Document:

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                                                                   Exhibit 10.21

                       ACCREDITED HOME LENDERS HOLDING CO.

                           DEFERRED COMPENSATION PLAN

                                 TRUST AGREEMENT

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<TABLE>
<S>                                                                            <C>
ARTICLE 1     ESTABLISHMENT OF TRUST ......................................... 1

ARTICLE 2     PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES .......... 2

ARTICLE 3     TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
              BENEFICIARY WHEN COMPANY IS INSOLVENT .......................... 2

ARTICLE 4     PAYMENTS TO THE COMPANY ........................................ 3

ARTICLE 5     INVESTMENT AUTHORITY ........................................... 3

ARTICLE 6     DISPOSITION OF INCOME .......................................... 4

ARTICLE 7     ACCOUNTING BY TRUSTEE .......................................... 4

ARTICLE 8     RESPONSIBILITY OF TRUSTEE ...................................... 4

ARTICLE 9     COMPENSATION AND EXPENSES OF TRUSTEE ........................... 5

ARTICLE 10    RESIGNATION AND REMOVAL OF TRUSTEE ............................. 5

ARTICLE 11    APPOINTMENT OF SUCCESSOR TRUSTEE ............................... 6

ARTICLE 12    AMENDMENT OR TERMINATION ....................................... 6

ARTICLE 13    MISCELLANEOUS .................................................. 6

ARTICLE 14    EFFECTIVE DATE ................................................. 7
</TABLE>

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                       ACCREDITED HOME LENDERS HOLDING CO.
                           DEFERRED COMPENSATION PLAN
                            Effective January 1, 2003

                                 TRUST AGREEMENT

     THIS TRUST AGREEMENT is entered into effective as of the 1st day of
January, 2003, by and between Accredited Home Lenders, Inc., a California
corporation (the "Company"), and by its wholly-owned subsidiary Accredited Home
Lenders Holding Co., a Delaware corporation (the "Subsidiary") and First
American Trust, FSB (the "Trustee").

                                    ARTICLE 1
                             ESTABLISHMENT OF TRUST

     (a) The Company hereby deposits with Trustee in trust $100.00, which shall
become the principal of the Trust to be held, administered and disposed of by
Trustee as provided in this Trust Agreement.

     (b) The Trust hereby established shall be irrevocable.

     (c) The Trust is intended to be a grantor trust, of which the Company is
the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.

     (d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of the Company and shall be used exclusively
for the uses and purposes of participants in the Accredited Home Lenders Holding
Co. Deferred Compensation Plan (the "Plan") and general creditors as herein set
forth. Plan participants and their beneficiaries shall have no preferred claim
on, or any beneficial ownership interest in, any assets of the Trust. Any rights
created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against the
Company. Any assets held by the Trust will be subject to the claims of the
Company's general creditors under federal and state law in the event of
Insolvency, as defined in Article 3(a) herein. In addition, any assets held by
the Trust for the benefit of the employees of the Subsidiary will also be
subject to the claims of the general creditors of that Subsidiary under federal
and state law in the event of Insolvency, as defined in Article 3(a) herein.

     (e) The Company, in its sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property in trust with Trustee
to augment the principal to be held, administered and disposed of by Trustee as
provided in this Trust Agreement. Neither Trustee nor any Plan participant or
beneficiary shall have any right to compel such additional deposits.

     (f) Upon a Change of Control, the Company shall, as soon as possible, but
in no event longer than 45 days following such Change of Control, as defined
herein, make an

                                       1

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irrevocable contribution to the Trust in an amount equal to the present value of
all vested and unvested accrued benefits (or account balances) payable to
participants or beneficiaries under the Plan on a pre-tax basis plus the present
value of all reasonably anticipated fees and expenses of the Trust for the
anticipated duration of the Trust.

     (g) The Company shall certify in writing to the Trustee the names and
specimen signatures of all those who are authorized to act as or on behalf of
the Company (and after a Change of Control the Company's Deferred Compensation
Committee), and those names and specimen signatures shall be updated as
necessary by a duly authorized officer of the Company. The Company shall
promptly notify the Trustee if any person so designated is no longer authorized
to act on behalf of the Company. Until the Trustee receives written notice that
a person is no longer authorized to act on behalf of the Company, the Trustee
may continue to rely on the prior designation of such person.

                                    ARTICLE 2
              PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES

     (a) The Company's Deferred Compensation Committee shall have the sole right
and authority to administer the Plan and shall be referred to hereafter as the
Plan Administrator. The Plan Administrator shall direct the Trustee as to when
amounts are payable to a Plan participant (or the participant's beneficiaries)
and the manner in which such amounts shall be paid. Such directions shall be in
writing and in a form acceptable to the Trustee. Except as otherwise provided
herein, the Trustee shall make payments to Plan participants and their
beneficiaries in accordance with the Plan Administrator's directions. The
Trustee shall have no duty or responsibility to supervise the Company, any agent
of the Company, or the Company's Deferred Compensation Committee regarding
payments to be made to Plan participants or their beneficiaries under the Trust.

     (b) The entitlement of a Plan participant or his or her beneficiaries to
benefits under the Plan shall be determined by the Plan Administrator or such
party as it shall designate under the Plan, and any claim for such benefits
shall be considered and reviewed under the procedures set out in the Plan.

     (c) The Company shall direct the Trustee to make provisions for reporting
and withholding of any federal, state or local taxes that may be required to be
withheld with respect to the payment of benefits by the Trustee pursuant to the
terms of the Plan and to pay amounts withheld to the Company for remittance to
the appropriate taxing authorities. The Company shall have the responsibility
for reporting and withholding of all federal, state or local taxes required to
be withheld with respect to such payments and for paying such amounts withheld
to the appropriate taxing authorities. The Trustee shall have no duty or
responsibility with respect to the reporting and withholding or payment of such
taxes and shall have no responsibility to determine that the Company has
provided for the reporting, withholding and payment of such taxes. The Company
shall indemnify and hold harmless the Trustee from any and all losses,
liabilities, claims, penalties or damages which may occur as a result of the
Trustee following in good faith the written direction of the Company to remit
payments to or reimburse the Company for payments made hereunder to or on behalf
of Participants or arising from the Company's tax

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reporting, withholding and payment obligations hereunder. This indemnification
shall survive termination of this Trust Agreement and shall be binding upon the
parties, their successors and assigns.

                                    ARTICLE 3
         TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY
                   WHEN COMPANY or a subsidiary IS INSOLVENT

     (a) Trustee shall cease payment of benefits to Plan participants who were
employed by the Company and their beneficiaries if the Company is Insolvent.
Additionally, the Trustee shall cease payment of benefits to Plan participants
who were employed by the Subsidiary and their beneficiaries if the Subsidiary is
Insolvent. The Company and/or the Subsidiary as applicable, shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) the Company and/or the
Subsidiary as applicable is unable to pay its debts as they become due, or (ii)
the Company and/or the Subsidiary as applicable is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.

     (b) With respect to any assets contributed to the Trust for the benefit of
employees of any Subsidiary of the Company, such assets shall also be subject to
the claims of creditors of such Subsidiary and the provisions of this Article 3
shall apply to the Subsidiary in the same manner as they apply to the Company in
the event the Subsidiary becomes Insolvent.

     (c) At all times during the continuance of this Trust, as provided in
Article 1(d) hereof, the principal and income of the Trust shall be used solely
for the payment of Plan benefits to participants and beneficiaries unless the
Company is determined to be Insolvent. If the Company is Insolvent, all assets
in the Trust shall be subject to claims of the Company's general creditors under
federal and state law as set forth below.

         (1) The Chief Executive Officer of the Company shall have the duty to
inform the Plan Administrator of the Company's Insolvency. The Plan
Administrator shall have the duty to inform the Trustee in writing of the
Company's Insolvency. If a person claiming to be a creditor of the Company
alleges in writing to Trustee that the Company has become Insolvent, Trustee
shall contact the Plan Administrator and request a determination as to whether
the Company is insolvent. Pending a determination as to whether the Company is
Insolvent, the Trustee shall discontinue payment of benefits to Plan
participants or their beneficiaries. The Trustee shall have no obligation to
independently determine whether the Company is Insolvent.

         (2) Unless Trustee has actual knowledge of the Company's Insolvency, or
has received notice from the Plan Administrator or a person claiming to be a
creditor alleging that the Company is Insolvent, Trustee shall have no duty to
inquire whether the Company is Insolvent. Trustee may in all events rely on the
Plan Administrator's determination as to whether the Company is Insolvent.

         (3) If at any time the Trustee is informed by the Plan Administrator
that the Company is Insolvent, Trustee shall discontinue payments to Plan
participants employed by the

                                       3

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applicable Insolvent entity or their beneficiaries and shall hold the assets of
the Trust for the benefit of the Company's general creditors, who shall include
Plan participants and beneficiaries. Nothing in this Trust Agreement shall in
any way diminish any rights of Plan participants or their beneficiaries to
pursue their rights as general creditors of the Company with respect to benefits
due under the Plan or otherwise.

         (4) Trustee shall resume the payment of benefits to Plan participants
or their beneficiaries in accordance with Article 2 of this Trust Agreement only
after the Plan Administrator has informed the Trustee in writing of its
determination that the Company is not Insolvent (or is no longer Insolvent).

     (d) Provided that there are sufficient assets, if the Trustee discontinues
the payment of benefits from the Trust pursuant to Article 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
participants or their beneficiaries by the Company in lieu of the payments
provided for hereunder during any such period of discontinuance.

                                   ARTICLE 4
                             PAYMENTS TO THE COMPANY

     Except as provided in Article 3 hereof, the Company shall have no right or
power to direct Trustee to return to the Company or to divert to others any of
the Trust assets before all payment[s] of benefits have been made to Plan
participants and their beneficiaries pursuant to the terms of the Plan.

                                    ARTICLE 5
                              INVESTMENT AUTHORITY

     (a) The Company shall have the power over and responsibility for the
management and investment of Trust assets, unless otherwise agreed in writing
between the Company and the Trustee. The Company may appoint an Agent to act as
investment manager and to direct the investment of Trust assets on behalf of the
Company, provided the Trustee is notified in writing prior to such appointment
taking effect. The Trustee shall have no duty to supervise the Agent or to make
recommendations regarding Trust assets and shall retain assets until directed in
writing by the Company or Agent to dispose of them. In the event the Company
delegates investment responsibility to the Trustee, fails to contact or direct
the Trustee regarding investment for a period of six (6) months or the Trustee
is otherwise required to take responsibility for the investment of Trust assets
at any time, for any reason, the Trustee is hereby specifically authorized to
retain and maintain any insurance contracts and employer securities purchased at
the direction of the Company or Agent regardless of the desirability of
diversification of Trust assets. In no event shall the Trustee assume investment
responsibility for Trust assets which consist of employer securities or
insurance products. The Company shall continue, at all times, to maintain
investment management authority and control of such assets.

                                       4

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     (b) Subject in all respects to applicable provisions of this Trust
Agreement and the direction of the Company, the Trustee shall have the rights,
powers and privileges of an absolute owner when dealing with property of the
Trust, including, without limiting the generality of the foregoing, the powers
listed below:

         (1) To invest and reinvest the Trust assets in any one or more kind,
type, class, item or parcel of property, real or personal, tangible or
intangible; or in any one or more kind, type, class, or item of obligation,
secured or unsecured; or in any combination of them and to retain the property
for the period of time that the Company, Agent or Participant Committee deems
appropriate, despite fluctuations in the market price or the property.

         (2) To sell, convey, transfer, exchange, partition, lease, and
otherwise dispose of any of the assets of the Trust at any time held by the
Trustee under this Trust Agreement, with or without notice.

         (3) To exercise any option, conversion privilege or subscription right
given the Trustee as the owner of any security held in the Trust; to vote any
corporate stock either in person or by proxy, with or without power of
substitution; to consent to or oppose any reorganization, consolidation, merger,
readjustment of financial structure, sale, lease or other disposition of the
assets of any corporation or other organization, the securities of which may be
an asset of the Trust; to take any action in connection therewith and receive
and retain any securities resulting therefrom.

         (4) To cause any property of the Trust to be issued, held or registered
in the name of the Trustee as the Trustee, or in the name of one or more of its
nominees, or one or more nominees of any system for the central handling of
securities, or in such form that title will pass by delivery, provided that the
records of the Trustee shall in all events indicate the true ownership of such
property.

         (5) To renew or extend the time of payment of any obligation due or to
become due.

         (6) To commence or defend lawsuits or legal or administrative
proceedings; to compromise, arbitrate or settle claims, debts or damages in
favor of or against the Trust; to deliver or accept, in either total or partial
satisfaction of any indebtedness or other obligation, any property; to continue
to hold for such period of time as the Trustee may deem appropriate any property
so received; and to pay all costs and reasonable attorneys' fees in connection
therewith out of the assets of the Trust.

         (7) To manage any real property in the Trust in the same manner as if
the Trustee were the absolute owner thereof.

         (8) To borrow money from any person in such amounts upon such terms and
conditions and for such purposes as the Trustee, in its discretion, may deem
appropriate; in

                                       5

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connection therewith to pledge or mortgage any Trust asset as security; to lend
money on a secured or unsecured basis to any person other than a party in
interest.

          (9)  To hold such part of the assets of the Trust uninvested for such
limited periods of time as may be necessary for purposes of orderly account
administration or pending required directions, without liability for payment of
interest.

          (10) To determine how all receipts and disbursements shall be
credited, charged or apportioned as between income and principal according to
the Principal and Income Act and other applicable authorities.

          (11) To dispose of any property in the Trust and to enforce any note
or obligations of the Company to the Trust (and foreclose on any collateral
securing such notes, subject to the terms of any pledge agreement to the
Trustee) in the event the Company fails to make required contributions to the
Trust after sixty (60) days' written notice to the Company of its failure to
make such required contributions.

          (12) To invest in any mutual fund, whether sponsored or advised by the
Trustee or any of its affiliates, and the Trustee and its affiliates may be
compensated for providing investment advice and other services to such fund, in
addition to any Trustee fees received under this Trust Agreement.

          (13) Generally to do all acts, whether or not expressly authorized,
which the Trustee may deem necessary or desirable for the orderly administration
or protection of the Trust.

     (c)  Trustee may invest in securities (including stock or rights to acquire
stock) or obligations issued by the Company. All rights associated with the
assets of the Trust shall be exercised by Trustee or the person designated by
Trustee, and shall in no event be exercisable by or rest with Plan participants,
except that voting rights with respect to Trust assets shall be exercised by
Trustee as directed by the Company.

                                    ARTICLE 6
                              DISPOSITION OF INCOME

     During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.

                                    ARTICLE 7
                              ACCOUNTING BY TRUSTEE

     (a)  Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between the
Company and Trustee. Within fifteen (15) days following the close of each
calendar quarter and/or after the removal or resignation of Trustee, Trustee
shall deliver to the Company a written account of its administration of the
Trust during such calendar quarter or during the period from the close of the
last preceding calendar quarter to

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the date of such removal or resignation, setting forth all investments,
receipts, disbursements and other transactions effected by it, including a
description of all securities and investments purchased and sold with the cost
or net proceeds of such purchases or sales (accrued interest paid or receivable
being shown separately), and showing all cash, securities and other property
held in the Trust at the end of such calendar quarter or as of the date of such
removal or resignation, as the case may be. The requirements for any other
accountings, including without limitation accountings to any Participant or
beneficiary, is hereby waived to the fullest extent permitted by applicable law.

     (b) The assets of the Trust shall be valued at their fair market value on
the date of valuation, as determined by the Trustee based upon such sources of
information as it may deem reliable; provided, however, that the Company, and,
after a Triggering Event, the Participant Committee, shall instruct the Trustee
as to asset valuations which are not readily determinable on an established
market. The Trustee may rely conclusively on such valuations provided by the
Company, the Participant Committee or a duly appointed Agent and shall be
indemnified and held harmless by the Company with respect to such reliance. If
the Company or Participant Committee fails to provide such values, the Trustee
may take whatever action it deems reasonable, including employment of attorneys,
appraisers or other professionals, the expense of which will be an expense of
administration of the Trust. The value of any insurance contract for purposes of
substitution shall be the present value of future projected cash flow or
benefits payable under the contract, but not less than the cash surrender value.
The projection shall include death benefits based on reasonable mortality
assumptions, including facts specifically related to the health of the insured
and the terms of the contract to be reacquired.

     (c) The Company and not the Trustee shall be responsible for all income tax
reporting and calculation and payment of any wage withholding or other tax
requirements in connection with the Trust and any contributions thereto, and any
income earned thereby, and payments or distributions therefrom, and the Company
agrees to indemnify and defend the Trustee against any liability for any such
taxes, interest or penalties resulting from or relating to the Trust. Unless
otherwise agreed in writing by the parties, the Trustee shall prepare annually a
grantor tax information letter for the Trust and shall promptly transmit that
document to the Company for its use in preparing its annual corporate income tax
return. If any part of the Trust may become liable for payment of any estate,
inheritance, or other taxes, charges or assessments, the Trustee shall refer
such matter to the Company and may take such action as the Company shall direct.

                                    ARTICLE 8
                            RESPONSIBILITY OF TRUSTEE

     (a) Trustee shall act with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person acting in like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims.

                                       7

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     (b)  Limitation on Trustee Liability.

          (1)  The Trustee shall have no powers, duties or responsibilities with
regard to the administration of the Plan(s) or to determine the rights or
benefits of any person having or claiming an interest under the Plan(s) or in
the Trust or under this Trust Agreement or to examine or control any disposition
of the Trust or part thereof which is directed by the Company or Agent, as
applicable. Any dispute with respect to a claim for benefit payable under the
Plan or Trust, among the Company and a Plan participant or beneficiary shall be
governed by and resolved through the claims procedures and dispute resolution
provisions contained in the Plan document.

          (2)  The Trustee shall have no liability for the adequacy of
contributions for the purposes of the Plans or for enforcement of the payment
thereof.

          (3)  The Trustee shall have no liability for the acts or omissions of
the Company, Agent or any of their agents.

          (4)  The Trustee shall have no liability for following proper
directions of the Company, Agent or any of their agents or of any participant
when such directions are made in accordance with this Trust Agreement.

          (5)  During such period or periods of time, if any, as the Company or
Agent is directing the investment and management of Trust assets, the Trustee
shall have no obligation to determine the existence of any conversion,
redemption, exchange, subscription or other right relating to any securities
purchased on the directions of such directing party if notice of any such right
was given prior to the purchase of such securities. If such notice is given
after the purchase of such securities, the Trustee shall notify such directing
party. The Trustee shall have no obligation to exercise any such right unless it
is instructed to exercise such right, in writing, by the directing party within
a reasonable time prior to the expiration of such right.

          (6)  During such period or periods of time, if any, as the Company or
Agent is directing the investment and management of Trust assets, if such
directing party directs the Trustee to purchase securities issued by any foreign
government or agency thereof, or by any corporation domiciled outside of the
United States, it shall be the responsibility of the directing party to advise
the Trustee in writing with respect to any laws or regulations of any foreign
countries or any United States territories or possessions which shall apply, in
any manner whatsoever, to such securities, including, but not limited to,
receipt of dividends or interest by the Trustee for such securities.

     (c)  Indemnification.

          (1)  The Company hereby agrees to indemnify and hold harmless the
Trustee, its officers, directors, employees or agents, from and against any and
all liabilities, claims for breach of fiduciary duty or otherwise, demands,
damages, costs and expenses, including reasonable attorneys' fees, arising in
any way from the Trustee's performance of its duties under and according to the
terms of this Trust Agreement, including but not limited to, (i) any act taken

                                       8

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or omitted by the Trustee in good faith in accordance with or due to the absence
of directions from the Company, Agent, Plan participant or any of their agents,
(ii) any act taken or omitted by the Company, Agent, Plan participant or their
agents in breach of such party's responsibilities under the Plan or this
Agreement, and (iii) any action taken by the Trustee pursuant to a notification
of an order to purchase or sell securities issued by the Company, Agent, Plan
participant or their agents directly to a broker or dealer.

          (2)  If the Trustee is named as a defendant in any lawsuit or other
proceeding involving the Plan or the Trust for any reason including, without
limitation, an alleged breach by the Trustee of its responsibilities under this
Agreement, the Company hereby agrees to indemnify the Trustee against all
liabilities, costs, and expenses, including reasonable attorneys' fees, incurred
by the Trustee unless the final judgment entered in the lawsuit or proceeding
holds the Trustee guilty of gross negligence, willful misconduct, or a breach of
fiduciary responsibility.

          (3) The Company shall have the right, but not the obligation, to
conduct the defense of the Trustee in any legal proceeding covered by this
section. However, any legal counsel selected to defend the Trustee must be
acceptable to the Trustee, and the Trustee may elect to choose counsel,
including in-house counsel, other than that selected by the Company. The Company
may satisfy all or any part of its obligations under this section through
insurance arrangements acceptable to the Trustee.

     (d)  Trustee may consult with legal counsel (who may also be counsel for
the Company generally) with respect to any of its duties or obligations
hereunder.

     (e)  Trustee may hire agents, accountants, actuaries, investment advisors,
financial consultants or other professionals to assist it in performing any of
its duties or obligations hereunder.

     (f)  Trustee shall have, without exclusion, all powers conferred on
Trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the Trust,
Trustee shall have no power to name a beneficiary of the policy other than the
Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy.

     (g)  Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, Trustee shall not have any power that could give
this Trust the objective of carrying on a business and dividing the gains
therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.

                                        9

<PAGE>

                                    ARTICLE 9
                      COMPENSATION AND EXPENSES OF TRUSTEE

     The Company shall pay all of the Trustee's fees and expenses that are
directly related to the performance of the Trustee's duties and obligations as
set forth in this Trust Agreement. If not so paid, the fees and expenses shall
be paid from the Trust.

                                   ARTICLE 10
                       RESIGNATION AND REMOVAL OF TRUSTEE

     (a) Trustee may resign at any time by written notice to the Company, which
shall be effective 60 days after receipt of such notice unless the Company and
Trustee agree otherwise.

     (b) Trustee may be removed by the Company on 60 days notice or upon shorter
notice accepted by Trustee.

     (c) Upon a Change of Control, Trustee may not be removed by the Company for
12 months.

     (d) Upon resignation or removal of Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor Trustee.
The transfer shall be completed within 90 days after receipt of notice of
resignation, removal or transfer, unless the Company extends the time limit.

                                   ARTICLE 11
                        APPOINTMENT OF SUCCESSOR TRUSTEE

     (a) If Trustee resigns or is removed in accordance with Article 10 hereof,
the Company may appoint any third party, such as a bank trust department or
other party that may be granted corporate trustee powers under state law, as a
successor to replace Trustee upon resignation or removal. The appointment shall
be effective when accepted in writing by the new Trustee, who shall have all of
the rights and powers of the former Trustee, including ownership rights in the
Trust assets. The former Trustee shall execute any instrument necessary or
reasonably requested by the Company or the successor Trustee to evidence the
transfer. After the occurrence of a Change in Control, a successor Trustee may
not be appointed without the consent of a majority of the Participants. If no
such appointment has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All expenses of
the Trustee in connection with the proceeding shall be allowed as administrative
expenses of the Trust.

     (b) The successor Trustee need not examine the records and acts of any
prior Trustee and may retain or dispose of existing Trust assets, subject to
Articles 7 and 8 hereof. The successor Trustee shall not be responsible for and
the Company shall indemnify and defend the successor Trustee from any claim or
liability resulting from any action or inaction of any prior Trustee or from any
other past event, or any condition existing at the time it becomes successor
Trustee.

                                       10

<PAGE>

                                   ARTICLE 12
                            AMENDMENT OR TERMINATION

 (d) This Trust Agreement may be amended by a written instrument executed by
Trustee and the Company. Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Plan or shall make the Trust revocable.

 (e) The Trust shall not terminate until the date on which Plan participants
and their beneficiaries are no longer entitled to benefits pursuant to the terms
of the Plan. Upon termination of the Trust any assets remaining in the Trust
shall be returned to the Company. Notwithstanding the above, any assets
initially contributed to this Trust by the Company for the benefit of employees
of a Subsidiary which are not transferred to employees of the Subsidiary during
the existence of the Trust shall revert to the Company upon the termination of
the Trust.

                                   ARTICLE 13
                                  MISCELLANEOUS

 (a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.

 (b) Benefits payable to Plan participants and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process.

 (c) This Trust Agreement shall be governed by and construed in accordance
with the laws of California.

 (d) For purposes of this Trust, "Change of Control" shall mean: The purchase or
other acquisition by any person, entity or group of persons, within the meaning
of section 13(d) or 14(d) of the Securities Exchange Act of 1934 ("Act"), or any
comparable successor provisions, of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Act) of 30 percent or more of either the
outstanding shares of common stock or the combined voting power of the Company's
then outstanding voting securities entitled to vote generally, or the approval
by the stockholders of the Company of a reorganization, merger, or
consolidation, in each case, with respect to which persons who were stockholders
of the Company immediately prior to such reorganization, merger or consolidation
do not, immediately thereafter, own more than 50 percent of the combined voting
power entitled to vote generally in the election of directors of the
reorganized, merged or consolidated the Company's then outstanding securities,
or a liquidation or dissolution of the Company or of the sale of all or
substantially all of the Company's assets.

                                       11

<PAGE>

                                   ARTICLE 14
                                 EFFECTIVE DATE

     The effective date of this Trust Agreement shall be January 1, 2003.

                                        ACCREDITED HOME LENDERS, INC.

                                        ________________________________
                                        By:

                                        ACCREDITED HOME LENDERS
                                        HOLDING CO.

                                        ________________________________
                                        By:

                                        FIRST AMERICAN TRUST, FSB

                                        ________________________________
                                        By:

                                       12EXHIBIT 4.1

                          FIBERNET TELECOM GROUP, INC.

                           FIRST AMENDED AND RESTATED

                             STOCKHOLDERS AGREEMENT

                                November 11, 2002

<PAGE>

                                TABLE OF CONTENTS

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                                                                            ----

I.   Covenants.................................................................1

     A. Negative Covenants with Other Holders of Common Stock..................1

II.  Voting....................................................................1

     A. Election of Directors..................................................1

III. Miscellaneous.............................................................2

     A. Legends................................................................2
     B. Termination of Covenants...............................................3
     C. Attendance at Meetings.................................................3
     D. Further Assurances.....................................................4
     E. Proxies................................................................4
     F. Entire Agreement.......................................................4
     G. Recapitalizations, Etc.................................................4
     H. Successors and Assigns.................................................4
     I. Amendments and Waivers.................................................5
     J. Notices................................................................5
     K. Severability...........................................................5
     L. Specific Performance; Delays or Omissions; Remedies
        Cumulative.............................................................5
     M. Attorney's Fees........................................................6
     N. Governing Law..........................................................6
     O. Counterparts...........................................................6
     P. Titles and Subtitles...................................................6

                                      -i-

<PAGE>

                          FIBERNET TELECOM GROUP, INC.
                           FIRST AMENDED AND RESTATED
                             STOCKHOLDERS AGREEMENT
                             ----------------------

     This First Amended and Restated Stockholders Agreement (this "Agreement")
is made as of November 11, 2002, between FiberNet Telecom Group, Inc., a
Delaware corporation (the "Company") and the investors listed on Exhibit A
hereto, each of which is herein referred to as an "Investor".

                                    RECITALS
                                    --------

     Pursuant to a Purchase Agreement among the Company and the Investors dated
October 30, 2002 (the "Old Purchase Agreement"), the Investors purchased from
the Company, and the Company sold to the Investors, upon the terms and subject
to the conditions set forth therein, shares of the Common Stock, par value
$0.001 per share, and warrants of the Company to purchase shares of Common Stock
(the "Old Warrants");

     The Company and the Investors have entered into a Common Stock and Warrant
Purchase Agreement (the "Purchase Agreement") of even date herewith pursuant to
which the Company desires to sell to the Investors, and the Investors desire to
purchase from the Company, shares of the Company's Common Stock and warrants to
purchase an additional amount of such shares (the "New Warrants" and together
with the Old Warrants, the "Warrants"). A condition to the Investors'
obligations under the Purchase Agreement is that the Company and the Investors
enter into this Agreement in order to provide the Investors with certain rights
with respect to the Company's Common Stock. The Company desires to induce the
Investors to purchase shares of Common Stock pursuant to the Purchase Agreement
by agreeing to the terms and conditions set forth herein.

                                    AGREEMENT

     The parties agree as follows:

I. Covenants

     A. Negative Covenants with Other Holders of Common Stock. The Company shall
not enter into any agreement with an existing or future investor acquiring
shares of the Company's Common Stock in connection with such investor's
investment that has the effect of establishing any material rights or otherwise
providing any material benefits for such investor that have not been received by
the Investors under this Agreement, the Old Purchase Agreement, the Purchase
Agreement, or the First Amended and Restated Investors Rights Agreement entered
into concurrently herewith, unless, in any such case, each Investor has been
offered the opportunity to receive, for no additional consideration, such rights
and the benefits of such agreement.

II. Voting

     A. Election of Directors. At any annual or special shareholders meeting,
and

<PAGE>

whenever the shareholders of the Company act by written consent with respect to
election of directors, each Investor agrees to vote or otherwise give such
Investor's consent in respect of all shares of the Company's Common Stock
acquired by such Investor pursuant to the Purchase Agreement or Old Purchase
Agreement or upon any exercise of any Warrants, and the Company shall take all
necessary and desirable actions within its control, in order to cause:

     1. the election to the Board of two Independent Individuals (as defined
     below) approved by Investors holding shares of the Company's capital stock
     entitled to cast a majority of the total number of votes entitled to be
     cast by all Investors in the election of directors to the Company's Board
     of Directors (the "Majority Investors");

     2. the authorized number of directors of the Board as set forth in the
     Company's Certificate of Incorporation or other similar document (in each
     case, as amended, amended and restated or otherwise modified from time to
     time) of the Company and/or the Bylaws of the Company to remain at six or
     such other number as the Majority Investors may specify from time to time
     in a notice delivered to the Company and the other Investors;

     3. the removal from the Board (with or without cause) of any director
     approved hereunder by the Majority Investors, upon the written request of
     the Majority Investors for the removal of such director, but only upon such
     written request; provided, however, that the removal of any director for
     cause or otherwise shall not prejudice the right of the Majority Investors
     to nominate pursuant to this Agreement a substitute director to fill the
     vacancy created by such removal; and

     4. upon any vacancy in the Board as a result of any individual approved as
     provided in clause (1) above ceasing to be a member of the Board, whether
     by resignation, removal or otherwise, the election to the Board of an
     individual approved by the Majority Investors.

     For purposes of this Agreement, an "Independent Individual" shall mean any
natural person who upon election to the Board will be an "independent director"
within the meaning of the rules and regulations of the primary national
securities exchange or automated quotation system on which shares of the
Company's Common Stock are traded.

III. Miscellaneous.

     A. Legends. Each certificate representing shares of Common Stock held by an
Investor or any subsequent holder of such shares to which rights under this
Agreement are transferred pursuant to the terms of Section III.H shall be
stamped or otherwise imprinted with legends substantially similar to the
following (in addition to any legend required under applicable state securities
laws):

     "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF AN AGREEMENT WHICH PLACES CERTAIN RESTRICTIONS ON THE VOTING OF
THE SHARES REPRESENTED HEREBY. ANY

                                      -2-

<PAGE>

PERSON ACCEPTING ANY INTEREST IN SUCH SHARES SHALL BE DEEMED TO AGREE TO AND
SHALL BECOME BOUND BY ALL THE PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH
VOTING AGREEMENT WILL BE FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE
WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF
BUSINESS."

     The Company agrees that, during the term of this Agreement, it will not
remove, and will not permit to be removed (upon registration of transfer,
reissuance or otherwise), the legend set forth above from any such certificate
and will place or cause to be placed such legend on any new certificate issued
to represent shares of Common Stock held by the Investors and such transferees
theretofore represented by a certificate carrying such legend. At any time after
the termination of the Company's and the Investors' obligations under Section II
of this Agreement pursuant to the terms of Section III.B and in connection with
any transfer of the shares evidenced by a certificate legended pursuant to this
Section III.A, any holder of a stock certificate so legended may surrender such
certificate to the Company for removal of such legend, and the Company will duly
reissue a new certificate without such legend.

     B. Termination of Covenants. All covenants of the Company and the Investors
contained in Section I and Section II of this Agreement shall expire and
terminate upon the earliest of,

     1. the closing of a Qualified Public Offering (as defined in the First
     Amended and Restated Investor's Rights Agreement, dated November 11, 2002,
     between the Company and the Investors), or

     2. (i) the sale, lease or other disposition of all or substantially all of
     the assets of the Company or (ii) any consolidation or merger of the
     Company with or into any other corporation or other entity or person, or
     any other corporate reorganization, in which the shareholders of the
     Company immediately prior to such consolidation, merger or reorganization,
     own less than 50% of the Company's voting power immediately after such
     consolidation, merger or reorganization, or (iii) any transaction or series
     of related transactions to which the Company is a party in which in excess
     of 50% of the Company's voting power is transferred, excluding any
     consolidation or merger effected exclusively to change the domicile of the
     Company (a "Change in Control"), or

     3. the date upon which the aggregate securities of the Company then held by
     the Investors that are a party to this Agreement on the date hereof
     comprise less than 30% of the Company's Common Stock outstanding on a
     fully-diluted basis.

     C. Attendance at Meetings. Each of the Investors agrees to be present,
either in person or by proxy, at all meetings of shareholders of the Company at
which one or more members of the Board are to be elected, so that all shares
held by such Investor may be voted for the election of the directors as set
forth herein; provided, that the Company shall have given notice of such meeting
to each Investor not less than 10 days prior to the date of such meeting (unless
waived in writing by such person). Each Investor may abstain from voting at all
such meetings with respect to any matter except for the election of directors.

                                      -3-

<PAGE>

     D. Further Assurances. The Company agrees to take all actions required to
ensure that the rights given to the parties hereunder are effective and that
they enjoy the benefits thereof. The Company will not, by any voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
performed hereunder by the Company, but will at all times in good faith assist
in the carrying out of all of the provisions of this Agreement and in the taking
of all such actions as may be appropriate in order to protect the rights of the
parties hereunder against impairment.

     E. Proxies. Each Investor hereby grants to each other Investor an
irrevocable proxy (a "Proxy") with respect to the voting of the shares of
capital stock of the Company owned or controlled by such Investor in accordance
with this Agreement. The Proxy granted by each Investor to each other Investor
is exercisable by any Investor at any time or from time to time, commencing with
the breach by any Investor granting the Proxy of its obligation to vote its
shares of capital stock in accordance with this the Agreement. Each Proxy shall
expire upon the termination of the Company's and the Investors' obligations
under Section II of this Agreement pursuant to the terms of Section III.B. Each
Investor agrees that each Proxy granted hereby is coupled with an interest.

     F. Entire Agreement. This Agreement constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof, and any and all
other written or oral agreements relating to the subject matter hereof existing
among any of the parties hereto are expressly canceled.

     G. Recapitalizations, Etc. The provisions of this Agreement (including any
calculation of share ownership) shall apply, to the full extent set forth herein
with respect to the Common Stock, to any and all shares of capital stock of the
Company or any capital stock, partnership or member units or any other security
evidencing ownership interests in any successor or assign of the Company
(whether by merger, consolidation, sale of assets or otherwise) that may be
issued in respect of, in exchange for, or in substitution of the Common Stock by
reason of any stock dividend, split, combination, recapitalization, liquidation,
reclassification, merger, consolidation or otherwise.

     H. Successors and Assigns. Except as provided below, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective permitted successors and assigns of the parties (including
transferees of any Common Stock or Warrants). Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

     The rights of an Investor under Sections I and II of this Agreement may be
assigned to any Permitted Transferee (as defined below) or to any transferee or
assignee in connection with the transfer or assignment of at least 40% of such
Investor's Common Stock (on a fully diluted basis); provided, that (a) such
transfer is otherwise effected in accordance with applicable securities laws and
other restrictions on transfer applicable to such shares, (b) notice of such
assignment is given to the Company and (c) such transferee or assignee agrees to
be bound by all provisions of this Agreement. For purposes of this Agreement, a
"Permitted Transferee" shall mean (i) in the case of an Investor who is an
individual, such person's

                                      -4-

<PAGE>

ancestors, descendants or spouse, or any custodian or trustee for the account of
such person (or for the account of such person's ancestors, descendants or
spouse), (ii) in the case of an Investor which is a partnership or limited
liability company, any constituent partner or member of such entity, (iii) in
the case of an Investor which is a corporation, any parent corporation or
wholly-owned subsidiary corporation or any officer, director or 10% stockholder
of such corporation, and (iv) any other Investor.

     I. Amendments and Waivers. Any term of this Agreement may be amended or
waived only with the written consent of the Company and Investors holding at
least 75% of the shares of Common Stock (on a fully-diluted basis) issued
pursuant to the Purchase Agreement or the Old Purchase Agreement and then held
by all Investors. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each Investor. Notwithstanding the foregoing, if
in any particular instance a party's obligations or rights under this Agreement
are adversely affected thereby in a disproportionately adverse manner from that
in which other parties are affected by application of this Section, the consent
of such party shall also be required in such instance.

     J. Notices. Unless otherwise provided, any notice required or permitted by
this Agreement shall be in writing and shall be deemed sufficient upon delivery,
when delivered personally or by overnight courier or sent by telegram or
confirmed fax, or if mailed to a domestic address, 48 hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed to the party to be notified at such party's address or
fax number as set forth below or on Exhibit A hereto or as subsequently modified
by written notice.

     K. Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.

     L. Specific Performance; Delays or Omissions; Remedies Cumulative. The
parties hereto hereby declare that it is impossible to measure in money the
damages which will accrue to a party hereto or to their heirs, personal
representatives, or assigns by reason of a failure to perform any of the
obligations under this Agreement and agree that the terms of this Agreement
shall be specifically enforceable without the requirement for the posting of a
bond. If any party hereto or his heirs, personal representatives, or assigns
institutes any action or proceeding to specifically enforce the provisions
hereof, any person against whom such action or proceeding is brought hereby
waives the claim or defense therein that such party or such personal
representative has an adequate remedy at law, and such person shall not offer in
any such action or proceeding the claim or defense that such remedy at law
exists.

     No delay or omission to exercise any right, power or remedy accruing to any
party under this Agreement, upon any breach or default of any other party under
this Agreement, shall impair any such right, power or remedy of such
non-breaching or non-defaulting party nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereafter occurring; nor shall any waiver of any
single

                                      -5-

<PAGE>

breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.

     M. Attorney's Fees. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorney's fees, costs and
disbursements in addition to any other relief to which such party may be
entitled.

     N. Governing Law. This Agreement and all acts and transactions pursuant
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of New York, without giving effect to principles of conflicts of
laws.

     O. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     P. Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.

                            [Signature Page Follows]

                                      -6-

<PAGE>

     The parties have executed this Stockholders Agreement as of the date first
above written.

COMPANY:
--------

FIBERNET TELECOM GROUP, INC.

By: /s/ Michael S. Liss
    ---------------------------------
Name:   Michael S. Liss
Title:  President and Chief Executive
        Officer

INVESTORS:
----------

DEUTSCHE BANK AG NEW YORK BRANCH

By: /s/ David J. Bell
    ------------------------------
Name:   David J. Bell
Title:  Director

By: /s/ Alexander Richarz
    ------------------------------
Name:   Alexander Richarz
Title:  Vice President

WACHOVIA INVESTORS, INC.

By: /s/ Matthew Berk
    ------------------------------
Name:   Matthew Berk
Title:  Authorized Officer

BANK ONE, N.A.

By: /s/ Michele L. Quentin
    ------------------------------
Name:   Michele L. Quentin
Title:  Assistant Vice President

<PAGE>

IBM CREDIT CORPORATION

By: /s/ Luc Grenon
    ------------------------------
Name:   Luc Grenon
Title:  Director, Credit Operations

TORONTO DOMINION (TEXAS), INC.

By: /s/ Jano Nixon
    ------------------------------
Name:   Jano Nixon
Title:  Vice President

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