suffer and permit the execution of every such power as though no such
law had been enacted.

                                  ARTICLE SIX

                                  THE TRUSTEE

Section 601. Certain Duties and Responsibilities.

      The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

Section 602. Notice of Defaults.

      If a default occurs hereunder with respect to Securities of any series,
the Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.

Section 603. Certain Rights of Trustee.

      Subject to the provisions of Section 601:

            (1) the Trustee may conclusively rely and shall be protected in
      acting or refraining from acting upon any resolution, certificate,
      statement, instrument, opinion, report, notice, request, direction,
      consent, order, bond, debenture, note, other evidence of indebtedness or
      other paper or document believed by it to be genuine and to have been
      signed or presented by the proper party or parties;

            (2) any request or direction of the Bank mentioned herein shall be
      sufficiently evidenced by a Bank Request or Bank Order, and any resolution
      of the Board of Directors shall be sufficiently evidenced by a Board
      Resolution;

            (3) whenever in the administration of this Indenture the Trustee
      shall deem it desirable that a matter be proved or established prior to
      taking, suffering or omitting any action hereunder, the Trustee (unless
      other evidence be herein specifically prescribed) may, in the absence of
      bad faith on its part, conclusively rely upon an Officers' Certificate;

            (4) the Trustee may consult with counsel and the written advice of
      such counsel or any Opinion of Counsel shall be full and complete
      authorization and

                                       35
<PAGE>

      protection in respect of any action taken, suffered or omitted by it
      hereunder in good faith and in reliance thereon;

            (5) the Trustee shall be under no obligation to exercise any of the
      rights or powers vested in it by this Indenture at the request or
      direction of any of the Holders pursuant to this Indenture, unless such
      Holders shall have offered to the Trustee security or indemnity reasonably
      satisfactory to it against the costs, expenses and liabilities which might
      be incurred by it in compliance with such request or direction;

            (6) the Trustee shall not be bound to make any investigation into
      the facts or matters stated in any resolution, certificate, statement,
      instrument, opinion, report, notice, request, direction, consent, order,
      bond, debenture, note, other evidence of indebtedness or other paper or
      document, but the Trustee, in its discretion, may make such further
      inquiry or investigation into such facts or matters as it may see fit,
      and, if the Trustee shall determine to make such further inquiry or
      investigation, it shall be entitled to examine the books, records and
      premises of the Bank, personally or by agent or attorney during the Bank's
      normal business hours; provided, however, that the Trustee shall cause its
      agents and attorneys to hold in confidence all such information except to
      the extent disclosure may be required by law and except to the extent that
      the Trustee, in its sole judgment, may determine that such disclosure is
      consistent with its obligations hereunder;

            (7) the Trustee may execute any of the trusts or powers hereunder or
      perform any duties hereunder either directly or by or through agents or
      attorneys and the Trustee shall not be responsible for any misconduct or
      negligence on the part of any agent or attorney appointed with due care by
      it hereunder;

            (8) the rights, privileges, protections, immunities and benefits
      given to the Trustee, including, without limitation, its right to be
      indemnified, are extended to, and shall be enforceable by, the Trustee in
      each of its capacities hereunder;

            (9) the Trustee shall not be charged with knowledge of any default
      or Event of Default with respect to the Securities, unless either (1) a
      Responsible Officer shall have actual knowledge of such default or Event
      of Default or (2) written notice of such default or Event of Default shall
      have been given to the Trustee by the Bank or by any Holder of the
      Securities; and

            (10) the permissive rights of the Trustee enumerated herein shall
      not be construed as duties.

Section 604. Not Responsible for Recitals or Issuance of Securities.

      The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Bank,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee shall not be accountable for the use or
application by the Bank of Securities or the proceeds thereof.

                                       36
<PAGE>

Section 605. May Hold Securities.

      The Trustee, any Paying Agent, any Security Registrar or any other agent
of the Bank, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal
with the Bank with the same rights it would have if it were not Trustee, Paying
Agent, Security Registrar or such other agent.

Section 606. Money Held in Trust.

      Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Bank.

Section 607. Compensation and Reimbursement.

      The Bank agrees:

            (1) to pay to the Trustee from time to time such compensation as
      shall be agreed to in writing between the Bank and the Trustee for all
      services rendered by it hereunder (which compensation shall not be limited
      by any provision of law in regard to the compensation of a trustee of an
      express trust);

            (2) except as otherwise expressly provided herein, to reimburse the
      Trustee upon its request for all reasonable expenses, disbursements and
      advances incurred or made by the Trustee in accordance with any provision
      of this Indenture (including the reasonable compensation and the
      reasonable expenses and disbursements of its agents and counsel), except
      any such expense, disbursement or advance as may be attributable to its
      negligence or bad faith;

            (3) to indemnify the Trustee for, and to hold it harmless against,
      any loss, liability or expense incurred without negligence or bad faith on
      its part, arising out of or in connection with the acceptance or
      administration of the trust or trusts hereunder, including the reasonable
      costs and expenses of defending itself against any claim or liability in
      connection with the exercise or performance of any of its powers or duties
      hereunder;

            (4) when the Trustee incurs any expenses or renders any services
      after the occurrence of an Event of Default specified in Section 501(3),
      such expenses and the compensation for such services are intended to
      constitute expenses of administration under the Winding-Up and
      Restructuring Act of Canada or any similar Canadian or United States
      federal or state law for the relief of debtors; and

            (5) the obligations of the Bank under this Section to compensate and
      indemnify the Trustee and to pay or reimburse the Trustee for expenses,
      disbursements and advances shall constitute additional indebtedness
      hereunder and shall survive the satisfaction and discharge of this
      Indenture and the removal and resignation of the Trustee. Such additional
      indebtedness shall be a senior claim and lien to that of the Securities
      upon all property and funds held or collected by the Trustee as such,
      except funds held in trust for the benefit of the Holders of particular
      Securities, and the

                                       37
<PAGE>

      Securities are hereby subordinated to such senior claim. In no event shall
      the lien granted hereunder attach to any assets of the Bank.

Section 608. Conflicting Interests.

      If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.

Section 609. Corporate Trustee Required; Eligibility.

      There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such, has a combined
capital and surplus of at least $50,000,000 and has its Corporate Trust Office
in the Borough of Manhattan, The City of New York. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee with respect to the Securities of any series shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.

Section 610. Resignation and Removal; Appointment of Successor.

      No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 611.

      The Trustee may resign at any time with respect to the Securities of one
or more series by giving written notice thereof to the Bank. If the instrument
of acceptance by a successor Trustee required by Section 611 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.

      The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the Bank.

      If at any time:

            (1) the Trustee shall fail to comply with Section 608 after written
      request therefor by the Bank or by any Holder who has been a bona fide
      Holder of a Security for at least six months, or

                                       38
<PAGE>

            (2) the Trustee shall cease to be eligible under Section 609 and
      shall fail to resign after written request therefor by the Bank or by any
      such Holder, or

            (3) the Trustee shall become incapable of acting or shall be
      adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
      property shall be appointed or any public officer shall take charge or
      control of the Trustee or of its property or affairs for the purpose of
      rehabilitation, conservation or liquidation,

then, in any such case, (A) the Bank by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.

      If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, with respect to
the Securities of one or more series, the Bank shall promptly appoint a
successor Trustee or Trustees with respect to the Securities of that or those
series (it being understood that any such successor Trustee may be appointed
with respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of any
particular series) and shall comply with the applicable requirements of Section
611. If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Bank and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Bank. If no successor Trustee with respect to
the Securities of any series shall have been so appointed by the Bank or the
Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.

      The Bank shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series to all Holders of
Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.

Section 611. Acceptance of Appointment by Successor.

      In case of the appointment hereunder of a successor Trustee with respect
to all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Bank and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Bank or the successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument

                                       39
<PAGE>

transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.

      In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Bank, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and that (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Bank or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.

      Upon request of any such successor Trustee, the Bank shall execute any and
all instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts referred to in the first or
second preceding paragraph, as the case may be.

      No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.

Section 612. Merger, Conversion, Consolidation or Succession to Business.

      Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion, consolidation or sale to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.

                                       40
<PAGE>

Section 613. Preferential Collection of Claims Against Bank.

      If and when the Trustee shall be or become a creditor of the Bank (or any
other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Bank (or any such other obligor).

Section 614. Appointment of Authenticating Agent.

      The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Bank and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

      Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent (including the
authenticating agency contemplated by this Indenture), shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

      An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Bank. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Bank. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent that shall be acceptable to the Bank and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if

                                       41
<PAGE>

originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.

      The Bank agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.

      If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:

      This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.

Dated:

                                                            The Bank of New York
                                                                      As Trustee

                                       By
                                          ------------------------------------,
                                              As Authenticating Agent

                                       By
                                          ------------------------------------
                                               Authorized Officer

                                 ARTICLE SEVEN

                 HOLDERS' LISTS AND REPORTS BY TRUSTEE AND BANK

Section 701. Bank to Furnish Trustee Names and Addresses of Holders.

      The Bank will furnish or cause to be furnished to the Trustee

            (1) semi-annually either (i) not later than January 15 and July 15
      in each year in the case of any series of Securities consisting solely of
      Original Issue Discount Securities, which by their terms do not bear
      interest prior to Maturity, or (ii) not more than 15 days after each
      Regular Record Date in the case of Securities of any other series, a list,
      in such form as the Trustee may reasonably require, of the names and
      addresses of the Holders of Securities of each series as of the preceding
      January 1 or July 1 or as of such Regular Record Date, as the case may be,
      and

            (2) at such other times as the Trustee may request in writing,
      within 30 days after the receipt by the Bank of any such request, a list
      of similar form and content as of a date not more than 15 days prior to
      the time such list is furnished;

      excluding from any such list names and addresses received by the Trustee
in its capacity as Security Registrar.

                                       42
<PAGE>

Section 702. Preservation of Information; Communications to Holders.

      The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.

      The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.

      Every Holder of Securities, by receiving and holding the same, agrees with
the Bank and the Trustee that neither the Bank nor the Trustee nor any agent of
either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the Trust
Indenture Act.

Section 703. Reports by Trustee.

      The Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.

      A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Bank. The Bank will
notify the Trustee when any Securities are listed on any stock exchange.

Section 704. Reports by Bank.

      The Bank shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents or reports filed electronically with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be deemed filed with, and
delivered to, the Trustee at the same time as filed with the Commission.

      Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Bank's compliance
with any of its covenants hereunder (as to which the Trustee is entitled to
conclusively rely exclusively on Officers' Certificates).

                                       43
<PAGE>

                                 ARTICLE EIGHT

          CONSOLIDATION, AMALGAMATION, MERGER, CONVEYANCE, TRANSFER OR
                                     LEASE

Section 801. Bank May Consolidate, Etc., Only on Certain Terms.

      The Bank shall not merge, amalgamate, consolidate or otherwise combine
with another other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:

            (1) in case the Bank shall consolidate with or merge into another
      Person or convey, transfer or lease its properties and assets
      substantially as an entirety to any Person, the Person formed by, or
      resulting from, such consolidation or amalgamation or into which the Bank
      is merged or the Person that acquires by conveyance or transfer, or which
      leases, the properties and assets of the Bank substantially as an entirety
      shall be a corporation, partnership or trust, shall be organized and
      validly existing and shall be legally responsible for the Securities,
      whether by agreement, operation of law or otherwise;

            (2) the consolidation, amalgamation, merger, conveyance, transfer or
      lease must not cause an Event of Default including any event which, after
      notice or lapse of time or both, would become an Event of Default, shall
      have happened and be continuing; and

            (3) the Bank has delivered to the Trustee an Officers' Certificate
      and an Opinion of Counsel, each stating that such consolidation,
      amalgamation, merger, conveyance, transfer or lease and, if a supplemental
      indenture is required in connection with such transaction, such
      supplemental indenture comply with this Article and that all conditions
      precedent herein provided for relating to such transaction have been
      complied with.

Section 802. Successor Substituted.

      Upon any consolidation or amalgamation of the Bank with, or merger of the
Bank into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Bank substantially as an entirety in accordance
with Section 801, the successor Person formed by or resulting from such
consolidation or amalgamation or into which the Bank is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Bank under this Indenture with
the same effect as if such successor Person had been named as the Bank herein,
and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities.

                                       44
<PAGE>

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

Section 901. Supplemental Indentures Without Consent of Holders.

      Without the consent of any Holders, the Bank and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:

            (1) to evidence the succession of another Person to the Bank and the
      assumption by any such successor of the covenants of the Bank herein and
      in the Securities; or

            (2) to add to the covenants of the Bank for the benefit of the
      Holders of all or any series of Securities (and if such covenants are to
      be for the benefit of less than all series of Securities, stating that
      such covenants are expressly being included solely for the benefit of such
      series) or to surrender any right or power herein conferred upon the Bank;
      or

            (3) to add any additional Events of Default for the benefit of the
      Holders of all or any series of Securities (and if such additional Events
      of Default are to be for the benefit of less than all series of
      Securities, stating that such additional Events of Default are expressly
      being included solely for the benefit of such series); or

            (4) to add to or change any of the provisions of this Indenture to
      such extent as shall be necessary to permit or facilitate the issuance of
      Securities in bearer form, registrable or not registrable as to principal,
      and with or without interest coupons, or to permit or facilitate the
      issuance of Securities in uncertificated form; or

            (5) to add to, change or eliminate any of the provisions of this
      Indenture in respect of one or more series of Securities, provided that
      any such addition, change or elimination (A) shall neither (i) apply to
      any Security of any series created prior to the execution of such
      supplemental indenture and entitled to the benefit of such provision nor
      (ii) modify the rights of the Holder of any such Security with respect to
      such provision or (B) shall become effective only when there is no
      Security described in clause (i) Outstanding; or

            (6) to secure the Securities; or

            (7) to establish the form or terms of Securities of any series as
      permitted by Sections 201 and 301; or

            (8) to evidence and provide for the acceptance of appointment
      hereunder by a successor Trustee with respect to the Securities of one or
      more series and to add to or change any of the provisions of this
      Indenture as shall be necessary to provide for or facilitate the
      administration of the trusts hereunder by more than one Trustee, pursuant
      to the requirements of Section 611; or

                                       45
<PAGE>

            (9) to cure any ambiguity, to correct or supplement any provision
      herein which may be defective or inconsistent with any other provision
      herein, or to make any other provisions with respect to matters or
      questions arising under this Indenture, provided that such action pursuant
      to this Clause (9) shall not adversely affect the interests of the Holders
      of Securities of any series in any material respect.

Section 902. Supplemental Indentures With Consent of Holders.

      With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Bank and the
Trustee, the Bank and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security affected
thereby,

            (1) change the Stated Maturity of the principal of, or any
      installment of principal of or interest on, any Security, or reduce the
      principal amount thereof or the rate of interest thereon or any premium
      payable upon the redemption thereof, or reduce the amount of the principal
      of an Original Issue Discount Security or any other Security which would
      be due and payable upon a declaration of acceleration of the Maturity
      thereof pursuant to Section 502, or change any Place of Payment where, or
      the coin or currency in which, any Security or any premium or interest
      thereon is payable, or impair the right to institute suit for the
      enforcement of any such payment on or after the Stated Maturity thereof
      (or, in the case of redemption, on or after the Redemption Date), or

            (2) if any Security provides that the Holder may require the Bank to
      repurchase such Security, impair such Holder's right to require repurchase
      of such Security on the terms provided therein, or

            (3) reduce the percentage in principal amount of the Outstanding
      Securities of any series, the consent of whose Holders is required for any
      such supplemental indenture, or the consent of whose Holders is required
      for any waiver (of compliance with certain provisions of this Indenture or
      certain defaults hereunder and their consequences) provided for in this
      Indenture, or

            (4) modify any of the provisions of this Section, Section 513 or
      Section 1006, except to increase any such percentage or to provide that
      certain other provisions of this Indenture cannot be modified or waived
      without the consent of the Holder of each Outstanding Security affected
      thereby; provided, however, that this clause shall not be deemed to
      require the consent of any Holder with respect to changes in the
      references to "the Trustee" and concomitant changes in this Section and
      Section 1006, or the deletion of this proviso, in accordance with the
      requirements of Sections 611 and 901(8).

A supplemental indenture that changes or eliminates any covenant or other
provision of this Indenture that has expressly been included solely for the
benefit of one or more particular series of Securities, or that modifies the
rights of the Holders of Securities of such series with respect to

                                       46
<PAGE>

such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.

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

Section 903. Execution of Supplemental Indentures.

      In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
in addition to the documents required by Section 102, and (subject to Section
601) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.

Section 904. Effect of Supplemental Indentures.

      Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

Section 905. Conformity with Trust Indenture Act.

      Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

Section 906. Reference in Securities to Supplemental Indentures.

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

                                   ARTICLE TEN

                                    COVENANTS

Section 1001. Payment of Principal, Premium and Interest.

      The Bank covenants and agrees for the benefit of each series of Securities
that it will duly and punctually pay the principal of and any premium and
interest on the Securities of that series in accordance with the terms of the
Securities and this Indenture.

                                       47
<PAGE>

Section 1002. Maintenance of Office or Agency.

      The Bank will maintain in each Place of Payment, and in the State of New
York, for any series of Securities an office or agency where Securities of that
series may be presented or surrendered for payment, where Securities of that
series may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Bank in respect of the Securities of that
series and this Indenture may be served. The Bank will give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Bank shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Bank hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.

      The Bank may also from time to time designate one or more other offices or
agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Bank of its obligation to maintain an office or agency in
each Place of Payment for Securities of any series for such purposes. The Bank
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.

      If the Bank issues Securities of any series through a branch, agency or
office other than its head or home office, the Bank represents that,
notwithstanding the place of booking office or jurisdiction of incorporation or
organization of the Bank, the obligations of the Bank in respect of such
Securities are the same as if it had issued such Securities through its head or
home office.

Section 1003. Money for Securities Payments to Be Held in Trust.

      If the Bank shall at any time act as its own Paying Agent with respect to
any series of Securities, it will, on or before each due date of the principal
of or any premium or interest on any of the Securities of that series, deposit
in an account established for the purpose of providing the Persons entitled
thereto a sum sufficient to pay the principal and any premium and interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and will promptly notify the Trustee of its action or
failure so to act.

      Whenever the Bank shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of or any premium
or interest on any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Bank will
promptly notify the Trustee of its action or failure so to act.

      The Bank will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (1) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Bank (or any other obligor upon the Securities
of that series) in the making of any payment in respect of the Securities of
that series, upon the written request of

                                       48
<PAGE>

the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent for payment in respect of the Securities of that series.

      The Bank may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Bank Order
direct any Paying Agent to pay, to the Trustee all sums held by the Bank or such
Paying Agent, such sums to be held by the Trustee in trust for the benefit of
the Persons entitled thereto; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.

      Any money deposited with the Trustee or any Paying Agent in trust for the
payment of the principal of or any premium or interest on any Security of any
series and remaining unclaimed for two years after such principal, premium or
interest has become due and payable shall be paid to the Bank on Bank Request;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Bank for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Bank cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Bank.

Section 1004. Statement by Officers as to Default.

      The Bank will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Bank ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Bank is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Bank shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge.

Section 1005. Existence.

      Subject to Article Eight, the Bank will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence.

Section 1006. Waiver of Certain Covenants.

      Except as otherwise specified as contemplated by Section 301 for
Securities of such series, the Bank may, with respect to the Securities of any
series, omit in any particular instance to comply with any term, provision or
condition set forth in any covenant provided pursuant to Section 301(18), 901(2)
or 901(7) for the benefit of the Holders of such series or in Section 1005 if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Bank and

                                       49
<PAGE>

the duties of the Trustee in respect of any such term, provision or condition
shall remain in full force and effect.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

Section 1101. Applicability of Article.

      Subject to any applicable law restricting the redemption of the
Securities, Securities of any series that are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for such Securities) in
accordance with this Article.

Section 1102. Election to Redeem; Notice to Trustee.

      The election of the Bank to redeem any Securities shall be evidenced by a
Board Resolution or in another manner specified as contemplated by Section 301
for such Securities. In case of any redemption at the election of the Bank of
less than all the Securities of any series (including any such redemption
affecting only a single Security), the Bank shall, at least 60 days prior to the
Redemption Date fixed by the Bank (unless a shorter notice shall be satisfactory
to the Trustee), notify the Trustee of such Redemption Date, of the principal
amount of Securities of such series to be redeemed and, if applicable, of the
tenor of the Securities to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Bank shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.

Section 1103. Selection by Trustee of Securities to Be Redeemed.

      If less than all the Securities of any series are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of a
portion of the principal amount of any Security of such series, provided that
the unredeemed portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security. If less than all the Securities of such series
and of a specified tenor are to be redeemed (unless such redemption affects only
a single Security), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series and specified tenor not previously called
for redemption in accordance with the preceding sentence.

      The Trustee shall promptly notify the Bank in writing of the Securities
selected for redemption as aforesaid and, in case of any Securities selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.

      The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or

                                       50
<PAGE>

in part. In the case of any such redemption in part, the unredeemed portion of
the principal amount of the Security shall be in an authorized denomination
(which shall not be less than the minimum authorized denomination) for such
Security.

      For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities that has been or is to be redeemed.

Section 1104. Notice of Redemption.

      Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.

      All notices of redemption shall state:

            (1) the Redemption Date,

            (2) the Redemption Price,

            (3) if less than all the Outstanding Securities of any series
      consisting of more than a single Security are to be redeemed, the
      identification (and, in the case of partial redemption of any such
      Securities, the principal amounts) of the particular Securities to be
      redeemed and, if less than all the Outstanding Securities of any series
      consisting of a single Security are to be redeemed, the principal amount
      of the particular Security to be redeemed,

            (4) that on the Redemption Date the Redemption Price will become due
      and payable upon each such Security to be redeemed and, if applicable,
      that interest thereon will cease to accrue on and after said date,

            (5) the place or places where each such Security is to be
      surrendered for payment of the Redemption Price,

            (6) that the redemption is for a sinking fund, if such is the case;
      and

            (7) if applicable, the CUSIP numbers of the Securities of that
      series.

      Notice of redemption of Securities to be redeemed at the election of the
Bank shall be given by the Bank or, at the Bank's request, by the Trustee in the
name and at the expense of the Bank and, unless otherwise specified or
contemplated by Section 301, shall be irrevocable.

Section 1105. Deposit of Redemption Price.

      One Business Day prior to any Redemption Date, the Bank shall deposit with
the Trustee or with a Paying Agent (or, if the Bank is acting as its own Paying
Agent, deposit in an account established for the purpose as provided in Section
1003) an amount of money sufficient to pay the Redemption Price of, and (except
if the Redemption Date shall be an Interest Payment Date or the

                                       51
<PAGE>

Securities of the series provide otherwise) accrued interest on, all the
Securities which are to be redeemed on that date.

Section 1106. Securities Payable on Redemption Date.

      Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Bank shall default in the payment of the Redemption Price and accrued interest)
such Securities shall cease to bear interest. Upon surrender of any such
Security for redemption in accordance with said notice, such Security shall be
paid by the Bank at the Redemption Price, together, if applicable, with accrued
interest to the Redemption Date; provided, however, that, unless otherwise
specified as contemplated by Section 307, installments of interest whose Stated
Maturity is on or prior to the Redemption Date will be payable to the Holders of
such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 307.

      If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.

Section 1107. Securities Redeemed in Part.

      Any Security that is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Bank or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Bank and the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Bank shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities of the same series and of like tenor, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.

                                 ARTICLE TWELVE

      PURCHASE OR REPAYMENT OF SECURITIES BY THE BANK AT THE OPTION OF THE
                                     HOLDER

Section 1201. Applicability of Article

      Subject to any applicable law restricting the purchase or repayment of the
Securities by the Bank at the option of the Holder, Securities of any series the
terms of which provide to each Holder the option to require the Bank to purchase
or repay such Securities in certain circumstances shall, upon exercise of such
option, be repayable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.

                                       52
<PAGE>

Section 1202. Notice of Repayment Date.

      Notice of any Repayment Date with respect to Securities of any series
shall, unless otherwise specified by the terms of the Securities of such series,
be given by the Bank not less than 30 nor more than 90 days prior to such
Repayment Date to each Holder of Securities of such series in accordance with
Section 106.

      Such notice shall state:

            (a) the Repayment Date;

            (b) the Repayment Price;

            (c) the place or places where, and the date by which, such
      Securities are to be surrendered for payment of the Repayment Price;

            (d) a description of the procedure which a Holder must follow to
      exercise the purchase or repayment option;

            (e) that exercise of the purchase or repayment option to elect
      repayment is irrevocable; and

            (f) such other information as the Bank may consider appropriate for
      inclusion.

      No failure of the Bank to give the foregoing notice shall limit any
Holder's right to exercise a repayment right.

Section 1203. Deposit of Repayment Price.

      One Business Day prior to the Repayment Date, the Bank shall deposit with
the Trustee or with a Paying Agent (or, if the Bank is acting as its own Paying
Agent, deposit in an account established for the purpose provided in Section
1003) an amount of money sufficient to pay the Repayment Price of and (unless
the Repayment Date shall be an Interest Payment Date) accrued and unpaid
interest, if any, on all of the Securities of such series that are to be repaid
on that date.

Section 1204. Securities Payable on Repayment Date.

      Holders having duly exercised the option to require purchase or repayment
by the Bank on any Repayment Date as specified in the form of Security for such
series as provided in Section 203, the Securities of such series so to be
purchased or repaid shall, on the Repayment Date, become due and payable at the
Repayment Price applicable thereto and from and after such date (unless the Bank
shall default in the payment of the Repayment Price and accrued interest
(including any Additional Interest)) such Securities shall cease to bear
interest. Upon surrender of any such Security for purchase or repayment in
accordance with the terms of such Security, provided the option has been duly
exercised and the Security duly surrendered as specified in the form of such
Security, such Security shall be paid by the Bank at the Repayment Price
together with accrued interest to the Repayment Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to such Repayment
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.

                                       53
<PAGE>

      If any Security shall not be paid upon due exercise of the option and
surrender thereof for purchase or repayment, the Repayment Price shall, until
paid, bear interest from the Repayment Date at the rate prescribed therefor in
such Security.

Section 1205. Securities Repaid in Part.

      Any Security that by its terms may be purchased or repaid by the Bank in
part at the option of the Holder and that is to be purchased or repaid only in
part by the Bank shall be surrendered at any office or agency of the Bank
designated for that purpose pursuant to Section 1002 (with, if the Bank or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Bank and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Bank shall execute,
and the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities of the same series, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unpurchased or unrepaid portion of the
principal of the Security so surrendered.

                                ARTICLE THIRTEEN

                                  SINKING FUNDS

Section 1301. Applicability of Article.

      The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series except as otherwise specified as
contemplated by Section 301 for such Securities.

      The minimum amount of any sinking fund payment provided for by the terms
of any series of Securities is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of such Securities is herein referred to as an "optional sinking fund
payment". If provided for by the terms of any series of Securities, the cash
amount of any sinking fund payment may be subject to reduction as provided in
Section 1302. Each sinking fund payment shall be applied to the redemption of
Securities of the series as provided for by the terms of such Securities.

Section 1302. Satisfaction of Sinking Fund Payments with Securities.

      The Bank (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption) and (2) may apply as a credit Securities
of a series which have been redeemed either at the election of the Bank (a)
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each
case in satisfaction of all or any part of any sinking fund payment with respect
to any Securities of such series required to be made pursuant to the terms of
such Securities as and to the extent provided for by the terms of such series or
(b) have been purchased or repaid by the Bank through the exercise of an option
by the Holder as provided for in the terms of such Securities; provided that the
Securities to be so credited have not been previously so credited. The
Securities to be so credited shall be received and credited for such purpose by
the Trustee at the Redemption Price, as specified in the Securities so to be
redeemed, for redemption through

                                       54
<PAGE>

operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.

Section 1303. Redemption of Securities for Sinking Fund.

      Not less than [60] days prior to each sinking fund payment date for any
Securities, the Bank will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1302 and will also deliver to the Trustee any Securities to be so
delivered. Not less than [30] days prior to each such sinking fund payment date,
the Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Bank in
the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.

                                ARTICLE FOURTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

Section 1401. Bank's Option to Effect Defeasance or Covenant Defeasance.

      Unless otherwise provided as contemplated by Section 301, Sections 1402
and 1403 shall apply to any Securities or any series of Securities, as the case
may be, in either case, denominated in U.S. dollars and bearing interest at a
fixed rate, in accordance with any applicable requirements provided pursuant to
Section 301 and upon compliance with the conditions set forth below in this
Article; and the Bank may elect, at its option at any time, to have Sections
1402 and 1403 applied to any Securities or any series of Securities, as the case
may be, designated pursuant to Section 301 as being defeasible pursuant to such
Section 1402 or 1403, in accordance with any applicable requirements provided
pursuant to Section 301 and upon compliance with the conditions set forth below
in this Article. Any such election to have or not to have Sections 1402 and 1403
apply, as the case may be, shall be evidenced by a Board Resolution or in
another manner specified as contemplated by Section 301 for such Securities.

Section 1402. Defeasance and Discharge.

      Upon the Bank's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, or if
this Section shall otherwise apply to any Securities or any series of
Securities, as the case may be, the Bank shall be deemed to have been discharged
from its obligations with respect to such Securities as provided in this Section
on and after the date the conditions set forth in Section 1404 are satisfied
(hereinafter called "Defeasance"). For this purpose, such Defeasance means that
the Bank shall be deemed to have paid and discharged the entire indebtedness
represented by such Securities and to have satisfied all its other obligations
under such Securities and this Indenture insofar as such Securities are
concerned (and the Trustee, at the expense of the Bank, shall execute proper
instruments acknowledging the same), subject to the following, which shall
survive until otherwise terminated or discharged hereunder: (1) the rights of
Holders of such Securities to receive, solely from the trust fund described in
Section 1404 and as more fully set forth in such Section, payments in

                                       55
<PAGE>

respect of the principal of and any premium and interest on such Securities when
payments are due, (2) the Bank's obligations with respect to such Securities
under Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and (4) this Article. Subject to
compliance with this Article, the Bank may exercise its option (if any) to have
this Section applied to the Securities of any series notwithstanding the prior
exercise of its option (if any) to have Section 1403 applied to such Securities.

Section 1403. Covenant Defeasance.

      Upon the Bank's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, or if
this Section shall otherwise apply to any Securities or any series of
Securities, as the case may be, (1) the Bank shall be released from its
obligations under Sections 1005 and 1006 and any covenants provided pursuant to
Section 301(18), 901(2) or 901(7) for the benefit of the Holders of such
Securities and (2) the occurrence of any event specified in Section 501(2) shall
be deemed not to be or result in an Event of Default, in each case with respect
to such Securities as provided in this Section on and after the date the
conditions set forth in Section 1404 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to such Securities, the Bank may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
specified Section, whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or by reason of any reference in any such
Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.

Section 1404. Conditions to Defeasance or Covenant Defeasance.

      The following shall be the conditions to the application of Section 1402
or 1403 to any Securities or any series of Securities, as the case may be:

            (1) The Bank shall irrevocably have deposited or caused to be
      deposited with the Trustee (or another trustee that satisfies the
      requirements contemplated by Section 609 and agrees to comply with the
      provisions of this Article applicable to it) as trust funds in trust for
      the purpose of making the following payments, specifically pledged as
      security for, and dedicated solely to, the benefits of the Holders of such
      Securities, (A) money in an amount, or (B) U.S. Government Obligations
      that through the scheduled payment of principal and interest in respect
      thereof in accordance with their terms will provide, not later than one
      day before the due date of any payment, money in an amount, or (C) a
      combination thereof, in each case sufficient, in the opinion of a
      nationally recognized firm of independent public accountants expressed in
      a written certification thereof delivered to the Trustee, to pay and
      discharge, and which shall be applied by the Trustee (or any such other
      qualifying trustee) to pay and discharge, the principal of and any premium
      and interest on such Securities on the respective Stated Maturities, in
      accordance with the terms of this Indenture and such Securities. As used
      herein, "U.S. Government Obligation" means (x) any security that is (i) a
      direct obligation of the United States of America for the payment of which
      the full faith and credit of the United States of America is pledged or
      (ii) an obligation of a Person controlled or supervised by and acting as
      an agency or instrumentality of the United States of America the payment
      of which is unconditionally guaranteed as a full faith and credit
      obligation by the United States of America, which, in either case (i) or
      (ii), is not

                                       56
<PAGE>

      callable or redeemable at the option of the issuer thereof, and (y) any
      depositary receipt issued by a bank (as defined in Section 3(a)(2) of the
      Securities Act) as custodian with respect to any U.S. Government
      Obligation which is specified in Clause (x) above and held by such bank
      for the account of the holder of such depositary receipt, or with respect
      to any specific payment of principal of or interest on any U.S. Government
      Obligation which is so specified and held, provided that (except as
      required by law) such custodian is not authorized to make any deduction
      from the amount payable to the holder of such depositary receipt from any
      amount received by the custodian in respect of the U.S. Government
      Obligation or the specific payment of principal or interest evidenced by
      such depositary receipt.

            (2) In the event of an election to have Section 1402 apply to any
      Securities or any series of Securities, as the case may be, the Bank shall
      have delivered to the Trustee an Opinion of Counsel stating that (A) the
      Bank has received from, or there has been published by, the Internal
      Revenue Service a ruling or (B) since the date of this instrument, there
      has been a change in the applicable Federal income tax law, in either case
      (A) or (B) to the effect that, and based thereon such opinion shall
      confirm that, the Holders of such Securities will not recognize gain or
      loss for Federal income tax purposes as a result of the deposit,
      Defeasance and discharge to be effected with respect to such Securities
      and will be subject to Federal income tax on the same amount, in the same
      manner and at the same times as would be the case if such deposit,
      Defeasance and discharge were not to occur.

            (3) In the event of an election to have Section 1403 apply to any
      Securities or any series of Securities, as the case may be, the Bank shall
      have delivered to the Trustee an Opinion of Counsel to the effect that the
      Holders of such Securities will not recognize gain or loss for Federal
      income tax purposes as a result of the deposit and Covenant Defeasance to
      be effected with respect to such Securities and will be subject to Federal
      income tax on the same amount, in the same manner and at the same times as
      would be the case if such deposit and Covenant Defeasance were not to
      occur.

            (4) The Bank shall have delivered to the Trustee an Officers'
      Certificate to the effect that neither such Securities nor any other
      Securities of the same series, if then listed on any securities exchange,
      will be delisted as a result of such deposit.

            (5) No event that is, or after notice or lapse of time or both would
      become, an Event of Default with respect to such Securities or any other
      Securities shall have occurred and be continuing at the time of such
      deposit or, with regard to any such event specified in Section 501(1), at
      any time on or prior to the 90th day after the date of such deposit (it
      being understood that this condition shall not be deemed satisfied until
      after such 90th day).

            (6) Such Defeasance or Covenant Defeasance shall not cause the
      Trustee to have a conflicting interest within the meaning of the Trust
      Indenture Act (assuming all Securities are in default within the meaning
      of such Act).

            (7) Such Defeasance or Covenant Defeasance shall not result in a
      breach or violation of, or constitute a default under, any other agreement
      or instrument to which the Bank is a party or by which it is bound.

                                       57
<PAGE>

            (8) Such Defeasance or Covenant Defeasance shall not result in the
      trust arising from such deposit constituting an investment company within
      the meaning of the Investment Company Act unless such trust shall be
      registered under such Act or exempt from registration thereunder.

            (9) The Bank shall have delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that all conditions
      precedent with respect to such Defeasance or Covenant Defeasance have been
      complied with (in each case, subject to the satisfaction of the condition
      in clause (5)).

Section 1405. Deposited Money and U.S. Government Obligations to Be Held in
              Trust; Miscellaneous Provisions.

      Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and
Section 1406, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 1404 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Bank acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Securities,
of all sums due and to become due thereon in respect of principal and any
premium and interest, but money so held in trust need not be segregated from
other funds except to the extent required by law.

      The Bank shall pay and indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 1404 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of Outstanding Securities.

      Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Bank from time to time upon Bank Request any money
or U.S. Government Obligations held by it as provided in Section 1404 with
respect to any Securities which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.

Section 1406. Reinstatement.

      If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Bank has been discharged or
released pursuant to Section 1402 or 1403 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1405 with respect to such Securities
in accordance with this Article; provided, however, that if the Bank makes any
payment of principal of or any premium or interest on any such Security

                                       58
<PAGE>

following such reinstatement of its obligations, the Bank shall be subrogated to
the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.

                                ARTICLE FIFTEEN

                           SUBORDINATION OF SECURITIES

Section 1501. Securities Subordinate to Deposit Liabilities and Other
              Indebtedness.

      The Securities constitute subordinated indebtedness within the meaning of
the Bank Act (Canada) and, in the event of the insolvency or winding-up of the
Bank, the indebtedness evidenced by the Securities ranks in right of payment
equally with and not prior to:

      (a)   the debentures under the 1984 Indenture;

      (b)   the debentures under the 1986 Indenture;

      (c)   the debentures under the 1994 Indenture;

      (d)   the debentures under the 1997 Indenture;

      (e)   the debentures under the Programme for the Issuance of Notes; and

      (f)   the debentures evidencing the Bank's US$300 million aggregate
            principal amount of Subordinated Notes due October 24, 2011.

      and subordinate in right of payment to the prior payment in full of

            (1) Indebtedness of the Bank then outstanding, other than
      Subordinated Indebtedness;

            (2) all Indebtedness to which the debentures under the 1984
      Indenture are subordinate in right of payment to the same extent as the
      debentures under the 1984 Indenture are subordinate thereto under the
      provisions of Article IV of the Trust Indenture made as of October 1, 1984
      between the Bank and Montreal Trust Company of Canada, a trust company
      incorporated under the laws of Canada (the "Montreal Trust Company of
      Canada") and subsequently assigned to Computershare Trust Company of
      Canada, a trust company incorporated under the laws of Canada (the
      "Computershare Trust Company");

            (3) all Indebtedness to which the debentures under the 1986
      Indenture are subordinate in right of payment to the same extent as the
      debentures under the 1986 Indenture are subordinate thereto under the
      provisions of Article IV of the Trust Indenture made as of June 6, 1986
      between the Bank and Montreal Trust Company of Canada and subsequently
      assigned to Computershare Trust Company;

            (4) all Indebtedness to which the debentures under the 1994
      Indenture are subordinate in right of payment to the same extent as the
      debentures under the 1994 Indenture are subordinate thereto under the
      provisions of Article IV of the Trust

                                       59
<PAGE>

      Indenture made as of November 14, 1994 between the Bank and Montreal Trust
      Company of Canada and subsequently assigned to Computershare Trust
      Company;

            (5) all Indebtedness to which the debentures under the 1997
      Indenture are subordinate in right of payment to the same extent as the
      debentures under the 1997 Indenture are subordinate thereto under the
      provisions of Article IV of the Trust Indenture made as of May 21, 1997
      between the Bank and Montreal Trust Company of Canada and subsequently
      assigned to Computershare Trust Company;

            (6) all Indebtedness to which the debentures under the Programme for
      the Issuance of Notes are subordinate to in right of payment; and

            (7) all Indebtedness to which the debentures evidencing the Bank's
      US$300 million aggregate principal amount of Subordinated Notes due
      October 24, 2011 are subordinated to in right of payment.

      The Bank agrees and each holder of any Security, by his acceptance of such
Security, also agrees and shall be deemed conclusively to have agreed, for the
benefit of the present and future holders of Indebtedness, other than
Subordinated Indebtedness, for the benefit of all present and future holders of
Indebtedness to which the debentures under the 1984 Indenture are subordinate in
right of payment, for the benefit of all present and future holders of
Indebtedness to which the debentures under the 1986 Indenture are subordinate in
right of payment, for the benefit of all present and future holders of
Indebtedness to which the debentures under the 1994 Indenture are subordinate in
right of payment, for the benefit of all present and future holders of
Indebtedness to which the debentures under the 1997 Indenture are subordinate in
right of payment and for the benefit of all present and future holders of
Indebtedness to which the debentures under the Programme for the Issuance of
Notes are subordinate in right of payment and for the benefit of all present and
future holders of Indebtedness to which the debentures evidencing the Bank's
US$300 million aggregate principal amount of Subordinated Notes due October 24,
2011 are subordinate in right of payment, to the provisions of this Article
Fifteen and the Bank and each holder of any Security by his acceptance of such
Security shall be bound by such provisions.

Section 1502. Further Assurances of Subordination.

      Each holder of Securities by his acceptance of such Security authorizes
and directs the Trustee on his behalf to take such action as may be necessary or
appropriate further to assure the subordination as provided in this Article
Fifteen.

Section 1503. Reliance on Judicial Order or Certificate of Liquidating Agent

      Upon payment or distribution of assets of the Bank, the Trustee, subject
to the provisions of Article Six hereof, and the Holders of the Securities shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon any certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or the Holders of the
Securities, for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
Indebtedness of the Bank, the amount thereof or payable thereon, the

                                       60
<PAGE>

amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Fifteen.

Section 1504. Trustee's Compensation Not Prejudiced

      Nothing in this Article Fifteen will apply to amounts due to the Trustee
pursuant to other sections in this Indenture.

                                ARTICLE SIXTEEN

                            MISCELLANEOUS PROVISIONS

Section 1601. Consent to Jurisdiction and Service of Process.

      The Bank irrevocably submits to the jurisdiction of any New York State or
Federal court sitting in The City of New York over any suit, action or
proceeding arising out of or relating to this Indenture or any Security. The
Bank irrevocably waives, to the fullest extent permitted by law, any objection
that it may have to the laying of the venue of any such suit, action or
proceeding brought in such a court and any claim that any such suit, action or
proceeding brought in such a court has been brought in any inconvenient forum.
The Bank agrees that final judgment in any such suit, action or proceeding
brought in such a court shall be conclusive and binding upon the Bank and may be
enforced in the courts of Canada (or any other courts to the jurisdiction of
which the Bank is subject) by a suit upon such judgment, provided that service
of process is effected upon the Bank in the manner specified in the following
paragraph or as otherwise permitted by law; provided, however, that the Bank
does not waive, and the foregoing provisions of this sentence shall not
constitute or be deemed to constitute a waiver of, (i) any right to appeal any
such judgment, to seek any stay or otherwise to seek reconsideration or review
of any such judgment or (ii) any stay of execution or levy pending an appeal
from, or a suit, action or proceeding for reconsideration or review of, any such
judgment.

      As long as any of the Securities remain outstanding, the Bank will at all
times have an authorized agent in the Borough of Manhattan, The City of New York
upon whom process may be served in any legal action or proceeding arising out of
or relating to the Indenture or any Security. Service of process upon such agent
and written notice of such service mailed or delivered to the Bank shall to the
extent permitted by law be deemed in every respect effective service of process
upon the Bank in any such legal action or proceeding. The Bank hereby appoints
National Corporate Research, Ltd. as its agent for such purpose, and covenants
and agrees that service of process in any such legal action or proceeding may be
made upon it at the office of such agent at 225 West 34th Street, Suite 910, New
York, NY 10122-0032 (or at such other address in the Borough of Manhattan, The
City of New York, as the Bank may designate by written notice to the Trustee).

      The Bank hereby consents to process being served in any suit, action or
proceeding of the nature referred to in the preceding paragraphs by service upon
such agent together with the mailing of a copy thereof by registered or
certified mail, postage prepaid, return receipt requested, to the address of the
Bank in Toronto set forth in the first paragraph of this instrument or to any
other address of which the Bank shall have given written notice to the Trustee.
The Bank irrevocably waives, to the fullest extent permitted by law, all claim
of error by reason of any such service (but does not waive any right to assert
lack of subject matter jurisdiction) and agrees that

                                       61
<PAGE>

such service (i) shall be deemed in every respect effective service of process
upon the Bank in any such suit, action or proceeding and (ii) shall, to the
fullest extent permitted by law, be taken and held to be valid personal service
upon and personal delivery to the Bank.

         Nothing in this Section shall affect the right of the Trustee or any
Holder to serve process in any manner permitted by law or limit the right of the
Trustee to bring proceedings against the Bank in the courts of any jurisdiction
or jurisdictions.

Section 1602. Indenture and Securities Solely Corporate Obligations.

      No recourse under or upon any obligation, covenant or agreement of this
Indenture, any supplemental indenture, or of any Security, or for any claim
based thereon or otherwise in respect thereof, shall be had against any
incorporator, shareholder, officer or director, as such, past, present or
future, of the Bank or of any successor corporation, either directly or through
the Bank, whether by virtue of any constitution, statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, shareholders, officers or
directors, as such, of the Bank or of any successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or any of the Securities or implied therefrom; and that any and all such
personal liability, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such
incorporator, shareholder, officer or director, as such, because of the creation
of the indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Securities
or implied therefrom, are hereby expressly waived and released as a condition
of, and as a consideration for, the execution of this Indenture and the issue of
such Securities.

Section 1603. Execution in Counterparts.

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

                                       62
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.

                                ROYAL BANK OF CANADA

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

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

                                THE BANK OF NEW YORK, as Trustee

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

                                       63EXHIBIT 4.1

                                                                  EXECUTION COPY

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

                 CITICORP RESIDENTIAL MORTGAGE SECURITIES, INC.,

                                    Depositor

                               CITIMORTGAGE, INC.,

                     Servicer and Certificate Administrator

                         U.S. BANK NATIONAL ASSOCIATION,

                                     Trustee

                                       And

                                 CITIBANK, N.A.,

          Paying Agent, Certificate Registrar and Authenticating Agent

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

                         POOLING AND SERVICING AGREEMENT

                          Dated as of November 1, 2006

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

                        REMIC PASS-THROUGH CERTIFICATES,
                                  SERIES 2006-3

<PAGE>

ARTICLES I-XI INCORPORATION BY REFERENCE

ARTICLE XII TERMS FOR SERIES 2006-3 CERTIFICATES

      Section 12.01. General Terms for Certificates.........................
      Section 12.02. Additional Terms and Definitions.......................
      Section 12.03. Wire Transfer Eligibility..............................
      Section 12.04. REMIC-Related Provisions...............................
      Section 12.05. Expenses and Liabilities of the Trust Fund.............
      Section 12.06. Tax Matters Person.....................................
      Section 12.07. [Reserved].............................................

ARTICLE XIII SUBORDINATION; PRIORITIES; ALLOCATION OF LOSSES

      Section 13.01. Subordination; Priority of Distributions...............
      Section 13.02. Allocation of Realized Losses; Recoveries..............
      Section 13.03. [Reserved].............................................
      Section 13.04. Distributions on the Class R Certificate...............

ARTICLE XIV ADDITIONAL PROVISIONS

      Section 14.01. Additional Representations and Warranties..............
      Section 14.02. Additional Servicing Events of Default.................
      Section 14.03. Additional Conditions for Subsequent
                     Transfer Dates.........................................
      Section 14.04. Additional Certificate Information.....................
      Section 14.05. Additional Pool Information............................

SCHEDULES

SCHEDULE 1       Servicing Criteria to be Addressed in Report on Assessment of
                 Compliance
SCHEDULE 2       Additional Form 10-D Disclosure
SCHEDULE 3       Additional Form 10-K Disclosure
SCHEDULE 4       Form 8-K Disclosure Information
EXHIBITS
EXHIBIT A-1      Form of Class A Certificates
EXHIBIT A-2      Form of Class M Certificates
EXHIBIT A-3      Form of Class CE Certificates
EXHIBIT A-4      Form of Class R Certificate
EXHIBIT B        Schedule of Mortgage Loans
EXHIBIT C        Form of Purchaser Letter
EXHIBIT D        Form of ERISA Letter
EXHIBIT E        Form of Servicer Certification
EXHIBIT F        Form of Mortgage Document Custodial Agreement

<PAGE>

      THIS POOLING AND SERVICING AGREEMENT ("this Pooling Agreement" or "this
Agreement"), dated as of November 1, 2006, among CITICORP RESIDENTIAL MORTGAGE
SECURITIES, INC., a Delaware corporation, as depositor ("CRMSI" or the
"Depositor"), CITIMORTGAGE, INC., a New York corporation, as servicer (the
"Servicer") and certificate administrator (the "Certificate Administrator"),
U.S. BANK NATIONAL ASSOCIATION, a national banking association, as trustee (the
"Trustee"), and CITIBANK, N.A., a national banking association, as paying agent
(the "Paying Agent"), certificate registrar (the "Certificate Registrar") and
authenticating agent (the "Authenticating Agent").

                                WITNESSETH THAT:

      In the regular course of their business, certain affiliates of CRMSI
originate and acquire Mortgage Loans. CRMSI, the Servicer and the Trustee wish
to set forth the terms and conditions pursuant to which CRMSI will sell to the
Trust Fund the Mortgage Loans listed on Exhibit B hereto. Certificates will be
issued to Holders evidencing ownership interests in such Trust Fund and the
Servicer will manage and service such Mortgage Loans. In consideration of the
mutual agreements herein contained, CRMSI, the Servicer and the Trustee agree as
follows:

                                  ARTICLES I-XI

                           INCORPORATION BY REFERENCE

      Those certain Standard Terms for Pooling and Servicing Agreements dated as
of November 1, 2006 (the "Standard Terms"), a copy of which is attached hereto,
as amended, superseded and supplemented hereby, are incorporated by reference
herein as if set forth in full. Such Standard Terms, as so amended, superseded
and supplemented, are hereby affirmed by, and shall constitute a part of this
Agreement between, the parties hereto. For purposes of this Pooling Agreement
and the Certificates executed and delivered hereunder, the terms "this
Agreement," "herein," "hereof" and words of similar import shall refer to this
Pooling Agreement including the Standard Terms as incorporated herein with such
modifications or amendments for the related series of Certificates as may be set
forth in this Pooling Agreement.

                                  ARTICLE XII.

                      TERMS FOR SERIES 2006-3 CERTIFICATES

      On November 29, 2006, there shall be established pursuant to the terms of,
and authenticated under, this Pooling Agreement a series of certificates known
and designated as "Citicorp Residential Mortgage Securities, Inc. REMIC
Pass-Through Certificates, Series 2006-3". Elections will be made pursuant to
this Agreement to treat the Trust as two REMICs for federal income tax purposes.
The Certificates shall consist of (i) one Class consisting of seven Subclasses
of Certificates (each a "Class A Subclass") designated as "Citicorp Residential
Mortgage Securities, Inc. REMIC Pass-Through Certificates, Series 2006-3, Senior
Class A-1a Certificates" (the "Class A-1a Certificates"), "Citicorp Residential
Mortgage Securities, Inc. REMIC Pass-Through Certificates, Series 2006-3, Senior
Class A-1b Certificates" (the "Class A-1b Certificates"), "Citicorp Residential
Mortgage Securities, Inc. REMIC Pass-Through Certificates, Series 2006-3, Senior
Class A-2 Certificates" (the "Class A-2 Certificates"), "Citicorp Residential
Mortgage Securities, Inc. REMIC Pass-Through Certificates, Series 2006-3, Senior
Class A-3 Certificates" (the "Class A-3 Certificates"), "Citicorp Residential
Mortgage Securities, Inc. REMIC Pass-Through Certificates, Series 2006-3, Senior
Class A-4 Certificates" (the "Class A-4 Certificates"), "Citicorp Residential
Mortgage Securities, Inc. REMIC Pass-Through Certificates, Series 2006-3, Senior
Class A-5 Certificates" (the "Class A-5 Certificates"), and "Citicorp
Residential Mortgage Securities, Inc. REMIC Pass-Through Certificates, Series
2006-3, Senior Class A-6 Certificates" (the "Class A-6 Certificates" and,
collectively, together with the Class A-1a, Class A-1b, Class A-2, Class A-3,
Class A-4 and Class A-5 Certificates, the "Class A Certificates"); (ii) one
Class consisting of nine Subclasses (each a "Class M Subclass") of Certificates
designated as "Citicorp Residential Mortgage Securities, Inc., REMIC
Pass-Through Certificates, Series 2006-3, Subordinated Class M-1 Certificates"
(the "Class M-1 Certificates"), "Citicorp Residential Mortgage Securities, Inc.
REMIC Pass-Through Certificates, Series 2006-3, Subordinated Class M-2
Certificates" (the "Class M-2 Certificates"), "Citicorp Residential Mortgage
Securities, Inc. REMIC Pass-Through Certificates, Series 2006-3, Subordinated
Class M-3 Certificates" (the "Class M-3 Certificates"), "Citicorp Residential
Mortgage Securities, Inc. REMIC Pass-Through Certificates, Series 2006-3,
Subordinated Class M-4 Certificates" (the "Class M-4 Certificates"), "Citicorp
Residential Mortgage Securities, Inc. REMIC Pass-Through Certificates, Series
2006-3, Subordinated Class M-5 Certificates" (the "Class M-5 Certificates"),
"Citicorp Residential Mortgage Securities, Inc. REMIC Pass-Through Certificates,
Series 2006-3, Subordinated Class M-6 Certificates" (the "Class M-6
Certificates"), "Citicorp Residential Mortgage Securities, Inc. REMIC
Pass-Through Certificates, Series 2006-3, Subordinated Class M-7 Certificates"
(the "Class M-7 Certificates"), "Citicorp Residential Mortgage Securities, Inc.
REMIC Pass-Through Certificates, Series 2006-3, Subordinated Class M-8
Certificates" (the "Class M-8 Certificates"), and "Citicorp Residential Mortgage
Securities, Inc. REMIC Pass-Through Certificates, Series 2006-3, Subordinated
Class M-9 Certificates" (the "Class M-9 Certificates", and together with the
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7 and
Class M-8 Certificates, collectively, the "Class M Certificates"); (iii) one
Class of Certificates designated as "Citicorp Residential Mortgage Securities,
Inc. REMIC Pass-Through Certificates, Series 2006-3, Subordinated Class CE
Certificates" (the "Class CE Certificates") and (iv) one class of residual
interests designated as "Citicorp Residential Mortgage Securities, Inc. REMIC
Pass-Through Certificates, Series 2006-3, Class R Certificate" (the "Class R
Certificate" and, together with the Class A, Class M and Class CE Certificates,
the "Certificates").

      For the avoidance of doubt, all of the Certificates are of the same Group
(as such term is defined in the Standard Terms) and all of the Mortgage Loans
are in the same Pool (as such term is defined in the Standard Terms).

      The Class A-1a, Class A-1b, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7, Class M-8 and Class M-9 Certificates (exclusive of their respective
rights to receive Class A Subclass Cap Amounts or Class M Subclass Cap Amounts,
as applicable) and the Class CE Certificates (exclusive of their obligation to
pay Class A Subclass Cap Amounts or Class M Subclass Cap Amounts) are hereby
designated as "regular interests" in the Upper-Tier REMIC within the meaning of
Code Section 860G(a)(1). The Class R Certificate represents ownership of the
Class LT-R Interest, which is the "residual interest" in the Lower-Tier REMIC,
and the Class UT-R Interest, which is the "residual interest" in the Upper-Tier
REMIC within the meaning of Code Section 860G(a)(2). The Certificates shall have
the terms provided for in this Agreement.

<PAGE>

      Section 12.01. General Terms for Certificates.

      (a) The Class A Certificates, the Class M Certificates, Class CE
Certificates and Class R Certificate shall have the following respective Initial
Principal Balances and Certificate Rates:

                          Initial Principal   Certificate
                               Balance          Rate(1)
                          -----------------   -----------
Class A-1a Certificates         $96,853,000        5.815%
Class A-1b Certificates         $96,853,000         (2)
Class A-2 Certificates          $64,542,000        5.609%
Class A-3 Certificates          $56,069,000        5.610%
Class A-4 Certificates          $77,419,000        5.703%
Class A-5 Certificates          $32,327,000        5.948%
Class A-6 Certificates          $47,118,000        5.628%
Class M-1 Certificates          $13,299,000        5.794%
Class M-2 Certificates          $14,928,000        5.824%
Class M-3 Certificates           $3,800,000        5.874%
Class M-4 Certificates           $4,886,000        5.953%
Class M-5 Certificates           $5,157,000        6.052%
Class M-6 Certificates           $4,071,000        6.151%
Class M-7 Certificates           $3,257,000        6.399%
Class M-8 Certificates           $2,985,000        6.697%
Class M-9 Certificates           $4,615,000        7.241%
Class CE Certificates                (3)             (4)
Class R Certificate                  (5)             (5)

(1)   For all Interest Accrual Periods commencing after the Optional Termination
      Date, the Certificate Rate for each Class of Certificates (other than
      Class A1-b, Class R and Class CE) will be the applicable rate set forth
      above plus 0.50% per annum.

(2)   Interest will accrue on the Class A-1b Certificates during each Interest
      Accrual Period at a per annum rate equal to the sum of (x) One-Month LIBOR
      for such Interest Accrual Period plus (y) the Class A-1b Margin for such
      Interest Accrual Period. The "Class A-1b Margin" shall be 0.07% for all
      Interest Accrual Periods commencing on or prior to the Optional
      Termination Date, and shall be 0.14% for all Interest Accrual Periods
      commencing after the Optional Termination Date. With respect to the first
      Interest Accrual Period, interest will accrue on the Class A-1b
      Certificates at a per annum rate equal to 5.39000%.

(3)   For federal income tax purposes, the Class CE Certificates will be treated
      as having a Principal Balance equal to the Overcollateralization Amount.

(4)   The Class CE Certificates have no Certificate Rate.

(5)   The Class R Certificate has no Principal Balance or Certificate Rate.

      The Class CE Certificates and the Class R Certificate will be entitled to
distributions as set forth herein.

      The last scheduled distribution date is November 25, 2036 for each Class,
and is the "latest possible maturity date" of the related Subclass or Class for
purposes of Section 860G(a)(1) of the Code and Treasury Regulations Section
1.860G-1(a)(4)(iii).

      (b) For each Distribution Date, each of the Class A Certificates and Class
M Certificates will accrue interest on their respective Principal Balances
during the related Interest Accrual Period at the lesser of (x) the applicable
Certificate Rate for such Subclass or Class set forth in Section 12.01(a) and
(y) the Net WAC Rate for such Distribution Date. Interest accrued on the
Certificates during any Interest Accrual Period will be calculated on the
assumption that any distributions in reduction of Principal Balance on all
Certificates were made, and any allocations of any losses were made, on the day
immediately following the last day of the preceding Interest Accrual Period.
Each Class A Subclass Interest Amount and each Class M Subclass Interest Amount
relating to an Interest Accrual Period shall be distributable on the following
Distribution Date. Each Subclass and Class of Certificates shall accrue interest
from the applicable Accrual Date for such Subclass and Class of Certificates.

      Interest on the Certificates (other than the Class A-1b, Class CE or Class
R Certificates) will be calculated on the basis of a 360-day year comprised on
twelve 30-day months. Interest on the Class A-1b Certificates will be calculated
on the basis of the actual number of days in the related Interest Accrual Period
and a 360-day year. On each Distribution Date, each Class A Subclass Interest
Amount and each Class M Subclass Interest Amount for such Subclass for such
Distribution Date shall be distributable to such Subclass or Class of
Certificates.

      (c) [Reserved].

      (d) Subject to the provisions of Section 13.01, on each Distribution Date
prior to the Subordination Depletion Date, the Senior Principal Distribution
Amount will be allocated among and distributed in reduction of the Principal
Balance of the Subclasses of the Class A Certificates sequentially as follows:

            (I)   first, to the Class A-6 Certificates, the Class A-6 Priority
                  Amount for such Distribution Date; and

            (II)  then, the amount remaining after application according to
                  clause (I) above, sequentially as follows:

                  (1)   to the Class A-1a and Class A-1b Certificates, pro rata,
                        based on their respective outstanding Principal
                        Balances, until their respective Principal Balances are
                        reduced to zero,

                  (2)   to the Class A-2 Certificates until their Principal
                        Balance is reduced to zero,

                  (3)   to the Class A-3 Certificates until their Principal
                        Balance is reduced to zero,

                  (4)   to the Class A-4 Certificates until their Principal
                        Balance is reduced to zero,

                  (5)   to the Class A-5 Certificates until their Principal
                        Balance is reduced to zero, and

                  (6)   to the Class A-6 Certificates until their Principal
                        Balance is reduced to zero.

      (e) On each Distribution Date on or after the Subordination Depletion
Date, notwithstanding the priorities set forth in Section 12.01(d), the Senior
Principal Distribution Amount will be distributed pro rata to the Class A
Subclasses, based on outstanding Principal Balances.

      (f) On each Distribution Date, distributions in reduction of the Principal
Balance made to each Class A Subclass will be distributed pro rata among the
holders of Certificates of such Class A Subclass.

      (g) On each Distribution Date, subject to the provisions of Section 13.01,
distributions in reduction of Principal Balance of the Subclasses of Class M
Certificates will be made in an aggregate amount equal to the applicable Class M
Subclass Principal Distribution Amount, respectively, in accordance with the
priorities set forth in Section 13.01(b).

      (h) Other distributions shall be made in respect of the Certificates as
provided in Section 13.01.

      Section 12.02. Additional Terms and Definitions.The Certificates shall
have and be subject to the following additional specific terms:

      Accrual Date. For each Class or Subclass of interest-bearing Certificates
other than the Class A-1b Certificates, the Cut-Off Date, and for the Class A-1b
Certificates, the Closing Date.

      Authenticating Agent. Citibank, N.A., Agency and Trust, 388 Greenwich
Street, 14th Floor, New York, New York 10013, Attention: CRMSI 2006-3 has been
appointed by the Trustee as an Authenticating Agent pursuant to Section 8.12.
Any such Authenticating Agent may be removed, and any other Authenticating Agent
appointed, as permitted by Section 8.12 and shall have the rights, privileges,
benefits, exculpatory provisions and protections of the Trustee as set forth in
Sections 8.01, 8.02, 8.03 and 8.04.

      Book-Entry Certificates. All Subclasses of Class A Certificates and all
Subclasses of Class M Certificates are Book-Entry Certificates.

      Cap Amounts. Any Class A Subclass Cap Amount or Class M Subclass Cap
Amount.

      Capitalized Interest Account. Not applicable.

      Cash Deposited into Collection Account. No cash will be deposited into the
Collection Account on the Issue Date.

      Certificate Administrator. CitiMortgage, Inc. shall act as the initial
Certificate Administrator, which appointment is hereby approved by the Trustee.
The Certificate Administrator is authorized to take actions permitted or
required thereof under this Agreement. The Certificate Administrator may be
removed, and any other Certificate Administrator reasonably acceptable to the
Trustee appointed, by the Servicer.

      Certificate Rate. The Certificate Rates for the Certificates are as set
forth in Section 12.01(a).

      Certificate Registrar. Citibank, N.A., having its principal offices
located at 111 Wall Street, 15th Floor, New York, New York 10005, Attention:
15th Floor Window, is hereby appointed as the Certificate Registrar for all of
the Certificates pursuant to Section 5.02 and shall have the rights, privileges,
benefits, exculpatory provisions and protections of the Trustee as set forth in
Sections 8.01, 8.02, 8.03, 8.04, 8.07, and 8.09.

      Class A Principal Balance. As of any date, the sum of the Class A Subclass
Principal Balances of the Class A Certificates.

      Class A Subclass Cap Amount. For a Distribution Date and any Class A
Subclass, the sum of (x) the difference (if greater than zero) between the
Normal Accrual for such Class A Subclass for the related Interest Accrual Period
and the WAC Accrual for such Class A Subclass for the related Interest Accrual
Period and (y) any Class A Subclass Cap Amount remaining unpaid on the prior
Distribution Date after giving effect to all payments made on such prior
Distribution Date, plus interest on the amount thereof at its Certificate Rate
for the related Interest Accrual Period for the Distribution Date in question.

      Class A Subclass Interest Shortfall. For a Distribution Date and any Class
A Subclass, the sum of (x) any Class A Subclass Interest Shortfall Amount for
such Subclass for such Distribution Date and (y) any Class A Subclass Interest
Shortfall for such Subclass for the prior Distribution Date and remaining unpaid
after application of all payments on such prior Distribution Date plus interest
on the amount thereof at the lower of (x) the applicable Certificate Rate for
the Interest Accrual Period related to the Distribution Date in question and (y)
the Net WAC Rate for the Distribution Date in question.

      Class A Subclass Principal Distribution Amount. For each Distribution Date
and any Class A Subclass, the amount of principal distributed to such Class A
Subclass pursuant to clause 1.d of Section 13.01(b).

      Class A-1b Margin: As defined in Section 12.01(b).

      Class A-6 Percentage. The Principal Balance of the Class A-6 Certificates,
divided by the aggregate Subclass Principal Balances of the Class A
Certificates.

      Class A-6 Priority Amount. For any Distribution Date means the lesser of
(A) the Principal Balance of the Class A-6 Certificates and (B) the product of
(a) the Class A-6 Percentage, (b) the Class A-6 Shift Percentage and (c) the
Senior Principal Distribution Amount.

      Class A-6 Shift Percentage. For any Distribution Date will be the
percentage indicated below:

                                                                 Class A-6
Distribution Date Occurring In                               Shift Percentage
------------------------------                               ----------------

December 2006 through November 2009.............                     0%
December 2009 through November 2011.............                    45%
December 2011 through November 2012.............                    80%
December 2012 through November 2013.............                   100%
December 2013 and thereafter....................                   300%

      Class CE Distributable Amount. On any Distribution Date, the sum of (i) as
a distribution in respect of interest, the amount of interest that has accrued
on the Class CE Interest and not applied as an Extra Principal Distribution
Amount on such Distribution Amount on such Distribution Date, plus any such
accrued interest remaining undistributed from prior Distribution Dates, plus
(without duplication) (ii) as a distribution in respect of principal, any
portion of the Principal Balance of the Class CE Interest which is distributable
as a Release Amount, minus (iii) any amounts paid in respect of the Class A
Subclass Cap Amounts or the Class M Subclass Cap Amounts.

      Class LT-Accrual Interest. One of the separate non-certificated beneficial
ownership interests in the Lower-Tier REMIC issued hereunder and designated as a
regular interest in the Lower-Tier REMIC. Class LT-Accrual Interest shall accrue
interest at the related Interest Rate in effect from time to time, and shall be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to 1/2 of the Pool Balance plus 1/2 of the
Overcollateralization Amount, as set forth in Section 12.04(a).

      Class LT-R Interest. The residual interest in the Lower-Tier REMIC as
described in Section 12.04(a) and the related footnote thereto.

      Class M Factor. For Class M-1, 78.50%; for Class M-2, 84.00%; for Class
M-3, 85.40%; for Class M-4, 87.20%; for Class M-5, 89.10%; for Class M-6,
90.60%; for Class M-7, 91.80%; for Class M-8, 92.90% and for Class M-9, 94.60%.

      Class M Subclass Cap Amount. For a Distribution Date and any Class M
Subclass, the sum of (x) the difference (if greater than zero) between the
Normal Accrual for such Class M Subclass for the related Interest Accrual Period
and the WAC Accrual for such Class M Subclass for the related Interest Accrual
Period and (y) any Class M Subclass Cap Amount remaining unpaid on the prior
Distribution Date after giving effect to all payments made on such prior
Distribution Date, plus interest on the amount thereof at the applicable
Certificate Rate for the related Interest Accrual Period for the Distribution
Date in question.

      Class M Subclass Interest Shortfall. For a Distribution Date and any Class
M Subclass, the sum of (x) any Class M Subclass Interest Shortfall Amount for
such Subclass for such Distribution Date and (y) any Class M Subclass Interest
Shortfall for such Subclass for the prior Distribution Date and remaining unpaid
after application of all payments on such prior Distribution Date plus interest
on the amount thereof at the lower of (x) the applicable Certificate Rate for
the Interest Accrual Period related to the Distribution Date in question and (y)
the Net WAC Rate for the Distribution Date in question.

      Class M Subclass Principal Distribution Amount. For any Distribution Date
on or after the Stepdown Date and on which a Trigger Event is not in effect, an
amount for a particular Class M Subclass equal to the excess of

      (a) the sum of (x) the Class A Principal Balance and the Class M Subclass
Principal Balance for each Class M Subclass having a lower numerical designation
(after giving effect to the payment on such Distribution Date of the Senior
Principal Distribution Amount and each Class M Subclass Principal Distribution
Amount for a Class M Subclass having a lower numerical designation) and (y) the
Class M Subclass Principal Balance of the Class M Subclass in question
immediately prior to such Distribution Date over

      (b) the lesser of (x) the Class M Factor for such Class M Subclass times
the Pool Balance as of the end of the related Collection Period and (y) the Pool
Balance as of the end of the related Collection Period minus the OC Floor
Amount.

For any other Distribution Date, (a) if the Class A Principal Balance has not
been reduced to zero and either (x) such Distribution Date is prior to the
Stepdown Date or (y) a Trigger Event is in effect, each Class M Subclass
Principal Distribution Amount shall be zero and (b) if the Class A Principal
Balance has been reduced to zero and either (x) such Distribution Date is prior
to the Stepdown Date or (y) a Trigger Event is in effect, the Class M Subclass
Principal Distribution Amount for a particular Class M Subclass shall be equal
to the lesser of (1) 100% of the Principal Distribution Amount minus the sum of
the Class M Subclass Principal Distribution Amounts for each Class M Subclass
with a lower numerical designation and (2) the Class M Subclass Principal
Balance of such Class M Subclass.

      Class UT-R Interest. The residual interest in the Upper-Tier REMIC as
described in Section 12.04(a) and the related footnote thereto.

      Closing Date. November 29, 2006.

      Constituent REMIC. The Upper-Tier REMIC and the Lower-Tier REMIC shall be
the "Constituent REMICs" for purposes of Section 3.11.

      Corporate Trust Office. The Corporate Trust Office is located at U.S. Bank
National Association, having its principal offices located at One Federal
Street--3rd Floor, Boston, Massachusetts 02110, Attention: Corporate Trust
Services, Citicorp Residential Mortgage Securities, Inc. REMIC Pass-Through
Certificates, Series 2006-3, or such other address as shall be identified to
CRMSI and all Certificateholders by or on behalf of the Trustee in writing.

      Cumulative Loss Test. The Cumulative Loss Test will be failed on a
Distribution Date if the Cumulative Loss Percentage equals or exceeds (1) with
respect to Distribution Dates from December 2008 through November 2009,
inclusive, 0.75%, (2) with respect to Distribution Dates from December 2009
through November 2010, inclusive, 1.75%, (3) with respect to Distribution Dates
from December 2010 through November 2011, inclusive, 2.95%, (4) with respect to
Distribution Dates from December 2011 through November 2012, inclusive, 3.95%
and (5) with respect to Distribution Dates from December 2012 and thereafter,
4.70%.

      Current Class A Enhancement Level. As of any Distribution Date, the
percentage obtained by dividing (i) the sum of the Class M Subclass Principal
Balances of the Class M Certificates and the Overcollateralization Amount (prior
to giving effect to any distributions in reduction of Principal Balance and the
allocation of any losses on such date) by (ii) the Pool Balance as of the last
day of the related Collection Period.

      Current Interest. For a Distribution Date, the sum of the Class A Subclass
Interest Amounts and Class M Subclass Interest Amounts.

      Current Pool Balance. For any date, the Pool Balance.

      Custodian. Citibank, N.A. is designated by the Trustee as the Custodian.

      Cut-Off Date. The Cut-Off Date is the beginning of business on November 1,
2006.

      Daily Servicing Fee Accrual Amount. For each Mortgage Loan during each day
during each Collection Period, an amount equal to (a) the product of (i) the
Servicing Fee Rate and (ii) the Loan Balance of such Mortgage Loan as of such
day, divided by (b) 360.

      Definitive Certificates. The Class CE Certificates and the Class R
Certificate will be issued in fully registered certificated form.

      Delinquency Test. The Delinquency Test will be failed on a Distribution
Date if the Rolling Sixty-Day Delinquency Rate for such Distribution Date is
greater than 50% of the Current Class A Enhancement Level as of such
Distribution Date.

      Denominations. The denominations of each Subclass of the Class A
Certificates and Class M Certificates are $100,000 Initial Principal Balance and
integral multiples of $1 in excess thereof (except that one Certificate of each
Class or Subclass may be issued in a different denomination). The denominations
of the Class CE Certificates and Class R Certificate are 100% Percentage
Interest.

      Depository. The initial Depository is Citibank, N.A.

      Determination Date. The Determination Date for each Distribution Date is
the close of business on the 18th day (or, if such day is not a Business Day,
the preceding Business Day) of the month in which the related Distribution Date
occurs.

      Distribution Date. Each Distribution Date shall be the 25th day of each
month (or if such day is not a Business Day, the next succeeding Business Day),
commencing in December 2006.

      Enhancement Date: The first Distribution Date on which the Current Class A
Enhancement Level is greater than or equal to the Required Class A Enhancement
Level.

      ERISA Restricted Certificates. The Class CE Certificates and Class R
Certificate.

      Extra Principal Distribution Amount. For any Distribution Date, the lesser
of (x) Monthly Excess Interest and (y) the Deficiency Amount.

      Initial Pool Balance. $542,836,307.48.

      Initial Principal Balance. The Initial Principal Balance for each Subclass
of the Class A Certificates and for each Subclass of the Class M Certificates
and for the Class R Certificate is as set forth in Section 12.01(a).

      Interest Accrual Period. The Interest Accrual Period for any given
Distribution Date is (x) for all Certificates other than the Class A-1b, Class
CE or Class R Certificates, the period from and including the first day of the
month preceding the month of such given Distribution Date to and including the
last day of the month preceding the month of such Distribution Date, and (y) for
the Class A-1(b) Certificates, the period from and including the immediately
preceding Distribution Date (or, in the case of the first Distribution Date, the
Closing Date) to and including the day before such given Distribution Date.

      Investment Account. None of the Collection Account or the Certificate
Account will be an Investment Account.

      Issue Date. The Issue Date is November 29, 2006.

      Last Scheduled Distribution Date. The Last Scheduled Distribution Date for
each Class of Certificates is as set forth in Section 12.01(a).

      LIBOR Determination Date. The date that is two London Business Days
preceding the relevant Interest Accrual Period for the Class A-1b Certificates.

      London Business Day. A day on which dealings in deposits in U.S. dollars
are transacted in the London interbank market.

      Lower-Tier REMIC. The designated portion of the Trust Fund consisting of
the Mortgage Loans, proceeds thereof, any related REO Property and all other
property of the Trust Fund other than the assets of the Upper-Tier REMIC and the
right of the Class A Certificates and the Class M Certificates to receive, and
the obligation of the Class CE Certificates to pay, Cap Amounts.

      Lower-Tier REMIC Principal Amount. On the Closing Date, with respect to
each Lower-Tier REMIC Regular Interest, the amount set forth in the chart under
the heading "Lower-Tier REMIC" in Section 12.04, and on any subsequent date, as
reduced by distributions of principal and Realized Losses and as increased by
Subsequent Recoveries, as set forth in Section 12.04.

      Lower-Tier REMIC Regular Interest. As defined in Section 12.04.

      LT Accretion Directed Classes. As defined in Section 12.04(a).

      Net Civil Relief Amount. For a Distribution Date and any Class A Subclass
and Class M Subclass, the sum of (x) any Civil Relief Shortfall Amount for such
Subclass for such Distribution Date and (y) the aggregate of all Civil Relief
Shortfall Amounts for such Subclass for all prior Distribution Dates, minus the
aggregate amount of payments made in respect thereof on all prior Distribution
Dates pursuant to Section 13.01(b)(1)(f).

      Net Class A WAC Cap Amount. For a Distribution Date and any Class A
Subclass, the sum of (x) any Class A Subclass Cap Amount for such Subclass for
such Distribution Date and (y) the aggregate of all Class A Subclass Cap Amounts
for such Subclass for all prior Distribution Dates, minus the aggregate amount
of payments made in respect thereof on all prior Distribution Dates pursuant to
Section 13.01(b)(1)(g), plus interest on the amount thereof at the applicable
Certificate Rate for the Interest Accrual Period related to the Distribution
Date in question; provided that, on any Distribution Date after the Principal
Balance of a Class A Subclass has been reduced to zero, the Net Class A WAC Cap
Amount for such Class A Subclass shall be zero.

      Net Class M WAC Cap Amount. For a Distribution Date and any Class M
Subclass, the sum of (x) any Class M Subclass Cap Amount for such Subclass for
such Distribution Date and (y) the aggregate of all Class M Subclass Cap Amounts
for such Subclass for all prior Distribution Dates, minus the aggregate amount
of payments made in respect thereof on all prior Distribution Dates pursuant to
Section 13.01(b)(1)(g), plus interest on the amount thereof at the applicable
Certificate Rate for the Interest Accrual Period related to the Distribution
Date in question; provided that, on any Distribution Date after the Principal
Balance of a Class M Subclass has been reduced to zero, the Net Class M WAC Cap
Amount for such Class M Subclass shall be zero.

      Net Non-Supported Amount. For a Distribution Date and any Class A Subclass
and Class M Subclass, the sum of (x) any Unsupported Prepayment Interest
Shortfall for such Subclass for such Distribution Date and (y) the aggregate of
all Unsupported Prepayment Interest Shortfalls for such Subclass for all prior
Distribution Dates, minus the aggregate amount of payments made in respect
thereof on all prior Distribution Dates pursuant to Section 13.01(b)(1)(f).

      Net WAC Rate. For a Distribution Date, a per annum rate equal to the
weighted average of the Pass-Through Rates of the Mortgage Loans as of the
beginning of business on the first day of the Collection Period related to such
Distribution Date (weighted on the basis of the respective Loan Balances of the
Mortgage Loans as of the beginning of business on such day).

      Normal Accrual. For any Interest Accrual Period and for each Subclass, the
amount of interest accrued thereon at the applicable Certificate Rate, minus any
Civil Relief Shortfall Amount and any Unsupported Prepayment Interest Shortfall
allocated to such Subclass on the related Distribution Date.

      Notices. The address of the Trustee to which notices should be sent is the
Corporate Trust Office. The address of CRMSI to which notices should be sent is
Citicorp Residential Mortgage Securities, Inc., 1000 Technology Drive, O'Fallon,
Missouri 63368-2240, Attention: Office of General Counsel. The address of the
Servicer to which notices should be sent is CitiMortgage, Inc., 1000 Technology
Drive, O'Fallon, Missouri 63368-2240, Attention: Office of General Counsel. The
address of S&P to which notices should be sent is 55 Water Street, New York, NY
10004. The address of Moody's to which notices should be sent is Structured
Finance Group, 99 Church Street, New York, New York 10007. The address of the
Paying Agent and Authenticating Agent is Citibank, N.A., 388 Greenwich Street,
14th Floor, New York, NY 10013, Attention: Agency and Trust, CRMSI 2006-3 or any
other address that the Paying Agent and Authenticating Agent may designate from
time to time by notice to the Certificateholders. The address of the Certificate
Registrar for certificate transfer purposes and for purposes of presentation and
surrender of certificates for the final distribution thereon is Citibank, N.A.,
Agency and Trust, 111 Wall Street, 14th floor, New York, New York 10005,
Attention: 15th Floor window or any other address that the Certificate Registrar
may designate from time to time for the Certificateholders.

      OC Floor Amount. For any date, 0.50% of the Initial Pool Balance.

      One-Month LIBOR. On any LIBOR Determination Date, One-Month LIBOR will be
equal to the offered rate for deposits in U.S. dollars having an index maturity
of one month for the next interest period, as such rate appears on Telerate Page
3750, Bloomberg Page BBAM, or another page of these or any other financial
reporting service in general use in the financial services industry at
approximately 11:00 a.m., London time, on such LIBOR Determination Date, rounded
upward, if necessary, to the nearest multiple of 1/16 of 1%. If Telerate Page
3750 or Bloomberg Page BBAM is replaced by another service or ceases to exist,
the Certificate Administrator will use the replacing service or such other
service that may be nominated by the British Bankers Association for the purpose
of displaying London interbank offered rates for U.S. dollar deposits.

      If no offered rate appears on Telerate Page 3750 or Bloomberg Page BBAM on
a LIBOR Determination Date at approximately 11:00 a.m., London time, then the
Certificate Administrator will select four major banks in the London interbank
market and shall request each of their principal London offices to provide a
quotation of the rate at which one-month deposits in U.S. dollars in amounts of
at least $1,000,000 are offered by it to prime banks in the London interbank
market, on that date and at that time, that is representative of single
transactions at that time. If at least two quotations are provided, One-Month
LIBOR will be the arithmetic average of the quotations provided. Otherwise, the
Certificate Administrator will select three major banks in New York City and
shall request each of them to provide a quotation of the rate offered by them at
approximately 11:00 a.m., New York City time, on the LIBOR Determination Date
for loans in U.S. dollars to leading European banks having an index maturity of
one month for the applicable Interest Accrual Period in an amount of at least
$1,000,000 that is representative of single transactions at that time. If three
quotations are provided, One-Month LIBOR will be the arithmetic average of the
quotations provided. Otherwise, the rate of One-Month LIBOR for the next
interest period will be set equal to the rate of One-Month LIBOR for the current
Interest Accrual Period.

      Optional Termination Date. The first Distribution Date on which the Right
to Purchase may be exercised.

      Overcollateralization Amount. For a Distribution Date, any excess of (x)
the Pool Balance as of the last day of the related Collection Period over (y)
the sum of the Class A Principal Balance and the Class M Principal Balance
(after giving effect to (i) distributions of Principal Proceeds on such
Distribution Date and (ii) and the increase of any Class M Subclass Principal
Balance as a result of Subsequent Recoveries, but prior to the payment of any
Extra Principal Distribution Amount).

      Paying Agent. Citibank, N.A. shall act as the initial Paying Agent, which
appointment is hereby approved by the Trustee. The Paying Agent shall take
actions permitted or required of the Trustee under Sections 3.06, 4.01, 4.02 and
4.03 and any other actions for the Paying Agent specifically set forth in the
Pooling Agreement and, in taking such actions, the Paying Agent (and not the
Trustee) shall have all of the rights, privilege, benefits, exculpatory
provisions and protections of the Trustee as set forth in Sections 8.01, 8.02,
8.03, 8.04, 8.07, and 8.09. The Servicer may at any time appoint an additional
Paying Agent reasonably acceptable to the Trustee for any particular Class or
all Classes of the Certificates. Any such Paying Agent may be removed, and any
other Paying Agent reasonably acceptable to the Trustee appointed, by the
Servicer. For purposes of Section 4.07, the website of the Paying Agent is
located at www.sf.citidirect.com.

      Principal Distribution Amount. For any Distribution Date, the lesser of
(x) the Certificate Balance and (y) Principal Proceeds plus any Extra Principal
Distribution Amount minus any Release Amount.

      Private Certificates. The Class CE Certificates and the Class R
Certificate.

      Prospectus. The prospectus dated November 28, 2006 relating to the Class A
Certificates and the Class M Certificates.

      Rating Agencies. The Rating Agencies are S&P and Moody's.

      Record Date. The Record Date for each Distribution Date will be (x) for
all Certificates other than the Class A-1b Certificates, the close of business
on the last day of the month preceding the month of the applicable Distribution
Date, and (y) for the Class A-1b Certificates, the day immediately preceding
such Distribution Date.

      Release Amount. For a Distribution Date on or after the Stepdown Date, the
lesser of (x) Principal Proceeds and (y) the excess of the Overcollateralization
Amount over the greater of (a) the Targeted Level and (b) the OC Floor Amount;
provided that if on such Distribution Date a Trigger Event is in effect, the
Release Amount is zero.

      Required Class A Enhancement Level. For any date, 26.40%.

      Right to Purchase. The right of the Servicer to purchase all of the
Mortgage Loans pursuant to Section 9.01 shall be conditioned upon, among other
things, the Current Pool Balance being less than 10% of the Initial Pool Balance
at the time of any such repurchase.

      Rolling Sixty-Day Delinquency Rate. For any Distribution Date on or after
the Stepdown Date, the average of the Sixty-Day Delinquency Rates for such
Distribution Date and the two immediately preceding Distribution Dates.

      Section 3.19 Applicability. Section 3.19 is not applicable to the Series
2006-3 Certificates.

      Senior Principal Distribution Amount. For any Distribution Date prior to
the Stepdown Date or on which a Trigger Event is in effect, the Principal
Distribution Amount for such Distribution Date; for all other Distribution
Dates, the lesser of (x) the Principal Distribution Amount and (y) the Class A
Principal Balance minus the lesser of (A) the Pool Balance minus the OC Floor
Amount and (B) 73.60% of the Pool Balance.

      Servicing Fee. The Servicing Fee is a monthly fee equal, for each
Collection Period, to the sum of Daily Servicing Fee Accrual Amounts for each
Mortgage Loan for each day during such Collection Period, payable to the
Servicer out of each payment received by it on account of interest on such
Mortgage Loan during such Collection Period.

      Servicing Fee Rate. 0.50% per annum.

      Sixty-Day Delinquency Rate. For any Distribution Date, the percentage
equivalent of a fraction, the numerator of which equals the aggregate Loan
Balances Delinquent more than 60 days (without regard to any grace period and
including, for this purpose, Mortgage Loans in foreclosure or subject to
Mortgagor bankruptcy proceedings and REO Properties) as of the last day of the
related Collection Period, and the denominator of which equals the Pool Balance
as of the last day of that Collection Period.

      Startup Day. The Startup Day will be the Issue Date.

      Stepdown Date. The earlier to occur of (a) the first Distribution Date on
or prior to which the Class A Principal Balance has been reduced to zero and (b)
the later to occur of (x) the Distribution Date in December 2009 and (y) the
Enhancement Date.

      Subordinated Certificates. The Class M Certificates.

      Subordination Depletion Date. The first Distribution Date on which the
Principal Balance of the Subordinated Certificates has been reduced to zero.

      Targeted Level. On any Distribution Date, (a) prior to the Stepdown Date,
2.70% of the Initial Pool Balance and (b) on any other Distribution Date, the
greater of (i) 5.40% of the Pool Balance and (ii) the OC Floor Amount. However,
in the event that a Trigger Event is in effect on a particular Distribution
Date, the Targeted Level for such Distribution Date shall not be less than the
Targeted Level on the preceding Distribution Date.

      Trigger Event. A Trigger Event will be in effect on a Distribution Date if
either the Delinquency Test or the Cumulative Loss Test is failed.

      Trust. The Trust created by this Agreement, which shall be named the
Citicorp Residential Mortgage Trust Series 2006-3.

      Upper-Tier REMIC. The designated portion of the Trust Fund consisting of
the Lower-Tier REMIC Regular Interests and proceeds thereof.

      Upper-Tier REMIC Regular Interests. As defined in Section 12.04.

      Voting Interest. As of any date, the Voting Interest of the Class A
Certificates shall equal 100% multiplied by a fraction the numerator of which is
the Class A Principal Balance and the denominator of which is the sum of the
Class A Principal Balance and the Class M Principal Balance. As of any date the
Voting Interest of the Class M Certificates will equal 100% minus the Class A
Voting Interest. The Voting Interest of the Class A Certificates and the Class M
Certificates will be allocated among the Subclasses of the Class A or Class M
Certificates, as the case may be, pro rata based on each such Subclass'
Principal Balance.

      WAC Accrual. For any Interest Accrual Period and for each Subclass, the
amount of interest accrued thereon at the Net WAC Rate.

      Section 12.03. Wire Transfer Eligibility.

      The minimum Initial Principal Balance for wire transfer on each
Distribution Date, in the case of Certificates (other than the Class CE and
Class R Certificates), is $1,000,000 and, in the case of each of the Class CE
Certificates and Class R Certificate, a 100% Percentage Interest.

      Section 12.04. REMIC-Related Provisions.

      (a) CRMSI and the Trustee will perform their respective duties in a manner
consistent with the REMIC provisions of the Code and will not knowingly take or
fail to take any action that would adversely affect the continuing treatment of
the Trust Fund as a segregated asset pool, and the treatment of such segregated
asset pool as two REMICs and to avoid the imposition of a tax on the Trust Fund
or either REMIC, and to carry out the covenants set forth in this Article XII
and the elections and reporting required in Section 8.11 on behalf of the
Upper-Tier REMIC and the Lower-Tier REMIC, including making the appropriate
elections to treat each such segregated asset pool as a REMIC and maintaining a
segregated account (the "Certificate Account"). The rights to the Cap Amounts
shall be accounted for as notional principal contracts (provided by the holder
of the Class CE Certificates and funded from amounts that would otherwise be
distributable thereon) and as assets of a grantor trust for federal income tax
purposes, and not as assets of either REMIC. CRMSI shall furnish or cause to be
furnished annually to the holders of the related Certificates information
regarding their allocable share of the income with respect to such grantor trust
and shall file or cause to be filed with the Internal Revenue Service Form 1041
(together with any necessary attachments) or such other applicable form.

                                Lower-Tier REMIC

      The Lower-Tier REMIC shall issue the interests designated in the table
below and the Class LT-R Interest, and each such interest, other than the Class
LT-R Interest, is hereby designated as a regular interest in the Lower-Tier
REMIC ("Lower-Tier REMIC Regular Interest"). The Class LT-R Interest is hereby
designated as the sole class of residual interest in the Lower-Tier REMIC and
shall be represented by the Class R Certificate.

                                                              Corresponding
 Corresponding      Lower-Tier                                  Upper-Tier
Lower-Tier REMIC       REMIC           Lower-Tier REMIC       REMIC Regular
Regular Interest   Interest Rate       Principal Amount          Interest
----------------   -------------   ------------------------   -------------
Class LT-A-1a           (1)        1/2 initial Certificate         A-1a
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-A-1b           (1)        1/2 initial Certificate         A-1b
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-A-2            (1)        1/2 initial Certificate          A-2
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-A-3            (1)        1/2 initial Certificate          A-3
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-A-4            (1)        1/2 initial Certificate          A-4
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-A-5            (1)        1/2 initial Certificate          A-5
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-A-6            (1)        1/2 initial Certificate          A-6
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-M-1            (1)        1/2 initial Certificate          M-1
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-M-2            (1)        1/2 initial Certificate          M-2
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-M-3            (1)        1/2 initial Certificate          M-3
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-M-4            (1)        1/2 initial Certificate          M-4
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-M-5            (1)        1/2 initial Certificate          M-5
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-M-6            (1)        1/2 initial Certificate          M-6
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-M-7            (1)        1/2 initial Certificate          M-7
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-M-8            (1)        1/2 initial Certificate          M-8
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-M-9            (1)        1/2 initial Certificate          M-9
                                   Balance of Corresponding
                                   Upper-Tier REMIC Regular
                                   Interest
Class LT-Accrual        (1)        1/2 Pool Balance plus 1/         N/A
                                   Overcollateralization
                                   Amount

-------------------------
(1)   The interest rate with respect to any Distribution Date for these
      interests is a per annum variable rate equal to the Net WAC Rate.

      Each Lower-Tier REMIC Regular Interest is hereby designated as a regular
interest in the Lower-Tier REMIC. The Class LT-A-1a, Class LT-A-1b, Class
LT-A-2, Class LT-A-3, Class LT-A-4, Class LT-A-5, Class LT-A-6, Class LT-M-1,
Class LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-M-5, Class LT-M-6, Class
LT-M-7, Class LT-M-8 and Class LT-M-9 Interests are hereby designated the LT
Accretion Directed Classes (the "LT Accretion Directed Classes").

      On each Distribution Date, 50% of the increase in the
Overcollateralization Amount shall be payable as a reduction of the Lower-Tier
REMIC Principal Amount of the LT Accretion Directed Classes (each such Class
will be reduced by an amount equal to 50% of any increase in the
Overcollateralization Amount that is attributable to a reduction in the
Certificate Balance of its Corresponding Class) and shall be accrued and added
to the Lower-Tier REMIC Principal Amount of the Class LT-Accrual Interest. On
each Distribution Date, the increase in the Lower-Tier REMIC Principal Amount of
the Class LT-Accrual Interest shall not exceed interest accruals for such
Distribution Date for the Class LT-Accrual Interest. In the event that: (i) 50%
of the increase in the Overcollateralization Amount exceeds (ii) interest
accruals on the Class LT-Accrual Interest for such Distribution Date, the excess
for such Distribution Date (accumulated with all such excesses for all prior
Distribution Dates) will be added to any increase in the Overcollateralization
Amount for purposes of determining the amount of interest accrual on the Class
LT-Accrual Interest payable as principal on the LT Accretion Directed Classes on
the next Distribution Date pursuant to the first sentence of this paragraph. All
payments of scheduled principal and prepayments of principal generated by the
Mortgage Loans and all Subsequent Recoveries allocable to principal shall be
allocated (i) 50% to the Class LT-Accrual Interest and (ii) 50% to the LT
Accretion Directed Classes (such principal payments and Subsequent Recoveries
shall be allocated among such LT Accretion Directed Classes in an amount equal
to 50% of the principal amounts and Subsequent Recoveries allocated to their
respective Corresponding Classes), until paid in full. Notwithstanding the
above, principal payments allocated to the Class CE Interest that result in the
reduction in the Overcollateralization Amount shall be allocated to the Class
LT-Accrual Interest (until paid in full). Realized Losses shall be applied so
that after all distributions have been made on each Distribution Date (i) the
Lower-Tier REMIC Principal Amount of each of the LT Accretion Directed Classes
is equal to 50% of the Certificate Balance of their Corresponding Class, and
(ii) the Class LT-Accrual Interest is equal to 50% of the aggregate Stated
Principal Balance of the Mortgage Loans plus 50% of the Overcollateralization
Amount. Any increase in the Certificate Balance of a Class of Certificates as a
result of a Subsequent Recovery shall increase the Lower-Tier REMIC Principal
Amount of the Corresponding Lower-Tier REMIC Regular Interest by 50% of such
increase, and the remaining 50% of such increase shall increase the Lower-Tier
REMIC Principal Amount of the Class LT-Accrual Interest.

                                Upper-Tier REMIC

      The Upper-Tier REMIC shall issue the interests designated in the table
below and the Class UT-R Interest, and each such interest, other than the Class
UT-R Interest, is hereby designated as a regular interest in the Upper-Tier
REMIC ("Upper-Tier REMIC Regular Interest"). The Class UT-R Interest is hereby
designated as the sole class of residual interests in the Upper-Tier REMIC and
shall be represented by the Class R Certificate.

                                      Initial Upper-Tier   Corresponding
Upper-Tier REMIC   Upper-Tier REMIC     REMIC Principal     Class of
Regular Interest     Interest Rate          Amount         Certificates
----------------   ----------------   ------------------   -------------
Class A-1a                (1)            $96,853,000        Class A-1a
Class A-1b                (1)            $96,853,000        Class A-1b
Class A-2                 (1)            $64,542,000         Class A-2
Class A-3                 (1)            $56,069,000         Class A-3
Class A-4                 (1)            $77,419,000         Class A-4
Class A-5                 (1)            $32,327,000         Class A-5
Class A-6                 (1)            $47,118,000         Class A-6
Class M-1                 (1)            $13,299,000         Class M-1
Class M-2                 (1)            $14,928,000         Class M-2
Class M-3                 (1)             $3,800,000         Class M-3
Class M-4                 (1)             $4,886,000         Class M-4
Class M-5                 (1)             $5,157,000         Class M-5
Class M-6                 (1)             $4,071,000         Class M-6
Class M-7                 (1)             $3,257,000         Class M-7
Class M-8                 (1)             $2,985,000         Class M-8
Class M-9                 (1)             $4,615,000         Class M-9
Class CE                  (2)                  (2)              N/A

------------------------
(1)   For any Distribution Date (and the related Interest Accrual Period), this
      interest shall bear interest at the lesser of (i) the Certificate Rate
      (determined without regard to the Net WAC Rate) for the Corresponding
      Class of Certificates and (ii) the Net WAC Rate.

(2)   The Class CE Interest has an initial principal balance of $14,657,307.48
      but will not accrue interest on such balance but will accrue interest on a
      notional principal balance. As of any Distribution Date, the Class CE
      Interest shall have a notional principal balance equal to the aggregate of
      the Lower-Tier REMIC Principal Amounts of the Lower-Tier REMIC Regular
      Interests as of the first day of the related Interest Accrual Period. With
      respect to any Interest Accrual Period, the Class CE Interest shall bear
      interest at a rate equal to the excess, if any, of the Net WAC Rate over
      the product of (i) 2 and (ii) the weighted average of the Lower-Tier REMIC
      Interest Rates of the Lower-Tier REMIC Regular Interests, where the
      Lower-Tier REMIC Interest Rate on the Class LT-Accrual Interest is subject
      to a cap equal to zero and each LT Accretion Directed Class is subject to
      a cap equal to the Upper-Tier REMIC Interest Rate on its Corresponding
      Class of Upper-Tier REMIC Regular Interest. With respect to any
      Distribution Date, interest that so accrues on the notional principal
      balance of the Class CE Interest shall be deferred in an amount equal to
      any increase in the Overcollateralization Amount on such Distribution
      Date. Such deferred interest shall not itself bear interest.

      On each Distribution Date, interest distributable in respect of the
Lower-Tier REMIC Regular Interests for such Distribution Date shall be deemed to
be distributed on the interests in the Upper-Tier REMIC at the rates shown
above.

      On each Distribution Date, all Realized Losses, Subsequent Recoveries and
all payments of principal shall be allocated to the Upper-Tier REMIC Regular
Interests until the outstanding principal balance of each such interest equals
the outstanding Class A Subclass Principal Balance or Class M Subclass Principal
Balance of the Corresponding Class of Certificates as of such Distribution Date.

      (b) CRMSI, on behalf of the Trustee, shall deposit in the Collection
Account in accordance with Section 3.06 all Scheduled Payments received by it,
all other deposits required to be made to the Collection Account and all
investments made with moneys on deposit in the Collection Account, including all
income or gain from such investments, if any. If the Certificate Account is an
Investment Account, then funds on deposit in the Certificate Account shall be
held and invested in accordance with the applicable provisions of Section 4.03.
Distributions from the Certificate Account shall be made in accordance with the
provisions of Articles XII and XIII to make payments in respect of the
Certificates and to pay the Servicing Fee in accordance with Section 3.13.
Amounts distributable as Cap Amounts to the related Certificates pursuant to
Section 13.01(b) shall first be deemed distributed in respect of the Class CE
Interest and then paid outside of the Upper-Tier REMIC to the related
Certificates.

      The Servicer shall maintain books with respect to the Upper-Tier REMIC and
the Lower-Tier REMIC on a calendar year taxable year and on the accrual method
of accounting.

      (c) None of the Servicer, the Certificate Administrator, the Paying Agent,
the Certificate Registrar or the Trustee shall create, or permit the creation
of, any "interests" in either REMIC within the meaning of Code Section
860D(a)(2) other than the interests represented by the Certificates.

      (d) Except as otherwise provided in the Code, CRMSI shall not grant, and
none of the Servicer, the Certificate Administrator, the Paying Agent, the
Certificate Registrar or the Trustee shall accept, property unless (i)
substantially all of the property held by either REMIC constitutes either
"qualified mortgages" or "permitted investments" as defined in Code Sections
860G(a)(3) and (5), respectively, and (ii) no property shall be granted to
either REMIC after the Startup Day, unless such grant would not subject the
REMIC to the 100% tax on contributions to a REMIC after the Startup Day imposed
by Code Section 860G(d).

      (e) None of the Servicer, the Certificate Administrator, the Paying Agent,
the Certificate Registrar or the Trustee shall accept on behalf of the Trust
Fund or the Upper-Tier REMIC or the Lower-Tier REMIC any fee or other
compensation for services and shall not accept on behalf of the Trust Fund any
income from assets other than those permitted to be held by a REMIC.

      (f) None of the Servicer, the Certificate Administrator, the Paying Agent
or the Trustee shall sell or permit the sale of all or any portion of the
Mortgage Loans, or of an Eligible Investment held in an Investment Account
(other than in accordance with Sections 2.02, 2.03, 2.04 and 4.03(d)) unless
such sale is pursuant to a "qualified liquidation" as defined in Code Section
860F(a)(4)(A) and is in accordance with Section 9.01.

      Section 12.05. Expenses and Liabilities of the Trust Fund.

      To the extent not otherwise payable pursuant to another provision of this
Agreement, the Depositor shall be liable for all expenses, liabilities and
obligations of the Trust Fund (other than the obligation to make distributions
in reduction of Principal Balance of the Certificates and the obligation to make
distributions of interest on the Certificates). To the extent such expenses,
liabilities or obligations consist of federal income taxes, including, without
limitation, prohibited transaction taxes, taxes on net income from foreclosure
property and taxes on certain contributions to a REMIC after the Startup Day,
nothing shall prevent the Depositor from contesting any such tax, if permitted
by law, pending the outcome of such proceedings. If the Paying Agent determines
that on any Distribution Date the amount in the Collection Account, after the
distribution of all amounts required to be distributed to the Holders of the
Certificates has been made, is insufficient to pay expenses or meet any
obligations of the Trust Fund that are not otherwise payable pursuant to another
provision of this Agreement, the Paying Agent shall give notice of any shortfall
to the Depositor setting forth the basis for such determination and, within ten
Business Days of such notice, the Depositor shall deliver to the Paying Agent
immediately available funds in the amount of such expenses.

      Section 12.06. Tax Matters Person.

      If in any taxable year there will be more than one holder of Class R
Certificate, a tax matters person may be designated with respect to the REMIC,
who will have the same duties with respect to the Upper-Tier REMIC and the
Lower-Tier REMIC as those of a "tax matters partner" under Subchapter C of
Chapter 63 of Subtitle F of the Code, and who will be, in order of priority, (i)
the Servicer or an affiliate of the Servicer, if the Servicer or such affiliate
is the holder of a residual certificate of the Upper-Tier REMIC or the
Lower-Tier REMIC at any time during the taxable year or at the time such
designation is made, (ii) if the Servicer is not a holder of a residual
certificate of the Upper-Tier REMIC or the Lower-Tier REMIC at the relevant
time, the Servicer as agent for the holder of the residual certificate of the
Upper-Tier REMIC or the Lower-Tier REMIC, if such designation is permitted to be
made under the Code, or (iii) such holder of a residual certificate of the
Upper-Tier REMIC or the Lower-Tier REMIC or person who may be designated a tax
matters person in the same manner in which a tax matters partner may be
designated under applicable Treasury Regulations, including Treasury Regulations
ss. 1.860F-4(d) and temporary Treasury Regulations ss. 301.6231(a)(7)-1T.

      Section 12.07. [Reserved]

                                  ARTICLE XIII

                 SUBORDINATION; PRIORITIES; ALLOCATION OF LOSSES

      Section 13.01. Subordination; Priority of Distributions.

      (a) The rights of the holders of any Subclass of Class M Certificates to
receive distributions in respect thereof on any Distribution Date shall be
subordinated to the rights of the Class A Certificateholders and the holders of
each Class M Subclass having a lower numerical designation to receive
distributions to the extent, and only to the extent, described herein. The right
of the Servicer to receive its Servicing Fee and its Additional Servicing
Compensation shall not be subordinated to the rights of Certificateholders.

      (b) On each Distribution Date, the aggregate amount of Interest Proceeds
and Principal Proceeds will be applied in the following amounts, to the extent
the amount thereof is sufficient therefor, in the manner and in the order of
priority as follows:

      1. The sum of Interest Proceeds and Principal Proceeds (in each case,
excluding all permitted withdrawals from the Collection Account pursuant to
Section 3.06(d)) will be applied sequentially, as follows:

            a. concurrently, to the Subclasses of Class A Certificates, pro
      rata, their respective Class A Subclass Interest Amounts and any Class A
      Subclass Interest Shortfalls for such Distribution Date;

            b. sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4,
      Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9 Certificates, in
      that order, their respective Class M Subclass Interest Amounts for such
      Distribution Date;

            c. to the Subclasses of Class A Certificates, the amounts provided
      in Section 12.01(d) or (e), as applicable;

            d. sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4,
      Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9 Certificates, in
      that order, in each case until their respective Principal Balance is
      reduced to zero, an amount equal to their Class M Subclass Principal
      Distribution Amount;

            e. sequentially to the Class M-1, Class M-2, Class M-3, Class M-4,
      Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9 Certificates, in
      that order, an amount equal to any Class M Subclass Interest Shortfall for
      such Class for such Distribution Date or previously allocated thereto, and
      then, sequentially, in that order, an amount equal to any Applied Loss
      Amount allocated to such Class pursuant to Section 13.02 on such
      Distribution Date plus any Class M Subclass Loss Amount for such Class;

            f. first, concurrently to the Class A Certificates, pro rata, any
      Net Civil Relief Amounts and Net Non-Supported Amounts for such
      Subclasses, and then, sequentially, to the Class M-1, Class M-2, Class
      M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
      Certificates, in that order, any Net Civil Relief Amounts and Net
      Non-Supported Amounts for such Class;

            g. first, concurrently to the Class A Certificates, pro rata, any
      Net Class A WAC Cap Amounts for such Subclasses, and then, sequentially,
      to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
      Class M-7, Class M-8 and Class M-9 Certificates, in that order, any Net
      Class M WAC Cap Amounts for such Class;

            h. to the Holder of the Class CE Certificates, the Class CE
      Distributable Amount; and

            i. to the Holder of the Class R Certificate, any remaining amount.

      2. It is the intention of the parties hereto that the portion of the Trust
Fund, exclusive of the Lower-Tier REMIC and Upper-Tier REMIC, be treated as a
grantor trust for purposes of Subpart E, Part I of Subchapter J of the Code. In
furtherance of such intention, neither the Servicer nor the Trustee shall vary
the investment of the Certificateholders in the grantor trust. Solely for REMIC
purposes, any amounts distributed pursuant to Section 13.01(b)(1)(g) shall be
deemed distributed to the Class CE Certificates in respect of the Class CE
Interest from the Upper-Tier REMIC and then deemed paid to the classes of
Certificates as described in Section 13.01(b)(1)(g) from the grantor trust.

      Section 13.02. Allocation of Realized Losses; Recoveries.

      (a) For any Distribution Date prior to the Subordination Depletion Date,
any Applied Loss Amount will be allocated to the Subclasses of Class M
Certificates, first to the Class M Subclass with the highest numerical
designation and then in order of decreasing numerical designation, until their
respective Class M Subclass Principal Balance has been reduced to zero.

      This allocation of Applied Loss Amounts will be effected through the
reduction of the applicable Subclass Principal Balance. Any Applied Loss Amount
allocated in accordance with this Section 13.02 will be allocated on the
Distribution Date following the Collection Period in which such loss was
incurred and after giving effect to distributions made under Section 13.01 on
such Distribution Date.

      (b) Any Applied Loss Amount allocated to a Subclass of Class M
Certificates pursuant to Section 13.02(a) shall be allocated among the
Certificates of such Subclass pro rata based on their respective Principal
Balances.

      (c) In the event that Net Subsequent Recoveries are received by the
Servicer during a Prepayment Collection Period, immediately prior to the
Distribution Date to which such Prepayment Collection Period relates, an amount
equal to the amount of such Net Subsequent Recoveries shall be added to the
outstanding Class M Subclass Principal Balances of the Class M Subclasses, in
order of increasing numerical designation, but only if and to the extent that
the Class M Subclass had theretofore been allocated any Applied Loss Amount.

      (d) No Civil Relief Shortfall Amount, Net Civil Relief Amount, Unsupported
Prepayment Interest Shortfall or Net Non-Supported Amount will accrue interest.

      Section 13.03. [Reserved]

      Section 13.04. Distributions on the Class R Certificate.

      Upon a termination of the Trust in accordance with Section 9.01, the Class
R Certificate shall receive all amounts remaining in the Certificate Account
after all required distributions on the Class A, Class M and Class CE
Certificates have been made and after all required payments and reimbursements
of fees and expenses have been made or provided for.

                                   ARTICLE XIV

                              ADDITIONAL PROVISIONS

      Section 14.01. Additional Representations and Warranties.

      CRMSI hereby represents and warrants to the Trustee, in addition to
Section 2.03(a) and with the same force and effect for all purposes of this
Agreement as though these representations and warranties were set forth in
Section 2.03(a), as follows:

      (i)   As of the Cut-Off Date, no principal or interest on a Mortgage Loan
            was more than 30 days Delinquent; and

      (ii)  All original executed Mortgage Notes have been or will be delivered
            to the Custodian.

      Section 14.02. Additional Servicing Events of Default.

      Not applicable.

      Section 14.03. Additional Conditions for Subsequent Transfer Dates.

      Not applicable.

      Section 14.04. Additional Certificate Information.

      Not applicable.

      Section 14.05. Additional Pool Information.

      Not applicable.

<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.

                              CITICORP RESIDENTIAL MORTGAGE SECURITIES, INC.,
                                  as Depositor

                              By:  /s/  Daniel P. Hoffman
                                 ---------------------------------------
                                 Name:  Daniel P. Hoffman
                                 Title: Vice President

                              U.S. BANK NATIONAL ASSOCIATION, as Trustee

                              By:  /s/  Maryellen Hunter
                                 ---------------------------------------
                                 Name:  Maryellen Hunter
                                 Title: Assistant Vice President

                              CITIMORTGAGE, INC., as Servicer and Certificate
                                  Administrator

                              By:  /s/  Paul Ince
                                 ---------------------------------------
                                 Name:  Paul Ince
                                 Title: Chief Financial Officer

                              CITIBANK, N.A., as Paying Agent, Certificate
                              Registrar and Authenticating Agent

                              By:  /s/  Nancy Forte
                                 ---------------------------------------
                                 Name:  Nancy Forte
                                 Title: Assistant Vice President

<PAGE>

State of Missouri       )
                        )  ss.:
County of St. Charles   )

            On the 29th day of November 2006 before me, a notary public in and
for the State of Missouri, personally appeared Daniel P. Hoffman known to me
who, being by me duly sworn, did depose and say that he is a Vice President of
Citicorp Residential Mortgage Securities, Inc., a Delaware corporation, one of
the parties that executed the foregoing instrument; that she signed her name to
said instrument and that she has been authorized by Citicorp Residential
Mortgage Securities, Inc. to execute said instrument.

__________________________________
         Notary Public

[Notarial Seal]

<PAGE>

State of Massachusetts  )
                        ) ss.:
County of _________     )

            On the 29th day of November 2006 before me, a notary public in and
for the State of Massachusetts, personally appeared Maryellen Hunter known to me
who, being by me duly sworn, did depose and say that she is an Assistant Vice
President of U.S. Bank National Association, a national banking association, one
of the parties that executed the foregoing instrument; that she signed her name
to said instrument and that she has been authorized by U.S. Bank National
Association to execute said instrument.

__________________________________
         Notary Public

[Notarial Seal]

<PAGE>

State of Missouri       )
                        )  ss.:
County of St. Charles   )

            On the 29th day of November 2006 before me, a notary public in and
for the State of Missouri, personally appeared Paul Ince known to me who, being
by me duly sworn, did depose and say that he is a Chief Financial Officer of
CitiMortgage, Inc., a New York corporation, one of the parties that executed the
foregoing instrument; that he signed his name to said instrument and that he has
been authorized by CitiMortgage, Inc. to execute said instrument.

__________________________________
         Notary Public

[Notarial Seal]

<PAGE>

State of New York       )
                        )  ss.:
County of New York      )

            On the 29th day of November 2006 before me, a notary public in and
for the State of New York, personally appeared Nancy Forte known to me who,
being by me duly sworn, did depose and say that she is an Assistant Vice
President of Citibank, N.A., a national banking association, one of the parties
that executed the foregoing instrument; that he signed his name to said
instrument and that he has been authorized by Citibank, N.A. to execute said
instrument.

__________________________________
         Notary Public

[Notarial Seal]

<PAGE>

                                   SCHEDULE 1

SERVICING CRITERIA TO BE ADDRESSED IN REPORT ON ASSESSMENT OF COMPLIANCE

<TABLE>
<CAPTION>

                                                                                                            Responsible
  AB reference                                    Servicing criteria                                         person(s)
----------------   -------------------------------------------------------------------------------   -------------------------
                                           General servicing considerations
<S>                <C>                                                                               <C>
1122(d)(1)(i)      Policies and procedures are instituted to monitor any performance or other        Servicer
                   triggers and events of default in accordance with the transaction agreements.

1122(d)(1)(ii)     If any material servicing activities are outsourced to third parties, policies    Servicer
                   and procedures are instituted to monitor the third party's performance and
                   compliance with such servicing activities.

1122(d)(1)(iii)    Any requirements in the transaction agreements to maintain a back-up servicer     Servicer
                   for the Pool Assets are maintained.

1122(d)(1)(iv)     A fidelity bond and errors and omissions policy is in effect on the party         Servicer
                   participating in the servicing function throughout the reporting period in the
                   amount of coverage required by and otherwise in accordance with the terms of
                   the transaction agreements.

                                          Cash collection and administration

1122(d)(2)(i)      Payments on pool assets are deposited into the appropriate custodial bank         Servicer
                   accounts and related bank clearing accounts no more than two business days
                   following receipt, or such other number of days specified in the transaction
                   agreements.

1122(d)(2)(ii)     Disbursements made via wire transfer on behalf of an obligor or to an investor    Servicer,
                   are made only by authorized personnel.                                            Paying Agent

1122(d)(2)(iii)    Advances of funds or guarantees regarding collections, cash flows or
                   distributions, and any interest or other fees charged for such advances, are      Servicer
                   made, reviewed and approved as specified in the transaction agreements.

1122(d)(2)(iv)     The related accounts for the transaction, such as cash reserve accounts or        Servicer,
                   accounts established as a form of over collateralization, are separately          Paying Agent
                   maintained (e.g., with respect to commingling of cash) as set forth in the
                   transaction agreements.

1122(d)(2)(v)      Each custodial account is maintained at a federally insured depository            Servicer,
                   institution as set forth in the transaction agreements.  For purposes of this     Paying Agent
                   criterion, "federally insured depository institution" with respect to a foreign
                   financial institution means a foreign financial institution that meets the
                   requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.

1122(d)(2)(vi)     Unissued checks are safeguarded so as to prevent unauthorized access.             Servicer,
                                                                                                     Paying Agent

1122(d)(2)(vii)    Reconciliations are prepared on a monthly basis for all asset-backed securities
                   related bank accounts, including custodial accounts and related bank clearing     Servicer,
                   accounts. These reconciliations are (A) mathematically accurate; (B) prepared     Certificate Administrator,
                   within 30 calendar days after the bank statement cutoff date, or such other       Paying Agent
                   number of days specified in the transaction agreements; (C) reviewed and
                   approved by someone other than the person who prepared the reconciliation; and
                   (D) contain explanations for reconciling items.  These reconciling items are
                   resolved within 90 calendar days of their original identification, or such
                   other number of days specified in the transaction agreements.

                                          Investor remittances and reporting

1122(d)(3)(i)      Reports to investors, including those to be filed with the Commission, are        Servicer,
                   maintained in accordance with the transaction agreements and applicable           Certificate Administrator
                   Commission requirements.  Specifically, such reports (A) are prepared in
                   accordance with timeframes and other terms set forth in the transaction
                   agreements; (B) provide information calculated in accordance with the terms
                   specified in the transaction agreements; (C) are filed with the Commission as
                   required by its rules and regulations; and (D) agree with investors' or the
                   trustee's records as to the total unpaid principal balance and number of Pool
                   Assets serviced by the Servicer.

1122(d)(3)(ii)     Amounts due to investors are allocated and remitted in accordance with            Servicer,
                   timeframes, distribution priority and other terms set forth in the transaction    Certificate Administrator,
                   agreements.                                                                       Paying Agent

1122(d)(3)(iii)    Disbursements made to an investor are posted within two business days to the
                   Servicer's investor records, or such other number of days specified in the        Servicer,
                   transaction agreements.                                                           Certificate Administrator,
                                                                                                     Paying Agent

1122(d)(3)(iv)     Amounts remitted to investors per the investor reports agree with cancelled
                   checks, or other form of payment, or custodial bank statements.                   Certificate Administrator,
                                                                                                     Paying Agent

                                              Pool asset administration

1122(d)(4)(i)      Collateral or security on pool assets is maintained as required by the            Servicer,
                   transaction agreements or related pool asset documents.                           Custodian

1122(d)(4)(ii)     Pool assets and related documents are safeguarded as required by the
                   transaction agreements.                                                           Custodian

1122(d)(4)(iii)    Any additions, removals or substitutions to the asset pool are made, reviewed
                   and approved in accordance with any conditions or requirements in the             Servicer
                   transaction agreements.

1122(d)(4)(iv)     Payments on pool assets, including any payoffs, made in accordance with the       Servicer
                   related pool asset documents are posted to the Servicer's obligor records
                   maintained no more than two business days after receipt, or such other number
                   of days specified in the transaction agreements, and allocated to principal,
                   interest or other items (e.g., escrow) in accordance with the related pool
                   asset documents.

1122(d)(4)(v)      The Servicer's records regarding the pool assets agree with the Servicer's        Servicer
                   records with respect to an obligor's unpaid principal balance.

1122(d)(4)(vi)     Changes with respect to the terms or status of an obligor's pool assets (e.g.,    Servicer
                   loan modifications or re-agings) are made, reviewed and approved by authorized
                   personnel in accordance with the transaction agreements and related pool asset
                   documents.

1122(d)(4)(vii)    Loss mitigation or recovery actions (e.g., forebearance plans, modifications      Servicer
                   and deeds in lieu of foreclosure, foreclosures and repossessions, as
                   applicable) are initiated, conducted and concluded in accordance with the
                   timeframes or other requirement established by the transaction agreements.

1122(d)(4)(viii)   Records documenting collection efforts are maintained during the period a pool    Servicer
                   asset is delinquent in accordance with the transaction agreements.  Such
                   records are maintained on at least a monthly basis, or such other period
                   specified in the transaction agreements, and describe the entity's activities
                   in monitoring delinquent pool assets including, for example, phone calls,
                   letters and payment rescheduling plans in cases where delinquency is deemed
                   temporary (e.g., illness or unemployment).

1122(d)(4)(ix)     Adjustments to interest rates or rates of return for pool assets with variable    Servicer
                   rates are computed based on the related pool asset documents.

1122(d)(4)(x)      Regarding any funds held in trust for an obligor (such as escrow accounts): (A)   Servicer
                   such funds are analyzed, in accordance with the obligor's pool asset documents,
                   on at least an annual basis, or such other period specified in the transaction
                   agreements; (B) interest on such funds is paid, or credited, to obligors in
                   accordance with applicable pool asset documents and state laws; and (C) such
                   funds are returned to the obligor within 30 calendar days of full repayment of
                   related pool assets, or such other number of days specified in the transaction
                   agreements.

1122(d)(4)(xi)     Payments made on behalf of an obligor (such as tax or insurance payments) are     Servicer
                   made on or before the related penalty or expiration dates, as indicated on the
                   appropriate bills or notices for such payments, provided that such support has
                   been received by the servicer at least 30 calendar days prior to these dates,
                   or such other number of days specified in the transaction agreements.

1122(d)(4)(xii)    Any late payment penalties in connection with any payment to be made on behalf    Servicer
                   of an obligor are paid from the Servicer's funds and not charged to the
                   obligor, unless the late payment was due to the obligor's error or omission.

1122(d)(4)(xiii)   Disbursements made on behalf of an obligor are posted within two business days    Servicer
                   to the obligor's records maintained by the servicer, or such other number of
                   days specified in the transaction agreements.

1122(d)(4)(xiv)    Delinquencies, charge-offs and uncollectible accounts are recognized and          Servicer
                   recorded in accordance with the transaction agreements.

1122(d)(4)(xv)     Any external enhancement or other support, identified in Item 1114(a)(1)          Servicer
                   through (3) or Item 1115 of Regulation AB, is maintained as set forth in the
                   transaction agreements.

</TABLE>
<PAGE>

                                   SCHEDULE 2

                         ADDITIONAL FORM 10-D DISCLOSURE

<TABLE>
<CAPTION>

Item on Form 10-D                                        Party Responsible
--------------------------------------------------------------------------------------------------------
<S>                                                      <C>
Item 1: Distribution and Pool Performance Information    Servicer, Certificate Administrator

         Any information required by 1121 which is NOT
         included on the Distribution Date Statement
--------------------------------------------------------------------------------------------------------
Item 2: Legal Proceedings per Item 1117 of Reg AB        (i) All parties to the Pooling and Servicing
                                                         Agreement and the Custodian as to themselves,
                                                         (ii) the Servicer as to the issuing entity,
                                                         (iii) the Depositor as to the sponsor, any
                                                         1110(b) originator, any 1100(d)(1) party
--------------------------------------------------------------------------------------------------------
Item 3: Sale of Securities and Use of Proceeds           Depositor
--------------------------------------------------------------------------------------------------------
Item 4: Defaults Upon Senior Securities                  Servicer, Certificate Administrator
--------------------------------------------------------------------------------------------------------
Item 5: Submission of Matters to a Vote of Security      Servicer, Certificate Administrator, Trustee,
           Holders                                       Paying Agent, Authenticating Agent, Certificate
                                                         Registrar (in each case, if such party is
                                                         responsible for submission of such vote to
                                                         Holders)
--------------------------------------------------------------------------------------------------------
Item 6: Significant Obligors of Pool Assets              Depositor, if applicable
--------------------------------------------------------------------------------------------------------
Item 7: Significant Enhancement Provider Information     Depositor, if applicable
--------------------------------------------------------------------------------------------------------
Item 8: Other Information                                Any party responsible for the applicable
                                                         disclosure items on Form 8-K to the extent not
                                                         previously filed on a Form 8-K
--------------------------------------------------------------------------------------------------------
Item 9: Exhibits                                         Depositor, Servicer, Certificate Administrator
--------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                   SCHEDULE 3

                         ADDITIONAL FORM 10-K DISCLOSURE

Item on Form 10-K                            Party Responsible
-----------------------------------------------------------------------------
Item 1B: Unresolved Staff Comments           Depositor

-----------------------------------------------------------------------------
Item 9B: Other Information                   Any party responsible for the
                                             applicable disclosure items on
                                             Form 8-K to the extent not
                                             previously filed on a Form 8-K
-----------------------------------------------------------------------------
Item 15: Exhibits, Financial Statement       Servicer, Certificate
         Schedules                           Administrator,
                                             Depositor
-----------------------------------------------------------------------------
Additional Item:                             (i) All parties to the Pooling
                                             and Servicing Agreement and the
                                             Custodian as to themselves, (ii)
                                             the Servicer as to the issuing
Disclosure per Item 1117 of Reg AB           entity, (iii) the Depositor as
                                             to the sponsor, any 1110(b)
                                             originator, any 1100(d)(1) party
-----------------------------------------------------------------------------
Additional Item:                             (i) All parties to the Pooling
Disclosure per Item 1119 of Reg AB           and Servicing Agreement and the
                                             Custodian as to themselves, (ii)
                                             the Servicer as to the issuing
                                             entity, (iii) the Depositor as
                                             to the sponsor, any 1110(b)
                                             originator, any 1100(d)(1)
                                             party, any significant obligor,
                                             any credit enhancement provider
                                             or derivative counterparty
-----------------------------------------------------------------------------
Additional Item:                             Depositor, if applicable
Disclosure per Item 1112(b) of Reg AB

-----------------------------------------------------------------------------
Additional Item:                             Depositor, if applicable
Disclosure per Items 1114(b) and
1115(b) of Reg AB
-----------------------------------------------------------------------------

<PAGE>

                                   SCHEDULE 4

                         FORM 8-K DISCLOSURE INFORMATION

Item on Form 8-K                             Party Responsible
-----------------------------------------------------------------------------
Item 1.01- Entry into a Material             All parties to the Pooling and
           Definitive Agreement              Servicing Agreement and the
                                             Custodian entering into such
                                             material definitive agreement
                                             (provided, however, that with
                                             respect to the Paying Agent, the
                                             Certificate Registrar and the
                                             Authenticating Agent, no such
                                             disclosure shall be required for
                                             any agreement to which the
                                             Servicer, the Certificate
                                             Administrator, the Depositor or
                                             the Custodian is a party)
-----------------------------------------------------------------------------
Item 1.02- Termination of a Material         All parties to the Pooling and
           Definitive Agreement              Servicing Agreement and the
                                             Custodian terminating such material
                                             definitive agreement (provided,
                                             however, that with respect to the
                                             Paying Agent, the Certificate
                                             Registrar and the Authenticating
                                             Agent, no such disclosure shall be
                                             required for any agreement to which
                                             the Servicer, the Certificate
                                             Administrator, the Depositor or the
                                             Custodian is a party)
-----------------------------------------------------------------------------
Item 1.03- Bankruptcy or Receivership        (i) Depositor, as to itself, the
                                             sponsor, any 1100(d)(1) party,
                                             any significant obligor, any
                                             credit enhancement provider or
                                             derivative counterparty and any
                                             other transaction party, to the
                                             extent known to the Depositor,
                                             (ii) Trustee, as to itself,
                                             (iii) Certificate Administrator,
                                             as to itself, (iv) Paying Agent,
                                             as to itself, and (v) Servicer,
                                             as to itself and any other
                                             transaction party, to the extent
                                             known to the Servicer
-----------------------------------------------------------------------------
Item 2.04- Triggering Events that            Servicer
           Accelerate or Increase a
           Direct Financial Obligation
           or an Obligation under an
           Off-Balance Sheet Arrangement
-----------------------------------------------------------------------------
Item 3.03- Material Modification to          Servicer, Certificate
           Rights of Security Holders        Administrator
-----------------------------------------------------------------------------
Item 5.03- Amendments of Articles of         Depositor
           Incorporation or Bylaws;
           Change of Fiscal Year
-----------------------------------------------------------------------------
Item 6.01- ABS Informational and             Depositor
           Computational Material
-----------------------------------------------------------------------------
Item 6.02- Change of Servicer,               Servicer, Certificate
           Certificate Administrator,        Administrator, Trustee
           Paying Agent or Trustee
-----------------------------------------------------------------------------
Item 6.03- Change in Credit                  Depositor, Servicer
           Enhancement or External
           Support
-----------------------------------------------------------------------------
Item 6.04- Failure to Make a Required        Certificate Administrator,
           Distribution                      Paying Agent
-----------------------------------------------------------------------------
Item 6.05- Securities Act Updating           Depositor
           Disclosure
-----------------------------------------------------------------------------
Item 7.01- Reg FD Disclosure                 Depositor
-----------------------------------------------------------------------------
Item 8.01- Other Events                      Depositor, Certificate
                                             Administrator
-----------------------------------------------------------------------------
Item 9.01                                    Depositor, Certificate
                                             Administrator
-----------------------------------------------------------------------------

<PAGE>

                                   EXHIBIT A-1

                          FORM OF CLASS A CERTIFICATES

                 REMIC Pass-Through Certificates, Series 2006-3
                             Class A-[*] Certificate
          representing an ownership interest in a trust fund consisting
                     primarily of mortgage loans acquired by

                 CITICORP RESIDENTIAL MORTGAGE SECURITIES, INC.

certificate no. 1

distribution day: 25th of each month

first distribution day: December 26, 2006

stated final maturity: November 25, 2036

--------------------------------------------------------------------------------
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC") to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or such other name as requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or such
other entity as is requested by an authorized representative of DTC), any
transfer, pledge, or other use hereof for value or otherwise by or to any person
is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

Neither this certificate nor the underlying mortgage loans are insured or
guaranteed by the United States government, the Federal Deposit Insurance
Corporation or any other governmental agency or instrumentality. This
certificate does not represent an interest in or obligation of Citicorp
Residential Mortgage Securities, Inc., CitiMortgage, Inc., Citicorp Trust Bank,
fsb, any affiliate thereof, or their ultimate parent, Citigroup Inc.
--------------------------------------------------------------------------------

THIS CERTIFIES THAT, for value received, Cede & Co. is the registered holder of
the initial principal balance of the class of certificates listed below.

            initial principal
  class          balance        certificate rate      CUSIP             ISIN
-------------------------------------------------------------------------------
  A-[*]   $[_________________]     [_______]%

Principal is paid on this certificate in accordance with the terms of the
Pooling Agreement. Accordingly, at any time the outstanding principal balance of
this certificate may be less than its initial principal amount.

This certificate represents an undivided beneficial ownership interest in the
Trust Fund created pursuant to the Pooling and Servicing Agreement dated as of
November 1, 2006 (the "Pooling Agreement") among Citicorp Residential Mortgage
Securities, Inc., as Depositor, CitiMortgage, Inc., as Servicer and Certificate
Administrator, Citibank, N.A., as Paying Agent, Certificate Registrar and
Authenticating Agent, and U.S. Bank National Association, as Trustee. Terms used
in this certificate that are defined in the Pooling Agreement have the meanings
assigned to them in the Pooling Agreement.

This certificate is one of a duly authorized issue of certificates designated as
Citicorp Residential Mortgage Securities, Inc. REMIC Pass-Through Certificates,
Series 2006-3, consisting of, for REMIC purposes, seven senior classes, ten
subordinated classes and one class of residual certificates.

The class of securities represented by this certificate constitutes an interest
in a "regular interest" in a real estate mortgage investment conduit ("REMIC")
within the meaning of Section 860G(a)(1) of the Internal Revenue Code of 1986,
as amended, and certain other assets.

                   Certificates governed by Pooling Agreement

The certificates are issued pursuant to the Pooling Agreement, which states the
rights, limitations (including restrictions on transfer), duties and immunities
of the Depositor, the Servicer, the Trustee, the Certificate Administrator, the
Paying Agent, the Certificate Registrar and the holders of the certificates,
specifies how amounts of interest and principal distributable on the classes of
certificates are calculated and when such amounts are payable, sets forth the
relative priorities of the classes of certificates to payments and to allocation
of losses, and sets forth the terms upon which the certificates are to be
authenticated and delivered, and other matters relevant to an investment in
certificates. Holders may obtain a copy of the Pooling Agreement (without
exhibits) from the Trustee.

                           Optional early termination

This certificate may receive a final distribution of all amounts owing in
respect of the class represented by this certificate before its last scheduled
distribution day if CitiMortgage, Inc. (or its assignee) exercises its right
under the Pooling Agreement to repurchase all of the mortgage loans in the Trust
Fund. This right cannot be exercised until the aggregate scheduled principal
balance of such mortgage loans is less than 10% of the aggregate scheduled
principal balance of the mortgage loans as of the cut-off date. [In the event
this right is not exercised at such time, the certificate rate of the class
A-[*] Certificates will equal the certificate rate listed on the first page of
this Certificate plus 0.50% per annum, subject to and in accordance with the
terms of the Pooling Agreement.] [In the event this right is not exercised at
such time, the Class A-1b Margin on the class A-1b Certificates will increase to
double its original percentage, subject to and in accordance with the terms of
the Pooling Agreement.]

                                  Governing law

This certificate and the Pooling Agreement are governed by the laws of the State
of New York.

                             Authentication required

Unless this certificate has been executed by the Trustee or a duly authorized
Authenticating Agent by manual signature, this certificate shall not be entitled
to any benefit under the Pooling Agreement or be valid for any purpose.

<PAGE>

      IN WITNESS WHEREOF, Citicorp Residential Mortgage Securities,
Inc. has caused this certificate to be duly executed.

                              CITICORP RESIDENTIAL MORTGAGE SECURITIES,
                              INC.

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

<PAGE>

This is one of the certificates referred to in the Pooling Agreement referred to
above.

                              U.S. BANK NATIONAL ASSOCIATION,
                                 as Trustee

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

                              or

                              CITIBANK, N.A.,
                                 as Authenticating Agent

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

Date:

<PAGE>

                                  ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common

UNIF GIFT MIN ACT - _______________ Custodian ____________________
                        (Cust)                     (Minor)

Under Uniform Gifts to Minors Act ___________________________________
                                          (State)

     Additional abbreviations may also be used though not in the above list.

    ________________________________________________________________________

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

________________________________________________________________
________________________________________________________________

(Please print or typewrite name and address, including zip code, of assignee)

________________________________________________________________

the within certificate, and all rights thereunder, hereby irrevocably
constituting and appointing

________________________________________________________________

attorney to transfer said certificate on the books of the Certificate Registrar
with full power of substitution in the premises.

Dated:      ________________  __________________________

Signature Guaranteed by:_________________________________________

NOTICE: the signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever, and must be guaranteed by a
member of a Signature Guarantee Medallion Program.

<PAGE>

                                   Exhibit A-2

                          FORM OF CLASS M CERTIFICATES

                 REMIC Pass-Through Certificates, Series 2006-3
                      Subordinated Class M-[*] Certificate
          representing an ownership interest in a trust fund consisting
                     primarily of mortgage loans acquired by

                 CITICORP RESIDENTIAL MORTGAGE SECURITIES, INC.

certificate no. 1

distribution day: 25th of each month

first distribution day: December 26, 2006

stated final maturity: November 25, 2036

--------------------------------------------------------------------------------
This class M-[*] certificate is subordinated in right of payments to the class
A, class M-[*] and class M-[*] certificates, as described in the Pooling
Agreement referred to below.

Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC") to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or such other name as requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or such
other entity as is requested by an authorized representative of DTC), any
transfer, pledge, or other use hereof for value or otherwise by or to any person
is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

Neither this certificate nor the underlying mortgage loans are insured or
guaranteed by the United States government, the Federal Deposit Insurance
Corporation or any other governmental agency or instrumentality. This
certificate does not represent an interest in or obligation of Citicorp
Residential Mortgage Securities, Inc., CitiMortgage, Inc., Citicorp Trust Bank,
fsb, any affiliate thereof, or their ultimate parent, Citigroup Inc.
--------------------------------------------------------------------------------

THIS CERTIFIES THAT, for value received, Cede & Co. is the registered holder of
the initial principal balance of the class of certificates listed below.

            initial principal
  class          balance        certificate rate      CUSIP             ISIN
--------------------------------------------------------------------------------
  M-[*]     $[_____________]       [_______]%

Principal is paid on this certificate in accordance with the terms of the
Pooling Agreement. Accordingly, at any time the outstanding principal balance of
this certificate may be less than its initial principal amount.

This certificate represents an undivided beneficial ownership interest in the
Trust Fund created pursuant to the Pooling and Servicing Agreement dated as of
November 1, 2006 (the "Pooling Agreement") among Citicorp Residential Mortgage
Securities, Inc., as Depositor, CitiMortgage, Inc., as Servicer and Certificate
Administrator, Citibank, N.A., as Paying Agent, Certificate Registrar and
Authenticating Agent, and U.S. Bank National Association, as Trustee. Terms used
in this certificate that are defined in the Pooling Agreement have the meanings
assigned to them in the Pooling Agreement.

This certificate is one of a duly authorized issue of certificates designated as
Citicorp Residential Mortgage Securities, Inc. REMIC Pass-Through Certificates,
Series 2006-3, consisting of, for REMIC purposes, seven senior classes, ten
subordinated classes and one class of residual certificates.

The class of securities represented by this certificate constitutes an interest
in a "regular interest" in a real estate mortgage investment conduit ("REMIC")
within the meaning of Section 860G(a)(1) of the Internal Revenue Code of 1986,
as amended, and certain other assets.

                   Certificates governed by Pooling Agreement

The certificates are issued pursuant to the Pooling Agreement, which states the
rights, limitations (including restrictions on transfer), duties and immunities
of the Depositor, the Servicer, the Trustee, the Certificate Administrator, the
Paying Agent, the Certificate Registrar and the holders of the certificates,
specifies how amounts of interest and principal distributable on the classes of
certificates are calculated and when such amounts are payable, sets forth the
relative priorities of the classes of certificates to payments and to allocation
of losses, and sets forth the terms upon which the certificates are to be
authenticated and delivered, and other matters relevant to an investment in
certificates. Holders may obtain a copy of the Pooling Agreement (without
exhibits) from the Trustee.

                           Optional early termination

This certificate may receive a final distribution of all amounts owing in
respect of the class represented by this certificate before its last scheduled
distribution day if CitiMortgage, Inc. (or its assignee) exercises its right
under the Pooling Agreement to repurchase all of the mortgage loans in the Trust
Fund. This right cannot be exercised until the aggregate scheduled principal
balance of such mortgage loans is less than 10% of the aggregate scheduled
principal balance of the mortgage loans as of the cut-off date. In the event
this right is not exercised at such time, the certificate rate of the class
M-[*] Certificates will equal the certificate rate listed on the first page of
this Certificate plus 0.50% per annum, subject to and in accordance with the
terms of the Pooling Agreement.

                                  Governing law

This certificate and the Pooling Agreement are governed by the laws of the State
of New York.

                             Authentication required

Unless this certificate has been executed by the Trustee or a duly authorized
Authenticating Agent by manual signature, this certificate shall not be entitled
to any benefit under the Pooling Agreement or be valid for any purpose.

<PAGE>

      IN WITNESS WHEREOF, Citicorp Residential Mortgage Securities,
Inc. has caused this certificate to be duly executed.

                              CITICORP RESIDENTIAL MORTGAGE SECURITIES,
                              INC.

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

<PAGE>

This is one of the certificates referred to in the Pooling Agreement referred to
above.

                              U.S. BANK NATIONAL ASSOCIATION,
                                 as Trustee

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

                              or

                              CITIBANK, N.A.,
                                 as Authenticating Agent

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

Date:

<PAGE>

                                  ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common

UNIF GIFT MIN ACT - _______________ Custodian ____________________
                        (Cust)                     (Minor)

Under Uniform Gifts to Minors Act ___________________________________
                                          (State)

     Additional abbreviations may also be used though not in the above list.

    ________________________________________________________________________

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

________________________________________________________________
________________________________________________________________

(Please print or typewrite name and address, including zip code, of assignee)

________________________________________________________________

the within certificate, and all rights thereunder, hereby irrevocably
constituting and appointing

________________________________________________________________

attorney to transfer said certificate on the books of the Certificate Registrar
with full power of substitution in the premises.

Dated:      ________________  __________________________

Signature Guaranteed by:_________________________________________

NOTICE: the signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever, and must be guaranteed by a
member of a Signature Guarantee Medallion Program.

<PAGE>

                                   Exhibit A-3

                          Form of Class CE Certificates

                 REMIC Pass-Through Certificates, Series 2006-3
                              Class CE Certificate

          representing an ownership interest in a trust fund consisting
                     primarily of mortgage loans acquired by

                 CITICORP RESIDENTIAL MORTGAGE SECURITIES, INC.

certificate no. 1                         100% percentage interest

CUSIP [_______]                                    ISIN  [_______]

--------------------------------------------------------------------------------
      This class CE certificate is subordinated in right of payments to the
class A and class M certificates, as described in the Pooling Agreement referred
to below.

      This certificate has not been registered under the Securities Act of 1933,
as amended, and may not be sold, or offered for sale, transferred or otherwise
disposed of unless such sale, transfer or other disposition is made pursuant to
an effective registration statement under such act and any applicable blue sky
law or unless an exemption under such act and any applicable blue sky law is
available.

      This certificate may not be purchased by or transferred to any person that
is an employee benefit plan subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code") or any Governmental Plan, as
defined in Section 3(32) of ERISA, subject to any federal, state or local law
which is, to a material extent, similar to the foregoing provisions of ERISA or
the Code (collectively, a "Plan") or any person investing the assets of a Plan
except as provided in section 5.02 of the Pooling Agreement referred to below.

      Neither this certificate nor the underlying mortgage loans are insured or
guaranteed by the United States government, the Federal Deposit Insurance
Corporation or any other governmental agency or instrumentality. This
certificate does not represent an interest in or obligation of Citicorp
Residential Mortgage Securities, Inc., CitiMortgage, Inc., Citicorp Trust Bank,
fsb, any affiliate thereof, or their ultimate parent, Citigroup Inc.
--------------------------------------------------------------------------------

THIS CERTIFIES THAT, for value received, Citicorp Residential Mortgage
Securities, Inc. is the registered holder of the percentage interest set forth
above, representing an ownership interest in the Trust Fund created pursuant to
the Pooling and Servicing Agreement dated as of November 1, 2006 (the "Pooling
Agreement") among Citicorp Residential Mortgage Securities, Inc., as Depositor,
CitiMortgage, Inc., as Servicer and Certificate Administrator, Citibank, N.A.,
as Paying Agent, Certificate Registrar and Authenticating Agent, and U.S. Bank
National Association, as Trustee. Terms used in this certificate that are
defined in the Pooling Agreement have the meanings assigned to them in the
Pooling Agreement.

The class CE certificate will not be entitled to payments until such time as
described in the Pooling Agreement.

This certificate is one of a duly authorized issue of certificates designated as
Citicorp Residential Mortgage Securities, Inc. REMIC Pass-Through Certificates,
Series 2006-3, consisting of, for REMIC purposes, seven senior classes, ten
subordinated classes and one class of residual certificates.

                   Certificates governed by Pooling Agreement

The certificates are issued pursuant to the Pooling Agreement, which states the
rights, limitations (including restrictions on transfer), duties and immunities
of Depositor, the Servicer, the Trustee, the Certificate Administrator, the
Paying Agent, the Certificate Registrar and the holders of the certificates, the
Trustee and the holders of the certificates, specifies how amounts of interest
and principal distributable on the classes of certificates are calculated and
when such amounts are payable, sets forth the relative priorities of the classes
of certificates to payments and to allocation of losses, and sets forth the
terms upon which the certificates are to be authenticated and delivered, and
other matters relevant to an investment in certificates. Holders may obtain a
copy of the Pooling Agreement (without exhibits) from the Trustee.

                       U.S. federal income tax information

This class CE certificate (exclusive of its obligation to pay Cap Amounts, if
any) represents a "regular interest" in the Upper-Tier REMIC within the meaning
of Code Section 860G(a)(1). As a condition of ownership hereof, the holder
hereof agrees that it will not take or cause to be taken any action that would
adversely affect the status of the asset pool comprising the Trust Fund as two
separate REMICs.

                                  Governing law

This certificate and the Pooling Agreement are governed by the laws of the State
of New York.

                             Authentication required

Unless this certificate has been executed by the Trustee or a duly authorized
Authenticating Agent by manual signature, this certificate shall not be entitled
to any benefit under the Pooling Agreement or be valid for any purpose.

<PAGE>

IN WITNESS WHEREOF, Citicorp Residential Mortgage Securities, Inc. has caused
this certificate to be duly executed.

                              CITICORP RESIDENTIAL MORTGAGE SECURITIES,
                              INC.

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

<PAGE>

This is one of the certificates referred to in the Pooling Agreement referred to
above.

                              U.S. BANK NATIONAL ASSOCIATION,
                                 as Trustee

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

                              or

                              CITIBANK, N.A.,
                                 as Authenticating Agent

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

Date:

<PAGE>

                                  ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common

UNIF GIFT MIN ACT - _______________ Custodian ____________________
                        (Cust)                     (Minor)

Under Uniform Gifts to Minors Act ___________________________________
                                          (State)

     Additional abbreviations may also be used though not in the above list.

    ________________________________________________________________________

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

________________________________________________________________
________________________________________________________________

(Please print or typewrite name and address, including zip code, of assignee)

________________________________________________________________

the within certificate, and all rights thereunder, hereby irrevocably
constituting and appointing

________________________________________________________________

attorney to transfer said certificate on the books of the Certificate Registrar
with full power of substitution in the premises.

Dated:      ________________  __________________________

Signature Guaranteed by:_________________________________________

NOTICE: the signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever, and must be guaranteed by a
member of a Signature Guarantee Medallion Program.

<PAGE>

                                   Exhibit A-4

                           Form of Class R Certificate

                 REMIC Pass-Through Certificates, Series 2006-3

                          Residual Class R Certificate

          representing an ownership interest in a trust fund consisting
                     primarily of mortgage loans acquired by

                 CITICORP RESIDENTIAL MORTGAGE SECURITIES, INC.

certificate no. 1                         100% percentage interest

CUSIP [___________]                             ISIN [___________]

--------------------------------------------------------------------------------
      This certificate has not been registered under the Securities Act of 1933,
as amended, and may not be sold, or offered for sale, transferred or otherwise
disposed of unless such sale, transfer or other disposition is made pursuant to
an effective registration statement under such act and any applicable blue sky
law or unless an exemption under such act and any applicable blue sky law is
available.

      This certificate may not be purchased by or transferred to any person that
is an employee benefit plan subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code") or any Governmental Plan, as
defined in Section 3(32) of ERISA, subject to any federal, state or local law
which is, to a material extent, similar to the foregoing provisions of ERISA or
the Code (collectively, a "Plan") or any person investing the assets of a Plan
except as provided in section 5.02 of the Pooling Agreement referred to below.

      Transfer of this certificate is restricted as set forth in section 5.02 of
the Pooling Agreement. As a condition of ownership of this certificate, a
transferee must furnish an affidavit to the transferor and the Trustee that (a)
it is not a "disqualified organization," as defined in Section 860E(e)(5) of the
Code, (b) it is not acquiring this certificate as an agent (including a broker,
nominee or other middleman) on behalf of a disqualified organization, (c) it
understands that it may incur tax liabilities in excess of cash flows generated
by the residual interest and it intends to pay taxes associated with holding the
residual interest as they become due, (d) it historically has paid its debts as
they have come due and intends to pay its debts as they come due in the future,
(e) it will not cause the income with respect to this certificate to be
attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of it or any other person, and (f)
it is not a "Non-permitted Foreign holder," as defined in section 5.02 of the
Pooling Agreement. By accepting this certificate, a transferee will be subject
to such restrictions on transferability, and will have consented to any
amendments to the Pooling Agreement that are required to ensure that this
certificate is not transferred to a disqualified organization or its agent, or
to a Non-permitted Foreign holder. To satisfy a regulatory safe harbor against
the disregard of such transfer, the transferor may be required to conduct a
reasonable investigation of the financial condition of the transferee and either
transfer this certificate at a specified minimum price or transfer this
certificate to an eligible transferee.

      Neither this certificate nor the underlying mortgage loans are insured or
guaranteed by the United States government, the Federal Deposit Insurance
Corporation or any other governmental agency or instrumentality. This
certificate does not represent an interest in or obligation of Citicorp
Residential Mortgage Securities, Inc., CitiMortgage, Inc., Citicorp Trust Bank,
fsb, any affiliate thereof, or their ultimate parent, Citigroup Inc.
--------------------------------------------------------------------------------

THIS CERTIFIES THAT, for value received, Citicorp Residential Mortgage
Securities, Inc. is the registered holder of the percentage interest set forth
above, representing an ownership interest in the Trust Fund created pursuant to
the Pooling and Servicing Agreement dated as of November 1, 2006 (the "Pooling
Agreement") among Citicorp Residential Mortgage Securities, Inc., as Depositor,
CitiMortgage, Inc., as Servicer and Certificate Administrator, Citibank, N.A.,
as Paying Agent, Certificate Registrar and Authenticating Agent, and U.S. Bank
National Association, as Trustee. Terms used in this certificate that are
defined in the Pooling Agreement have the meanings assigned to them in the
Pooling Agreement.

The class R certificate will not be entitled to payments until such time as
described in the Pooling Agreement.

This certificate is one of a duly authorized issue of certificates designated as
Citicorp Residential Mortgage Securities, Inc. REMIC Pass-Through Certificates,
Series 2006-3, consisting of, for REMIC purposes, seven senior classes, ten
subordinated classes and one class of residual certificates.

                   Certificates governed by Pooling Agreement

The certificates are issued pursuant to the Pooling Agreement, which states the
rights, limitations (including restrictions on transfer), duties and immunities
of Depositor, the Servicer, the Trustee, the Certificate Administrator, the
Paying Agent, the Certificate Registrar and the holders of the certificates,
specifies how amounts of interest and principal distributable on the classes of
certificates are calculated and when such amounts are payable, sets forth the
relative priorities of the classes of certificates to payments and to allocation
of losses, and sets forth the terms upon which the certificates are to be
authenticated and delivered, and other matters relevant to an investment in
certificates. Holders may obtain a copy of the Pooling Agreement (without
exhibits) from the Trustee.

                       U.S. federal income tax information

Election will be made to treat the asset pool within the Trust Fund as two
separate real estate mortgage investment conduits (each a "REMIC," or in the
alternative, the "Lower-Tier REMIC" and the "Upper-Tier REMIC"). This class R
certificate represents the "residual interest" in the Upper-Tier and Lower-Tier
REMICs within the meaning of Code Section 860G(a)(2). As a condition of
ownership hereof, the holder hereof agrees that it will not take or cause to be
taken any action that would adversely affect the status of the asset pool
comprising the Trust Fund as two separate REMICs.

The holder further agrees to the designation of the Servicer as its agent to act
as "tax matters person" of the Upper-Tier REMIC and the Lower-Tier REMIC for
purposes of Subchapter C of Chapter 63 of Subtitle F of the Code or, if
requested by the Servicer, to act as tax matters person.

                                  Governing law

This certificate and the Pooling Agreement are governed by the laws of the State
of New York.

                             Authentication required

Unless this certificate has been executed by the Trustee or a duly authorized
Authenticating Agent by manual signature, this certificate shall not be entitled
to any benefit under the Pooling Agreement or be valid for any purpose.

<PAGE>

IN WITNESS WHEREOF, Citicorp Residential Mortgage Securities, Inc. has caused
this certificate to be duly executed.

                              CITICORP RESIDENTIAL MORTGAGE SECURITIES,
                              INC.

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

<PAGE>

This is one of the certificates referred to in the Pooling Agreement referred to
above.

                              U.S. BANK NATIONAL ASSOCIATION,
                                 as Trustee

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

                              or

                              CITIBANK, N.A.,
                                 as Authenticating Agent

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

Date:

<PAGE>

                                  ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common

UNIF GIFT MIN ACT - _______________ Custodian ____________________
                        (Cust)                     (Minor)

Under Uniform Gifts to Minors Act ___________________________________
                                          (State)

     Additional abbreviations may also be used though not in the above list.

    ________________________________________________________________________

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

________________________________________________________________
________________________________________________________________

(Please print or typewrite name and address, including zip code, of assignee)

________________________________________________________________

the within certificate, and all rights thereunder, hereby irrevocably
constituting and appointing

________________________________________________________________

attorney to transfer said certificate on the books of the Certificate Registrar
with full power of substitution in the premises.

Dated:      ________________  __________________________

Signature Guaranteed by:_________________________________________

NOTICE: the signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever, and must be guaranteed by a
member of a Signature Guarantee Medallion Program.

<PAGE>

                                    EXHIBIT B

                             MORTGAGE LOAN SCHEDULE

                             [Delivered to Trustee]

<PAGE>

                                    EXHIBIT C

                            FORM OF PURCHASER LETTER

                                   [Purchaser]

                                                                          [Date]

Citicorp Residential Mortgage Securities, Inc.
1000 Technology Drive
O'Fallon, Missouri 63368-2240

U.S. Bank National Association
Corporate Trust Services
One Federal Street-3rd Floor
Boston, Massachusetts 02110

Ladies and Gentlemen:

      In connection with the purchase by us of $ initial principal balance of
the Citicorp Residential Mortgage Trust Series 2006-3, REMIC Pass-Through
Certificates, class [CE][R] certificates, we confirm that:

      1. We understand that the class [CE][R] certificates are not being
registered under the Securities Act of 1933, as amended (the "Securities Act")
or any state securities or "blue sky" laws and are being transferred to us in a
transaction that is exempt from the registration requirements of the Securities
Act and any such laws.

      2. We (check one)

      |_| have such knowledge and experience in financial and business matters
      as to be capable of evaluating the merits and risks of investment in the
      class [CE][R] certificates, we are able to bear the economic risk of
      investment in the class [CE][R] certificates and we are an accredited
      investor as defined in Regulation D under the Securities Act. We have such
      knowledge and experience in financial and business matters, specifically
      in the field of mortgage related securities, as to be able to evaluate the
      risk of purchasing a certificate which is subordinate in right of payment,
      and we have direct, personal and significant experience in making
      investments in mortgage related securities. If we are non-institutional
      investors, our net worth (exclusive of our primary residence) is at least
      $1,000,000.

      |_| are "Qualified Institutional Buyers" within the meaning of Rule 144A
      promulgated under the Securities Act.

      3. We will acquire the class [CE][R] certificates for our own account or
for accounts as to which we exercise sole investment discretion and not with a
view to any distribution of the class [CE][R] certificates, subject,
nevertheless, to the understanding that disposition of our property shall at all
times be and remain within our control.

      4. We agree that our class [CE][R] certificates must be held indefinitely
by us unless subsequently registered under the Securities Act and any applicable
state securities or "blue sky" laws or unless exemptions from the registration
requirements of the Securities Act and such laws are available.

      5. We agree that in the event that at some future time we wish to sell,
dispose of or otherwise transfer any of our class [CE] [R] certificates, we will
not transfer any of such class [CE][R] certificates unless:

            (A) (1) the transfer is made to an Eligible Purchaser (as defined
below), (2) a letter to substantially the same effect as this letter is executed
promptly by such Eligible Purchaser or by an Eligible Dealer (as defined below)
on behalf of such Eligible Purchaser and (3) all offers or solicitations in
connection with the sale (if a sale), whether directly or through any agent on
our behalf, are limited only to Eligible Purchasers and are not made by means of
any form of general solicitation or general advertising whatsoever; or

            (B) Such class [CE][R] certificates are otherwise sold in a
transaction that does not require registration under the Securities Act.

      "Eligible Purchaser" means an Eligible Dealer or a corporation,
partnership or other entity which we have reasonable grounds to believe and do
believe can make representations with respect to itself to substantially the
same effect as the representations set forth herein; "Eligible Dealer" means any
corporation or other entity having as a principal business acting as a broker or
dealer in securities.

      6. We understand that each of the class [CE][R] certificates will bear a
legend to substantially the following effect:

      This class [CE] certificate is subordinated in right of payments to the
class A and class M certificates, as described in the Pooling Agreement referred
to herein. This certificate has not been registered under the Securities Act of
1933, as amended, and may not be sold, or offered for sale, transferred or
otherwise disposed of unless such sale, transfer or other disposition is made
pursuant to an effective registration statement under such act and any
applicable blue sky law or unless an exemption under such act and any applicable
blue sky law is available.

      This certificate may not be purchased by or transferred to any person that
is an employee benefit plan subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code") or any Governmental Plan, as
defined in Section 3(32) of ERISA, subject to any federal, state or local law
which is, to a material extent, similar to the foregoing provisions of ERISA or
the Code (collectively, a "Plan") or any person investing the assets of a Plan
except as provided in section 5.2 of the Pooling Agreement referred to herein.

                                          Very truly yours,

                                          [Name of Purchaser]

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

------------------------
* This letter may be signed by Purchaser's attorney-in-fact if an executed power
of attorney to such attorney-in-fact is attached hereto; provided that, upon
written instruction from the Issuer to the Trustee, no such attachment shall be
required.

<PAGE>

                                    EXHIBIT D

                              FORM OF ERISA LETTER

                                   [Purchaser]

                                                                          [Date]

Citicorp Residential Mortgage Securities, Inc.
1000 Technology Drive
O'Fallon, Missouri 63368-2240

U.S. Bank National Association
One Federal Street, 3rd floor
Boston, Massachusetts 02110

Citibank, N.A.
111 Wall Street, 15th Floor
New York, New York 10005
Attention: 15th Floor Window

Ladies and Gentlemen:

      In connection with the purchase by us of $_______________ initial
principal balance of the Citicorp Residential Mortgage Trust Series 2006-3,
REMIC Pass-Through Certificates, class [CE][R] certificates we confirm that:

      We (check one)

|_| are not an employee benefit plan subject to the fiduciary responsibility
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code") or any governmental plan, as defined in Section 3(32) of ERISA, subject
to any federal, state or local law ("Similar Law") which is, to a material
extent, similar to the foregoing provisions of ERISA or the Code (collectively,
a "Plan"), an agent acting on behalf of a Plan, or a person utilizing the assets
of a Plan or

|_| have provided a "Benefit Plan Opinion" satisfactory to Citicorp Residential
Mortgage Securities, Inc. and the Trustee of the trust fund. A Benefit Plan
Opinion is an opinion of counsel to the effect that the proposed transfer will
not (a) constitute or result in a non-exempt prohibited transaction under ERISA
or Section 4975 of the Code or Similar Law, or (b) give rise to a fiduciary duty
under ERISA, Section 4975 of the Code or Similar Law on the part of Citicorp
Mortgage Securities, Inc., the Servicer or the Trustee with respect to any Plan.

      The certificates will be registered in the name of [Nominee Name] but the
undersigned will be the beneficial owner thereof.

<PAGE>

                                          Very truly yours,

                                          [Name of Purchaser]

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

------------------------
      * This letter may be signed by Purchaser's attorney-in-fact if an executed
power of attorney to such attorney-in-fact is attached hereto; provided that,
upon written instruction from the Issuer to the Trustee, no such attachment
shall be required.

<PAGE>

                                    EXHIBIT E

                         FORM OF SERVICER CERTIFICATION

             Citicorp Residential Mortgage Trust Series 2006-3 Trust
                         REMIC Pass-Through Certificates

            I, [________], a [_____________] of CitiMortgage, Inc. (the
"Servicer"), certify that:

1.    I have reviewed this report on Form 10-K and all reports on Form 10-D
      required to be filed in respect of the period covered by this report on
      Form 10-K of the Citicorp Residential Mortgage Trust Series 2006-3 (the
      "Exchange Act Periodic Reports");

2.    Based on my knowledge, the Exchange Act Periodic Reports, taken as a
      whole, do not contain any untrue statement of a material fact or omit to
      state a material fact necessary to make the statements made, in light of
      the circumstances under which such statements were made, not misleading
      with respect to the period covered by this report;

3.    Based on my knowledge, all of the distribution, servicing and other
      information required to be provided under Form 10-D for the period covered
      by this report is included in the Exchange Act Periodic Reports;

4.    I am responsible for reviewing the activities performed by the
      Servicer and based upon my knowledge and the compliance review
      conducted in preparing the servicer compliance statement required
      in this report under Item 1123 of Regulation AB, and except as
      disclosed in the Exchange Act Periodic Reports, the Servicer has
      fulfilled its obligations under the pooling and servicing
      agreement, dated November 1, 2006, among Citicorp Residential
      Mortgage Securities, Inc., as depositor, Citibank, N.A., as
      paying agent, certificate registrar and authenticating agent,
      U.S. Bank National Association, as trustee, and the Servicer; and

5.    All of the reports on assessment of compliance with the servicing
      criteria for asset-backed securities and their related
      attestation reports on assessment of compliance with servicing
      criteria for asset-backed securities required to be included in
      this report in accordance with Item 1122 of Regulation AB and
      Exchange Act Rules 13a-18 and 15d-18 have been included as an
      exhibit to this report, except as otherwise disclosed in this
      report. Any material instances of noncompliance described in such
      reports have been disclosed in this report on Form 10-K.

      In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated part[y][ies]:

[___________].

[_________], 2006

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

<PAGE>

                                    EXHIBIT F

                      MORTGAGE DOCUMENT CUSTODIAL AGREEMENT

MORTGAGE DOCUMENT CUSTODIAL AGREEMENT
------------------------------------------------------------------------------
November 1, 2006

PARTIES

o     U.S. Bank National Association, a national banking association, as trustee
      (the Trustee)

o     Citibank, N.A., a national banking association (Citibank)

o     Citicorp Residential Mortgage Securities, Inc., a Delaware corporation
      (CRMSI)

o     CitiMortgage, Inc., as Servicer and Certificate Administrator
      (CitiMortgage)

BACKGROUND

      The Trustee, CRMSI, CitiMortgage and Citibank, N.A. are entering into a
Pooling and Servicing Agreement dated November 1, 2006 relating to Citicorp
Residential Mortgage Securities, Inc. REMIC Pass-Through Certificates, Series
2006-3 (the Pooling Agreement). Unless otherwise stated, terms defined in the
Pooling Agreement are used in this agreement with the same meaning.

      Pursuant to the Pooling Agreement,

      o     CRMSI will sell to the Trustee, without recourse, the mortgage loans
            identified in exhibit B to the Pooling Agreement, and

      o     Citibank has been designated as Mortgage Document Custodian and
            Mortgage Note Custodian.

AGREEMENT

1  Appointment as Custodian; Acknowledgment of Receipt

      (a) Citibank will serve as Mortgage Document Custodian and Mortgage Note
Custodian (collectively, Custodian) under the Pooling Agreement. Citibank
certifies to the Trustee that Citibank is qualified to serve as Mortgage
Document Custodian and Mortgage Note Custodian under the Pooling Agreement.
Citibank will act as Custodian solely for the benefit of the Trustee and the
certificate holders.

      (b) CRMSI has delivered to Citibank, as Custodian, the Mortgage Files,
including the Mortgage Notes referred to in section 2.01 of the Pooling
Agreement. Citibank acknowledges receipt of the Pooling Agreement and the
Mortgage Files.

      From time to time, CitiMortgage will forward to Citibank additional
documents evidencing an assumption or modification of a mortgage loan, and
Citibank will hold such documents in the related Mortgage File in accordance
with this agreement and the Pooling Agreement.

      (c) CitiMortgage will pay the reasonable custodial fees and expenses of
Citibank or its successor, including the Trustee if the Trustee holds any
Mortgage Files directly as Custodian.

      (d) Upon CitiMortgage's receipt of notice from Citibank or the Trustee
that Citibank has breached this agreement or the Pooling Agreement, CitiMortgage
will cause Citibank to comply with this agreement and the Pooling Agreement.

2  Maintenance of office

      Citibank will maintain the Mortgage Files, at the office of Citibank
located at Citibank, N.A., 5280 Corporate Drive, M/C 0005, Frederick, Md. 21703,
or at such other office of Citibank as it designates by 30 days' prior written
notice to the Trustee and CRMSI.

3  Duties of Custodian

      As Custodian, Citibank will have all of the rights and obligations of the
Mortgage Document Custodian and Mortgage Note Custodian set forth in the Pooling
Agreement, including but not limited to the following:

      (a) Safekeeping. Citibank will

      o identify each Mortgage File by loan number, address of mortgaged
property, and name of Mortgagor,

      o maintain the Mortgage Files in secure and fire resistant facilities in
accordance with customary standards for such custody,

      o identify the Mortgage Files as being held and to hold the Mortgage Files
for and on behalf of the Trustee for the benefit of all present and future
certificate holders,

      o maintain accurate records pertaining to Mortgages in the Mortgage Files
as will enable the Trustee to comply with the terms and conditions of the
Pooling Agreement, and

      o maintain at all times a current inventory and conduct periodic physical
inspections of the Mortgage Files in such a manner as will enable the Trustee
and CitiMortgage to verify the accuracy of Citibank's record-keeping, inventory
and physical possession.

      Citibank will promptly report to the Trustee and CitiMortgage any failure
on its part to hold the Mortgage Files as herein provided and will promptly take
appropriate action to remedy any such failure.

      (b) Release of Files. Citibank is authorized, upon receipt of a direction
from the Trustee pursuant to section 3.12, "Trustee to Cooperate; Release of
Files," of the Pooling Agreement, to release to CitiMortgage or its designee, as
directed, the Mortgage File or the documents set forth in such direction. All
documents so released will be held by the recipient in trust for the benefit of
the Trustee in accordance with the Pooling Agreement. Such Mortgage Files will
be returned to Citibank when the need therefor in connection with foreclosure or
servicing no longer exists, unless the mortgage loan is liquidated or paid in
full. Citibank is also authorized to release any Mortgage or Mortgage Note to
CRMSI after purchase by CRMSI of the related mortgage loan or the property
securing such mortgage loan, all as provided in, and subject to the provisions
of, the Pooling Agreement.

      (c) Review of Mortgage Files; Administration; Reports. Citibank will
attend to all non-discretionary details in connection with maintaining custody
of the Mortgage Files, including reviewing each Mortgage File within 90 days
after issuance of the certificates, ascertaining that all documents required to
be delivered pursuant to section 2.01, "Conveyance of Trust Fund," of the
Pooling Agreement have been executed, received and recorded, if applicable, and,
in connection therewith, delivering, in electronic form, such reports and
certifications to the Trustee and CRMSI as are required by the Pooling
Agreement. If in the course of such review, or if at any time during the term of
this agreement, Citibank determines that a document or documents constituting
part of a Mortgage File is defective or missing, it will promptly so notify, in
electronic form, the Trustee and CitiMortgage in accordance with the provisions
of section 2.02, "Acceptance by Trustee," of the Pooling Agreement, and will,
within 30 days thereafter, provide the Trustee with an updated report certifying
as to the completeness of the Mortgage File, with any applicable exceptions
noted thereon. Citibank will assist the Trustee and CitiMortgage generally in
the preparation of reports (including by providing information reasonably
requested as necessary to such preparation) to certificate holders or to
regulatory bodies to the extent necessitated by Citibank's custody of the
Mortgage Files.

      (d) Successor trustees. Citibank will, in accordance with section 8.08.
"Successor Trustee," of the Pooling Agreement, amend this agreement to make a
successor Trustee the successor to the predecessor Trustee under this agreement.

      (e) Assessments of Compliance and Attestation Statements. Citibank will,
in its capacity as Custodian, perform the obligations of the Custodian under
Sections 3.15(a), 3.15(b) and 3.15(c) of the Pooling Agreement, and will provide
any Additional Form 10-D Disclosure, any Additional Form 10-K Disclosure and any
Form 8-K Disclosure Information (as such terms are defined in the Pooling
Agreement) required so to be delivered by the Custodian under Section 4.09 of
the Pooling Agreement.

4  Access to Records

      Subject to section 3(b), upon not less than three days' notice, Citibank
will permit the Trustee, CitiMortgage or any Subservicer appointed by
CitiMortgage or their duly authorized representatives, attorneys or auditors to
inspect the Mortgage Files and the books and records maintained by Citibank
pursuant hereto at such times as the Trustee, CitiMortgage or any Subservicer
may reasonably request, subject only to compliance by the Trustee, CitiMortgage
or any Subservicer with the security procedures of Citibank applied by Citibank
to its own employees having access to these and similar records.

5  Instructions; Authority to Act

      Citibank will be deemed to have received proper instructions with respect
to the Mortgage Files upon its receipt of written instructions signed by a
Responsible Officer of the Trustee or a Servicing Officer of the Servicer. A
certified copy of a resolution of the Board of Directors of the Trustee may be
accepted by Citibank as conclusive evidence of the authority of any such officer
to act and may be considered as in full force and effect until receipt of
written notice to the contrary by Citibank from the Trustee, CitiMortgage or any
Subservicer. Such instructions may be general or specific in terms. Citibank may
rely upon and will be protected in acting in good faith upon any such written
instructions received by it and which it reasonably believes to be genuine and
duly authorized with respect to all matters pertaining to this agreement and its
duties hereunder.

6  Indemnification

      (a) Citibank will indemnify the Trustee for any and all liabilities,
obligations, losses, damages, payments, costs or expenses of any kind whatsoever
which may be imposed on, incurred or asserted against the Trustee as the result
of any act or omission in any way relating to the maintenance and custody by
Citibank of the Mortgage Files; provided, however, that Citibank will not be
liable for any portion of any such amount resulting from the gross negligence or
willful misconduct of the Trustee.

      (b) To the extent provided under Section 8.05(b) of the Pooling Agreement,
CitiMortgage will indemnify Citibank and hold it harmless against any loss,
liability or expense incurred without negligence or bad faith on Citibank's
part, arising out of or in connection with the acceptance or administration of
the trust or trusts created under the Pooling Agreement or Citibank's custody of
the Mortgage Files, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder or under the Pooling Agreement. Such
indemnification will survive the payment of the certificates and termination of
the Trust Fund, as well as the resignation or removal of CitiMortgage as
Servicer (if such action which caused the need for the indemnification occurred
while CitiMortgage acted as Servicer), and for purposes of such indemnification
neither the negligence nor bad faith of the Trustee will be imputed to, or
adversely affect, the right of Citibank to indemnification.

7  Limitation of Custodian's Liabilities and Duties

      (a) Citibank will not be responsible for preparing or filing any reports
or returns relating to federal, state or local income taxes with respect to this
agreement, other than for Citibank's compensation or for reimbursement of
expenses.

      (b) Citibank will not be responsible or liable for, and makes no
representation or warranty with respect to, the validity, adequacy or perfection
of any lien upon or security interest in any Mortgage File.

      (c) Any other provision of this agreement to the contrary notwithstanding,
Citibank will have no notice, and will not be bound by any of the terms and
conditions of any other document or agreement executed or delivered in
connection with, or intended to control any part of, the transactions
anticipated by or referred to in this agreement unless Citibank is a signatory
party to that document or agreement. Notwithstanding the foregoing sentence,
Citibank will be deemed to have notice of the terms and conditions (including
without limitation definitions not otherwise set forth in full in this
agreement) of other documents and agreements executed or delivered in connection
with, or intended to control any part of, the transactions anticipated by or
referred to in this agreement, to the extent such terms and provisions are
referenced, or are incorporated by reference, into this agreement only as long
as the Trustee or CitiMortgage will have provided a copy of any such document or
agreement to Citibank.

      (d) Citibank's rights and obligations will only be such as are expressly
set forth in this agreement or the Pooling Agreement. In no event will Citibank
be obligated to ascertain or take action except as expressly provided in this
agreement or the Pooling Agreement.

      (e) Nothing in this agreement will be deemed to impose on Citibank any
obligation to qualify to do business in any jurisdiction, other than (i) a
jurisdiction where a Mortgage File is or may be held by Citibank, and (ii) where
failure to qualify could have a material adverse effect on Citibank or its
property or business or on the ability of Citibank to perform it duties
hereunder.

      (f) Subject to section 3, under no circumstances will Citibank be
obligated to verify the authenticity of any signature on any of the documents
received or examined by it in connection with this agreement or the authority or
capacity of any person to execute or issue such document, nor will Citibank be
responsible for the value, form, substance, validity, perfection (other than by
taking and continuing possession of the Mortgage Files), priority, effectiveness
or enforceability of any of such documents, nor will Citibank be under a duty to
inspect, review or examine the documents to determine whether they are
appropriate for the represented purpose or that they have been actually recorded
or that they are other than what they purport to be on their face.

      (g) Citibank will have no duty to ascertain whether or not any cash amount
or payment has been received by the Trustee, the CRMSI or any third person.

      (h) Citibank may assign its rights and obligations under this agreement,
in whole or in part, to any Affiliate; however, Citibank will notify CRMSI,
CitiMortgage and the Trustee of any such assignment. Citibank may not assign its
rights or obligations under this agreement, in whole or in part, to any other
entity without the prior written consent of CRMSI, CitiMortgage and the Trustee,
which consent will not be unreasonably withheld. An "Affiliate" is an entity
that directly or indirectly controls, is controlled by or is under common
control with Citibank. Notwithstanding any such assignment, Citibank will remain
liable for all of its obligations under this agreement unless the assignment has
been approved by CRMSI, CitiMortgage and the Trustee.

      (i) Subject to section 6, "Indemnification," neither Citibank nor any of
its Affiliates, directors, officers, agents, and employees will be liable for

      o any action or omission to act hereunder except for its own or such
person's gross negligence, willful misconduct, breach of this agreement or
violation of applicable law, or

      o any special, indirect, punitive or consequential damages resulting from
any action taken or omitted to be taken by it or them hereunder or in connection
herewith even if advised of the possibility of such damages.

      (j) Citibank will not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
under this Agreement or the Pooling Agreement or in the exercise of any of its
rights and obligations, if, in its sole judgment, it will believe that repayment
of such funds or adequate indemnity against such risk or liability is not
assured to it.

      (k) Citibank will not be responsible for delays or failures in performance
resulting from acts beyond its control, such as acts of God, strikes, lockouts,
riots, acts of war or terrorism, epidemics, nationalization, expropriation,
currency restrictions, governmental regulations superimposed after the fact,
fire, communication line failures, computer viruses, power failures, earthquakes
or other disasters.

      (l) Any entity into which Citibank may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which Citibank will be a party, or any entity
succeeding to the business of Citibank, will be the successor of Citibank
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.

8. Advice of Counsel

      Citibank may rely and act upon advice of counsel with respect to its
performance as Custodian, and will not be liable for any action it reasonably
takes pursuant to such advice, provided that such action is not in violation of
applicable federal or state law.

9. Effective Period, Termination and Amendment, and Interpretive and
Additional Provisions

      This agreement may be terminated (a) by Citibank's resignation as
Custodian, or (b) by either CitiMortgage or the Trustee. In each case, such
termination will be effected by notice to the other parties given no less than
60 days prior to termination. Upon notice of such termination, CitiMortgage will
use its reasonable best efforts to select a successor Custodian reasonably
acceptable to the Trustee upon substantially the same terms and conditions as
set forth in this agreement. If no such successor Custodian has been selected by
the 50th day after such notice, the Trustee may, upon prior notice to
CitiMortgage, select a successor Custodian. If no successor Custodian has been
selected by CitiMortgage or the Trustee by the effective date of the Citibank's
termination, the Trustee will act as successor Custodian until the Trustee and
CitiMortgage agree on a successor Custodian.

      At, or as soon as practicable after, the termination of this agreement,
Citibank will deliver the Mortgage Files to the successor Custodian at such
place as the successor Custodian reasonably designates.

10.   Binding Arbitration

      Any misunderstanding or dispute between Citibank and CRMSI or CitiMortgage
arising out of this agreement will be settled through consultation and
negotiation in good faith and a spirit of mutual cooperation. However, if these
attempts fail, such misunderstandings or disputes will be decided by binding
arbitration conducted, upon request by either of them, in New York, New York,
before a single arbitrator designated by the American Arbitration Association
(the AAA), in accordance with the terms of the Commercial Arbitration Rules of
the AAA, and to the maximum extent applicable, the United States Arbitration Act
(Title 9 of the United States Code). Notwithstanding anything herein to the
contrary, either Citibank, CRMSI or CitiMortgage may proceed to a court of
competent jurisdiction to obtain equitable relief at any time. An arbitrator may
not award punitive damages or other damages not measured by the prevailing
party's actual damages. To the maximum extent practicable, an arbitration
proceeding under this agreement will be concluded within 180 days of the filing
of the dispute with the AAA. This arbitration clause will survive any
termination or expiration of this agreement and if any term, covenant, condition
or provision of this arbitration clause is found to be unlawful, invalid or
unenforceable, the remaining parts of the arbitration clause will not be
affected thereby and will remain fully enforceable.

11.   Governing Law

      This agreement will be governed by, and construed in accordance with, the
laws of the State of New York.

12.   Notice

      Notices and other writings will be delivered or mailed, postage prepaid,

      o to the Trustee at One Federal Street, 3rd Floor, Boston, Massachusetts
02110, Attention: Corporate Trust Services,

      o to Citibank at 5280 Corporate Drive, M/C 0005, Frederick, Maryland
21703, Attention: Loretta Badgett, with a copy to Eric K. Kawamura, Vice
President & General Counsel, Citibank, N.A., One Sansome St., 19th fl., San
Francisco, California 94104, tel: (415) 658-4371, fax: (415) 658-4294, and

      o to CRMSI or CitiMortgage at 1000 Technology Drive, O'Fallon, Missouri
63368, Attention: Daniel P. Hoffman

      or to such other address as the Trustee, Citibank, CRMSI or CitiMortgage
subsequently specifies in writing to the other parties. Notices or other
writings will be effective only upon receipt.

13.   Binding Effect

      This agreement will be binding upon and will inure to the benefit of the
Trustee and Citibank and their respective successors and permitted assigns.
Concurrently with the appointment of a successor trustee as provided in section
8.08 of the Pooling Agreement, the Trustee, CRMSI, CitiMortgage and Citibank
will amend this agreement to make the successor trustee the successor to the
Trustee under this agreement.

<PAGE>

SIGNATURES

U.S. BANK NATIONAL ASSOCIATION,
as Trustee under the Pooling Agreement

By:
   -----------------------------------
Name:  Maryellen Hunter
Title:     Assistant Vice President

CITIBANK, N.A.,
as Custodian

By:
   -----------------------------------
Name: Loretta Badgett
Title:   Assistant Vice President

CITICORP RESIDENTIAL MORTGAGE
 SECURITIES, INC.

By:
   -----------------------------------
Name:  Daniel P. Hoffman
Title: Vice President

CITIMORTGAGE, INC.

By:
   -----------------------------------
Name:  Paul Ince
Title: Chief Financial Officer

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