Residential Funding Mortgage Securities II Inc – ‘8-K’ for 9/26/00 – EX-4.5

On:  Wednesday, 10/11/00, at 3:49pm ET   ·   For:  9/26/00   ·   Accession #:  945212-0-56   ·   File #:  33-92096

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         2000-Hs1 Operative Documents                           4     13K 
 2: EX-4.3      Servicing Agreement                                   39    160K 
 3: EX-4.4      Trust Agreement                                       60    236K 
 4: EX-4.5      Indenture                                            117    532K 
 5: EX-10.1     Purchase Agreement                                   412±  1.69M 
 6: EX-10.2     Insurance Policy                                       7     33K 

EX-4.5   —   Indenture
Exhibit Table of Contents

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 EXHIBIT 4.5

EXECUTION COPY

 HOME EQUITY LOAN TRUST 2000-HS1

Issuer

 AND

THE CHASE MANHATTAN BANK

 Indenture Trustee

 INDENTURE

Dated as of September 26, 2000

HOME EQUITY LOAN-BACKED TERM NOTES

HOME EQUITY LOAN-BACKED VARIABLE FUNDING NOTES

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                                TABLE OF CONTENTS                                               

                                                                                            Page

                                                                                                
ARTICLE I         Definitions...............................................................1   

        Section 1.01.    Definitions........................................................1   

        Section 1.02.    Incorporation by Reference of Trust Indenture Act..................2   

        Section 1.03.    Rules of Construction..............................................2   

ARTICLE II        Original Issuance of Notes................................................3   

        Section 2.01.    Form...............................................................3   

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

ARTICLE III       Covenants.................................................................4   

        Section 3.01.    Collection of Payments with respect to the Revolving Credit            
                         Loans..............................................................4   

        Section 3.02.    Maintenance of Office or Agency....................................4   

        Section 3.03.    Money for Payments to Be Held in Trust; Paying Agent...............4   

        Section 3.04.    Existence..........................................................5   

        Section 3.05.    Payment of Principal and Interest; Defaulted Interest..............6   

        Section 3.06.    Protection of Trust Estate.........................................8   

        Section 3.07.    Opinions as to Trust Estate........................................8   

        Section 3.08.    Performance of Obligations; Servicing Agreement....................9   

        Section 3.09.    Negative Covenants.................................................9   

        Section 3.10.    Annual Statement as to Compliance.................................10   

        Section 3.11.    Recording of Assignments..........................................10   

        Section 3.12.    Representations and Warranties Concerning the Revolving                
                         Credit Loans......................................................10   

        Section 3.13.    Assignee of Record of the Revolving Credit Loans..................10   

        Section 3.14.    Master Servicer as Agent and Bailee of the Indenture Trustee......11   

        Section 3.15.    Investment Company Act............................................11   

        Section 3.16.    Issuer May Consolidate, etc.......................................11   

        Section 3.17.    Successor or Transferee...........................................13   

        Section 3.18.    No Other Business.................................................13   

        Section 3.19.    No Borrowing......................................................13   

        Section 3.20.    Guarantees, Loans, Advances and Other Liabilities.................13   

        Section 3.21.    Capital Expenditures..............................................13   

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        Section 3.22.    Owner Trustee Not Liable for Certificates or Related                   
                         Documents.........................................................13   

        Section 3.23.    Restricted Payments...............................................14   

        Section 3.24.    Notice of Events of Default.......................................14   

        Section 3.25.    Further Instruments and Act.......................................14   

        Section 3.26.    Statements to Noteholders.........................................14   

        Section 3.27.    Determination of Note Rates.......................................14   

        Section 3.28.    Payments under the Credit Enhancement Instrument..................14   

ARTICLE IV        The Notes; Satisfaction and Discharge of Indenture.......................15   

        Section 4.01.    The Notes; Increase of Maximum Variable Funding Balance;               
                         Variable Funding Notes............................................15   

        Section 4.02.    Registration of and Limitations on Transfer and Exchange of            
                         Notes; Appointment of Certificate Registrar.......................17   

        Section 4.03.    Mutilated, Destroyed, Lost or Stolen Notes........................18   

        Section 4.04.    Persons Deemed Owners.............................................19   

        Section 4.05.    Cancellation......................................................19   

        Section 4.06.    Book-Entry Notes..................................................20   

        Section 4.07.    Notices to Depository.............................................21   

        Section 4.08.    Definitive Notes..................................................21   

        Section 4.09.    Tax Treatment.....................................................21   

        Section 4.10.    Satisfaction and Discharge of Indenture...........................21   

        Section 4.11.    Application of Trust Money........................................22   

        Section 4.12.    Subrogation and Cooperation.......................................23   

        Section 4.13.    Repayment of Monies Held by Paying Agent..........................23   

        Section 4.14.    Temporary Notes...................................................24   

ARTICLE V         Default and Remedies.....................................................24   

        Section 5.01.    Events of Default.................................................24   

        Section 5.02.    Acceleration of Maturity; Rescission and Annulment................24   

        Section 5.03.    Collection of Indebtedness and Suits for Enforcement by                
                         Indenture Trustee.................................................25   

        Section 5.04.    Remedies; Priorities..............................................27   

        Section 5.05.    Optional Preservation of the Trust Estate.........................28   

        Section 5.06.    Limitation of Suits...............................................29   

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        Section 5.07.    Unconditional Rights of Noteholders to Receive Principal and           
                         Interest..........................................................29   

        Section 5.08.    Restoration of Rights and Remedies................................30   

        Section 5.09.    Rights and Remedies Cumulative....................................30   

        Section 5.10.    Delay or Omission Not a Waiver....................................30   

        Section 5.11.    Control by Noteholders............................................30   

        Section 5.12.    Waiver of Past Default............................................31   

        Section 5.13.    Undertaking for Costs.............................................31   

        Section 5.14.    Waiver of Stay or Extension Laws..................................31   

        Section 5.15.    Sale of Trust Estate..............................................31   

        Section 5.16.    Action on Notes...................................................33   

        Section 5.17.    Performance and Enforcement of Certain Obligations................33   

ARTICLE VI        The Indenture Trustee....................................................34   

        Section 6.01.    Duties of Indenture Trustee.......................................34   

        Section 6.02.    Rights of Indenture Trustee.......................................35   

        Section 6.04.    Indenture Trustee's Disclaimer....................................36   

        Section 6.05.    Notice of Event of Default........................................36   

        Section 6.06.    Reports by Indenture Trustee to Holders...........................36   

        Section 6.07.    Compensation and Indemnity........................................36   

        Section 6.08.    Replacement of Indenture Trustee..................................37   

        Section 6.09.    Successor Indenture Trustee by Merger.............................38   

        Section 6.10.    Appointment of Co-Indenture Trustee or Separate Indenture              
                         Trustee...........................................................38   

        Section 6.11.    Eligibility; Disqualification.....................................39   

        Section 6.12.    Preferential Collection of Claims Against Issuer..................39   

        Section 6.13.    Representations and Warranties....................................39   

        Section 6.14.    Directions to Indenture Trustee...................................40   

        Section 6.15.    Indenture Trustee May Own Securities..............................40   

ARTICLE VII       Noteholders' Lists and Reports...........................................41   

        Section 7.01.    Issuer to Furnish Indenture Trustee Names and Addresses of             
                         Noteholders.......................................................41   

        Section 7.02.    Preservation of Information; Communications to Noteholders........41   

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        Section 7.03.    Reports by Issuer.................................................41   

        Section 7.04.    Reports by Indenture Trustee......................................42   

ARTICLE VIII      Accounts, Disbursements and Releases.....................................42   

        Section 8.01.    Collection of Money...............................................42   

        Section 8.02.    Trust Accounts....................................................42   

        Section 8.03.    Officer's Certificate.............................................43   

        Section 8.04.    Termination Upon Distribution to Noteholders......................43   

        Section 8.05.    Release of Trust Estate...........................................43   

        Section 8.06.    Surrender of Notes Upon Final Payment.............................43   

ARTICLE IX        SUPPLEMENTAL INDENTURES..................................................44   

        Section 9.01.    Supplemental Indentures Without Consent of Noteholders............44   

        Section 9.02.    Supplemental Indentures With Consent of Noteholders...............45   

        Section 9.03.    Execution of Supplemental Indentures..............................46   

        Section 9.04.    Effect of Supplemental Indenture..................................46   

        Section 9.05.    Conformity with Trust Indenture Act...............................47   

        Section 9.06.    Reference in Notes to Supplemental Indentures.....................47   

ARTICLE X         MISCELLANEOUS............................................................47   

        Section 10.01.   Compliance Certificates and Opinions, etc.........................47   

        Section 10.02.   Form of Documents Delivered to Indenture Trustee..................49   

        Section 10.03.   Acts of Noteholders...............................................50   

        Section 10.04.   Notices, etc., to Indenture Trustee, Issuer, Credit Enhancer           
                         and Rating Agencies...............................................50   

        Section 10.05.   Notices to Noteholders; Waiver....................................51   

        Section 10.06.   Alternate Payment and Notice Provisions...........................51   

        Section 10.07.   Conflict with Trust Indenture Act.................................52   

        Section 10.08.   Effect of Headings................................................52   

        Section 10.09.   Successors and Assigns............................................52   

        Section 10.10.   Separability......................................................52   

        Section 10.11.   Benefits of Indenture.............................................52   

        Section 10.12.   Legal Holidays....................................................52   

        Section 10.13.   GOVERNING LAW.....................................................52   

        Section 10.14.   Counterparts......................................................52   

        Section 10.15.   Recording of Indenture............................................52   

        Section 10.16.   Issuer Obligation.................................................53   

        Section 10.17.   No Petition.......................................................53   

        Section 10.18.   Inspection........................................................53   


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               This  Indenture,  dated as of September  26,  2000,  between HOME
EQUITY LOAN TRUST 2000-HS1, a Delaware business trust, as Issuer (the "Issuer"),
and THE CHASE MANHATTAN BANK, as Indenture Trustee (the "Indenture Trustee"),   

              WITNESSETH THAT:

               Each party hereto  agrees as follows for the benefit of the other
party and for the equal and  ratable  benefit  of the  Holders  of the  Issuer's
Series 2000-HS1 Home Equity  Loan-Backed Term Notes and Home Equity  Loan-Backed
Variable Funding Notes (together, the "Notes").                                 

 GRANTING CLAUSE

               The Issuer hereby Grants to the Indenture  Trustee at the Closing
Date,  as  trustee  for the  benefit of the  Holders  of the  Notes,  all of the
Issuer's right,  title and interest in and to the Revolving  Credit Loans and to
all accounts, chattel paper, general intangibles,  contract rights, certificates
of deposit, deposit accounts, instruments,  documents, letters of credit, money,
advices of credit,  investment property, goods and other property consisting of,
arising under or related to whether now existing or hereafter created in (a) the
Revolving  Credit  Loans,  (b) the  Payment  Account,  all funds on  deposit  or
credited  thereto  from time to time and all  proceeds  thereof;  (c) the Credit
Enhancement  Instrument;  and (d) all present and future claims, demands, causes
and choses in action in respect of any or all of the  foregoing and all payments
on or under, and all proceeds of every kind and nature whatsoever in respect of,
any or all of the  foregoing  and all payments on or under,  and all proceeds of
every  kind and  nature  whatsoever  in the  conversion  thereof,  voluntary  or
involuntary,  into cash or other liquid property,  all cash proceeds,  accounts,
accounts  receivable,  notes,  drafts,  acceptances,  checks,  deposit accounts,
rights to payment of any and every  kind,  and other  forms of  obligations  and
receivables,  instruments and other property which at any time constitute all or
part of or are included in the proceeds of any of the  foregoing  (collectively,
the "Trust Estate" or the "Collateral").                                        

               The  foregoing  Grant is made in trust to secure  the  payment of
principal  of and interest  on, and any other  amounts  owing in respect of, the
Notes,  equally and ratably without prejudice,  priority or distinction,  and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.                                                                      

               The  foregoing  Grant  shall  inure to the  benefit of the Credit
Enhancer  in  respect of draws made on the  Credit  Enhancement  Instrument  and
amounts owing from time to time pursuant to the Insurance Agreement  (regardless
of whether such amounts relate to the Notes or the Certificates), and such Grant
shall  continue in full force and effect for the benefit of the Credit  Enhancer
until all such amounts owing to it have been repaid in full.                    

               The Indenture Trustee, as trustee on behalf of the Holders of the
Notes,  acknowledges  such  Grant,  accepts the trust  under this  Indenture  in
accordance  with the  provisions  hereof  and  agrees to  perform  its duties as
Indenture Trustee as required herein.                                           

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ARTICLE I 

 Definitions

Section  1.01.  Definitions.  For all  purposes  of this  Indenture,  except  as
otherwise  expressly  provided herein or unless the context otherwise  requires,
capitalized  terms not otherwise defined herein shall have the meanings assigned
to such  terms  in the  Definitions  attached  hereto  as  Appendix  A which  is
incorporated by reference herein.  All other capitalized terms used herein shall
have the meanings specified herein.                                             

Section 1.02.  Incorporation by Reference of Trust Indenture Act.  Whenever this
Indenture  refers to a provision of the Trust  Indenture  Act (the  "TIA"),  the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:         

"Commission" means the Securities and Exchange Commission.                    

"indenture securities" means the Notes.                                       

"indenture security holder" means a Noteholder.                               

"indenture to be qualified" means this Indenture.                             

"indenture trustee" or "institutional trustee" means the Indenture Trustee.   

 "obligor" on the  indenture  securities  means the Issuer and any other obligor
on the indenture securities.                                        

               All other TIA terms used in this  Indenture  that are  defined by
        the TIA,  defined  by TIA  reference  to  another  statute or defined by
      Commission rule have the meaning assigned to them by such definitions.

Section 1.03.  Rules of Construction.  Unless the context otherwise requires:   

(i)     a term has the meaning assigned to it;                                  

(ii)    an accounting term not otherwise  defined has the meaning assigned to it
        in accordance with generally accepted accounting principles as in effect
from time to time;                                              

(iii)   "or" is not exclusive;                                                  

(iv)    "including" means including without limitation;                         

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

(vi)    any agreement, instrument or statute defined or referred to herein or in
        any  instrument or  certificate  delivered in connection  herewith means
        such  agreement,  instrument  or statute  as from time to time  amended,
        modified or  supplemented  and  includes (in the case of  agreements  or

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

ARTICLE II

Original Issuance of Notes

Section 2.01.  Form. The Term Notes and the Variable Funding Notes, in each case
together with the Indenture Trustee's certificate of authentication, shall be in
substantially  the forms set forth in Exhibits A-1 and A-2,  respectively,  with
such appropriate  insertions,  omissions,  substitutions and other variations as
are required or permitted by this  Indenture and may have such letters,  numbers
or other marks of identification and such legends or endorsements placed thereon
as may,  consistently  herewith,  be determined by the officers  executing  such
Notes, as evidenced by their execution of the Notes.  Any portion of the text of
any Note may be set forth on the reverse thereof,  with an appropriate reference
thereto on the face of the Note.                                                

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

        The terms of the Notes set forth in Exhibits A-1 and A-2 are part of the
terms of this Indenture.                                                        

     Section 2.02.  Execution,  Authentication and Delivery.  The Notes shall be
executed  on  behalf  of the  Issuer  by any of  its  Authorized  Officers.  The
signature  of any  such  Authorized  Officer  on the  Notes  may  be  manual  or
facsimile.                                                                      

        Notes bearing the manual or facsimile  signature of individuals who were
at  any  time  Authorized   Officers  of  the  Issuer  shall  bind  the  Issuer,
notwithstanding  that such  individuals  or any of them have ceased to hold such
offices prior to the  authentication  and delivery of such Notes or did not hold
such offices at the date of such Notes.                                         

        The Indenture Trustee shall upon Issuer Request authenticate and deliver
Term  Notes for  original  issue in an  aggregate  initial  principal  amount of
$138,370,000  and  Variable  Funding  Notes for  original  issue in an aggregate
initial  principal  amount of zero. The Security Balance of the Variable Funding
Notes in the aggregate may not exceed the Maximum Variable Funding Balance.     

        Each Note shall be dated the date of its authentication. The Notes shall
be  issuable  as  registered  Notes and the Term Notes  shall be issuable in the
minimum initial Security Balances of $25,000 and in integral multiples of $1,000
in excess thereof.                                                              

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

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

ARTICLE III 

 Covenants

Section 3.01. Collection of Payments with respect to the Revolving Credit Loans.
The  Indenture  Trustee  shall  establish  and maintain  with itself the Payment
Account  in which the  Indenture  Trustee  shall,  subject  to the terms of this
paragraph,  deposit, on the same day as it is received from the Master Servicer,
each remittance  received by the Indenture Trustee with respect to the Revolving
Credit Loans. The Indenture  Trustee shall make all payments of principal of and
interest  on the Notes,  subject to Section  3.03 as  provided  in Section  3.05
herein from monies on deposit in the Payment Account.                           

Section 3.02.  Maintenance of Office or Agency.  The Issuer will maintain in the
City of New York,  an  office  or  agency  where,  subject  to  satisfaction  of
conditions  set forth  herein,  Notes may be  surrendered  for  registration  of
transfer  or  exchange,  and where  notices and demands to or upon the Issuer in
respect  of the  Notes and this  Indenture  may be  served.  The  Issuer  hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes.  If at any time the Issuer  shall fail to maintain  any such office or
agency or shall fail to furnish the Indenture  Trustee with the address thereof,
such  surrenders,  notices and  demands  may be made or served at the  Corporate
Trust Office,  and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.                            

Section  3.03.  Money for  Payments to Be Held in Trust;  Paying  Agent.  (a) As
provided in Section  3.01,  all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Payment Account
pursuant to Section 3.01 shall be made on behalf of the Issuer by the  Indenture
Trustee or by the Paying  Agent,  and no amounts so  withdrawn  from the Payment
Account  for  payments  of Notes  shall be paid  over to the  Issuer  except  as
provided in this Section 3.03.                                                  

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

(i)     hold all sums held by it for the payment of amounts due with  respect to
        the Notes in trust for the benefit of the Persons entitled thereto until
        such sums shall be paid to such  Persons  or  otherwise  disposed  of as
     herein provided and pay such sums to such Persons as herein provided;

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

(iii)   at any time during the continuance of any such default, upon the written
        request of the Indenture Trustee, forthwith pay to the Indenture Trustee
all sums so held in trust by such Paying Agent;                 

(iv)    immediately  resign as Paying Agent and  forthwith  pay to the Indenture
        Trustee all sums held by it in trust for the payment of Notes, if at any
        time it  ceases  to meet the  standards  required  to be met by a Paying
Agent at the time of its appointment;                           

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

(vi)    deliver to the  Indenture  Trustee a copy of the  report to  Noteholders
        prepared  with  respect  to each  Payment  Date by the  Master  Servicer
pursuant to Section 4.01 of the Servicing Agreement.            

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

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

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Section  3.04.  Existence.  The Issuer will keep in full  effect its  existence,
rights  and  franchises  as a  business  trust  under  the laws of the  State of
Delaware  (unless it becomes,  or any successor  Issuer hereunder is or becomes,
organized  under the laws of any other state or of the United States of America,
in which case the Issuer  will keep in full  effect  its  existence,  rights and
franchises  under  the laws of such  other  jurisdiction)  and will  obtain  and
preserve its  qualification  to do business in each  jurisdiction  in which such
qualification   is  or  shall  be   necessary   to  protect  the   validity  and
enforceability of this Indenture, the Notes, the Revolving Credit Loans and each
other instrument or agreement included in the Trust Estate.                     

Section 3.05. Payment of Principal and Interest; Defaulted Interest. (a) On each
Payment  Date from amounts on deposit in the Payment  Account,  the Paying Agent
shall pay to the  Noteholders,  the  Certificate  Paying Agent, on behalf of the
Certificateholders, and to other Persons the amounts to which they are entitled,
as set forth in the statements  delivered to the Indenture  Trustee  pursuant to
Section 4.01 of the  Servicing  Agreement,  as set forth below in the  following
order of priority:                                                              

(i)     to the  Noteholders,  as interest on the Term Notes and Variable Funding
        Notes,  interest for the related Interest Period at the Note Rate on the
        Security Balances of Notes immediately prior to such Payment Date, other
than any Basis Risk Shortfalls;                                 

(ii)    to the Noteholders,  as principal on the Term Notes and Variable Funding
        Notes, pro rata based on the Security  Balances  thereof,  the Principal
Collection Distribution Amount for such Payment Date;           

(iii)   to the Noteholders,  as principal to the Term Notes and Variable Funding
        Notes, pro rata based on the Security Balances thereof,  the Liquidation
        Loss  Distribution  Amount for such  Payment  Date and any  Excess  Loss
        Amount  included in the Credit  Enhancement  Draw Amount on such Payment
Date;                                                           

(iv)    to the  Credit  Enhancer,  in the amount of the  premium  for the Credit
        Enhancement  Instrument,  with  interest  thereon  as  provided  in  the
Insurance Agreement;                                            

(v)     to the Credit  Enhancer,  to  reimburse  it for prior  draws made on the
        Credit  Enhancement  Instrument with interest thereon as provided in the
        Insurance  Agreement  (except  for draws  attributable  to  Excess  Loss
Amounts);                                                       

(vi)    except for the Payment  Date in October  2000,  to the  Noteholders,  as
        principal to the Term Notes and Variable  Funding Notes,  pro rata based
        on the Security  Balances  thereof,  the amount  necessary to reduce the
        aggregate  Security  Balance of the Notes to the Pool  Balance as of the
        end of the related  Collection  Period (if applicable) and then to bring
the Outstanding Reserve Amount up to the Reserve Amount Target; 

(vii)to the Credit  Enhancer,  any other  amounts  owed to the  Credit  Enhancer
pursuant to the Insurance Agreement;                                  

(viii)  to pay the Term Notes and the  Variable  Funding  Notes,  any Basis Risk
        Shortfalls  not previously  paid (together with interest  thereon at the
        Note Rate (as adjusted from time to time)), pro rata, based on the Basis
    Risk Shortfalls remaining unpaid with respect to each of such Notes;

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(ix) to the  Indenture  Trustee,  any  amounts  owing to the  Indenture  Trustee
pursuant to Section 6.07 remaining unpaid; and                        

(x)  any remaining  amount,  to the  Certificate  Paying Agent, on behalf of the
holders of the Certificates;                                          

provided, however, in the event that on a Payment Date a Credit Enhancer Default
shall have occurred and be  continuing,  then the  priorities  of  distributions
described above will be adjusted such that payments of any amounts to be paid to
the Credit  Enhancer  will not be paid  until the full  amount of  interest  and
principal in  accordance  with clauses (i) through (iii) and (vi) above that are
due and required to be paid on the Notes on such Payment Date have been paid and
provided,  further,  that on the Final  Scheduled  Payment  Date or other  final
Payment Date, the amount to be paid pursuant to clause (ii) above shall be equal
to the Security  Balances of the Notes  immediately  prior to such Payment Date.
For purposes of the  foregoing,  required  payments of principal on the Notes on
each Payment  Date will  include the pro rata portion  allocable to the Notes of
all  Liquidation  Loss  Amounts  for  such  Payment  Date  and for all  previous
Collection  Periods  until paid or covered in full,  to the extent not otherwise
covered  by  a  Liquidation  Loss  Distribution   Amount,  a  reduction  of  the
Outstanding Reserve Amount or a draw on the Credit Enhancement Instrument (up to
the outstanding Security Balance thereof).                                      

        In addition  to the  foregoing,  on the  Insured  Undercollateralization
Payment  Date,  if there is any  Undercollateralization  Amount  remaining,  the
Noteholders  shall  be  entitled  to an  additional  principal  payment  (to  be
allocated  to the Term Notes and  Variable  Funding  Notes on a pro rata  basis)
equal to the Undercollateralization  Amount, if any, which shall be payable from
the Credit Enhancement Draw Amount pursuant to Section 3.28.                    

         On each Payment Date, the Certificate Paying Agent shall deposit in the
Certificate  Distribution  Account  all  amounts it  received  pursuant  to this
Section   3.05   for  the   purpose   of   distributing   such   funds   to  the
Certificateholders.                                                             

        The amounts paid to Noteholders  shall be paid to the Term Notes and the
Variable Funding Notes in accordance with the applicable percentage as set forth
in  paragraph  (b) below.  Interest  will accrue on the Notes during an Interest
Period on the basis of the actual number of days in such  Interest  Period and a
year assumed to consist of 360 days.                                            

        Any  installment of interest or principal,  if any,  payable on any Note
that is  punctually  paid or duly  provided for by the Issuer on the  applicable
Payment Date shall, if such Holder holds Notes of an aggregate  initial Security
Balance  of at  least  $1,000,000,  be paid  to each  Holder  of  record  on the
preceding  Record Date, by wire  transfer to an account  specified in writing by
such Holder reasonably satisfactory to the Indenture Trustee as of the preceding
Record Date or in all other cases or if no such instructions have been delivered
to the Indenture  Trustee,  by check to such Noteholder  mailed to such Holder's
address as it appears in the Note Register the amount required to be distributed
to such  Holder on such  Payment  Date  pursuant  to such  Holder's  Securities;
provided,  however, that the Indenture Trustee shall not pay to such Holders any
amount required to be withheld from a payment to such Holder by the Code.       

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(b) The  principal  of each Note  shall be due and  payable in full on the Final
Scheduled Payment Date for such Note as provided in the related form of Note set
forth in Exhibits A-1 and A-2. All principal  payments on each of the Term Notes
and the Variable Funding Notes shall be made to the Noteholders entitled thereto
in accordance  with the Percentage  Interests  represented  by such Notes.  Upon
written  notice to the Indenture  Trustee by the Issuer,  the Indenture  Trustee
shall  notify  the  Person in whose  name a Note is  registered  at the close of
business on the Record Date preceding the Final Scheduled  Payment Date or other
final Payment Date. Such notice shall be mailed no later than five Business Days
prior to such Final Scheduled Payment Date or other final Payment Date and shall
specify that payment of the  principal  amount and any interest due with respect
to such Note at the Final  Scheduled  Payment  Date or other final  Payment Date
will be payable  only upon  presentation  and  surrender  of such Note and shall
specify  the place where such Note may be  presented  and  surrendered  for such
final payment.                                                                  

Section 3.06.  Protection of Trust Estate.  (a) The Issuer will from time to ime
execute and  deliver all such  supplements  and  amendments  hereto and all such
financing statements,  continuation statements, instruments of further assurance
and other  instruments,  and will take such other action  necessary or advisable
to:                                                                             

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

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

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

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

(b) Except as otherwise provided in this Indenture,  the Indenture Trustee shall
not  remove  any  portion  of the  Trust  Estate  that  consists  of money or is
evidenced by an instrument,  certificate or other writing from the  jurisdiction
in which it was held at the date of the most recent Opinion of Counsel delivered
pursuant  to  Section  3.07 (or from  the  jurisdiction  in which it was held as
described in the Opinion of Counsel  delivered  at the Closing Date  pursuant to
Section  3.07(a),  if no Opinion of Counsel has yet been  delivered  pursuant to
Section  3.07(b))  unless the Owner Trustee shall have first received an Opinion
of Counsel to the effect  that the lien and  security  interest  created by this
Indenture  with respect to such property  will  continue to be maintained  after
giving effect to such action or actions.                                        

        The  Issuer  hereby  designates  the  Indenture  Trustee  its  agent and
attorney-in-fact to execute any financing statement,  continuation  statement or
other instrument required to be executed pursuant to this Section 3.06.         

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Section 3.07.  Opinions as to Trust Estate.  (a) On the Closing Date, the Issuer
shall  furnish  to the  Indenture  Trustee  and the Owner  Trustee an Opinion of
Counsel at the expense of the Issuer  stating  that,  upon  delivery of the Loan
Agreements  relating to the Initial  Mortgage Loans to the Indenture  Trustee or
the  Custodian,  the  Indenture  Trustee will have a perfected,  first  priority
security interest in the Revolving Credit Loans.                                

(b) On or before  December 31st in each calendar  year,  beginning in 2000,  the
Issuer  shall  furnish  to the  Indenture  Trustee  an Opinion of Counsel at the
expense of the Issuer either stating that, in the opinion of such counsel,  such
action has been taken with respect to the recording,  filing,  re-recording  and
refiling of this  Indenture,  any indentures  supplemental  hereto and any other
requisite  documents  and  with  respect  to the  execution  and  filing  of any
financing statements and continuation statements as is necessary to maintain the
lien and  security  interest in the  Revolving  Credit  Loans and  reciting  the
details of such action or stating  that in the  opinion of such  counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording,  filing, re-recording and refiling of
this  Indenture,  any  indentures  supplemental  hereto and any other  requisite
documents  and  the  execution  and  filing  of  any  financing  statements  and
continuation  statements that will, in the opinion of such counsel,  be required
to maintain the lien and security  interest in the Revolving  Credit Loans until
December 31 in the following calendar year.                                     

     Section 3.08.  Performance of  Obligations;  Servicing  Agreement.  (a) The
Issuer will punctually perform and observe all of its obligations and agreements
contained in this  Indenture,  the Basic  Documents and in the  instruments  and
agreements included in the Trust Estate.                                        

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

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

(d) The Issuer may retain an  administrator  and may enter into  contracts  with
other Persons for the  performance of the Issuer's  obligations  hereunder,  and
performance  of  such  obligations  by  such  Persons  shall  be  deemed  to  be
performance of such obligations by the Issuer.                                  

     Section 3.09. Negative Covenants. So long as any Notes are Outstanding, the
Issuer shall not:                                                               

     (a)  except as  expressly  permitted  by this  Indenture,  sell,  transfer,
exchange or otherwise  dispose of the Trust Estate,  unless directed to do so by
the Indenture Trustee;                                                          

(b) claim any credit on, or make any  deduction  from the  principal or interest
payable in respect of, the Notes (other than amounts properly withheld from such
payments  under the Code) or assert  any claim  against  any  present  or former
Noteholder  by reason of the payment of the taxes  levied or  assessed  upon any
part of the Trust Estate;                                                       

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

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

Section 3.10. Annual Statement as to Compliance.  The Issuer will deliver to the
Indenture  Trustee,  within  120 days after the end of each  fiscal  year of the
Issuer (commencing with the fiscal year 2000), an Officer's Certificate stating,
as to the Authorized Officer signing such Officer's Certificate, that:          

(a) a  review  of the  activities  of the  Issuer  during  such  year and of its
performance  under this  Indenture  and the Trust  Agreement has been made under
such Authorized Officer's supervision; and                                      

(b) to the best of such Authorized  Officer's  knowledge,  based on such review,
the Issuer has complied with all conditions  and covenants  under this Indenture
and the provisions of the Trust Agreement throughout such year, or, if there has
been a default in its compliance with any such condition or covenant, specifying
each such  default  known to such  Authorized  Officer and the nature and status
thereof.                                                                        

Section 3.11. Recording of Assignments.  The Issuer shall enforce the obligation
of the Seller under the Revolving  Credit Loan  Purchase  Agreement to submit or
cause to be submitted for recording all Assignments of Mortgages  within 60 days
of receipt of recording information by the Master Servicer.                     

Section 3.12.  Representations  and Warranties  Concerning the Revolving  Credit
Loans. The Indenture Trustee,  as pledgee of the Revolving Credit Loans, has the
benefit  of the  representations  and  warranties  made by the Seller in Section
3.1(a) and  Section  3.1(b) of the  Revolving  Credit  Loan  Purchase  Agreement
concerning  the  Revolving  Credit  Loans and the right to enforce the  remedies
against the Seller provided in such Section 3.1(a) or Section 3.1(b) to the same
extent as though such  representations  and warranties were made directly to the
Indenture Trustee.                                                              

Section 3.13.  Assignee of Record of the Revolving  Credit Loans.  As pledgee of
the Revolving Credit Loans, the Indenture Trustee shall hold record title to the
Revolving  Credit  Loans by being  named  as  payee in the  endorsements  of the
Mortgage Notes and assignee in the  Assignments of Mortgage to be recorded under
Section 2.1 of the Revolving Credit Loan Purchase Agreement. Except as expressly

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provided in the  Revolving  Credit Loan  Purchase  Agreement or in the Servicing
Agreement  with respect to any specific  Revolving  Credit Loan,  the  Indenture
Trustee shall not execute any endorsement or assignment or otherwise  release or
transfer such record title to any of the Revolving  Credit Loans until such time
as the remaining Trust Estate may be released pursuant to Section 8.05(b).      

Section  3.14.  Master  Servicer as Agent and Bailee of the  Indenture  Trustee.
Solely for purposes of perfection under Section 9-305 of the Uniform  Commercial
Code or other similar  applicable  law, rule or regulation of the state in which
such  property  is held by the Master  Servicer,  the  Issuer and the  Indenture
Trustee  hereby  acknowledge  that the  Master  Servicer  is acting as agent and
bailee of the Indenture  Trustee in holding  amounts on deposit in the Custodial
Account  pursuant to Section 3.02 of the Servicing  Agreement that are allocable
to the Revolving  Credit Loans, as well as the agent and bailee of the Indenture
Trustee  in holding  any  Related  Documents  released  to the  Master  Servicer
pursuant  to Section  3.06(c) of the  Servicing  Agreement,  and any other items
constituting  a part of the Trust  Estate  which from time to time come into the
possession of the Master Servicer. It is intended that, by the Master Servicer's
acceptance of such agency  pursuant to Section 3.02 of the Servicing  Agreement,
the  Indenture  Trustee,  as a pledgee of the Revolving  Credit  Loans,  will be
deemed to have possession of such Related Documents,  such monies and such other
items for purposes of Section 9-305 of the Uniform  Commercial Code of the state
in which such property is held by the Master Servicer.                          

Section 3.15. Investment Company Act. The Issuer shall not become an "investment
company" or under the  "control"  of an  "investment  company" as such terms are
defined in the  Investment  Company Act of 1940, as amended (or any successor or
amendatory  statute),  and the rules and  regulations  thereunder  (taking  into
account not only the general  definition  of the term  "investment  company" but
also any available  exceptions to such general definition);  provided,  however,
that the Issuer shall be in  compliance  with this Section 3.15 if it shall have
obtained an order  exempting it from  regulation as an  "investment  company" so
long as it is in compliance with the conditions imposed in such order.          

Section 3.16. Issuer May Consolidate,  etc. (a) The Issuer shall not consolidate
or merge with or into any other Person, unless:                                 

(i)  the  Person  (if  other  than  the  Issuer)  formed  by or  surviving  such
     consolidation  or merger shall be a Person organized and existing under the
     laws of the  United  States  of  America  or any state or the  District  of
     Columbia and shall expressly assume, by an indenture  supplemental  hereto,
     executed  and  delivered  to the  Indenture  Trustee,  in  form  reasonably
     satisfactory to the Indenture Trustee,  the due and punctual payment of the
     principal of and interest on all Notes and to the Certificate Paying Agent,
     on behalf of the  Certificateholders  and the  performance or observance of
     every agreement and covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein;                     

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

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(iii)   the  Issuer  receives  consent  of the  Credit  Enhancer  and the Rating
        Agencies shall have notified the Issuer that such transaction  shall not
        cause the rating of the Notes to be reduced,  suspended  or withdrawn or
        to be considered by either  Rating Agency to be below  investment  grade
without taking into account the Credit Enhancement Instrument;  

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

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

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

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

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

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

(iii)   the  Issuer  receives  consent  of the  Credit  Enhancer  and the Rating
        Agencies shall have notified the Issuer that such transaction  shall not
        cause the rating of the Notes to be reduced,  suspended or withdrawn, if
determined without regard to the Credit Enhancement Instrument; 

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

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

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

Section 3.17.  Successor or Transferee.  (a) Upon any consolidation or merger of
the Issuer in accordance with Section 3.16(a), the Person formed by or surviving
such consolidation or merger (if other than the Issuer) shall succeed to, and be
substituted  for,  and may  exercise  every right and power of, the Issuer under
this  Indenture  with the same  effect as if such  Person  had been named as the
Issuer herein.                                                                  

(b) Upon a conveyance or transfer of all the assets and properties of the Issuer
pursuant to Section 3.16(b), the Issuer will be released from every covenant and
agreement  of this  Indenture  to be  observed or  performed  on the part of the
Issuer with respect to the Notes immediately upon the delivery of written notice
to the Indenture Trustee of such conveyance or transfer.                        

Section  3.18.  No Other  Business.  The Issuer shall not engage in any business
other than financing,  purchasing, owning and selling and managing the Revolving
Credit  Loans  and the  issuance  of the Notes and  Certificates  in the  manner
contemplated  by this  Indenture  and the  Basic  Documents  and all  activities
incidental thereto.                                                             

Section 3.19. No Borrowing. The Issuer shall not issue, incur, assume, guarantee
or otherwise become liable, directly or indirectly,  for any indebtedness except
for the Notes.                                                                  

Section  3.20.  Guarantees,  Loans,  Advances and Other  Liabilities.  Except as
contemplated by this Indenture or the Basic Documents, the Issuer shall not make
any loan or advance or credit to, or guarantee  (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise),  endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or  dividends  of, or own,  purchase,  repurchase  or  acquire  (or agree
contingently to do so) any stock,  obligations,  assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.       

Section 3.21.  Capital  Expenditures.  The Issuer shall not make any expenditure
(by long- term or  operating  lease or  otherwise)  for capital  assets  (either
realty or personalty).                                                          

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Section 3.22.  Owner Trustee Not Liable for  Certificates or Related  Documents.
The recitals contained herein shall be taken as the statements of the Depositor,
and the Owner Trustee assumes no responsibility for the correctness thereof. The
Owner Trustee makes no representations as to the validity or sufficiency of this
Indenture,  of  any  Basic  Document  or of the  Certificates  (other  than  the
signatures of the Owner  Trustee on the  Certificates)  or the Notes,  or of any
Related Documents. The Owner Trustee shall at no time have any responsibility or
liability with respect to the  sufficiency of the Trust Estate or its ability to
generate the payments to be  distributed to  Certificateholders  under the Trust
Agreement or the Noteholders under this Indenture,  including, the compliance by
the Depositor or the Seller with any warranty or  representation  made under any
Basic  Document or in any related  document or the accuracy of any such warranty
or  representation,   or  any  action  of  the  Certificate  Paying  Agent,  the
Certificate  Registrar or the  Indenture  Trustee taken in the name of the Owner
Trustee.                                                                        

Section 3.23. Restricted Payments. The Issuer shall not, directly or indirectly,
(i) pay any  dividend  or make any  distribution  (by  reduction  of  capital or
otherwise),  whether in cash, property,  securities or a combination thereof, to
the  Owner  Trustee  or any  owner of a  beneficial  interest  in the  Issuer or
otherwise with respect to any ownership or equity  interest or security in or of
the Issuer,  (ii) redeem,  purchase,  retire or otherwise  acquire for value any
such  ownership  or equity  interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose;  provided,  however, that the Issuer
may make, or cause to be made,  (x)  distributions  to the Owner Trustee and the
Certificateholders as contemplated by, and to the extent funds are available for
such purpose under the Trust  Agreement and (y) payments to the Master  Servicer
pursuant to the terms of the Servicing Agreement.  The Issuer will not, directly
or  indirectly,  make payments to or  distributions  from the Custodial  Account
except in accordance with this Indenture and the Basic Documents.               

Section 3.24.  Notice of Events of Default.  The Issuer shall give the Indenture
Trustee,  the Credit  Enhancer and the Rating  Agencies prompt written notice of
each Event of Default hereunder and under the Trust Agreement.                  

Section  3.25.  Further  Instruments  and Act.  Upon  request  of the  Indenture
Trustee,  the Issuer will execute and deliver such  further  instruments  and do
such  further  acts as may be  reasonably  necessary or proper to carry out more
effectively the purpose of this Indenture.                                      

Section 3.26.  Statements to  Noteholders.  On each Payment Date,  the Indenture
Trustee and the  Certificate  Registrar shall forward by mail to each Noteholder
and  Certificateholder,  respectively,  the  statement  delivered  to it, on the
Business Day following the related  Determination  Date pursuant to Section 4.01
of the Servicing Agreement.                                                     

Section  3.27.  Determination  of Note Rates.  On the second LIBOR  Business Day
immediately  preceding  (i) the Closing  Date in the case of the first  Interest
Period and (ii) the first day of each succeeding  Interest Period, the Indenture
Trustee shall  determine  LIBOR and the Note Rates for such Interest  Period and
shall  inform  the  Issuer,  the  Master  Servicer  and the  Depositor  at their
respective facsimile numbers given to the Indenture Trustee in writing.         

Section  3.28.  Payments  under the Credit  Enhancement  Instrument.  (a) On any
Payment Date, the Indenture Trustee shall make a draw on the Credit  Enhancement
Instrument in an amount,  if any, equal to the Credit  Enhancement  Draw Amount.

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For purposes of the  foregoing,  amounts in the Payment  Account  available  for
interest  distributions  on any  Payment  Date  shall be deemed to  include  all
amounts  distributed on the Revolving  Credit Loans for such Payment Date, other
than the  Principal  Collection  Distribution  Amount and the  Liquidation  Loss
Distribution   Amount   (if   any)   distributed   thereon.   On   the   Insured
Undercollateralization  Payment Date, the Indenture Trustee shall make a draw on
the   Credit    Enhancement    Instrument    in   an   amount   equal   to   the
Undercollateralization  Amount,  if any,  remaining  after  payment of all other
amounts to be paid pursuant to Section 3.05(a) on such Payment Date. Such amount
shall be paid to the  Noteholders  on such Payment Date in  accordance  with the
second  paragraph of Section  3.05(a).  On any  Dissolution  Payment  Date,  the
Indenture Trustee shall make a draw on the Credit  Enhancement  Instrument in an
amount,  if any,  equal to the  Dissolution  Draw.  In  addition,  on the  Final
Scheduled  Payment Date,  the Indenture  Trustee shall make a draw on the Credit
Enhancement Instrument in the amount by which the Security Balances on the Notes
exceeds the payments  otherwise  available to be made to the Holders  thereof on
the Final Scheduled Payment Date.                                               

(b) The Indenture Trustee shall submit,  if a Credit  Enhancement Draw Amount or
Dissolution Draw is specified in any statement to Holders prepared by the Master
Servicer  pursuant to Section  4.01 of the  Servicing  Agreement,  the Notice of
Nonpayment  and Demand for Payment of Insured  Amounts (in the form  attached as
Exhibit A to the  Credit  Enhancement  Instrument)  in the  amount of the Credit
Enhancement Draw Amount or Dissolution Draw to the Credit Enhancer no later than
2:00  P.M.,  New  York  City  time,  on the  second  Business  Day  prior to the
applicable  Payment Date. Upon receipt of such Credit Enhancement Draw Amount or
Dissolution  Draw  in  accordance  with  the  terms  of the  Credit  Enhancement
Instrument,  the Indenture  Trustee shall deposit such Credit  Enhancement  Draw
Amount  or  Dissolution   Draw  in  the  Payment  Account  for  distribution  to
Noteholders pursuant to Section 3.05.                                           

ARTICLE IV

              The Notes; Satisfaction and Discharge of Indenture

Section 4.01. The Notes; Increase of Maximum Variable Funding Balance;  Variable
Funding  Notes.  (a) The Term Notes shall be registered in the name of a nominee
designated by the Depository.  Beneficial Owners will hold interests in the Term
Notes as set forth in Section 4.06 herein in minimum initial  Security  Balances
of  $25,000  and  integral  multiples  of $1,000 in excess  thereof.  The Capped
Funding Notes will be issued as  definitive  notes in fully  registered  form in
minimum initial Security Balances of $10,000 and integral multiples of $1,000 in
excess thereof,  together with any additional  amount necessary to cover (i) the
aggregate  initial Security  Balance of the Capped Funding Notes  surrendered at
the time of the  initial  denominational  exchange  thereof  (with such  initial
Security  Balance in each case being  deemed to be the  Security  Balance of the
Capped  Funding  Notes  at the  time of  such  initial  denominational  exchange
thereof) or (ii) the aggregate  initial  Security  Balance of any Capped Funding
Notes issued in an exchange described in subsection (d) below.                  

        The  Indenture  Trustee may for all  purposes  (including  the making of
payments  due  on  the  Notes)  deal  with  the  Depository  as  the  authorized
representative  of the Beneficial  Owners with respect to the Term Notes for the
purposes of exercising the rights of Holders of Term Notes hereunder.  Except as
provided in the next  succeeding  paragraph of this Section 4.01,  the rights of

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Beneficial  Owners  with  respect  to the Term  Notes  shall be limited to those
established  by law  and  agreements  between  such  Beneficial  Owners  and the
Depository  and  Depository  Participants.  Except as provided in Section  4.08,
Beneficial Owners shall not be entitled to definitive  certificates for the Term
Notes as to which they are the Beneficial Owners.  Requests and directions from,
and votes of, the  Depository  as Holder of the Term  Notes  shall not be deemed
inconsistent if they are made with respect to different  Beneficial  Owners. The
Indenture  Trustee may  establish a reasonable  record date in  connection  with
solicitations  of consents from or voting by Noteholders  and give notice to the
Depository  of such  record  date.  Without  the  consent  of the Issuer and the
Indenture Trustee, no Term Note may be transferred by the Depository except to a
successor  Depository  that  agrees  to hold such  Note for the  account  of the
Beneficial Owners.                                                              

        In the event the  Depository  Trust  Company  resigns  or is  removed as
Depository,  the Indenture Trustee with the approval of the Issuer may appoint a
successor  Depository.  If no successor  Depository has been appointed within 30
days of the effective  date of the  Depository's  resignation  or removal,  each
Beneficial  Owner shall be entitled to  certificates  representing  the Notes it
beneficially owns in the manner prescribed in Section 4.08.                     

        The Notes shall,  on original issue, be executed on behalf of the Issuer
by the  Owner  Trustee,  not in its  individual  capacity  but  solely  as Owner
Trustee,  authenticated  by the Note  Registrar  and  delivered by the Indenture
Trustee to or upon the order of the Issuer.                                     

(b) On each Payment Date, the aggregate Security Balance of the Variable Funding
Notes  shall  be  increased  by  an  amount  equal  to  the  Additional  Balance
Differential  for such Payment  Date,  subject to the Maximum  Variable  Funding
Balance and the terms and  conditions  set forth  below.  The  Maximum  Variable
Funding Balance may be increased as provided in Section 9.01(a)(viii).          

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

(d) Subject to the  following  conditions,  the  Variable  Funding  Notes may be
exchanged  pursuant to Section 4.02 for one or more Capped Funding Notes.  Prior
to any such exchange,  the party requesting the exchange must provide an Opinion
of  Counsel,  addressed  to the Credit  Enhancer,  the Issuer and the  Indenture
Trustee,  to the effect that the Capped  Funding Notes shall qualify for federal
income tax  purposes  as  indebtedness  of the Issuer and the Issuer will not be
characterized as an association (or a publicly traded partnership)  taxable as a
corporation or a taxable  mortgage pool within the meaning of Section 7701(i) of
the Code. If required by the Opinion of Counsel, the Capped Funding Notes may be
issued  concurrently  with a reduction in the  Security  Balance of the Variable
Funding  Notes  and an  equivalent  increase  in  the  Security  Balance  of the
Certificates,  pursuant to Section 3.12 of the Trust Agreement.  Upon receipt of
the Opinion of Counsel,  the Indenture  Trustee shall issue Capped Funding Notes
with a Security  Balance  equal to the  Security  Balance  permitted  under such
Opinion of Counsel,  in minimum  denominations  as set forth in  subsection  (a)
above. The Capped Funding Notes shall bear the designation  "Capped" in addition

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to any other  applicable  designation.  In connection  with such  exchange,  any
Security  Balance not represented by either a Capped Funding Note or an increase
in the Security  Balance of the  Certificates  referred to above shall result in
the issuance of a new Variable  Funding Note having an initial  Security Balance
equal to the excess of the outstanding  Security Balance of the Variable Funding
Note so  surrendered  over the initial  Security  Balances of the Capped Funding
Notes and an increase in the Security  Balance of the  Certificates  referred to
above.  The Indenture  Trustee and the Issuer agree to cooperate with each other
and the party  requesting  the  exchange  of Variable  Funding  Notes for Capped
Funding Notes,  the Credit  Enhancer,  the  Depositor,  the Seller and the Owner
Trustee and to cause no  unreasonable  delay in issuing  Capped Funding Notes in
connection with this Section and Section 3.12 of the Trust Agreement.           

Section 4.02. Registration of and Limitations on Transfer and Exchange of Notes;
Appointment of Certificate  Registrar.  The Issuer shall cause to be kept at the
Indenture Trustee's Corporate Trust Office a Note Register in which,  subject to
such  reasonable  regulations  as it may  prescribe,  the Note  Registrar  shall
provide for the registration of Notes and of transfers and exchanges of Notes as
herein provided.                                                                

        Subject  to the  restrictions  and  limitations  set forth  below,  upon
surrender  for  registration  of  transfer  of any Note at the  Corporate  Trust
Office,  the Issuer shall execute and the Note Registrar shall  authenticate and
deliver,  in the name of the designated  transferee or transferees,  one or more
new Notes in authorized initial Security Balances  evidencing the same aggregate
Percentage Interests.                                                           

        No Variable  Funding Note,  other than any Capped Funding Notes,  may be
transferred. Subject to the provisions set forth below, Capped Funding Notes may
be transferred,  provided that with respect to the initial  transfer  thereof by
the Seller, prior written notification of such transfer shall have been given to
the Rating Agencies and to the Credit Enhancer by the Seller.                   
        No transfer,  sale, pledge or other disposition of a Capped Funding Note
shall be made unless such transfer,  sale, pledge or other disposition is exempt
from the  registration  requirements  of the Securities Act of 1933, as amended,
and any applicable  state securities laws or is made in accordance with said Act
and laws. In the event of any such transfer, the Indenture Trustee or the Issuer
shall require the  transferee to execute  either (i)(a) an investment  letter in
substantially  the  form  attached  hereto  as  Exhibit  B (or in such  form and
substance reasonably satisfactory to the Indenture Trustee and the Issuer) which
investment letters shall not be an expense of the Trust, the Owner Trustee,  the
Indenture  Trustee,  the Master Servicer,  the Depositor or the Issuer and which
investment  letter states that,  among other things,  such  transferee  (a) is a
"qualified  institutional  buyer" as defined under Rule 144A, acting for its own
account or the  accounts of other  "qualified  institutional  buyers" as defined
under Rule 144A, and (b) is aware that the proposed  transferor  intends to rely
on the exemption  from  registration  requirements  under the  Securities Act of
1933, as amended,  provided by Rule 144A or (ii)(a) a written Opinion of Counsel
(which  may  be  in-house  counsel)  acceptable  to and in  form  and  substance
reasonably  satisfactory  to the  Indenture  Trustee  and the  Issuer  that such
transfer  may be  made  pursuant  to an  exemption,  describing  the  applicable
exemption  and the  basis  therefor,  from  said Act and  laws or is being  made
pursuant to said Act and laws,  which Opinion of Counsel shall not be an expense
of the  Indenture  Trustee  or the Issuer and (b) the  Indenture  Trustee  shall

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require the transferee  executes an investment  letter in substantially the form
of  Exhibit  C hereto  and the  transferor  executes  a  representation  letter,
substantially  in the form of  Exhibit  D hereto  acceptable  to and in form and
substance  reasonably  satisfactory  to the  Issuer  and the  Indenture  Trustee
certifying to the Issuer and the Indenture  Trustee the facts  surrounding  such
transfer,  which  investment  letter  shall not be an expense  of the  Indenture
Trustee or the Issuer.  The Holder of a Capped  Funding Note  desiring to effect
such transfer shall, and does hereby agree to,  indemnify the Indenture  Trustee
the Credit  Enhancer and the Issuer against any liability that may result if the
transfer  is not so exempt or is not made in  accordance  with such  federal and
state laws. In addition,  any  Noteholder  of a Capped  Funding Note desiring to
effect any such transfer shall deliver,  if any private placement  memorandum or
other offering  document prepared in connection with the offering of such Capped
Funding Notes  specifies  that such delivery will be required,  to the Indenture
Trustee and the Servicer,  either (i) a certificate  substantially to the effect
of the  certification  set forth in Exhibit G to the Trust  Agreement or (ii) an
Opinion of Counsel that establishes to the satisfaction of the Indenture Trustee
and the  Servicer  that  the  purchase  of  Certificates  is  permissible  under
applicable  law,  will not  constitute  or result in any  non-exempt  prohibited
transaction  under  ERISA or Section  4975 of the Code and will not  subject the
Indenture  Trustee or the Servicer to any  obligation  or  liability  (including
obligations or liabilities  under ERISA or Section 4975 of the Code) in addition
to those undertaken in this Indenture,  which Opinion of Counsel shall not be an
expense of the Indenture Trustee or the Servicer. Notwithstanding the foregoing,
the  restrictions on transfer  specified in this paragraph are not applicable to
any Capped Funding Notes that have been  registered  under the Securities Act of
1933 pursuant to Section 2.4 of the Revolving Credit Loan Purchase Agreement.   

        Subject to the foregoing, at the option of the Noteholders, Notes may be
exchanged  for other Notes of like  tenor,  in each case in  authorized  initial
Security  Balances  evidencing  the same  aggregate  Percentage  Interests  upon
surrender of the Notes to be exchanged at the Corporate Trust Office of the Note
Registrar.  With respect to any  surrender of Capped  Funding Notes for exchange
the new Notes delivered in exchange therefor will bear the designation  "Capped"
in  addition to any other  applicable  designations.  Whenever  any Notes are so
surrendered  for  exchange,  the  Indenture  Trustee  shall execute and the Note
Registrar shall  authenticate and deliver the Notes which the Noteholder  making
the  exchange is entitled to receive.  Each Note  presented or  surrendered  for
registration  of  transfer  or  exchange  shall  (if so  required  by  the  Note
Registrar) be duly  endorsed by, or be  accompanied  by a written  instrument of
transfer in form reasonably satisfactory to the Note Registrar duly executed by,
the  Holder  thereof  or his  attorney  duly  authorized  in  writing  with such
signature  guaranteed by a commercial  bank or trust company located or having a
correspondent  located in the city of New York.  Notes  delivered  upon any such
transfer or exchange will evidence the same obligations, and will be entitled to
the same rights and privileges, as the Notes surrendered.                       

        No service charge shall be imposed for any  registration  of transfer or
exchange  of  Notes,  but the Note  Registrar  shall  require  payment  of a sum
sufficient  to cover  any tax or  governmental  charge  that may be  imposed  in
connection with any registration of transfer or exchange of Notes.              

        All Notes surrendered for registration of transfer and exchange shall be
cancelled  by the Note  Registrar  and  delivered to the  Indenture  Trustee for
subsequent destruction without liability on the part of either.                 

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        The  Issuer  hereby  appoints  the  Indenture   Trustee  as  Certificate
Registrar to keep at its Corporate Trust Office a Certificate  Register pursuant
to Section  3.09 of the Trust  Agreement  in which,  subject to such  reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges  thereof pursuant to
Section 3.05 of the Trust Agreement.  The Indenture  Trustee hereby accepts such
appointment.                                                                    

Section 4.03. Mutilated,  Destroyed,  Lost or Stolen Notes. If (i) any mutilated
Note is surrendered to the Indenture Trustee,  or the Indenture Trustee receives
evidence to its satisfaction of the destruction,  loss or theft of any Note, and
(ii) there is delivered to the  Indenture  Trustee such security or indemnity as
may be required  by it to hold the Issuer and the  Indenture  Trustee  harmless,
then,  in the  absence  of  notice  to the  Issuer,  the Note  Registrar  or the
Indenture Trustee that such Note has been acquired by a bona fide purchaser, and
provided that the  requirements  of Section 8-405 of the UCC are met, the Issuer
shall execute, and upon its request the Indenture Trustee shall authenticate and
deliver,  in exchange for or in lieu of any such mutilated,  destroyed,  lost or
stolen Note, a replacement Note of the same class;  provided,  however,  that if
any such destroyed,  lost or stolen Note, but not a mutilated  Note,  shall have
become or within  seven  days  shall be due and  payable,  instead  of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so
due or  payable  without  surrender  thereof.  If,  after the  delivery  of such
replacement Note or payment of a destroyed,  lost or stolen Note pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Note in
lieu of which  such  replacement  Note was  issued  presents  for  payment  such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any  Person  taking  such  replacement  Note  from  such  Person to whom such
replacement  Note was  delivered or any  assignee of such Person,  except a bona
fide purchaser,  and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.                    

        Upon the issuance of any  replacement  Note under this Section 4.03, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other  governmental  charge  that may be  imposed  in  relation
thereto and any other  reasonable  expenses  (including the fees and expenses of
the Indenture Trustee) connected therewith.                                     

        Every   replacement  Note  issued  pursuant  to  this  Section  4.03  in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original  additional  contractual  obligation of the Issuer,  whether or not the
mutilated,  destroyed,  lost or stolen Note shall be at any time  enforceable by
anyone,  and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.             

        The provisions of this Section 4.03 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.                       

Section 4.04.  Persons Deemed Owners.  Prior to due presentment for registration
of transfer of any Note, the Issuer,  the Indenture Trustee and any agent of the
Issuer or the  Indenture  Trustee may treat the Person in whose name any Note is
registered  (as of the day of  determination)  as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any, on such Note
and for all other purposes whatsoever,  whether or not such Note be overdue, and

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none of the  Issuer,  the  Indenture  Trustee  or any agent of the Issuer or the
Indenture Trustee shall be affected by notice to the contrary.                  

Section 4.05. Cancellation.  All Notes surrendered for payment,  registration of
transfer,  exchange or redemption shall, if surrendered to any Person other than
the  Indenture  Trustee,  be  delivered  to the  Indenture  Trustee and shall be
promptly cancelled by the Indenture Trustee.  The Issuer may at any time deliver
to the Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.
No  Notes  shall  be  authenticated  in lieu  of or in  exchange  for any  Notes
cancelled as provided in this  Section  4.05,  except as expressly  permitted by
this Indenture.  All cancelled Notes may be held or disposed of by the Indenture
Trustee in  accordance  with its  standard  retention  or disposal  policy as in
effect at the time unless the Issuer shall direct by an Issuer Request that they
be destroyed or returned to it;  provided  however,  that such Issuer Request is
timely  and the Notes  have not been  previously  disposed  of by the  Indenture
Trustee.                                                                        

Section 4.06.  Book-Entry Notes. The Term Notes shall initially be issued as one
or more Term Notes held by the  Book-Entry  Custodian  or, if  appointed to hold
such Term Notes as provided  below,  the Depository  Trust Company,  the initial
Depository,  and  registered  in the name of its  nominee  Cede & Co.  Except as
provided  below,  registration  of such Term Notes may not be transferred by the
Indenture  Trustee  except to another  Depository  that agrees to hold such Term
Notes for the  respective  Beneficial  Owners.  The Indenture  Trustee is hereby
initially appointed as the Book-Entry Custodian and hereby agrees to act as such
in accordance herewith and in accordance with the agreement that it has with the
Depository  authorizing it to act as such. The Book-Entry Custodian may, and, if
it is no  longer  qualified  to act as such,  the  Book-Entry  Custodian  shall,
appoint, by a written instrument delivered to the Depositor, the Master Servicer
and, if the Indenture  Trustee is not the  Book-Entry  Custodian,  the Indenture
Trustee,  any other  transfer  agent  (including the Depository or any successor
Depository)  to  act  as  Book-Entry  Custodian  under  such  conditions  as the
predecessor  Book-Entry Custodian and the Depository or any successor Depository
may prescribe,  provided that the predecessor  Book-Entry Custodian shall not be
relieved  of any  of  its  duties  or  responsibilities  by  reason  of any  new
appointment,  except  if the  Depository  is  the  successor  to the  Book-Entry
Custodian. If the Indenture Trustee resigns or is removed in accordance with the
terms hereof,  the successor  trustee or, if it so elects,  the Depository shall
immediately  succeed to its predecessor's  duties as Book-Entry  Custodian.  The
Depositor  shall have the right to  inspect,  and to obtain  copies of, any Term
Notes held as Book-Entry Notes by the Book-Entry Custodian.  No Beneficial Owner
will receive a Definitive Note representing such Beneficial  Owner's interest in
such Note,  except as provided  in Section  4.08.  Unless and until  definitive,
fully registered  Notes (the "Definitive  Notes") have been issued to Beneficial
Owners pursuant to Section 4.08:                                                

(i)     the provisions of this Section 4.06 shall be in full force and effect;  

(ii)    the Note  Registrar and the Indenture  Trustee shall be entitled to deal
        with the Depository  for all purposes of this  Indenture  (including the
        payment  of  principal  of and  interest  on the Notes and the giving of
        instructions  or  directions  hereunder)  as the sole holder of the Term
Notes, and shall have no obligation to the Owners of Term Notes;

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(iii)   to the extent that the provisions of this Section 4.06 conflict with any
        other provisions of this Indenture,  the provisions of this Section 4.06
shall control;                                                  

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

(v)     whenever this  Indenture  requires or permits  actions to be taken based
        upon  instructions  or directions of Holders of Term Notes  evidencing a
        specified  percentage  of the Security  Balances of the Term Notes,  the
        Depository  shall be deemed to  represent  such  percentage  only to the
        extent that it has received  instructions to such effect from Beneficial
        Owners   and/or   Depository   Participants   owning  or   representing,
        respectively, such required percentage of the beneficial interest in the
        Term Notes and has delivered such instructions to the Indenture Trustee.

Section 4.07. Notices to Depository. Whenever a notice or other communication to
the Term Note  Holders  is  required  under  this  Indenture,  unless  and until
Definitive  Term Notes shall have been issued to Beneficial  Owners  pursuant to
Section  4.08,   the   Indenture   Trustee  shall  give  all  such  notices  and
communications  specified herein to be given to Holders of the Term Notes to the
Depository, and shall have no obligation to the Beneficial Owners.              

Section 4.08. Definitive Notes. If (i) the Indenture Trustee determines that the
Depository   is  no  longer   willing  or  able  to   properly   discharge   its
responsibilities  with  respect to the Term Notes and the  Indenture  Trustee is
unable to locate a qualified  successor,  (ii) the Indenture  Trustee  elects to
terminate  the  book-entry  system  through  the  Depository  or (iii) after the
occurrence of an Event of Default,  Owners of Term Notes representing beneficial
interests  aggregating at least a majority of the Security  Balances of the Term
Notes advise the  Depository  in writing that the  continuation  of a book-entry
system  through  the  Depository  is no  longer  in the  best  interests  of the
Beneficial  Owners,  then the Depository shall notify all Beneficial  Owners and
the  Indenture  Trustee  of  the  occurrence  of  any  such  event  and  of  the
availability of Definitive Term Notes to Beneficial  Owners requesting the same.
Upon  surrender  to  the  Indenture   Trustee  of  the  typewritten  Term  Notes
representing the Book-Entry Notes by the Book-Entry Custodian or the Depository,
as  applicable,  accompanied  by  registration  instructions,  the Issuer  shall
execute and the Indenture  Trustee shall  authenticate the Definitive Term Notes
in accordance with the instructions of the Depository.  None of the Issuer,  the
Note  Registrar  or the  Indenture  Trustee  shall be  liable  for any  delay in
delivery  of such  instructions  and may  conclusively  rely  on,  and  shall be
protected  in relying on, such  instructions.  Upon the  issuance of  Definitive
Notes, the Indenture Trustee shall recognize the Holders of the Definitive Notes
as Noteholders.                                                                 

Section 4.09. Tax Treatment. The Issuer has entered into this Indenture, and the
Notes will be issued,  with the  intention  that,  for federal,  state and local
income,  single  business and franchise tax purposes,  the Notes will qualify as
indebtedness of the Issuer.  The Issuer,  by entering into this  Indenture,  and
each Noteholder, by its acceptance of its Note (and each Beneficial Owner by its

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acceptance of an interest in the applicable Book-Entry Note), agree to treat the
Notes for federal,  state and local  income,  single  business and franchise tax
purposes as indebtedness of the Issuer.                                         

Section 4.10.  Satisfaction  and Discharge of Indenture.  This  Indenture  shall
cease to be of further  effect with respect to the Notes except as to (i) rights
of  registration  of transfer and  exchange,  (ii)  substitution  of  mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.16, 3.18 and 3.19, (v) the rights, obligations and immunities of the Indenture
Trustee  hereunder  (including the rights of the Indenture Trustee under Section
6.07 and the  obligations of the Indenture  Trustee under Section 4.11) and (vi)
the rights of Noteholders as  beneficiaries  hereof with respect to the property
so deposited with the Indenture  Trustee  payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer,  shall execute
proper  instruments  acknowledging  satisfaction and discharge of this Indenture
with respect to the Notes, when                                                 

(A)    either                                     

               (1) all Notes theretofore authenticated and delivered (other than
        (i) Notes  that have been  destroyed,  lost or stolen and that have been
        replaced or paid as  provided  in Section  4.03 and (ii) Notes for whose
        payment money has theretofore  been deposited in trust or segregated and
        held in trust by the  Issuer  and  thereafter  repaid  to the  Issuer or
        discharged  from such  trust,  as  provided  in Section  3.03) have been
delivered to the Indenture Trustee for cancellation; or         

               (2) all Notes not theretofore  delivered to the Indenture Trustee
for cancellation                                            

a.     have become due and payable, 

                         b. will become due and  payable at the Final  Scheduled
Payment Date within one year, or        

                         c.  have  been  declared  immediately  due and  payable
pursuant to Section 5.02.               

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

               (B) the  Issuer  has paid or  caused  to be paid all  other  sums
      payable hereunder and under the Insurance Agreement by the Issuer; and

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               (C) the Issuer has  delivered  to the  Indenture  Trustee and the
        Credit Enhancer an Officer's Certificate and an Opinion of Counsel, each
        meeting the  applicable  requirements  of Section 10.01 and each stating
        that all  conditions  precedent  herein  provided  for  relating  to the
        satisfaction  and  discharge of this  Indenture  have been complied with
        and, if the Opinion of Counsel  relates to a deposit made in  connection
        with Section  4.10(A)(2)b.  above,  such opinion shall further be to the
        effect  that  such  deposit  will  not  have any  material  adverse  tax
      consequences to the Issuer, any Noteholders or any Certificateholders.

Section  4.11.  Application  of  Trust  Money.  All  monies  deposited  with the
Indenture  Trustee  pursuant to Section  4.10 hereof  shall be held in trust and
applied  by it,  in  accordance  with  the  provisions  of the  Notes  and  this
Indenture,  to the  payment,  either  directly  or through  any Paying  Agent or
Certificate Paying Agent, as the Indenture Trustee may determine, to the Holders
of  Securities,  of all sums due and to become due  thereon  for  principal  and
interest;  but such monies need not be segregated from other funds except to the
extent required herein or required by law.                                      

Section  4.12.  Subrogation  and  Cooperation.  (a) The Issuer and the Indenture
Trustee  acknowledge  that (i) to the extent the Credit  Enhancer makes payments
under the Credit  Enhancement  Instrument on account of principal of or interest
on the Revolving  Credit Loans,  the Credit Enhancer will be fully subrogated to
the rights of the  Noteholders  to receive such  principal and interest from the
Revolving  Credit  Loans,  and  (ii) the  Credit  Enhancer  shall  be paid  such
principal  and  interest  but only from the sources  and in the manner  provided
herein and in the  Insurance  Agreement  for the payment of such  principal  and
interest.                                                                       

        The  Indenture   Trustee  shall  cooperate  in  all  respects  with  any
reasonable  request by the Credit Enhancer for action to preserve or enforce the
Credit  Enhancer's  rights or interest  under this  Indenture  or the  Insurance
Agreement, consistent with this Indenture and without limiting the rights of the
Noteholders  as  otherwise  set  forth  in  the  Indenture,  including,  without
limitation, upon the occurrence and continuance of a default under the Insurance
Agreement, a request to take any one or more of the following actions:          

(i)     institute  Proceedings for the collection of all amounts then payable on
        the  Notes or under  this  Indenture  in  respect  to the  Notes and all
        amounts  payable  under  the  Insurance  Agreement  and to  enforce  any
  judgment obtained and collect from the Issuer monies adjudged due;

(ii)    sell the  Trust  Estate or any  portion  thereof  or rights or  interest
        therein,  at one or more public or private  Sales (as defined in Section
 5.15 hereof) called and conducted in any manner permitted by law;

(iii)   file or record all assignments that have not previously been recorded;  

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

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(v)     exercise  any remedies of a secured  party under the Uniform  Commercial
        Code and take any other  appropriate  action to protect  and enforce the
rights and remedies of the Credit Enhancer hereunder.           

        Following the payment in full of the Notes,  the Credit  Enhancer  shall
continue to have all rights and privileges provided to it under this Section and
in all other provisions of this Indenture, until all amounts owing to the Credit
Enhancer have been paid in full.                                                

Section 4.13.  Repayment of Monies Held by Paying Agent.  In connection with the
satisfaction  and  discharge of this  Indenture  with respect to the Notes,  all
monies  then held by any  Person  other  than the  Indenture  Trustee  under the
provisions of this  Indenture  with respect to such Notes shall,  upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05 and thereupon  such Paying Agent shall be released from all further
liability with respect to such monies.                                          

Section 4.14.  Temporary Notes. Pending the preparation of any Definitive Notes,
the Issuer may execute and upon its written direction, the Indenture Trustee may
authenticate and make available for delivery,  temporary Notes that are printed,
lithographed,   typewritten,   photocopied   or  otherwise   produced,   in  any
denomination,  substantially  of the  tenor of the  Definitive  Notes in lieu of
which  they  are  issued  and  with  such  appropriate  insertions,   omissions,
substitutions  and other  variations  as the officers  executing  such Notes may
determine, as evidenced by their execution of such Notes.                       

        If temporary Notes are issued, the Issuer will cause Definitive Notes to
be prepared without  unreasonable delay. After the preparation of the Definitive
Notes,  the temporary  Notes shall be  exchangeable  for  Definitive  Notes upon
surrender  of the  temporary  Notes at the  office or  agency  of the  Indenture
Trustee,  without charge to the Holder.  Upon surrender for  cancellation of any
one or more temporary Notes, the Issuer shall execute and the Indenture  Trustee
shall  authenticate  and make  available  for  delivery,  in exchange  therefor,
Definitive  Notes of  authorized  denominations  and of like tenor and aggregate
principal amount. Until so exchanged, such temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.      

ARTICLE V                                                                       

Default and Remedies

Section  5.01.  Events of Default.  The Issuer  shall  deliver to the  Indenture
Trustee  and the  Credit  Enhancer,  within  five  days  after  learning  of the
occurrence any event which with the giving of notice and the lapse of time would
become an Event of Default  under  clause (iii) of the  definition  of "Event of
Default"  written  notice in the form of an Officer's  Certificate of its status
and what action the Issuer is taking or proposes to take with respect thereto.  

Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an Event of
Default should occur and be continuing or if the Master  Servicer shall purchase
all of the  Revolving  Credit Loans  pursuant to Section  8.08 of the  Servicing
Agreement,  then and in every such case the Indenture  Trustee or the Holders of
Notes  representing  not less than a majority  of the  Security  Balances of all
Notes with the written  consent of the Credit  Enhancer,  or the Credit Enhancer

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may declare the Notes to be immediately due and payable,  by a notice in writing
to the Issuer (and to the Indenture  Trustee if given by Noteholders),  and upon
any such  declaration  the  unpaid  principal  amount  of such  class of  Notes,
together  with  accrued  and  unpaid  interest   thereon  through  the  date  of
acceleration, shall become immediately due and payable.                         

        At any time after such  declaration  of  acceleration  of maturity  with
respect to an Event of Default has been made and before a judgment or decree for
payment  of the  money  due  has  been  obtained  by the  Indenture  Trustee  as
hereinafter  in this  Article V provided,  the Holders of Notes  representing  a
majority of the Security  Balances of all Notes, by written notice to the Issuer
and the Indenture  Trustee with the written consent of the Credit  Enhancer,  or
the Credit  Enhancer,  may in writing  waive the  related  Event of Default  and
rescind and annul such declaration and its consequences if:                     

(i)  the  Issuer  has  paid  or  deposited  with  the  Indenture  Trustee  a sum
sufficient to pay:                                                    

                      (A) all payments of principal of and interest on the Notes
               and all other  amounts  that would then be due  hereunder or upon
               the  Notes  if  the  Event  of  Default   giving   rise  to  such
acceleration had not occurred; and                

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

(ii)    all Events of Default, other than the nonpayment of the principal of the
        Notes that has become due solely by such  acceleration,  have been cured
or waived as provided in Section 5.12.                          

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

Section 5.03.  Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee.  (a) The Issuer  covenants  that if  default in the  payment of (i) any
interest on any Note when the same  becomes due and  payable,  and such  default
continues for a period of five days, or (ii) the principal of or any installment
of the  principal of any Note when the same becomes due and payable,  the Issuer
shall, upon demand of the Indenture  Trustee,  pay to it, for the benefit of the
Holders  of  Notes,  the  whole  amount  then due and  payable  on the Notes for
principal  and  interest,  with  interest  upon the  overdue  principal,  and in
addition  thereto such further  amount as shall be sufficient to cover the costs
and expenses of  collection,  including the reasonable  compensation,  expenses,
disbursements and advances of the Indenture Trustee and its agents and counsel. 

(b) In case the  Issuer  shall  fail  forthwith  to pay such  amounts  upon such
demand,  the  Indenture  Trustee,  in its own name and as  trustee of an express
trust,  subject to the  provisions  of Section  10.17  hereof  may  institute  a
Proceeding for the  collection of the sums so due and unpaid,  and may prosecute
such  Proceeding to judgment or final  decree,  and may enforce the same against
the Issuer or other obligor upon the Notes and collect in the manner provided by
law out of the property of the Issuer or other obligor upon the Notes,  wherever
situated, the monies adjudged or decreed to be payable.                         

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(c) If an Event of  Default  occurs and is  continuing,  the  Indenture  Trustee
subject to the  provisions  of Section  10.17  hereof may, as more  particularly
provided in Section 5.04, in its discretion,  proceed to protect and enforce its
rights and the rights of the Noteholders, by such appropriate Proceedings as the
Indenture  Trustee  shall deem most  effective  to protect  and enforce any such
rights,  whether for the  specific  enforcement  of any covenant or agreement in
this  Indenture or in aid of the  exercise of any power  granted  herein,  or to
enforce  any other  proper  remedy  or legal or  equitable  right  vested in the
Indenture Trustee by this Indenture or by law.                                  

(d) In case there shall be pending,  relative to the Issuer or any other obligor
upon the Notes or any Person  having or  claiming an  ownership  interest in the
Trust Estate,  Proceedings under Title 11 of the United States Code or any other
applicable  federal or state bankruptcy,  insolvency or other similar law, or in
case  a  receiver,   assignee  or  trustee  in  bankruptcy  or   reorganization,
liquidator,  sequestrator  or similar  official shall have been appointed for or
taken  possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial  Proceedings  relative to the Issuer
or other  obligor upon the Notes,  or to the creditors or property of the Issuer
or such other  obligor,  the  Indenture  Trustee,  irrespective  of whether  the
principal of any Notes shall then be due and payable as therein  expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any  demand  pursuant  to the  provisions  of this  Section,  shall be
entitled and empowered, by intervention in such Proceedings or otherwise:       

(i)  to file and prove a claim or claims for the whole amount of  principal  and
     interest  owing and  unpaid in  respect of the Notes and to file such other
     papers or  documents  as may be necessary or advisable in order to have the
     claims  of the  Indenture  Trustee  (including  any  claim  for  reasonable
     compensation  to the  Indenture  Trustee  and  each  predecessor  Indenture
     Trustee,  and their  respective  agents,  attorneys  and  counsel,  and for
     reimbursement  of all expenses and liabilities  incurred,  and all advances
     made,  by the Indenture  Trustee and each  predecessor  Indenture  Trustee,
     except as a result of negligence,  willful  misconduct or bad faith) and of
the Noteholders allowed in such Proceedings;                          

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

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

(iv)    to file such  proofs of claim and other  papers or  documents  as may be
        necessary  or  advisable  in order to have the  claims of the  Indenture
        Trustee or the  Holders of Notes  allowed  in any  judicial  proceedings
relative to the Issuer, its creditors and its property;         

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and any trustee,  receiver,  liquidator,  custodian or other similar official in
any such  Proceeding is hereby  authorized by each of such  Noteholders  to make
payments to the Indenture Trustee,  and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders,  to pay to
the Indenture  Trustee such amounts as shall be  sufficient to cover  reasonable
compensation to the Indenture  Trustee,  each predecessor  Indenture Trustee and
their  respective  agents,  attorneys  and counsel,  and all other  expenses and
liabilities  incurred,  and all advances made, by the Indenture Trustee and each
predecessor  Indenture  Trustee  except  as  a  result  of  negligence,  willful
misconduct or bad faith.                                                        

(e) Nothing herein contained shall be deemed to authorize the Indenture  Trustee
to  authorize  or  consent  to or vote for or  accept  or adopt on behalf of any
Noteholder any plan of  reorganization,  arrangement,  adjustment or composition
affecting  the Notes or the rights of any Holder  thereof  or to  authorize  the
Indenture  Trustee to vote in respect of the claim of any Noteholder in any such
proceeding  except,  as  aforesaid,  to vote for the  election  of a trustee  in
bankruptcy or similar Person.                                                   

(f) All rights of action and of asserting claims under this Indenture,  or under
any  of the  Notes,  may  be  enforced  by the  Indenture  Trustee  without  the
possession of any of the Notes or the  production  thereof in any trial or other
Proceedings relative thereto,  and any such action or proceedings  instituted by
the Indenture  Trustee shall be brought in its own name as trustee of an express
trust,  and any  recovery of judgment,  subject to the payment of the  expenses,
disbursements  and  compensation  of the  Indenture  Trustee,  each  predecessor
Indenture  Trustee and their respective  agents and attorneys,  shall be for the
ratable benefit of the Holders of the Term Notes or the Variable  Funding Notes,
as applicable.                                                                  

(g)  In  any  Proceedings  brought  by  the  Indenture  Trustee  (and  also  any
Proceedings  involving the  interpretation of any provision of this Indenture to
which the Indenture  Trustee shall be a party),  the Indenture  Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.                            

Section  5.04.  Remedies;  Priorities.  (a) If an Event of  Default  shall  have
occurred and be continuing,  the Indenture  Trustee subject to the provisions of
Section  10.17 hereof may with the written  consent of the Credit  Enhancer,  or
shall at the  written  direction  of the Credit  Enhancer  do one or more of the
following (subject to Section 5.05):                                            

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

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

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

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(iv)    sell the  Trust  Estate or any  portion  thereof  or rights or  interest
        therein,  at one or more public or private sales called and conducted in
any manner permitted by law;                                    

provided,  however,  that  the  Indenture  Trustee  may not  sell  or  otherwise
liquidate  the  Trust  Estate  following  an Event of  Default,  unless  (A) the
Indenture  Trustee  obtains the consent of the Holders of 100% of the  aggregate
Security  Balances of the Notes and the Credit Enhancer,  which consent will not
be  unreasonably  withheld,  (B)  the  proceeds  of  such  sale  or  liquidation
distributable  to Holders are  sufficient  to discharge in full all amounts then
due and unpaid upon the Notes for  principal  and interest and to reimburse  the
Credit  Enhancer for any amounts drawn under the Credit  Enhancement  Instrument
and any other amounts due the Credit  Enhancer under the Insurance  Agreement or
(C) the Indenture  Trustee  determines that the Revolving  Credit Loans will not
continue  to  provide  sufficient  funds for the  payment  of  principal  of and
interest  on the Notes as they would  have  become due if the Notes had not been
declared due and payable,  and the Indenture  Trustee obtains the consent of the
Credit  Enhancer,  which consent will not be unreasonably  withheld,  and of the
Holders  of 66  2/3%  of  the  aggregate  Security  Balances  of the  Notes.  In
determining  such  sufficiency or  insufficiency  with respect to clause (B) and
(C), the Indenture Trustee may, but need not, obtain and rely upon an opinion of
an Independent  investment banking or accounting firm of national  reputation as
to the  feasibility  of such proposed  action and as to the  sufficiency  of the
Trust  Estate for such  purpose.  Notwithstanding  the  foregoing,  so long as a
Servicing  Default has not occurred,  any Sale of the Trust Estate shall be made
subject to the continued  servicing of the Revolving  Credit Loans by the Master
Servicer as provided in the Servicing Agreement.                                

(b) If the  Indenture  Trustee  collects any money or property  pursuant to this
Article V, it shall pay out the money or property in the following order:       

   FIRST: to the Indenture Trustee for amounts due under Section 6.07;

        SECOND:to Holders of the Notes for amounts due and unpaid on the related
        Notes for interest, ratably, without preference or priority of any kind,
        according to the amounts due and payable on such Notes for interest from
amounts available in the Trust Estate for such Noteholders;     

        THIRD: to Holders of the Notes for amounts due and unpaid on the related
        Notes for  principal,  ratably,  without  preference  or priority of any
        kind,  according  to the  amounts  due and  payable  on such  Notes  for
        principal,   from  amounts  available  in  the  Trust  Estate  for  such
        Noteholders,  until the Security Balances of the Notes have been reduced
to zero;                                                        

FOURTH:[reserved];                                              

          FIFTH:  to the  payment  of all  amounts  due and owing to the  Credit
Enhancer under the Insurance Agreement;                     

          SIXTH: to the  Certificate  Paying Agent for amounts due under Article
VIII of the Trust Agreement; and                            

          SEVENTH: to the payment of the remainder, if any, to the Issuer or any
other person legally entitled thereto.                      

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        The  Indenture  Trustee may fix a record  date and payment  date for any
payment to  Noteholders  pursuant to this Section  5.04. At least 15 days before
such record date, the Indenture  Trustee shall mail to each  Noteholder a notice
that states the record date, the payment date and the amount to be paid.        

Section 5.05. Optional  Preservation of the Trust Estate. If the Notes have been
declared to be due and payable under Section 5.02  following an Event of Default
and such declaration and its consequences  have not been rescinded and annulled,
the Indenture  Trustee may, but need not, (but shall at the written direction of
the Credit Enhancer) elect to take and maintain  possession of the Trust Estate.
It is the desire of the parties hereto and the Noteholders  that there be at all
times sufficient funds for the payment of principal of and interest on the Notes
and other  obligations of the Issuer  including  payment to the Credit Enhancer,
and the Indenture  Trustee shall take such desire into account when  determining
whether  or not  to  take  and  maintain  possession  of the  Trust  Estate.  In
determining  whether to take and maintain  possession of the Trust  Estate,  the
Indenture  Trustee  may,  but need not,  obtain  and rely upon an  opinion of an
Independent  investment banking or accounting firm of national  reputation as to
the  feasibility of such proposed  action and as to the sufficiency of the Trust
Estate for such purpose.                                                        

Section 5.06. Limitation of Suits. No Holder of any Note 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 and subject to the provisions of Section 10.17 hereof:        

(i)  such Holder has previously given written notice to the Indenture Trustee of
a continuing Event of Default;                                        

(ii)    the Holders of not less than 25% of the  Security  Balances of the Notes
        have made written  request to the  Indenture  Trustee to institute  such
        Proceeding  in  respect  of such  Event  of  Default  in its own name as
Indenture Trustee hereunder;                                    

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

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

(v)     no direction  inconsistent  with such written  request has been given to
        the  Indenture  Trustee  during such  60-day  period by the Holders of a
        majority  of the  Security  Balances  of  the  Notes  or by  the  Credit
Enhancer.                                                       

It is  understood  and intended  that no one or more Holders of Notes 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
Holders of Notes or to obtain or to seek to obtain  priority or preference  over
any other  Holders or to enforce any right under this  Indenture,  except in the
manner herein provided.                                                         

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        In  the  event  the  Indenture  Trustee  shall  receive  conflicting  or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each  representing  less than a majority of the Security  Balances of the Notes,
the Indenture  Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.         

Section  5.07.  Unconditional  Rights of  Noteholders  to Receive  Principal and
Interest.  Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and  unconditional,  to receive
payment of the principal of and  interest,  if any, on such Note on or after the
respective due dates thereof  expressed in such Note or in this Indenture and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.                                 

Section 5.08.  Restoration of Rights and Remedies.  If the Indenture  Trustee or
any  Noteholder  has  instituted  any  Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been  discontinued or abandoned for
any reason or has been determined  adversely to the Indenture Trustee or to such
Noteholder,  then and in every such case the Issuer,  the Indenture  Trustee and
the Noteholders  shall,  subject to any  determination  in such  Proceeding,  be
restored  severally and  respectively to their former positions  hereunder,  and
thereafter all rights and remedies of the Indenture  Trustee and the Noteholders
shall continue as though no such Proceeding had been instituted.                

Section  5.09.  Rights  and  Remedies  Cumulative.  No  right or  remedy  herein
conferred upon or reserved to the Indenture  Trustee,  the Credit Enhancer or to
the  Noteholders  is intended to be exclusive of any other right or remedy,  and
every right and remedy shall, to the extent  permitted by law, be cumulative and
in addition to every other right and remedy given  hereunder or now or hereafter
existing at law or in equity or  otherwise.  The  assertion or employment of any
right or remedy  hereunder,  or  otherwise,  shall not  prevent  the  concurrent
assertion or employment of any other appropriate right or remedy.               

Section  5.10.  Delay or  Omission  Not a Waiver.  No delay or  omission  of the
Indenture Trustee, the Credit Enhancer or any Holder of any Note 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  V or by law to the
Indenture  Trustee or to the Noteholders may be exercised from time to time, and
as  often  as may  be  deemed  expedient,  by the  Indenture  Trustee  or by the
Noteholders, as the case may be.                                                

Section 5.11. Control by Noteholders.  The Holders of a majority of the Security
Balances  of Notes  with the  consent  of the  Credit  Enhancer,  or the  Credit
Enhancer (so long as no Credit Enhancer  Default exists) shall have the right to
direct the time,  method and place of conducting  any  Proceeding for any remedy
available to the Indenture  Trustee with respect to the Notes or exercising  any
trust or power conferred on the Indenture Trustee; provided that:               

(i)  such  direction  shall not be in conflict with any rule of law or with this
Indenture;                                                            

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(ii)    subject to the  express  terms of Section  5.04,  any  direction  to the
        Indenture  Trustee to sell or  liquidate  the Trust  Estate  shall be by
        Holders  of  Notes  representing  not  less  than  100% of the  Security
        Balances of Notes with the consent of the Credit Enhancer, or the Credit
Enhancer (so long as no Credit Enhancer Default exists);        

(iii)   if the  conditions set forth in Section 5.05 have been satisfied and the
        Indenture  Trustee  elects to retain the Trust  Estate  pursuant to such
        Section, then any direction to the Indenture Trustee by Holders of Notes
        representing less than 100% of the Security Balances of Notes to sell or
liquidate the Trust Estate shall be of no force and effect; and 

(iv)    the  Indenture  Trustee may take any other action  deemed  proper by the
Indenture Trustee that is not inconsistent with such direction. 

Notwithstanding the rights of Noteholders set forth in this Section,  subject to
Section 6.01, the Indenture  Trustee need not take any action that it determines
might involve it in liability or might materially adversely affect the rights of
any Noteholders not consenting to such action.                                  

Section  5.12.  Waiver  of  Past  Default.  Prior  to  the  declaration  of  the
acceleration  of the  maturity  of the Notes as provided  in Section  5.02,  the
Holders of Notes of not less than a majority  of the  Security  Balances  of the
Notes with the consent of the Credit  Enhancer,  or the Credit Enhancer (so long
as no Credit  Enhancer  Default  exists) may waive any past Event of Default and
its  consequences  except an Event of  Default  (i) with  respect  to payment of
principal of or interest on any of the Notes or (ii) in respect of a covenant or
provision  hereof which cannot be modified or amended without the consent of the
Holder of each Note. In the case of any such waiver,  the Issuer,  the Indenture
Trustee  and the  Holders of the Notes  shall be  restored  to their  respective
former  positions and rights  hereunder;  but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereto.    

        Upon any such waiver,  any Event of Default  arising  therefrom shall be
deemed to have been cured and not to have  occurred,  for every  purpose of this
Indenture;  but no such waiver shall extend to any  subsequent or other Event of
Default or impair any right consequent thereto.                                 

Section 5.13.  Undertaking for Costs.  All parties to this Indenture  agree, and
each Holder of any Note by such Holder's  acceptance  thereof shall be deemed to
have agreed,  that any court may in its discretion  require, in any suit for the
enforcement of any right or remedy under this Indenture,  or in any suit against
the  Indenture  Trustee  for any  action  taken,  suffered  or  omitted by it as
Indenture  Trustee,  the  filing  by any  party  litigant  in  such  suit  of an
undertaking  to pay the  costs of such  suit,  and that  such  court  may in its
discretion  assess  reasonable  costs,  including  reasonable  attorneys'  fees,
against  any party  litigant  in such suit,  having due regard to the merits and
good  faith of the  claims or  defenses  made by such  party  litigant;  but the
provisions  of this Section 5.13 shall not apply to (a) any suit  instituted  by
the Indenture  Trustee,  (b) any suit instituted by any Noteholder,  or group of
Noteholders, in each case holding in the aggregate more than 10% of the Security
Balances  of the  Notes or (c) any suit  instituted  by any  Noteholder  for the
enforcement  of the payment of  principal of or interest on any Note on or after
the respective due dates expressed in such Note and in this Indenture.          

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Section 5.14.  Waiver of Stay or Extension  Laws.  The Issuer  covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon,  or
plead or in any manner  whatsoever,  claim or take the benefit or advantage  of,
any stay or extension  law  wherever  enacted,  now or at any time  hereafter in
force,  that may affect the covenants or the performance of this Indenture;  and
the Issuer (to the extent that it may  lawfully do so) hereby  expressly  waives
all  benefit  or  advantage  of any such law,  and  covenants  that it shall not
hinder,  delay or impede  the  execution  of any  power  herein  granted  to the
Indenture Trustee,  but will suffer and permit the execution of every such power
as though no such law had been enacted.                                         

Section 5.15.  Sale of Trust  Estate.  (a) The power to effect any sale or other
disposition  (a "Sale") of any portion of the Trust  Estate  pursuant to Section
5.04 is  expressly  subject to the  provisions  of Section 5.05 and this Section
5.15.  The power to effect  any such Sale shall not be  exhausted  by any one or
more Sales as to any portion of the Trust  Estate  remaining  unsold,  but shall
continue  unimpaired  until the entire  Trust Estate shall have been sold or all
amounts  payable on the Notes and under this  Indenture  and under the Insurance
Agreement  shall have been paid.  The  Indenture  Trustee  may from time to time
postpone  any public Sale by public  announcement  made at the time and place of
such Sale. The Indenture Trustee hereby expressly waives its right to any amount
fixed by law as compensation for any Sale.                                      

(b) The  Indenture  Trustee shall not in any private Sale sell the Trust Estate,
or any portion thereof, unless:                                                 

               (1) the Holders of all Notes and the Credit Enhancer  consent to,
or direct the Indenture Trustee to make, such Sale, or      

               (2) the  proceeds  of such Sale would be not less than the entire
        amount which would be payable to the  Noteholders  under the Notes,  the
        Certificateholders  under the  Certificates  and the Credit  Enhancer in
        respect of amounts drawn under the Credit Enhancement Instrument and any
        other amounts due the Credit Enhancer under the Insurance Agreement,  in
        full payment  thereof in  accordance  with Section  5.02, on the Payment
Date next succeeding the date of such Sale, or                  

               (3) the Indenture  Trustee  determines,  in its sole  discretion,
        that the  conditions  for  retention  of the Trust  Estate  set forth in
        Section 5.05 cannot be satisfied (in making any such determination,  the
        Indenture Trustee may rely upon an opinion of an Independent  investment
        banking firm  obtained and delivered as provided in Section  5.05),  and
        the Credit  Enhancer  consents to such Sale,  which  consent will not be
        unreasonably  withheld and the Holders  representing at least 66-2/3% of
the Security Balances of the Notes consent to such Sale.        

The purchase by the Indenture  Trustee of all or any portion of the Trust Estate
at a private  Sale shall not be deemed a Sale or other  disposition  thereof for
purposes of this Section 5.15(b).                                               

(c) Unless the Holders  and the Credit  Enhancer  have  otherwise  consented  or
directed the Indenture Trustee,  at any public Sale of all or any portion of the
Trust  Estate  at which a  minimum  bid  equal  to or  greater  than the  amount

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described in paragraph (2) of  subsection  (b) of this Section 5.15 has not been
established  by the  Indenture  Trustee and no Person bids an amount equal to or
greater than such amount,  the  Indenture  Trustee  shall bid an amount at least
$1.00 more than the highest other bid.                                          

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

               (1) any  Holder  or  Holders  of  Notes  may bid for and with the
        consent of the Credit Enhancer  purchase the property  offered for sale,
        and upon compliance with the terms of sale may hold,  retain and possess
        and dispose of such property,  without further accountability,  and may,
        in paying the purchase money  therefor,  deliver any Notes or claims for
        interest  thereon in lieu of cash up to the  amount  which  shall,  upon
        distribution of the net proceeds of such sale, be payable  thereon,  and
        such Notes,  in case the amounts so payable  thereon  shall be less than
        the amount due thereon,  shall be returned to the Holders  thereof after
being appropriately stamped to show such partial payment;       

               (2) the  Indenture  Trustee may bid for and acquire the  property
        offered for Sale in connection  with any Sale thereof,  and,  subject to
        any requirements  of, and to the extent permitted by,  applicable law in
        connection  therewith,  may  purchase  all or any  portion  of the Trust
        Estate in a private sale, and, in lieu of paying cash therefor, may make
        settlement  for the  purchase  price by  crediting  the gross Sale price
        against the sum of (A) the amount  which would be  distributable  to the
        Holders of the Notes and Holders of  Certificates  and amounts  owing to
        the Credit  Enhancer as a result of such Sale in accordance with Section
        5.04(b) on the Payment  Date next  succeeding  the date of such Sale and
        (B) the  expenses  of the  Sale  and of any  Proceedings  in  connection
        therewith  which are  reimbursable  to it,  without  being  required  to
        produce the Notes in order to complete any such Sale or in order for the
        net Sale price to be credited  against  such Notes,  and any property so
        acquired by the Indenture  Trustee shall be held and dealt with by it in
accordance with the provisions of this Indenture;               

               (3)  the   Indenture   Trustee   shall  execute  and  deliver  an
        appropriate  instrument of conveyance  transferring  its interest in any
portion of the Trust Estate in connection with a Sale thereof;  

               (4) the  Indenture  Trustee is hereby  irrevocably  appointed the
        agent and  attorney-  in-fact of the Issuer to  transfer  and convey its
        interest in any portion of the Trust  Estate in  connection  with a Sale
  thereof, and to take all action necessary to effect such Sale; and

               (5) no purchaser or  transferee  at such a Sale shall be bound to
        ascertain  the   Indenture   Trustee's   authority,   inquire  into  the
        satisfaction  of any conditions  precedent or see to the  application of
any monies.                                                     

Section 5.16. Action on Notes. The Indenture Trustee's right to seek and recover
judgment  on the Notes or under  this  Indenture  shall not be  affected  by the
seeking,  obtaining or  application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies of
the Indenture  Trustee or the  Noteholders  shall be impaired by the recovery of
any judgment by the Indenture  Trustee  against the Issuer or by the levy of any
execution  under such  judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer.  Any money or property  collected by the  Indenture
Trustee shall be applied in accordance with Section 5.04(b).                    

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Section 5.17.  Performance and Enforcement of Certain Obligations.  (a) Promptly
following a written  request from the Credit  Enhancer or the Indenture  Trustee
with the written  consent of the Credit  Enhancer  to do so, the Issuer,  in its
capacity  as holder of the  Revolving  Credit  Loans,  shall,  with the  written
consent of the Credit  Enhancer,  take all such lawful  action as the  Indenture
Trustee may request to cause the Issuer to compel or secure the  performance and
observance  by the Seller and the Master  Servicer,  as  applicable,  of each of
their obligations to the Issuer under or in connection with the Revolving Credit
Loan Purchase Agreement and the Servicing Agreement, and to exercise any and all
rights,  remedies,  powers and privileges lawfully available to the Issuer under
or in  connection  with the  Revolving  Credit Loan  Purchase  Agreement and the
Servicing  Agreement to the extent and in the manner  directed by the  Indenture
Trustee, as pledgee of the Revolving Credit Loans, including the transmission of
notices of default on the part of the Seller or the Master  Servicer  thereunder
and the institution of legal or administrative  actions or proceedings to compel
or secure  performance  by the  Seller or the Master  Servicer  of each of their
obligations under the Revolving Credit Loan Purchase Agreement and the Servicing
Agreement.                                                                      

(b) If an Event  of  Default  has  occurred  and is  continuing,  the  Indenture
Trustee, as pledgee of the Revolving Credit Loans,  subject to the rights of the
Credit Enhancer under the Servicing  Agreement may, and at the direction  (which
direction  shall be in writing or by telephone  (confirmed  in writing  promptly
thereafter))  of the  Holders of 66-2/3% of the  Security  Balances of the Notes
shall,  exercise  all rights,  remedies,  powers,  privileges  and claims of the
Issuer against the Seller or the Master Servicer under or in connection with the
Revolving Credit Loan Purchase Agreement and the Servicing Agreement,  including
the  right or power to take any  action  to  compel  or  secure  performance  or
observance by the Seller or the Master Servicer,  as the case may be, of each of
their  obligations to the Issuer  thereunder  and to give any consent,  request,
notice, direction, approval, extension or waiver under the Revolving Credit Loan
Purchase  Agreement  and the  Servicing  Agreement,  as the case may be, and any
right of the Issuer to take such action shall not be  suspended.  In  connection
therewith,  as determined by the  Indenture  Trustee,  the Issuer shall take all
actions  necessary to effect the transfer of the  Revolving  Credit Loans to the
Indenture Trustee.                                                              

ARTICLE VI

 The Indenture Trustee

Section  6.01.  Duties of  Indenture  Trustee.  (a) If an Event of  Default  has
occurred and is continuing,  the Indenture Trustee shall exercise the rights and
powers vested in it by this  Indenture and use the same degree of care and skill
in  their  exercise  as a  prudent  person  would  exercise  or  use  under  the
circumstances in the conduct of such person's own affairs.                      

(b)     Except during the continuance of an Event of Default:                   

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(i)     the  Indenture  Trustee  undertakes to perform such duties and only such
        duties as are  specifically  set forth in this  Indenture and no implied
        covenants or obligations  shall be read into this Indenture  against the
Indenture Trustee; and                                          

(ii)    in the  absence  of bad faith on its part,  the  Indenture  Trustee  may
        conclusively rely, as to the truth of the statements and the correctness
        of  the  opinions  expressed  therein,  upon  certificates  or  opinions
        furnished to the Indenture Trustee and conforming to the requirements of
        this  Indenture;  however,  the  Indenture  Trustee  shall  examine  the
        certificates  and opinions to  determine  whether or not they conform to
the requirements of this Indenture.                             

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

(i)  this  paragraph  does not limit the effect of paragraph (b) of this Section
6.01;                                                                 

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

(iii)   the Indenture  Trustee shall not be liable with respect to any action it
        takes or omits to take in good  faith  in  accordance  with a  direction
        received  by it (A)  pursuant  to  Section  5.11 or (B) from the  Credit
        Enhancer, which it is entitled to give under any of the Basic Documents.

(d) The Indenture Trustee shall not be liable for interest on any money received
by it except as the Indenture Trustee may agree in writing with the Issuer.     

(e) Money held in trust by the  Indenture  Trustee need not be  segregated  from
other funds except to the extent  required by law or the terms of this Indenture
or the Trust Agreement.                                                         

(f) No provision of this Indenture shall require the Indenture Trustee to expend
or risk its own funds or otherwise incur financial  liability in the performance
of any of its  duties  hereunder  or in the  exercise  of any of its  rights  or
powers,  if it shall have  reasonable  grounds to believe that repayment of such
funds or adequate  indemnity  against such risk or  liability is not  reasonably
assured to it.                                                                  

(g) Every  provision of this Indenture  relating to the conduct or affecting the
liability of or affording  protection to the Indenture  Trustee shall be subject
to the provisions of this Section and to the provisions of the TIA.             

Section 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee may rely on
any  document  believed by it to be genuine and to have been signed or presented
by the proper person.  The Indenture  Trustee need not  investigate  any fact or
matter stated in the document.                                                  

(b) Before the Indenture Trustee acts or refrains from acting, it may require an
Officer's  Certificate or an Opinion of Counsel. The Indenture Trustee shall not
be liable for any action it takes or omits to take in good faith in  reliance on
an Officer's Certificate or Opinion of Counsel.                                 

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(c) The Indenture  Trustee may execute any of the trusts or powers  hereunder or
perform  any  duties  hereunder  either  directly  or by or  through  agents  or
attorneys  or a custodian or nominee,  and the  Indenture  Trustee  shall not be
responsible  for  any  misconduct  or  negligence  on the  part  of,  or for the
supervision of, any such agent,  attorney,  custodian or nominee  appointed with
due care by it hereunder.                                                       

(d) The  Indenture  Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers;  provided,  however,  that  the  Indenture  Trustee's  conduct  does not
constitute willful misconduct, negligence or bad faith.                         

(e) The Indenture Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters  relating to this  Indenture and the Notes
shall be full and  complete  authorization  and  protection  from  liability  in
respect to any action  taken,  omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.                   

Section 6.03.  Individual Rights of Indenture Trustee.  The Indenture Trustee in
its  individual  or any other  capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee. Any Note Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Indenture Trustee
must comply with Sections 6.11 and 6.12.                                        

Section 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee shall not be
(i) responsible for and makes no  representation  as to the validity or adequacy
of this  Indenture or the Notes,  (ii)  accountable  for the Issuer's use of the
proceeds from the Notes or (iii)  responsible for any statement of the Issuer in
the Indenture or in any document issued in connection with the sale of the Notes
or  in  the  Notes   other  than  the   Indenture   Trustee's   certificate   of
authentication.                                                                 

Section 6.05.  Notice of Event of Default.  If an Event of Default occurs and is
continuing and if it is known to a Responsible Officer of the Indenture Trustee,
the Indenture  Trustee  shall give notice  thereof to the Credit  Enhancer.  The
Indenture  Trustee shall mail to each Noteholder  notice of the Event of Default
within 90 days  after it  occurs.  Except in the case of an Event of  Default in
payment of  principal  of or interest  on any Note,  the  Indenture  Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good  faith  determines  that  withholding  the  notice is in the  interests  of
Noteholders.                                                                    

Section 6.06.  Reports by Indenture  Trustee to Holders.  The Indenture  Trustee
shall deliver to each Noteholder  such  information as may be required to enable
such holder to prepare its federal and state  income tax  returns.  In addition,
upon the Issuer's written request,  the Indenture Trustee shall promptly furnish
information  reasonably  requested by the Issuer that is reasonably available to
the  Indenture  Trustee to enable the Issuer to perform  its  federal  and state
income tax reporting obligations.                                               

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Section 6.07. Compensation and Indemnity.  The Issuer shall pay to the Indenture
Trustee on each Payment  Date  reasonable  compensation  for its  services.  The
Indenture Trustee shall be compensated and indemnified by the Master Servicer in
accordance with Section 6.06 of the Servicing  Agreement,  and all amounts owing
to the Indenture Trustee hereunder in excess of such amount shall be paid solely
as  provided  in  Section  3.05  hereof  (subject  to the  priorities  set forth
therein).  The Indenture Trustee's  compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Issuer shall reimburse the
Indenture Trustee for all reasonable  out-of-pocket expenses incurred or made by
it,  including  costs of  collection,  in addition to the  compensation  for its
services.  Such expenses shall include the reasonable compensation and expenses,
disbursements  and  advances  of  the  Indenture   Trustee's  agents,   counsel,
accountants  and  experts.  The Issuer shall  indemnify  the  Indenture  Trustee
against  any and all loss,  liability  or expense  (including  attorneys'  fees)
incurred  by it in  connection  with the  administration  of this  trust and the
performance  of its duties  hereunder.  The  Indenture  Trustee shall notify the
Issuer  promptly  of any claim for which it may seek  indemnity.  Failure by the
Indenture  Trustee to so notify the Issuer  shall not  relieve the Issuer of its
obligations hereunder. The Issuer shall defend any such claim, and the Indenture
Trustee may have separate counsel and the Issuer shall pay the fees and expenses
of such  counsel.  The  Issuer is not  obligated  to  reimburse  any  expense or
indemnify  against any loss,  liability  or expense  incurred  by the  Indenture
Trustee through the Indenture  Trustee's own willful  misconduct,  negligence or
bad faith.                                                                      

        The Issuer's  payment  obligations to the Indenture  Trustee pursuant to
this  Section  6.07 shall  survive the  discharge  of this  Indenture.  When the
Indenture  Trustee  incurs  expenses after the occurrence of an Event of Default
specified  in clause (iv) or (v) of the  definition  thereof with respect to the
Issuer, the expenses are intended to constitute expenses of administration under
Title 11 of the  United  States  Code or any other  applicable  federal or state
bankruptcy, insolvency or similar law.                                          

Section 6.08. Replacement of Indenture Trustee. No resignation or removal of the
Indenture  Trustee and no  appointment  of a successor  Indenture  Trustee shall
become effective until the acceptance of appointment by the successor  Indenture
Trustee  pursuant to this Section 6.08. The Indenture  Trustee may resign at any
time by so  notifying  the  Issuer  and the Credit  Enhancer.  The  Holders of a
majority of Security Balances of the Notes or the Credit Enhancer may remove the
Indenture  Trustee by so notifying the Indenture Trustee and the Credit Enhancer
and may appoint a  successor  Indenture  Trustee.  The Issuer  shall  remove the
Indenture Trustee if:                                                           

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

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

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

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

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

        A successor  Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer.  Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture.  The successor  Indenture Trustee
shall mail a notice of its  succession to  Noteholders.  The retiring  Indenture
Trustee shall promptly  transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.                                                

        If a successor  Indenture  Trustee  does not take office  within 60 days
after the  retiring  Indenture  Trustee  resigns  or is  removed,  the  retiring
Indenture Trustee,  the Issuer or the Holders of a majority of Security Balances
of  the  Notes  may  petition  any  court  of  competent  jurisdiction  for  the
appointment of a successor Indenture Trustee.                                   

        If the  Indenture  Trustee  fails  to  comply  with  Section  6.11,  any
Noteholder may petition any court of competent  jurisdiction  for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.     

        Notwithstanding  the  replacement of the Indenture  Trustee  pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.                                      

Section 6.09.  Successor  Indenture  Trustee by Merger. If the Indenture Trustee
consolidates  with,  merges or converts into, or transfers all or  substantially
all its corporate  trust business or assets to,  another  corporation or banking
association,  the  resulting,  surviving or transferee  corporation  without any
further  act  shall be the  successor  Indenture  Trustee;  provided,  that such
corporation  or banking  association  shall be otherwise  qualified and eligible
under Section  6.11.  The  Indenture  Trustee shall provide the Rating  Agencies
written notice of any such transaction after the Closing Date.                  

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

Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal  requirement of any  jurisdiction in which any part

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of the Trust Estate may at the time be located, the Indenture Trustee shall have
the power and may execute and  deliver  all  instruments  to appoint one or more
Persons to act as a co-trustee or co-trustees,  or separate  trustee or separate
trustees,  of all or any part of the Trust Estate, and to vest in such Person or
Persons, in such capacity and for the benefit of the Noteholders,  such title to
the Trust Estate,  or any part thereof,  and, subject to the other provisions of
this  Section,  such  powers,  duties,  obligations,  rights  and  trusts as the
Indenture Trustee may consider necessary or desirable. No co-trustee or separate
trustee  hereunder  shall be  required  to meet the  terms of  eligibility  as a
successor  trustee  under  Section  6.11 and no  notice  to  Noteholders  of the
appointment  of any  co-trustee  or separate  trustee  shall be  required  under
Section 6.08 hereof.                                                            

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

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

(ii) no trustee  hereunder  shall be  personally  liable by reason of any act or
omission of any other trustee hereunder; and                          

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

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

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

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Section 6.11. Eligibility;  Disqualification. The Indenture Trustee shall at all
times satisfy the  requirements of TIA ss. 310(a).  The Indenture  Trustee shall
have a combined capital and surplus of at least  $50,000,000 as set forth in its
most recent published annual report of condition and it or its parent shall have
a long-term debt rating of A or better by Moody's.  The Indenture  Trustee shall
comply with TIA ss. 310(b),  including the optional  provision  permitted by the
second sentence of TIA ss.  310(b)(9);  provided,  however,  that there shall be
excluded  from the  operation of TIA ss.  310(b)(1)  any indenture or indentures
under which other  securities of the Issuer are outstanding if the  requirements
for such exclusion set forth in TIA ss. 310(b)(1) are met.                      

Section 6.12.  Preferential  Collection of Claims Against Issuer.  The Indenture
Trustee shall comply with TIA ss.  311(a),  excluding any creditor  relationship
listed in TIA ss. 311(b).  An Indenture Trustee who has resigned or been removed
shall be subject to TIA ss. 311(a) to the extent indicated.                     

Section 6.13.  Representations  and  Warranties.  The Indenture  Trustee  hereby
represents that:                                                                

(i)     The Indenture  Trustee is duly organized,  validly  existing and in good
        standing  under  the  laws of the  State  of New  York  with  power  and
        authority  to own its  properties  and to conduct  its  business as such
        properties are currently owned and such business is presently conducted.

(ii)    The Indenture Trustee has the power and authority to execute and deliver
        this Indenture and to carry out its terms;  and the execution,  delivery
        and  performance  of this  Indenture  have been duly  authorized  by the
Indenture Trustee by all necessary corporate action.            

(iii)   The consummation of the transactions  contemplated by this Indenture and
        the fulfillment of the terms hereof do not conflict with,  result in any
        breach of any of the terms and  provisions  of, or  constitute  (with or
        without  notice  or lapse of time) a  default  under,  the  articles  of
        organization  or bylaws of the  Indenture  Trustee or any  agreement  or
        other  instrument to which the Indenture  Trustee is a party or by which
it is bound.                                                    

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

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

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Section 6.14.  Directions to Indenture Trustee.  The Indenture Trustee is hereby
directed:                                                                       

(a) to accept the pledge of the  Revolving  Credit  Loans and hold the assets of
the Trust in trust for the Noteholders and the Credit Enhancer;                 

(b) to authenticate  and deliver the Notes  substantially in the form prescribed
by Exhibit A in accordance with the terms of this Indenture; and                

(c) to take all other  actions as shall be  required to be taken by the terms of
this Indenture.                                                                 

Section 6.15.  Indenture Trustee May Own Securities.  The Indenture Trustee,  in
its  individual  or any  other  capacity  may  become  the owner or  pledgee  of
Securities with the same rights it would have if it were not Indenture Trustee. 

ARTICLE VII 

Noteholders' Lists and Reports

Section  7.01.  Issuer to  Furnish  Indenture  Trustee  Names and  Addresses  of
Noteholders.  The Issuer will furnish or cause to be furnished to the  Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably  require,  of the names and addresses of
the Holders of Notes as of such Record Date and,  (b) at such other times as the
Indenture Trustee and the Credit Enhancer may request in writing, within 30 days
after  receipt by the  Issuer of any such  request,  a list of similar  form and
content  as of a date not more  than 10 days  prior  to the  time  such  list is
furnished;  provided, however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished.                      

Section 7.02.  Preservation of Information;  Communications to Noteholders.  (a)
The  Indenture  Trustee  shall  preserve,  in as current a form as is reasonably
practicable,  the names and  addresses of the Holders of Notes  contained in the
most recent list furnished to the Indenture  Trustee as provided in Section 7.01
and the names and  addresses  of  Holders  of Notes  received  by the  Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.                                                                   

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

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

Section 7.03.  Reports by Issuer.  (a)  The Issuer shall:                       

(i)     file with the  Indenture  Trustee,  within 15 days  after the  Issuer is
        required  to file the same with the  Commission,  copies  of the  annual
        reports and the  information,  documents and other reports (or copies of
        such portions of any of the foregoing as the Commission may from time to
        time by rules and regulations prescribe) that the Issuer may be required
        to file  with the  Commission  pursuant  to  Section  13 or 15(d) of the
Exchange Act;                                                   

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(ii)    file with the Indenture  Trustee,  and the Commission in accordance with
        rules and  regulations  prescribed  from time to time by the  Commission
        such  additional  information,  documents  and reports  with  respect to
        compliance  by the Issuer  with the  conditions  and  covenants  of this
        Indenture  as may be  required  from  time to time  by  such  rules  and
regulations; and                                                

(iii)   supply  to the  Indenture  Trustee  (and  the  Indenture  Trustee  shall
        transmit by mail to all  Noteholders  described in TIA ss.  313(c)) such
        summaries of any information, documents and reports required to be filed
        by the Issuer  pursuant to clauses (i) and (ii) of this Section  7.03(a)
        and by  rules  and  regulations  prescribed  from  time  to  time by the
Commission.                                                     

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

Section  7.04.  Reports by  Indenture  Trustee.  If required by TIA ss.  313(a),
within 60 days  after  each  January 1  beginning  with  January  1,  2000,  the
Indenture  Trustee  shall mail to each  Noteholder as required by TIA ss. 313(c)
and to the Credit  Enhancer a brief report  dated as of such date that  complies
with TIA ss.  313(a).  The  Indenture  Trustee  also shall  comply  with TIA ss.
313(b).                                                                         

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

ARTICLE VIII                                                                    

Accounts, Disbursements and Releases

Section  8.01.  Collection  of Money.  Except as  otherwise  expressly  provided
herein,  the  Indenture  Trustee may demand  payment or  delivery  of, and shall
receive and collect,  directly and without  intervention  or  assistance  of any
fiscal agent or other  intermediary,  all money and other property payable to or
receivable by the Indenture  Trustee  pursuant to this Indenture.  The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture,  if any default occurs
in the making of any payment or  performance  under any  agreement or instrument
that is part of the Trust Estate,  the Indenture Trustee may take such action as
may be  appropriate  to enforce  such  payment  or  performance,  including  the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.         

Section 8.02.  Trust  Accounts.  (a) On or prior to the Closing Date, the Issuer
shall cause the Indenture Trustee to establish and maintain,  in the name of the
Indenture Trustee, for the benefit of the Noteholders and the Certificate Paying
Agent, on behalf of the  Certificateholders and the Credit Enhancer, the Payment
Account as provided in Section 3.01 of this Indenture.                          

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(b) All monies  deposited from time to time in the Payment  Account  pursuant to
the Servicing  Agreement and all deposits therein pursuant to this Indenture are
for the benefit of the Noteholders  and the Certificate  Paying Agent, on behalf
of the  Certificateholders  and all investments  made with such monies including
all income or other gain from such investments are for the benefit of the Master
Servicer as provided by the Servicing Agreement.                                

        On each Payment Date, the Indenture Trustee shall distribute all amounts
on deposit in the Payment  Account to Noteholders in respect of the Notes and in
its capacity as Certificate Paying Agent to  Certificateholders  in the order of
priority  set forth in Section  3.05  (except as  otherwise  provided in Section
5.04(b).                                                                        

        The Master  Servicer  shall direct the  Indenture  Trustee in writing to
invest any funds in the Payment  Account in  Permitted  Investments  maturing no
later than the Business Day preceding each Payment Date and shall not be sold or
disposed of prior to the maturity.                                              

Section 8.03.  Officer's  Certificate.  The  Indenture  Trustee shall receive at
least seven days notice when requested by the Issuer to take any action pursuant
to Section 8.05(a), accompanied by copies of any instruments to be executed, and
the  Indenture  Trustee shall also  require,  as a condition to such action,  an
Officer's  Certificate,  in form and  substance  satisfactory  to the  Indenture
Trustee,  stating  the legal  effect  of any such  action,  outlining  the steps
required to complete the same, and concluding  that all conditions  precedent to
the taking of such action have been complied with.                              

Section 8.04.  Termination Upon Distribution to Noteholders.  This Indenture and
the respective  obligations and responsibilities of the Issuer and the Indenture
Trustee created hereby shall terminate upon the distribution to the Noteholders,
the  Certificate  Paying  Agent (on  behalf of the  Certificateholders)  and the
Indenture Trustee of all amounts required to be distributed  pursuant to Article
III; provided, however, that in no event shall the trust created hereby continue
beyond  the  expiration  of 21 years  from  the  death  of the  survivor  of the
descendants  of Joseph P. Kennedy,  the late  ambassador of the United States to
the Court of St. James's, living on the date hereof.                            

Section 8.05.  Release of Trust  Estate.  (a) Subject to the payment of its fees
and expenses,  the Indenture Trustee may, and when required by the provisions of
this Indenture shall,  execute  instruments to release property from the lien of
this  Indenture,  or convey the Indenture  Trustee's  interest in the same, in a
manner and under  circumstances that are not inconsistent with the provisions of
this  Indenture.  No party relying upon an instrument  executed by the Indenture
Trustee as provided in Article VIII  hereunder  shall be bound to ascertain  the
Indenture Trustee's  authority,  inquire into the satisfaction of any conditions
precedent, or see to the application of any monies.                             

(b) The  Indenture  Trustee  shall,  at  such  time as (i)  there  are no  Notes
Outstanding,  (ii) all sums due the Indenture Trustee pursuant to this Indenture

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have been  paid,  and (iii) all sums due the  Credit  Enhancer  have been  paid,
release any  remaining  portion of the Trust  Estate that secured the Notes from
the lien of this Indenture.                                                     

(c) The Indenture Trustee shall release property from the lien of this Indenture
pursuant to this  Section  8.05 only upon  receipt of a request  from the Issuer
accompanied by an Officers'  Certificate and a letter from the Credit  Enhancer,
stating  that the Credit  Enhancer  has no  objection  to such  request from the
Issuer.                                                                         

(d) The Indenture  Trustee shall, at the request of the Issuer or the Depositor,
surrender  the  Credit  Enhancement   Instrument  to  the  Credit  Enhancer  for
cancellation, upon final payment of principal and interest on the Notes.        

Section 8.06.  Surrender of Notes Upon Final Payment. By acceptance of any Note,
the  Holder  thereof  agrees to  surrender  such Note to the  Indenture  Trustee
promptly, prior to such Noteholder's receipt of the final payment thereon.      

ARTICLE IX

 Supplemental Indentures

Section  9.01.  Supplemental  Indentures  Without  Consent of  Noteholders.  (a)
Without  the  consent of the  Holders of any Notes but with prior  notice to the
Rating Agencies and the Credit Enhancer,  the Issuer and the Indenture  Trustee,
when  authorized by an Issuer  Request,  at any time and from time to time,  may
enter into one or more  indentures  supplemental  hereto (which shall conform to
the provisions of the TIA as in force at the date of the execution thereof),  in
form satisfactory to the Indenture Trustee, for any of the following purposes:  

(i)     to  correct or  amplify  the  description  of any  property  at any time
        subject to the lien of this Indenture,  or better to assure,  convey and
        confirm unto the Indenture  Trustee any property  subject or required to
        be subjected to the lien of this Indenture, or to subject to the lien of
this Indenture additional property;                             

(ii)    to evidence the succession, in compliance with the applicable provisions
        hereof, of another person to the Issuer,  and the assumption by any such
        successor  of  the  covenants  of the  Issuer  herein  and in the  Notes
contained;                                                      

(iii)   to add to the covenants of the Issuer, for the benefit of the Holders of
        the Notes or the Credit  Enhancer,  or to  surrender  any right or power
herein conferred upon the Issuer;                               

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

(v)  to cure any ambiguity,  to correct or supplement any provision herein or in
     any  supplemental  indenture  that  may  be  inconsistent  with  any  other
provision herein or in any supplemental indenture;                    

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(vi)    to make any other  provisions  with  respect  to  matters  or  questions
        arising under this Indenture or in any supplemental indenture; provided,
        that such action shall not materially and adversely affect the interests
of the Holders of the Notes or the Credit Enhancer;             

(vii)   to evidence and provide for the acceptance of the appointment  hereunder
        by a successor trustee with respect to the Notes and to add to or change
        any of the  provisions  of this  Indenture  as  shall  be  necessary  to
        facilitate the  administration  of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI;            

(viii) to  increase  the  Maximum  Variable  Funding  Balance,  with the written
consent of the Credit Enhancer: or                                    

(ix)    to modify,  eliminate or add to the provisions of this Indenture to such
        extent  as  shall be  necessary  to  effect  the  qualification  of this
        Indenture under the TIA or under any similar  federal statute  hereafter
        enacted and to add to this  Indenture  such other  provisions  as may be
expressly required by the TIA;                                  

provided,  however,  that no such  indenture  supplements  shall be entered into
unless the  Indenture  Trustee  shall have  received an Opinion of Counsel  that
entering into such indenture  supplement will not have any material  adverse tax
consequences to the Noteholders.                                                

        The Indenture  Trustee is hereby  authorized to join in the execution of
any such supplemental  indenture and to make any further appropriate  agreements
and stipulations that may be therein contained.                                 

(b) The Issuer and the Indenture Trustee,  when authorized by an Issuer Request,
may,  also without the consent of any of the Holders of the Notes but with prior
notice to the Rating Agencies and the Credit  Enhancer,  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 the Notes
under  this  Indenture;  provided,  however,  that such  action  shall  not,  as
evidenced by an Opinion of Counsel, (i) adversely affect in any material respect
the interests of any Noteholder or the Credit  Enhancer or (ii) cause the Issuer
to be subject to an entity level tax.                                           

Section 9.02.  Supplemental  Indentures With Consent of Noteholders.  The Issuer
and the Indenture Trustee,  when authorized by an Issuer Request, also may, with
prior  notice to the Rating  Agencies and with the consent of the Holders of not
less than a majority of the Security  Balances of the Notes affected thereby and
the Credit  Enhancer,  by Act of such  Holders  delivered  to the Issuer and the
Indenture Trustee, enter into an indenture or indentures supplemental hereto for
the  purpose  of  adding  any  provisions  to,  or  changing  in any  manner  or
eliminating  any of the  provisions  of, this  Indenture  or of modifying in any
manner the rights of the  Holders of the Notes under this  Indenture;  provided,
however,  that no such supplemental  indenture shall, without the consent of the
Holder of each Note affected thereby:                                           

(i)  change the date of payment of any  installment  of principal of or interest
     on any Note,  or reduce the principal  amount  thereof or the interest rate
     thereon,   change  the  provisions  of  this  Indenture   relating  to  the
     application  of  collections  on, or the proceeds of the sale of, the Trust

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     Estate to payment of principal  of or interest on the Notes,  or change any
     place of payment where,  or the coin or currency in which,  any Note or the
     interest thereon is payable,  or impair the right to institute suit for the
     enforcement of the provisions of this Indenture  requiring the  application
     of funds  available  therefor,  as provided in Article V, to the payment of
     any such  amount  due on the  Notes on or after  the  respective  due dates
thereof;                                                              

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

(iii)   modify or alter the  provisions of the proviso to the  definition of the
        term "Outstanding" or modify or alter the exception in the definition of
the term "Noteholder";                                          

(iv)    reduce the percentage of the Security  Balances of the Notes required to
        direct the  Indenture  Trustee to direct the Issuer to sell or liquidate
the Trust Estate pursuant to Section 5.04;                      

(v)     modify  any  provision  of this  Section  9.02  except to  increase  any
        percentage  specified  herein  or to  provide  that  certain  additional
        provisions of this Indenture or the Basic  Documents  cannot be modified
        or waived  without  the  consent  of the  Holder  of each Note  affected
thereby;                                                        

(vi)    modify any of the  provisions  of this  Indenture  in such  manner as to
        affect the  calculation  of the amount of any  payment  of  interest  or
        principal due on any Note on any Payment Date (including the calculation
of any of the individual components of such calculation); or    

(vii)   permit the creation of any lien ranking prior to or on a parity with the
        lien of this  Indenture with respect to any part of the Trust Estate or,
        except as otherwise permitted or contemplated herein, terminate the lien
        of this  Indenture on any property at any time subject hereto or deprive
        the  Holder  of any Note of the  security  provided  by the lien of this
        Indenture;  and  provided,  further,  that such  action  shall  not,  as
        evidenced by an Opinion of Counsel, cause the Issuer to be subject to an
entity level tax.                                               

        The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be  conclusive  upon the  Holders of all  Notes,  whether  theretofore  or
thereafter  authenticated and delivered  hereunder.  The Indenture Trustee shall
not be liable for any such determination made in good faith.                    

        It shall not be  necessary  for any Act of  Noteholders  (as  defined in
Section  10.03) under this Section  9.02 to approve the  particular  form of any
proposed  supplemental  indenture,  but it shall be sufficient if such Act shall
approve the substance thereof.                                                  

        Promptly after the execution by the Issuer and the Indenture  Trustee of
any supplemental  indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Notes to which such  amendment or  supplemental

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indenture  relates a notice setting forth in general terms the substance of such
supplemental  indenture.  Any  failure  of the  Indenture  Trustee  to mail such
notice, or any defect therein,  shall not, however,  in any way impair or affect
the validity of any such supplemental indenture.                                

Section 9.03. Execution of Supplemental Indentures.  In executing, or permitting
the additional trusts created by, any supplemental  indenture  permitted by this
Article IX or the modification  thereby of the trusts created by this Indenture,
the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01
and 6.02,  shall be fully  protected  in  relying  upon,  an  Opinion of Counsel
stating that the  execution of such  supplemental  indenture  is  authorized  or
permitted  by this  Indenture.  The  Indenture  Trustee  may,  but  shall not be
obligated  to,  enter into any such  supplemental  indenture  that  affects  the
Indenture  Trustee's own rights,  duties,  liabilities or immunities  under this
Indenture or otherwise.                                                         

Section  9.04.  Effect of  Supplemental  Indenture.  Upon the  execution  of any
supplemental  indenture pursuant to the provisions hereof,  this Indenture shall
be and shall be deemed to be modified and amended in accordance  therewith  with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations,  duties, liabilities and immunities under this Indenture of
the Indenture Trustee,  the Issuer and the Holders of the Notes shall thereafter
be determined,  exercised and enforced hereunder subject in all respects to such
modifications  and  amendments,  and all the  terms and  conditions  of any such
supplemental  indenture  shall  be and be  deemed  to be part of the  terms  and
conditions of this Indenture for any and all purposes.                          

Section 9.05.  Conformity  with Trust  Indenture  Act.  Every  amendment of this
Indenture and every supplemental  indenture executed pursuant to this Article IX
shall conform to the  requirements  of the TIA as then in effect so long as this
Indenture shall then be qualified under the TIA.                                

Section 9.06. Reference in Notes to Supplemental Indentures. Notes authenticated
and delivered after the execution of any supplemental indenture pursuant to this
Article IX may, and if required by the Indenture  Trustee shall, bear a notation
in form approved by the Indenture  Trustee as to any matter provided for in such
supplemental  indenture.  If  the  Issuer  or the  Indenture  Trustee  shall  so
determine,  new Notes so modified as to conform, in the opinion of the Indenture
Trustee and the Issuer, to any such  supplemental  indenture may be prepared and
executed by the Issuer and  authenticated and delivered by the Indenture Trustee
in exchange for Outstanding Notes.                                              

ARTICLE X 

 Miscellaneous

Section  10.01.   Compliance  Certificates  and  Opinions,  etc.  (a)  Upon  any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee and to the Credit Enhancer (i) an Officer's Certificate stating that all
conditions  precedent,  if any,  provided for in this Indenture  relating to the
proposed  action have been complied with and (ii) an Opinion of Counsel  stating
that in the opinion of such counsel all such conditions precedent,  if any, have

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been complied with,  except that, in the case of any such application or request
as to which the  furnishing of such  documents is  specifically  required by any
provision  of this  Indenture,  no  additional  certificate  or opinion  need be
furnished.                                                                      

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

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

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

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

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

(v)  if the Signer of such Certificate or Opinion is required to be Independent,
the statement required by the definition of the term "Independent".   

(b) (i) Prior to the deposit of any  Collateral or other  property or securities
with the  Indenture  Trustee that is to be made the basis for the release of any
property or securities subject to the lien of this Indenture,  the Issuer shall,
in addition to any obligation  imposed in Section  10.01(a) or elsewhere in this
Indenture,  furnish to the Indenture Trustee an Officer's Certificate certifying
or stating the opinion of each person  signing such  certificate  as to the fair
value (within 90 days of such deposit) to the Issuer of the  Collateral or other
property or securities to be so deposited.                                      

(ii) Whenever  the Issuer is  required  to furnish to the  Indenture  Trustee an
     Officer's  Certificate  certifying  or  stating  the  opinion of any signer
     thereof as to the matters  described in clause (i) above,  the Issuer shall
     also deliver to the Indenture Trustee an Independent  Certificate as to the
     same  matters,  if the fair value to the Issuer of the  securities to be so
     deposited  and of all  other  such  securities  made the  basis of any such
     withdrawal or release since the  commencement  of the  then-current  fiscal
     year of the Issuer, as set forth in the certificates  delivered pursuant to
     clause  (i)  above and this  clause  (ii),  is 10% or more of the  Security
     Balances of the Notes,  but such a certificate  need not be furnished  with
     respect to any  securities so  deposited,  if the fair value thereof to the
     Issuer  as set  forth in the  related  Officer's  Certificate  is less than
 $25,000 or less than one percent of the Security Balances of the Notes.

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(iii)   Whenever any property or securities  are to be released from the lien of
        this Indenture,  the Issuer shall also furnish to the Indenture  Trustee
        an  Officer's  Certificate  certifying  or stating  the  opinion of each
        person signing such  certificate as to the fair value (within 90 days of
        such release) of the property or securities  proposed to be released and
        stating that in the opinion of such person the proposed release will not
        impair  the  security  under  this  Indenture  in  contravention  of the
provisions hereof.                                              

(iv) Whenever  the Issuer is  required  to furnish to the  Indenture  Trustee an
     Officer's  Certificate  certifying  or  stating  the  opinion of any signer
     thereof as to the matters described in clause (iii) above, the Issuer shall
     also furnish to the Indenture Trustee an Independent  Certificate as to the
     same  matters if the fair value of the  property or  securities  and of all
     other property,  other than property as contemplated by clause (v) below or
     securities  released from the lien of this Indenture since the commencement
     of the  then-current  calendar  year,  as  set  forth  in the  certificates
     required by clause (iii) above and this clause (iv),  equals 10% or more of
     the  Security  Balances  of the  Notes,  but such  certificate  need not be
     furnished in the case of any release of property or  securities if the fair
     value  thereof as set forth in the related  Officer's  Certificate  is less
     than $25,000 or less than one percent of the then Security  Balances of the
Notes.                                                                

(v)  Notwithstanding  any provision of this Indenture,  the Issuer may,  without
     compliance with the  requirements  of the other  provisions of this Section
     10.01, (A) collect, sell or otherwise dispose of the Revolving Credit Loans
     as and to the extent  permitted  or required by the Basic  Documents or (B)
     make  cash  payments  out  of the  Payment  Account  as  and to the  extent
     permitted or required by the Basic  Documents,  so long as the Issuer shall
     deliver to the Indenture Trustee every six months,  commencing December 31,
     2000,  an  Officer's  Certificate  of  the  Issuer  stating  that  all  the
     dispositions  of  Collateral  described  in  clauses  (A) or (B) above that
     occurred  during the  preceding  six  calendar  months were in the ordinary
     course of the Issuer's  business and that the proceeds thereof were applied
in accordance with the Basic Documents.                               

Section 10.02.  Form of Documents  Delivered to Indenture  Trustee.  In any case
where several  matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered  by the  opinion  of,  only one such  Person,  or that they be so
certified  or covered by only one  document,  but one such Person may certify or
give an opinion  with respect to some matters and one or more other such Persons
as to other  matters,  and any such  Person may certify or give an opinion as to
such matters in one or several documents.                                       

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

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exercise of  reasonable  care should know,  that the  certificate  or opinion or
representations with respect to such matters are erroneous.                     

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

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

Section 10.03.  Acts of  Noteholders.  (a) Any request,  demand,  authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially  similar tenor signed by such Noteholders in person
or by agents duly appointed in writing; and except as herein otherwise expressly
provided such action shall become  effective when such instrument or instruments
are  delivered  to the  Indenture  Trustee,  and,  where it is hereby  expressly
required, to the Issuer. Such instrument or instruments (and the action embodied
therein and evidenced  thereby) are herein sometimes referred to as the "Act" of
the Noteholders  signing such  instrument or instruments.  Proof of execution of
any  such  instrument  or of a  writing  appointing  any  such  agent  shall  be
sufficient  for any purpose of this  Indenture  and  (subject  to Section  6.01)
conclusive  in favor of the  Indenture  Trustee and the  Issuer,  if made in the
manner provided in this Section 10.03.                                          

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

(c)     The ownership of Notes shall be proved by the Note Registrar.           

(d) Any request, demand,  authorization,  direction,  notice, consent, waiver or
other  action by the  Holder of any Notes  shall  bind the  Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything  done,  omitted or  suffered to be done by the  Indenture
Trustee or the Issuer in  reliance  thereon,  whether  or not  notation  of such
action is made upon such Note.                                                  

Section 10.04. Notices, etc., to Indenture Trustee,  Issuer, Credit Enhancer and
Rating Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of  Noteholders or other  documents  provided or permitted by this
Indenture  shall  be in  writing  and if such  request,  demand,  authorization,
direction,  notice,  consent,  waiver or Act of  Noteholders is to be made upon,
given or furnished to or filed with:                                            

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(i)     the  Indenture  Trustee  by any  Noteholder  or by the  Issuer  shall be
        sufficient  for every  purpose  hereunder if made,  given,  furnished or
        filed in writing to or with the Indenture Trustee at the Corporate Trust
        Office.  The  Indenture  Trustee  shall  promptly  transmit  any  notice
received by it from the Noteholders to the Issuer, or           

(ii)    the  Issuer  by the  Indenture  Trustee  or by any  Noteholder  shall be
        sufficient  for  every  purpose  hereunder  if  in  writing  and  mailed
        first-class,  postage  prepaid to the Issuer  addressed  to: Home Equity
        Loan Trust  2000-HS1,  in care of Wilmington  Trust  Company,  or at any
        other address  previously  furnished in writing to the Indenture Trustee
        by the Issuer. The Issuer shall promptly transmit any notice received by
it from the Noteholders to the Indenture Trustee, or            

(iii)the  Credit  Enhancer  by  the  Issuer,  the  Indenture  Trustee  or by any
     Noteholders  shall be sufficient for every purpose  hereunder to in writing
     and mailed,  first-class  postage  pre-paid,  or  personally  delivered  or
     telecopied to: Ambac Assurance  Corporation,  One State Street Plaza,  19th
     Floor,  New  York,  New  York  10004,   Attention:   Consumer  Asset-Backed
     Securities  Group,  telecopier  number (212) 363-1459.  The Credit Enhancer
     shall  promptly  transmit  any notice  received by it from the Issuer,  the
     Indenture Trustee or the Noteholders to the Issuer or Indenture Trustee, as
the case may be.                                                      

        Notices  required to be given to the Rating Agencies by the Issuer,  the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered
or mailed by certified  mail,  return receipt  requested,  to (i) in the case of
Fitch, at the following address:  Fitch, Inc., One State Street Plaza, New York,
New York 10004,  Attention:  Residential  Mortgage Group and (ii) in the case of
Standard & Poor's, at the following address: Standard & Poor's Ratings Services,
55  Water  Street,  New  York,  New  York  10041,   Attention  of  Asset  Backed
Surveillance  Department;  or as to each of the foregoing, at such other address
as shall be designated by written notice to the other parties.                  

Section 10.05. Notices to Noteholders; Waiver. Where this Indenture provides for
notice to  Noteholders  of any event,  such notice shall be  sufficiently  given
(unless  otherwise  herein  expressly   provided)  if  in  writing  and  mailed,
first-class,  postage prepaid to each Noteholder affected by such event, at such
Person's  address as it appears on the Note Register,  not later than the latest
date, and not earlier than the earliest date,  prescribed for the giving of such
notice.  In any case where notice to Noteholders  is given by mail,  neither the
failure  to mail  such  notice  nor any  defect  in any  notice so mailed to any
particular  Noteholder  shall affect the sufficiency of such notice with respect
to other  Noteholders,  and any  notice  that is  mailed  in the  manner  herein
provided shall  conclusively  be presumed to have been duly given  regardless of
whether such notice is in fact actually received.                               

        Where this Indenture provides for notice in any manner,  such notice may
be waived in writing by any Person  entitled  to  receive  such  notice,  either
before or after the  event,  and such  waiver  shall be the  equivalent  of such
notice.  Waivers  of notice by  Noteholders  shall be filed  with the  Indenture
Trustee but such filing  shall not be a condition  precedent  to the validity of
any action taken in reliance upon such a waiver.                                

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        In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity,  it shall be impractical to mail
notice of any event to  Noteholders  when such  notice is  required  to be given
pursuant  to any  provision  of this  Indenture,  then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.                                               

        Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice  shall not affect any other  rights or  obligations  created
hereunder, and shall not under any circumstance constitute an Event of Default. 

Section 10.06.  Alternate  Payment and Notice  Provisions.  Notwithstanding  any
provision of this Indenture or any of the Notes to the contrary,  the Issuer may
enter into any  agreement  with any Holder of a Note  providing  for a method of
payment,  or notice by the Indenture  Trustee to such Holder,  that is different
from the methods  provided for in this  Indenture  for such payments or notices.
The Issuer shall furnish to the Indenture  Trustee a copy of each such agreement
and the  Indenture  Trustee  shall  cause  payments to be made and notices to be
given in accordance with such agreements.                                       

Section  10.07.  Conflict  with Trust  Indenture  Act. If any  provision  hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the TIA, such required
provision shall control.                                                        

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

Section 10.08.  Effect of Headings.  The Article and Section headings herein are
for convenience only and shall not affect the construction hereof.              

Section  10.09.  Successors  and Assigns.  All covenants and  agreements in this
Indenture  and the Notes by the Issuer  shall bind its  successors  and assigns,
whether so expressed or not. All  agreements  of the  Indenture  Trustee in this
Indenture shall bind its successors, co-trustees and agents.                    

Section 10.10.  Separability.  In case any provision in this Indenture or in the
Notes shall be invalid,  illegal or unenforceable,  the validity,  legality, and
enforceability  of the remaining  provisions shall not in any way be affected or
impaired thereby.                                                               

Section 10.11. Benefits of Indenture. Nothing in this Indenture or in the Notes,
express or implied,  shall give to any Person, other than the parties hereto and
their successors hereunder,  and the Noteholders,  the Credit Enhancer,  and any
other party secured  hereunder,  and any other Person with an ownership interest
in any part of the Trust  Estate,  any benefit or any legal or equitable  right,
remedy or claim under this Indenture.                                           

Section 10.12.  Legal Holidays.  In any case where the date on which any payment
is due shall not be a Business Day, then (notwithstanding any other provision of
the Notes or this  Indenture)  payment need not be made on such date, but may be
made on the next  succeeding  Business  Day with the same force and effect as if
made on the date on which  nominally  due, and no interest  shall accrue for the
period from and after any such nominal date.                                    

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Section 10.13.  GOVERNING  LAW. THIS INDENTURE  SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS,  AND THE OBLIGATIONS,  RIGHTS AND REMEDIES OF THE PARTIES  HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.                               

Section  10.14.  Counterparts.  This  Indenture may be executed in any number of
counterparts,  each of which so executed shall be deemed to be an original,  but
all such counterparts shall together constitute but one and the same instrument.

Section 10.15. Recording of Indenture. If this Indenture is subject to recording
in any appropriate public recording offices, such recording is to be effected by
the Issuer and at its expense accompanied by an Opinion of Counsel (which may be
counsel to the Indenture Trustee or any other counsel  reasonably  acceptable to
the Indenture Trustee) to the effect that such recording is necessary either for
the protection of the  Noteholders or any other Person secured  hereunder or for
the  enforcement of any right or remedy  granted to the Indenture  Trustee under
this Indenture.                                                                 

Section  10.16.  Issuer  Obligation.  No  recourse  may be  taken,  directly  or
indirectly,  with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other  writing  delivered in connection  herewith or therewith,  against (i) the
Indenture  Trustee or the Owner  Trustee in its  individual  capacity,  (ii) any
owner of a  beneficial  interest  in the  Issuer  or (iii) any  partner,  owner,
beneficiary,  agent,  officer,  director,  employee  or agent  of the  Indenture
Trustee  or the  Owner  Trustee  in its  individual  capacity,  any  holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture  Trustee or the Owner Trustee in its
individual  capacity,  except as any such Person may have  expressly  agreed (it
being  understood that the Indenture  Trustee and the Owner Trustee have no such
obligations  in their  individual  capacity)  and except that any such  partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid  consideration  for stock,  unpaid capital  contribution  or
failure to pay any installment or call owing to such entity. For all purposes of
this  Indenture,  in the  performance of any duties or obligations of the Issuer
hereunder,  the Owner  Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.

Section  10.17.  No  Petition.  The  Indenture  Trustee,  by entering  into this
Indenture,  and each Noteholder,  by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Depositor or the Issuer, or
join in any institution  against the Depositor or the Issuer of, any bankruptcy,
reorganization,  arrangement,  insolvency or liquidation  proceedings,  or other
proceedings  under any United States federal or state  bankruptcy or similar law
in connection with any obligations  relating to the Notes, this Indenture or any
of the Basic Documents.                                                         

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Section 10.18.  Inspection.  The Issuer agrees that, on reasonable prior notice,
it shall permit any representative of the Indenture Trustee, during the Issuer's
normal business hours, to examine all the books of account, records, reports and
other papers of the Issuer, to make copies and extracts therefrom, to cause such
books to be audited by Independent certified public accountants,  and to discuss
the  Issuer's  affairs,  finances  and  accounts  with  the  Issuer's  officers,
employees, and Independent certified public accountants,  all at such reasonable
times and as often as may be reasonably  requested.  The Indenture Trustee shall
and shall cause its  representatives  to hold in confidence all such information
except to the  extent  disclosure  may be  required  by law (and all  reasonable
applications for confidential treatment are unavailing) and except to the extent
that the Indenture  Trustee may  reasonably  determine  that such  disclosure is
consistent with its obligations hereunder.                                      

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        IN WITNESS  WHEREOF,  the Issuer and the  Indenture  Trustee have caused
their names to be signed  hereto by their  respective  officers  thereunto  duly
authorized, all as of the day and year first above written.                     

            HOME EQUITY LOAN TRUST 2000-HS1,
as Issuer           

            By:    WILMINGTON TRUST COMPANY,
                        not in its individual capacity
                     but solely as Owner Trustee

  By:/s/ James P. Lawler
        Name:  James P. Lawler
           Title:     Vice President

     THE CHASE MANHATTAN BANK,
as Indenture Trustee

 By:/s/ Mark McDermott
       Name:  Mark McDermott
         Title:    Trust Officer

THE CHASE MANHATTAN BANK hereby accepts the appointment as Paying Agent pursuant
to Section 3.03 hereof and as Note Registrar pursuant to Section 4.02 hereof.   

By:  /s/ Mark McDermott                                                         
Name:  Mark McDermott                                                   
Title:    Trust Officer                                                 

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STATE OF DELAWARE            )                                                  
) ss.:                
COUNTY OF NEWCASTLE          )                                                  

        On this 26th day of September, 2000, before me personally appeared James
P. Lawler,  to me known,  who being by me duly sworn,  did depose and say,  that
s/he  resides  at in  Delaware,  that  s/he is the Vice  President  of the Owner
Trustee,  one of the  corporations  described  in and which  executed  the above
instrument; that s/he knows the seal of said corporation;  that the seal affixed
to said  instrument is such corporate  seal;  that it was so affixed by order of
the Board of Directors of said  corporation;  and that s/he signed  her/his name
thereto by like order.                                                          

                      /s/ Leigh Emmi
                     Notary Public

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STATE OF                     )                                                  
) ss.:                
COUNTY OF                    )                                                  

        On this 26th day of September,  2000, before me personally appeared Mark
McDermott,  to me known,  who being by me duly sworn,  did depose and say,  that
s/he resides at Chase Bank New York that s/he is the Trust  Officer of The Chase
Manhattan Bank, as Indenture Trustee,  one of the corporations  described in and
which  executed  the  above  instrument;  that  s/he  knows  the  seal  of  said
corporation;  that the seal affixed to said  instrument is such corporate  seal;
that it was so affixed by order of the Board of Directors  of said  corporation;
and that s/he signed her/his name thereto by like order.                        

                              /s/ Jonathan P. Ravens
                     Notary Public

NOTORIAL SEAL                                                                   

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 Exhibit A-1

FORM OF TERM NOTES

               UNLESS   THIS   TERM   NOTE  IS   PRESENTED   BY  AN   AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION  ("DTC"),
TO THE ISSUER OR ITS AGENT FOR  REGISTRATION  OF TRANSFER,  EXCHANGE OR PAYMENT,
AND ANY TERM  NOTE  ISSUED  IS  REGISTERED  IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER  NAME AS IS  REQUESTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF DTC (AND ANY
PAYMENT  IS MADE TO CEDE & CO. OR TO 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.                               

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

               THIS TERM NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER,  THE DEPOSITOR,  THE MASTER  SERVICER,  THE INDENTURE  TRUSTEE,  THE
TRUSTEE OR GMAC  MORTGAGE  GROUP,  INC. OR ANY OF THEIR  RESPECTIVE  AFFILIATES,
EXCEPT AS EXPRESSLY PROVIDED IN THE INDENTURE OR THE BASIC DOCUMENTS.           

 HOME EQUITY LOAN TRUST 2000-HS1
 Home Equity Loan-Backed Term Note

Registered                                    Principal Amount:  $138,370,000   

No. 1                                                    Note Rate:  Floating   

CUSIP NO. 76110V EW4                                                            

               Home Equity Loan Trust 2000-HS1,  a business trust duly organized
and existing under the laws of the State of Delaware  (herein referred to as the
"Issuer"),  for  value  received,  hereby  promises  to  pay to  Cede  & Co.  or
registered assigns,  the principal sum of $138,370,000,  payable on each Payment
Date in an amount equal to the Percentage  Interest  evidenced by this Term Note
of the aggregate  amount, if any, payable from the Payment Account in respect of
principal on the Term Notes  pursuant to Section 3.05 of the Indenture  dated as
of September 26, 2000 (the "Indenture")  between the Issuer, as Issuer,  and The
Chase Manhattan Bank, as Indenture Trustee (the "Indenture Trustee");  provided,
however,  that the entire unpaid principal amount of this Term Note shall be due
and payable on the Payment Date in September  2030, to the extent not previously
paid on a prior Payment Date.  Capitalized terms used but not defined herein are
defined in Appendix A of the Indenture.                                         

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               Interest on the Term Notes will be paid  monthly on each  Payment
Date at the Note Rate for the related  Interest  Period  subject to  limitations
which  may  result  in  Basis  Risk  Shortfalls  (as  further  described  in the
Indenture). The Note Rate for each Interest Period will be a floating rate equal
to the lesser of (i) LIBOR plus 0.24% per annum and (ii) 17.25% per annum. LIBOR
for each  applicable  Interest  Period will be  determined  on the second  LIBOR
Business Day immediately preceding (i) the Closing Date in the case of the first
Interest Period and (ii) the first day of each succeeding Interest Period by the
Indenture Trustee as set forth in the Indenture.  All determinations of LIBOR by
the Indenture Trustee shall, in the absence of manifest error, be conclusive for
all purposes,  and each holder of this Term Note,  by accepting  this Term Note,
agrees to be bound by such determination. Interest on this Term Note will accrue
for each  Payment Date from the most recent  Payment Date on which  interest has
been paid (in the case of the first Payment Date,  from the Closing Date) to but
excluding  such  Payment  Date.  Interest  will be  computed on the basis of the
actual number of days in each  Interest  Period and a year assumed to consist of
360 days.  Principal  of and  interest  on this  Term Note  shall be paid in the
manner specified on the reverse hereof.                                         

               Principal  of and  interest on this Term Note are payable in such
coin or  currency  of the United  States of America as at the time of payment is
legal tender for payment of public and private  debts.  All payments made by the
Issuer with respect to this Term Note shall be applied first to interest due and
payable on this Term Note as provided above and then to the unpaid  principal of
this Term Note.                                                                 

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

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

               This Term Note is one of a duly authorized issue of Term Notes of
the Issuer,  designated as its Home Equity  Loan-Backed  Term Notes,  all issued
under the Indenture,  to which Indenture and all indentures supplemental thereto
reference  is  hereby  made  for  a  statement  of  the  respective  rights  and
obligations  thereunder of the Issuer,  the Indenture Trustee and the holders of
the Term Notes. The Term Notes are subject to all terms of the Indenture.       

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

               This Term Note is entitled to the benefits of an irrevocable  and
unconditional  financial  guaranty  insurance  policy issued by Ambac  Assurance
Corporation.                                                                    

               Principal  of and  interest  on this Term Note will be payable on
each Payment Date,  commencing  October 20, 2000, as described in the Indenture.
"Payment  Date" means the twentieth  day of each month,  or, if any such date is
not a Business Day, then the next Business Day.                                 

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               The entire unpaid principal amount of this Term Note shall be due
and  payable in full on the  Payment  Date in  September  2030  pursuant  to the
Indenture,  to  the  extent  not  previously  paid  on  a  prior  Payment  Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be
continuing,  then the Indenture Trustee or the holders of Notes representing not
less than a majority of the  Security  Balances of all Notes with the consent of
the  Credit  Enhancer,  or the  Credit  Enhancer  may  declare  the  Notes to be
immediately  due and  payable in the  manner  provided  in  Section  5.02 of the
Indenture.  All  principal  payments on the Term Notes shall be made pro rata to
the holders of Term Notes entitled thereto.                                     

               Payments  of  interest  on this Term Note due and payable on each
Payment Date, together with the installment of principal,  if any, to the extent
not in full  payment  of this Term  Note,  shall be made by check  mailed to the
Person whose name appears as the Registered  Holder of this Term Note (or one or
more Predecessor Term Notes) on the Note Register as of the close of business on
each Record  Date,  except  that with  respect to Term Notes  registered  on the
Record Date in the name of the nominee of the Depository Agency (initially, such
nominee to be Cede & Co.), payments will be made by wire transfer in immediately
available funds to the account designated by such nominee.  Such checks shall be
mailed to the  Person  entitled  thereto  at the  address  of such  Person as it
appears on the Note Register as of the applicable  Record Date without requiring
that this Term Note be submitted  for notation of payment.  Any reduction in the
principal  amount of this Term Note (or any one or more  Predecessor Term Notes)
effected  by any  payments  made on any Payment  Date shall be binding  upon all
future  holders  of  this  Term  Note  and of any  Term  Note  issued  upon  the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon.  If funds are expected to be available,  as provided in the
Indenture,  for payment in full of the then remaining unpaid principal amount of
this Term Note on a Payment Date, then the Indenture Trustee, in the name of and
on behalf of the Issuer,  will notify the Person who was the  Registered  Holder
hereof as of the Record Date  preceding  such Payment  Date by notice  mailed or
transmitted by facsimile prior to such Payment Date, and the amount then due and
payable shall be payable only upon  presentation and surrender of this Term Note
at the address specified in such notice of final payment.                       

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

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any tax or  governmental  charge  that may be  imposed  in  connection  with any
registration of transfer or exchange of this Term Note.                         

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

               Each holder or Beneficial  Owner of a Term Note, by acceptance of
a Term Note or, in the case of a  Beneficial  Owner of a Term Note, a beneficial
interest in a Term Note,  covenants  and agrees by accepting the benefits of the
Indenture  that such holder or  Beneficial  Owner of a Term Note will not at any
time institute  against the Depositor,  the Seller,  the Master  Servicer,  GMAC
Mortgage  Group,  Inc. or the  Issuer,  or join in any  institution  against the
Depositor,  the Seller,  the Master Servicer,  GMAC Mortgage Group,  Inc. or the
Issuer  of,  any   bankruptcy,   reorganization,   arrangement,   insolvency  or
liquidation  proceedings  under any United States federal or state bankruptcy or
similar law in connection with any obligations  relating to the Term Notes,  the
Indenture or the Basic Documents.                                               

               The Issuer has entered into the  Indenture  and this Term Note is
issued with the intention  that,  for federal,  state and local  income,  single
business and franchise tax purposes, the Term Notes will qualify as indebtedness
of the Issuer.  Each holder of a Term Note,  by  acceptance  of a Term Note (and
each Beneficial Owner of a Term Note by acceptance of a beneficial interest in a
Term Note), agrees to treat the Term Notes for federal,  state and local income,
single business and franchise tax purposes as indebtedness of the Issuer.       

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

               The  Indenture  permits,   with  certain  exceptions  as  therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the  Issuer  and the  Indenture  Trustee  and the  rights of the
holders of the Term Notes under the  Indenture at any time by the Issuer and the
Indenture  Trustee  with the  consent  of the  holders of Notes  representing  a
majority of the Security  Balances of all Notes at the time  Outstanding and the
Credit Enhancer and with prior notice to the Rating Agencies. The Indenture also

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contains  provisions  permitting  the  holders of Notes  representing  specified
percentages of the Security  Balances of all Notes,  on behalf of the holders of
all the Notes, to waive compliance by the Issuer with certain  provisions of the
Indenture and certain past defaults under the Indenture and their  consequences.
Any such  consent  or waiver by the holder of this Term Note (or any one of more
Predecessor  Term Notes)  shall be  conclusive  and binding upon such holder and
upon all future  holders of this Term Note and of any Term Note  issued upon the
registration  of transfer hereof or in exchange hereof or in lieu hereof whether
or not  notation  of such  consent  or waiver is made upon this Term  Note.  The
Indenture  also permits the Issuer and the  Indenture  Trustee to amend or waive
certain terms and conditions  set forth in the Indenture  without the consent of
holders of the Term Notes issued  thereunder but with prior notice to the Rating
Agencies and the Credit Enhancer.                                               

               The  term  "Issuer"  as used  in  this  Term  Note  includes  any
successor or the Issuer under the Indenture.                                    

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

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

               This Term Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.                    

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

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

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

        HOME EQUITY LOAN TRUST 2000-HS1,

            By     WILMINGTON TRUST COMPANY, not
                              in its individual capacity but solely as
   Owner Trustee

Dated:  September 26, 2000                                                      

 By:
                                  Authorized Signatory

 CERTIFICATE OF AUTHENTICATION

This is one of the Term Notes referred to in the within mentioned Indenture.    

              THE CHASE MANHATTAN BANK, not in
                             its individual capacity but solely as Indenture
Trustee           

Dated:  September 26, 2000                                                      

 By:
                                  Authorized Signatory

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ASSIGNMENT

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

_____________________________________________________________________________   

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

_____________________________________________________________________________   
              (name and address of assignee)

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

Dated:                                                                  */      
-----------------------    ---------------------------------------  
       Signature Guaranteed:

                                                                    */
                          ----------------------------------------

___________________________________----                                         

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

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 Exhibit A-2

FORM OF VARIABLE FUNDING NOTES

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

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

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

 HOME EQUITY LOAN TRUST 2000-HS1
 Home Equity Loan-Backed Variable Funding Note

Registered                   Initial Maximum Variable                           
            Funding Note Balance:  $45,763,660

No.VFN-1                                       Note Rate:  Floating             

               Home Equity Loan Trust 2000-HS1,  a business trust duly organized
and existing under the laws of the State of Delaware  (herein referred to as the
"Issuer"),  for value received,  hereby  promises to pay to Residential  Funding
Corporation or registered assigns,  the principal amount set forth on Schedule A
attached  hereto (or otherwise  owing  hereunder as  determined  pursuant to the
Indenture as defined below),  payable on each Payment Date in an amount equal to
the pro rata portion  allocable  hereto  (based on the Security  Balances of all
Variable Funding Notes  immediately prior to such Payment Date) of the aggregate
amount,  if any, payable from the Payment Account in respect of principal on the
Variable  Funding Notes  pursuant to Section 3.05 of the  Indenture  dated as of
September  26, 2000 (the  "Indenture")  between the Issuer,  as Issuer,  and The
Chase Manhattan Bank, as Indenture Trustee (the "Indenture Trustee");  provided,
however,  that the entire unpaid  principal amount of this Variable Funding Note
shall be due and payable on the Payment Date in September 2030 to the extent not
previously paid on a prior Payment Date.  Capitalized terms used but not defined
herein are defined in Appendix A of the Indenture.                              

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               Interest on the  Variable  Funding  Notes will be paid monthly on
each Payment Date at the Note Rate for the related  Interest  Period  subject to
limitations  which may result in Basis Risk Shortfalls (as further  described in
the  Indenture).  The Note Rate for each Interest Period will be a floating rate
equal to the lesser of (i) LIBOR plus 0.24% per annum and (ii) 17.25% per annum.
LIBOR for each applicable Interest Period will be determined on the second LIBOR
Business Day immediately preceding (i) the Closing Date in the case of the first
Interest Period and (ii) the first day of each succeeding Interest Period by the
Indenture Trustee as set forth in the Indenture.  All determinations of LIBOR by
the Indenture Trustee shall, in the absence of manifest error, be conclusive for
all purposes,  and each holder of this Variable  Funding Note, by accepting this
Variable  Funding Note,  agrees to be bound by such  determination.  Interest on
this  Variable  Funding  Note will  accrue for each  Payment  Date from the most
recent  Payment  Date on which  interest has been paid (in the case of the First
Payment  Date,  from the  Closing  Date) to but  excluding  such  Payment  Date.
Interest  will be  computed  on the basis of the  actual  number of days in each
Interest  Period and a year  assumed to  consist of 360 days.  Principal  of and
interest on this Variable  Funding Note shall be paid in the manner specified on
the reverse hereof.                                                             

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

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

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

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

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

               This  Variable  Funding  Note is entitled  to the  benefits of an
irrevocable and  unconditional  financial  guaranty  insurance  policy issued by
Ambac Assurance Corporation.                                                    

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               Principal of and interest on this  Variable  Funding Note will be
payable on each  Payment  Date,  commencing  October  2000,  as described in the
Indenture. "Payment Date" means the twentieth day of each month, or, if any such
day is not a Business Day, then the next Business Day.                          

               The entire unpaid  principal amount of this Variable Funding Note
shall be due and payable in full on the Payment Date in September  2030 pursuant
to the  Indenture,  to the extent not  previously  paid on a prior Payment Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be
continuing,  then the Indenture Trustee or the holders of Notes representing not
less than a majority of the  Security  Balances of all Notes with the consent of
the  Credit  Enhancer,  or the  Credit  Enhancer  may  declare  the  Notes to be
immediately  due and  payable in the  manner  provided  in  Section  5.02 of the
Indenture.  All principal  payments on the Variable  Funding Notes shall be made
pro rata to the holders of Variable Funding Notes entitle thereto.              

               Payments  of  interest  on this  Variable  Funding  Note  due and
payable on each Payment Date,  together with the  installment  of principal,  if
any, to the extent not in full payment of this Variable  Funding Note,  shall be
made by check mailed to the Person whose name appears as the  Registered  Holder
of this  Variable  Funding Note (or one or more  Predecessor  Notes) on the Note
Register  as of the close of  business  on each  Record  Date,  except that with
respect to Variable  Funding Notes  registered on the Record Date in the name of
the nominee of the Depository Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire  transfer in  immediately  available  funds to the
account  designated by such  nominee.  Such checks shall be mailed to the Person
entitled  thereto  at the  address  of such  Person  as it  appears  on the Note
Register as of the applicable  Record Date without  requiring that this Variable
Funding  Note be  submitted  for  notation  of  payment.  Any  reduction  in the
principal  amount of this Variable  Funding Note (or any one or more Predecessor
Variable  Funding Notes) effected by any payments made on any Payment Date shall
be binding  upon all future  holders of this  Variable  Funding  Note and of any
Variable  Funding  Note issued upon the  registration  of transfer  hereof or in
exchange  hereof or in lieu hereof,  whether or not noted  hereon.  If funds are
expected to be available,  as provided in the Indenture,  for payment in full of
the then remaining  unpaid  principal  amount of this Variable Funding Note on a
Payment Date,  then the Indenture  Trustee,  in the name of and on behalf of the
Issuer,  will notify the Person who was the  Registered  Holder hereof as of the
Record Date  preceding  such Payment  Date by notice  mailed or  transmitted  by
facsimile  prior to such Payment Date and the amount then due and payable  shall
be payable only upon presentation and surrender of this Variable Funding Note at
the address specified in such notice of final payment.                          

               As provided in the Indenture  and subject to certain  limitations
set forth therein,  the transfer of this Variable Funding Note may be registered
on  the  Note  Register  upon  surrender  of  this  Variable  Funding  Note  for
registration  of transfer at the Corporate  Trust Office,  duly endorsed by, and
accompanied  by a written  instrument  of transfer in form  satisfactory  to the
Indenture  Trustee duly executed by, the holder hereof or such holder's attorney
duly  authorized  in writing,  with such  signature  guaranteed  by an "eligible
guarantor  institution"  meeting the  requirements of the Note Registrar,  which
requirements  include  membership or  participation  in the Securities  Transfer
Agent's Medallion Program ("STAMP") or such other "signature  guarantee program"
as may be  determined  by the Note  Registrar in addition to or in  substitution
for,  STAMP,  all in  accordance  with the  Securities  Exchange Act of 1934, as
amended,  and  thereupon  one or more new Variable  Funding  Notes in authorized
denominations  and in the same aggregate  principal amount will be issued to the

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designated transferee or transferees.  No service charge will be charged for any
registration of transfer or exchange of this Variable Funding Note, but the Note
Registrar  shall  require  payment  of a sum  sufficient  to  cover  any  tax or
governmental  charge that may be imposed in connection with any  registration of
transfer or exchange of this Variable Funding Note.                             

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

               Each holder or  Beneficial  Owner of a Variable  Funding Note, by
acceptance of a Variable Funding Note or, in the case of a Beneficial Owner of a
Variable  Funding  Note,  a  beneficial  interest  in a Variable  Funding  Note,
covenants and agrees by accepting the benefits of the Indenture that such holder
or Beneficial  Owner of a Variable  Funding Note will not at any time  institute
against the Depositor,  the Seller,  the Master  Servicer,  GMAC Mortgage Group,
Inc. or the  Issuer,  or join in any  institution  against  the  Depositor,  the
Seller,  the Master  Servicer,  GMAC Mortgage Group,  Inc. or the Issuer of, any
bankruptcy,  reorganization,  arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations  relating to the Variable  Funding Notes,  the Indenture or
the Basic Documents.                                                            

               The Issuer  has  entered  into the  Indenture  and this  Variable
Funding Note is issued with the  intention  that,  for federal,  state and local
income,  single business and franchise tax purposes,  the Variable Funding Notes
will qualify as  indebtedness of the Issuer.  Each holder of a Variable  Funding
Note, by acceptance of a Variable  Funding Note (and each Beneficial  Owner of a
Variable  Funding Note,  by  acceptance  of a beneficial  interest in a Variable
Funding Note), agrees to treat the Variable Funding Notes for federal, state and
local income,  single business and franchise tax purposes as indebtedness of the
Issuer.                                                                         

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

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               The  Indenture  permits,   with  certain  exceptions  as  therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the  Issuer  and the  Indenture  Trustee  and the  rights of the
holders of the  Variable  Funding  Notes under the  Indenture at any time by the
Issuer  and the  Indenture  Trustee  with the  consent  of the  holders of Notes
representing  a  majority  of the  Security  Balances  of all  Notes at the time
Outstanding  and the  Credit  Enhancer  and  with  prior  notice  to the  Rating
Agencies. The Indenture also contains provisions permitting the holders of Notes
representing  specified  percentages of the Security  Balances of all Notes,  on
behalf of the holders of all the Notes,  to waive  compliance by the Issuer with
certain  provisions  of the  Indenture  and  certain  past  defaults  under  the
Indenture  and their  consequences.  Any such consent or waiver by the holder of
this  Variable  Funding Note (or any one of more  Predecessor  Variable  Funding
Notes)  shall be  conclusive  and  binding  upon such holder and upon all future
holders of this  Variable  Funding Note and of any Variable  Funding Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not  notation  of such  consent or waiver is made upon this  Variable
Funding Note. The Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions  set forth in the Indenture  without the consent of
holders of the Variable Funding Notes issued thereunder but with prior notice to
the Rating Agencies and the Credit Enhancer.                                    

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

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

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

               This Variable  Funding Note and the Indenture  shall be construed
in accordance with the laws of the State of New York,  without  reference to its
conflict of law  provisions,  and the  obligations,  rights and  remedies of the
parties  hereunder and  thereunder  shall be determined in accordance  with such
laws.                                                                           

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

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

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

  HOME EQUITY LOAN TRUST 2000-HS1,

                    By     WILMINGTON   TRUST  COMPANY,   not  in  its
                           individual  capacity  but  solely  as Owner
Trustee         

Dated:  September 26, 2000                                                      

 By:
                                  Authorized Signatory

 CERTIFICATE OF AUTHENTICATION

This is one of the  Variable  Funding Note  referred to in the within  mentioned
Indenture.                                                                      

            THE CHASE MANHATTAN BANK, not in
                           its individual capacity but solely as Indenture
Trustee             

Dated:  September 26, 2000                                                      

 By:
                                  Authorized Signatory

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ASSIGNMENT

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

_____________________________________________________________________________   

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

_____________________________________________________________________________   
              (name and address of assignee)

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

Dated:                                                                  */      
-----------------------    ---------------------------------------  
       Signature Guaranteed:

                                                                    */
                          ----------------------------------------

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

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 Exhibit B

             [FORM OF RULE 144A INVESTMENT REPRESENTATION]

             Description of Rule 144A Securities, including numbers:
              ==============================================
              ==============================================

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

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

               2. The Buyer warrants and represents to, and covenants  with, the
Indenture Trustee and the Issuer (as defined in the Indenture (the "Indenture"),
dated as of September  26, 2000,  between  Home Equity Loan Trust  2000-HS1,  as
Issuer, and The Chase Manhattan Bank, as Indenture Trustee,  pursuant to Section
4.02 of the Indenture, as follows:                                              

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

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

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

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

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

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

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

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

Print Name of Seller                              Print Name of Buyer           

By:__________________________________             By:_________________________  
Name:                                              Name:                
Title:                                             Title:               

Tax Payer Identification:                         Tax Payer Identification:     

No. _________________________________             No._________________________  

Date: _______________________________             Date:_______________________  

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ANNEX 1 TO EXHIBIT B

              QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

             [For Buyers Other Than Registered Investment Companies]

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

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

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

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

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

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

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

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

_____________________________________________-                                  
** Buyer must own and/or invest on a discretionary  basis at least  $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.             

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

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

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

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

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

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

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

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

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

___  ___      Will the Buyer be purchasing  the Rule 144A   Securities  only for
Yea  No       the Buyer's own account?                                          

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

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

                           Print Name of Buyer

                                By:_______________________________
                   Name:
                    Title:

                               Date:______________________________

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ANNEX 2 TO EXHIBIT B

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

 [For Buyers That Are Registered Investment Companies]

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

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

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

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

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

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

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

               5. The Buyer is familiar with Rule 144A and understands that each
of the parties to which this certification is made are relying and will continue
to rely on the  statements  made  herein  because one or more sales to the Buyer
will be in reliance on Rule 144A. In addition,  the Buyer will only purchase for
the Buyer's own account.                                                        

               6. The undersigned  will notify each of the parties to which this
certification is made of any changes in the information and conclusions  herein.

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Until such notice,  the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this  certification by the undersigned as of the date of such
purchase.                                                                       

                           Print Name of Buyer

                               By:______________________________
                   Name:
                    Title:

                      IF AN ADVISER:

                                ________________________________
                           Print Name of Buyer

                              Date:_____________________________

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 EXHIBIT C

FORM OF INVESTOR REPRESENTATION LETTER

_______________ , 20__

Residential Funding Mortgage Securities II, Inc.                                
8400 Normandale Lake Boulevard                                                  
Suite 600                                                                       
Minneapolis, MN 55437                                                           

The Chase Manhattan Bank                                                        
450 West 33rd Street, 15th Floor                                                
New York, NY  10001                                                             
Attention:  Corporate Trust Administration                                      

 Re:    Home Equity Loan-Backed Capped Funding Notes
Series 2000-HS1                     

Ladies and Gentlemen:                                                           

               __________________(the  "Purchaser")  intends  to  purchase  from
_________ (the "Seller")  $_______  Capped Funding Notes of Series 2000-HS1 (the
"Notes"),  issued  pursuant  to the  Indenture  (the  "Indenture"),  dated as of
September 26, 2000 between Home Equity Loan Trust, as issuer (the "Issuer"), and
The Chase Manhattan Bank, as indenture  trustee (the "Indenture  Trustee").  All
terms used herein and not otherwise defined shall have the meanings set forth in
the Indenture.  The Purchaser hereby certifies,  represents and warrants to, and
covenants with, the Issuer and the Indenture Trustee that:                      

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

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

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

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               4.  The  Purchaser  has  been  furnished  with,  and  has  had an
        opportunity to review (a) [a copy of the Private  Placement  Memorandum,
        dated  relating  to the Notes (b)] a copy of the  Indenture  and [b] [c]
        such other information  concerning the Notes, the Revolving Credit Loans
        and the Company as has been  requested by the Purchaser from the Company
        or the Seller and is  relevant to the  Purchaser's  decision to purchase
        the Notes. The Purchaser has had any questions  arising from such review
        answered  by the  Company  or the  Seller  to  the  satisfaction  of the
        Purchaser.  [If the Purchaser did not purchase the Notes from the Seller
        in  connection  with  the  initial  distribution  of the  Notes  and was
        provided  with  a  copy  of  the  Private   Placement   Memorandum  (the
        "Memorandum") relating to the original sale (the "Original Sale") of the
        Notes by the Company,  the Purchaser  acknowledges  that such Memorandum
        was provided to it by the Seller,  that the  Memorandum  was prepared by
        the Company solely for use in connection  with the Original Sale and the
        Company did not  participate in or facilitate in any way the purchase of
        the Notes by the Purchaser  from the Seller,  and the  Purchaser  agrees
        that it will  look  solely to the  Seller  and not to the  Company  with
        respect  to any  damage,  liability,  claim or expense  arising  out of,
        resulting from or in connection  with (a) error or omission,  or alleged
        error or omission,  contained in the Memorandum, or (b) any information,
development or event arising after the date of the Memorandum.] 

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

     6.     The Purchaser is not a non-United States person.

                         Very truly yours,

 By:
                   Name:
                    Title:

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 EXHIBIT D

FORM OF TRANSFEROR REPRESENTATION LETTER

 __________________, 20___

Residential Funding Mortgage Securities II, Inc.                                
8400 Normandale Lake Boulevard                                                  
Suite 600                                                                       
Minneapolis, MN 55437                                                           

The Chase Manhattan Bank                                                        
450 West 33rd Street, 15th Floor                                                
New York, NY  10001                                                             

Attention:  Corporate Trust Administration                                      

 Re:    Home Equity Loan-Backed Capped Funding Notes
Series 2000-HS1                     

Ladies and Gentlemen:                                                           

               ___________________(the  "Purchaser")  intends to  purchase  from
______ (the  "Seller")  $_______Capped  Funding  Notes of Series  2000-HS1  (the
"Notes"),  issued pursuant to the (the  "Indenture"),  dated as of September 26,
2000 between  Home Equity Loan Trust,  as issuer (the  "Issuer"),  and The Chase
Manhattan Bank, as indenture trustee (the "Indenture  Trustee").  All terms used
herein  and not  otherwise  defined  shall  have the  meanings  set forth in the
Indenture.  The  Seller  hereby  certifies,  represents  and  warrants  to,  and
covenants with, the Issuer and the Indenture Trustee that:                      

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

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                         Very truly yours,

                               _______________________________________
(Seller)

                                  By:_________________________________
 Name:
Title:

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EXECUTION COPY

APPENDIX A

 DEFINITIONS

               Additional  Balance:  With respect to any Revolving  Credit Loan,
any future Draw made by the  related  Mortgagor  pursuant  to the  related  Loan
Agreement  after the Cut-off Date;  provided,  however,  that if an Amortization
Event occurs,  then any Draw after such Amortization Event shall not be acquired
by the Trust and shall not be an Additional Balance.                            

               Additional  Balance  Differential:  With  respect to any  Payment
Date, unless and until an Amortization Event occurs, (x) up to and including the
Payment Date occurring in the calendar  month during which the Revolving  Period
ends,  the amount,  if any, by which  Additional  Balances  resulting from Draws
under the  Revolving  Credit Loans during the related  Collection  Period exceed
Principal  Collections  during such Collection  Period and (y) after the Payment
Date occurring in the calendar month during which the Revolving Period ends, the
aggregate amount of Additional Balances conveyed to the Trust during the related
Collection Period.                                                              

               Additional  Certificate  Security  Balance:  With  respect to the
issuance of Capped Funding Notes  pursuant to Section  4.01(d) of the Indenture,
the  amount,  if any,  required  in  accordance  with the  Opinion of Counsel in
connection therewith to be added to the Security Balances of the Certificates in
accordance with Section 3.12 of the Trust Agreement.  In addition,  with respect
to any Payment Date described in the second  sentence of Section  3.12(a) of the
Trust Agreement, the "Additional Certificate Security Balance" shall include the
amount of the excess described in such sentence.                                

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

               Aggregate  Additional Balance  Differential:  With respect to any
Payment  Date and any  Variable  Funding  Note,  the sum of  Additional  Balance
Differentials  that have been added to the  Security  Balance  of such  Variable
Funding Note prior to such Payment Date.                                        

     Aggregate Security Balance: With respect to any Payment Date, the aggregate
of the Security Balances of all Securities as of such date.                     

   Amortization Event:  Any one of the following events:

               (a) the failure on the part of the Seller (i) to make any payment
        or deposit  required to be made under the Revolving Credit Loan Purchase
        Agreement  within  five  Business  Days  after the date such  payment or
        deposit  is  required  to be made;  or (ii) to observe or perform in any
        material  respect any other  covenants or  agreements  of the Seller set
        forth in the  Revolving  Credit Loan Purchase  Agreement,  which failure
        continues  unremedied  for a period of 60 days after written  notice and
        such  failure  materially  and  adversely  affects the  interests of the
Securityholders or the Credit Enhancer;                         

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               (b) if any  representation  or warranty made by the Seller in the
        Revolving  Credit Loan Purchase  Agreement proves to have been incorrect
        in any material respect when made and which continues to be incorrect in
        any  material  respect  for a  period  of 45 days  with  respect  to any
        representation  or warranty of the Seller made in Section  3.1(a) of the
        Revolving Credit Loan Purchase  Agreement or 90 days with respect to any
        representation  or  warranty  made in  Section  3.1(b) of the  Revolving
        Credit Loan Purchase  Agreement  after written notice and as a result of
        which the interests of the  Securityholders  or the Credit  Enhancer are
        materially  and  adversely   affected;   provided,   however,   that  an
        Amortization  Event  shall  not be  deemed  to occur if the  Seller  has
        repurchased or caused to be  repurchased or substituted  for the related
        Revolving  Credit Loans or all Revolving  Credit Loans,  if  applicable,
        during such period (or within an  additional 60 days with the consent of
        the Indenture  Trustee and the Credit  Enhancer) in accordance  with the
provisions of the Indenture;                                    

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

               (d)  the  Seller  or  the  Issuer  shall   voluntarily   go  into
        liquidation,  consent to the  appointment  of a  conservator,  receiver,
        liquidator or similar person in any  insolvency,  readjustment  of debt,
        marshalling  of assets  and  liabilities  or similar  proceedings  of or
        relating  to  the  Seller  or the  Issuer  or of or  relating  to all or
        substantially  all of its  property,  or a  decree  or order of a court,
        agency or supervisory  authority having jurisdiction in the premises for
        the appointment of a conservator, receiver, liquidator or similar person
        in any  insolvency,  readjustment  of debt,  marshalling  of assets  and
        liabilities or similar proceedings, or for the winding-up or liquidation
        of its affairs, shall have been entered against the Seller or the Issuer
        and such  decree or order  shall have  remained  in force  undischarged,
        unbonded  or  unstayed  for a period  of 60 days;  or the  Seller or the
        Issuer shall admit in writing its  inability to pay its debts  generally
        as they become due, file a petition to take  advantage of any applicable
        insolvency or reorganization statute, make an assignment for the benefit
   of its creditors or voluntarily suspend payment of its obligations;

               (e) the Issuer becomes subject to regulation by the Commission as
        an investment  company within the meaning of the Investment  Company Act
of 1940, as amended;                                            

               (f) a Servicing  Default  relating to the Master  Servicer occurs
        under the Servicing Agreement and the Master Servicer is the Seller;

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               (g) the  aggregate  of all  draws  under the  Credit  Enhancement
        Instrument (other than draws with respect to the  Undercollateralization
Amount) exceeds 1% of the Cut-off Date Loan Balance; or         

               (h) the Issuer is  determined to be an  association  taxable as a
corporation for federal income tax purposes.                

               In the case of any event  described  in (a),  (b), (f) or (g), an
Amortization Event will be deemed to have occurred only if, after any applicable
grace period described in such clauses, any of the Indenture Trustee, the Credit
Enhancer or, with the consent of the Credit Enhancer, Securityholders evidencing
not less  than 51% of the  Security  Balance  of each of the Term  Notes and the
Certificates,  by  written  notice  to the  Seller,  the  Master  Servicer,  the
Depositor and the Owner Trustee (and to the Indenture  Trustee,  if given by the
Credit Enhancer or the Securityholders),  declare that an Amortization Event has
occurred as of the date of such  notice.  In the case of any event  described in
clauses  (c),  (d),  (e) or (h),  an  Amortization  Event will be deemed to have
occurred  without  any  notice  or other  action  on the  part of the  Indenture
Trustee,  the Noteholders or the Credit Enhancer immediately upon the occurrence
of such event; provided, that any Amortization Event may be waived and deemed of
no effect  with the  written  consent of the  Credit  Enhancer  and each  Rating
Agency, subject to the satisfaction of any conditions to such waiver.           

               Appraised  Value: For any Revolving Credit Loan, the value of the
related Mortgaged  Property  determined in the appraisal used in the origination
of such Revolving  Credit Loan (which may have been obtained at an earlier time)
or any subsequent  increase or decrease in the related Credit Limit or to reduce
or  eliminate  the  amount  of any  primary  insurance;  provided  that  if such
Revolving  Credit Loan was  originated  simultaneously  with or not more than 12
months  after a senior lien on the related  Mortgaged  Property,  the  appraised
value  shall be the  lesser of the  appraised  value at the  origination  of the
senior lien and the sales price for such Mortgaged Property.                    

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

               Authorized  Newspaper:  A newspaper of general circulation in the
Borough of Manhattan,  The City of New York, printed in the English language and
customarily  published  on  each  Business  Day,  whether  or not  published  on
Saturdays, Sundays or holidays.                                                 

               Authorized  Officer:  With respect to the Issuer,  any officer of
the Owner  Trustee  who is  authorized  to act for the Owner  Trustee in matters
relating to the Issuer and who is identified on the list of Authorized  Officers
delivered by the Owner Trustee to the Indenture  Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter).        

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        Bankruptcy Code:  The Bankruptcy Code of 1978, as amended.

               Bankruptcy  Loss:  With respect to any  Revolving  Credit Loan, a
Deficient Valuation or Debt Service Reduction; provided, however, that neither a
Deficient  Valuation nor a Debt Service  Reduction  shall be deemed a Bankruptcy
Loss hereunder so long as the Master Servicer has notified the Indenture Trustee
in writing that the Master Servicer is diligently pursuing any remedies that may
exist in connection with the  representations  and warranties made regarding the
related  Revolving Credit Loan and either (A) the related  Revolving Credit Loan
is not in default  with  regard to payments  due  thereunder  or (B)  delinquent
payments of principal and interest under the related  Revolving  Credit Loan and
any premiums on any applicable  primary hazard  insurance policy and any related
escrow payments in respect of such Revolving Credit Loan are being advanced on a
current basis by the Master  Servicer or a  Subservicer,  in either case without
giving effect to any Debt Service Reduction.                                    

               Bankruptcy  Loss  Amount:  As of any date of  determination,  the
Bankruptcy Loss Amount shall equal $100,000 less the sum of any Liquidation Loss
Amounts on the Revolving  Credit Loans due to Bankruptcy  Losses up to such date
of determination.                                                               

               Basic  Documents:   The  Trust  Agreement,   the  Indenture,  the
Revolving Credit Loan Purchase Agreement,  the Insurance  Agreement,  the Credit
Enhancement Instrument, the Servicing Agreement, the Custodial Agreement and the
other documents and certificates delivered in connection with any of the above. 

               Basis  Risk  Shortfall:  With  respect  to the Term  Notes or the
Variable  Funding Notes, on any Payment Date an amount by which interest accrued
on such Notes at the  applicable  Note Rate during the related  Interest  Period
exceeds interest accrued thereon at the Net Loan Rate Cap. Basis Risk Shortfalls
will not be included as interest payments on the Notes for such Payment Date and
such  amount will accrue  interest  at the Note Rate (as  adjusted  from time to
time) and will be paid on future  Payment  Dates  only to the  extent  funds are
available therefor as set forth in Section 3.05(a) of the Indenture.            

               Beneficial Owner: With respect to any Note, the Person who is the
beneficial  owner of such Note as reflected on the books of the Depository or on
the books of a Person maintaining an account with such Depository (directly as a
Depository  Participant  or  indirectly  through a  Depository  Participant,  in
accordance with the rules of such Depository).                                  

               Billing Cycle:  With respect to any Revolving Credit Loan and Due
Date, the calendar month preceding such Due Date.           

               Book-Entry Custodian: The custodian appointed pursuant to Section
4.06 of the Indenture.                                                          

               Book-Entry Notes:  Beneficial  interests in the Notes,  ownership
and  transfers of which shall be made through book entries by the  Depository as
described in Section 4.06 of the Indenture.                                     

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               Business  Day:  Any day other than (i) a Saturday  or a Sunday or
(ii) a day on which banking institutions in the States of New York,  California,
Minnesota, Illinois or Delaware are required or authorized by law to be closed. 

     Business  Trust  Statute:  Chapter 38 of Title 12 of the Delaware  Code, 12
Del.  Code  ss.ss.3801  et seq.,  as the same may be amended  from time to time.
Capped  Funding  Note:  Any Capped  Funding  Note issued in  connection  with an
exchange pursuant to Section 4.01(d) of the Indenture.                          

               Certificate Distribution Account: The account or accounts created
and maintained by the  Certificate  Paying Agent pursuant to Section  3.10(c) of
the Trust Agreement. The Certificate Paying Agent will make all distributions on
the Certificates from money on deposit in the Certificate Distribution Account. 

               Certificate Distribution Amount: For any Payment Date, the amount
remaining in the Payment Account following distributions pursuant to clauses (i)
through (ix) of Section 3.05 of the Indenture.                                  

     Certificate  Paying  Agent:  The meaning  specified  in Section 3.10 of the
Trust Agreement.                                                                

               Certificate  Percentage  Interest:  With  respect to any  Payment
Date,  the  Certificate  Percentage  Interest  as  stated  on the  face  of such
Certificate,  which  percentage may be  recalculated  in accordance with Section
3.12 of the Trust Agreement.                                                    

               Certificate  Principal  Balance:  As of any  Payment  Date,  with
respect to any Certificate,  an amount equal to the then applicable  Certificate
Percentage  Interest of such Certificate  multiplied by the Outstanding  Reserve
Amount.                                                                         

     Certificate Register:  The register maintained by the Certificate Registrar
in which  the  Certificate  Registrar  shall  provide  for the  registration  of
Certificates and of transfers and exchanges of Certificates.                    

     Certificate Registrar: Initially, the Indenture Trustee, in its capacity as
Certificate Registrar.                                                          

     Certificate of Trust: The Certificate of Trust filed for the Trust pursuant
to Section 3810(a) of the Business Trust Statute.                               

               Certificateholder:  The  Person in whose  name a  Certificate  is
registered in the Certificate  Register except that, any Certificate  registered
in the name of the Issuer,  the Owner  Trustee or the  Indenture  Trustee or any
Affiliate  of any  of  them  shall  be  deemed  not to be  outstanding  and  the
registered  holder will not be  considered a  Certificateholder  or a holder for
purposes  of giving  any  request,  demand,  authorization,  direction,  notice,
consent or waiver under the Indenture or the Trust  Agreement  provided that, in
determining  whether  the  Indenture  Trustee  or the  Owner  Trustee  shall  be
protected in relying upon any such request,  demand,  authorization,  direction,

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notice,  consent or waiver,  only Certificates that the Indenture Trustee or the
Owner  Trustee  knows  to  be  so  owned  shall  be so  disregarded.  Owners  of
Certificates  that have been pledged in good faith may be regarded as Holders if
the pledgee  establishes  to the  satisfaction  of the Indenture  Trustee or the
Owner Trustee, as the case may be, the pledgee's right so to act with respect to
such Certificates and that the pledgee is not the Issuer, any other obligor upon
the Certificates or any Affiliate of any of the foregoing Persons.              

     Certificates:  The  Certificates  in  substantially  the form set  forth in
Exhibit A to the Trust Agreement.                                               

Closing Date:  September 26, 2000.                

     Code:  The  Internal  Revenue Code of 1986,  as amended,  and the rules and
regulations promulgated thereunder.                                             

    Collateral: The meaning specified in the Granting Clause of the Indenture.

     Collection  Period:  With  respect  to any  Revolving  Credit  Loan and any
Payment Date, the calendar month preceding any such Payment Date.               

               Combined  Loan-to-Value  Ratio:  With  respect  to any  Revolving
Credit Loan and any date, the percentage equivalent of a fraction, the numerator
of which is the sum of (i) the Credit Limit and (ii) the  outstanding  principal
balance as of the date of the origination of such Revolving  Credit Loan (or any
subsequent date as of which such outstanding principal balance may be determined
in connection  with an increase or decrease in the Credit  Limit,  to reduce the
amount of  primary  insurance  for such  Revolving  Credit  Loan or to approve a
subordinate  lien) and of all other mortgage  loans, if any, that are secured by
liens on the Mortgaged  Property that are senior or  subordinate to the Mortgage
and the denominator of which is the Appraised Value or, to the extent  permitted
by the  Seller's  Client  Guide,  the Stated  Value,  of the  related  Mortgaged
Property.                                                                       

               Corporate  Trust Office:  With respect to the Indenture  Trustee,
Certificate Registrar,  Certificate Paying Agent and Paying Agent, the principal
corporate  trust office of the Indenture  Trustee and Note Registrar at which at
any particular  time its corporate trust business shall be  administered,  which
office at the date of the  execution of this  instrument  is located at 450 West
33rd Street, New York, New York 10007,  Attention:  Structured Finance Services.
With respect to the Owner Trustee,  the principal  corporate trust office of the
Owner Trustee at which at any particular time its corporate trust business shall
be  administered,  which  office  at the  date of the  execution  of this  Trust
Agreement  is  located  at  Rodney  Square  North,  1100  North  Market  Street,
Wilmington, Delaware 19890, Attention: Corporate Trust Administration.          

               Credit  Enhancement Draw Amount:  (1) With respect to any Payment
Date,  an amount,  if any,  equal to the sum of (a) the amount by which  accrued
interest on the Notes,  at the Note Rate on such Payment Date exceeds the amount
on deposit in the Payment Account  available for interest  distributions on such
Payment Date (exclusive of any Basis Risk Shortfalls),  (b) any Liquidation Loss
Amount  (other  than  any  Excess  Loss  Amount)  not  currently  covered  by  a
Liquidation Loss Distribution  Amount or a reduction in the Outstanding  Reserve
Amount and (c) and any Excess Loss Amount;  (2) with respect to the  Dissolution
Payment  Date,  the amount of the  Dissolution  Draw payable to the  Noteholders

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following the sale,  liquidation or other disposition of the assets of the Owner
Trust Estate in connection with the liquidation of the Trust Estate as permitted
under the Indenture following an Event of Default  thereunder;  (3) with respect
to the Final Scheduled  Payment Date, the amount by which the Security  Balances
on the Notes,  and any accrued and unpaid  interest  thereon  (exclusive  of any
Basis Risk  Shortfalls)  to the extent not paid  pursuant  to clause (1) of this
definition,  exceeds the payments otherwise  available to be made to the Holders
thereof on the Final Scheduled Payment Date; and (4) with respect to the Insured
Undercollateralization Payment Date, the Undercollateralization Amount.         

               Credit   Enhancement   Instrument:   The  Certificate   Guarantee
Insurance  Policy number AB0394BE,  dated as of the Closing Date,  issued by the
Credit Enhancer to the Indenture Trustee.                                       

               Credit    Enhancer:     Ambac    Assurance     Corporation,     a
Wisconsin-domiciled  stock insurance  corporation,  any successor thereto or any
replacement  credit  enhancer  substituted  pursuant  to  Section  3.29  of  the
Indenture.                                                                      

     Credit  Enhancer  Default:  If the Credit  Enhancer fails to make a payment
required under the Credit Enhancement Instrument in accordance with its terms.  

Credit Enhancer Premium Rate: As set forth in the Insurance Agreement.

     Credit Limit:  With respect to any Revolving  Credit Loan, the maximum Loan
Balance permitted under the terms of the related Loan Agreement.                

     Credit  Limit  Increase:  As  defined  in  Section  3.01  of the  Servicing
Agreement.                                                                      

               Credit  Line  Agreement  or  Mortgage  Note:  With  respect  to a
Revolving  Credit  Loan,  the  Loan  Agreement  pursuant  to which  the  related
mortgagor  agrees to pay the indebtedness  evidenced  thereby and secured by the
related Mortgage as modified or amended.                                        

               Credit  Score:  With respect to any  Revolving  Credit Loan,  the
numerical  designation  obtained  from  credit  reports  provided  by any credit
reporting  organization  used to assess a borrower's  credit-worthiness  and the
relative  degree of risk a borrower  represents  to a lender,  as  determined in
accordance with the applicable underwriting criteria.                           

               Custodial Account: The account or accounts created and maintained
by the Master Servicer  pursuant to Section 3.02(b) of the Servicing  Agreement,
in which the Master  Servicer  shall  deposit or cause to be  deposited  certain
amounts in respect of the Revolving Credit Loans.                               

               Custodial Agreement: Any Custodial Agreement among the Custodian,
the  Indenture  Trustee,  the  Issuer and the Master  Servicer  relating  to the
custody of the Revolving Credit Loans and the Related Documents.                

     Custodian:  Wells  Fargo  Bank  Minnesota,  N.A.,  and its  successors  and
assigns.                                                                        

Cut-off Date:  September 1, 2000.                 

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               Cut-off Date Loan Balance:  With respect to any Revolving  Credit
Loan, the unpaid  principal  balance  thereof as of the close of business on the
last day of the Billing Cycle immediately prior to the Cut-off Date.            

               Debt  Service  Reduction:  With respect to any  Revolving  Credit
Loan, a reduction in the scheduled  payment for such Revolving  Credit Loan by a
court of competent  jurisdiction  in a  proceeding  under the  Bankruptcy  Code,
except such a reduction constituting a Deficient Valuation or any reduction that
results in a permanent forgiveness of principal.                                

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

               Deficient Valuation: With respect to any Revolving Credit Loan, a
valuation by a court of competent  jurisdiction of the Mortgaged  Property in an
amount less than the then  outstanding  indebtedness  under the Revolving Credit
Loan, or any reduction in the amount of principal to be paid in connection  with
any scheduled  payment that  constitutes a permanent  forgiveness  of principal,
which  valuation or reduction  results  from a proceeding  under the  Bankruptcy
Code.                                                                           

     Deleted  Loan: A Revolving  Credit Loan  replaced or to be replaced with an
ligible Substitute Loan.                                                        

               Delinquent: As used herein, a Revolving Credit Loan is considered
to be: "30 to 59 days" or "30 or more days" delinquent when a payment due on any
due date  remains  unpaid  as of the  close of  business  on the next  following
monthly due date. Since the  determination as to whether a Revolving Credit Loan
falls  into these  categories  is made as of the close of  business  on the last
business day of each month, a Revolving Credit Loan with a payment due on July 1
that  remained  unpaid as of the  close of  business  on July 31 would  still be
considered  current  as of July 31. If that  payment  remained  unpaid as of the
close of  business  on August  31,  the  Revolving  Credit  Loan  would  then be
considered 30-59 days delinquent. Delinquency information as of the Cut-off Date
is determined  and prepared as of the close of business on the last business day
immediately prior to the Cut-off Date.                                          

   Definitive Notes: The meaning specified in Section 4.06 of the Indenture.

     Depositor:  Residential  Funding  Mortgage  Securities II, Inc., a Delaware
corporation, or its successor in interest.                                      

               Depository or Depository  Agency: The Depository Trust Company or
a  successor  appointed  by the  Indenture  Trustee  with  the  approval  of the
Depositor.  Any successor to the Depository shall be an organization  registered
as a  "clearing  agency"  pursuant to Section  17A of the  Exchange  Act and the
regulations of the Securities and Exchange Commission thereunder.               

     Depository  Participant:  A  Person  for  whom,  from  time  to  time,  the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.                                                                 

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               Determination  Date:  With respect to any Payment Date,  the 15th
day of the  month in which  such  Payment  Date  occurs  or if such day is not a
Business Day, the next succeeding Business Day.                                 

               Dissolution  Draw:  Following  an  Event of  Liquidation,  on the
Business Day following the date on which the proceeds of the sale or liquidation
of the Trust Estate are to be distributed to the Securityholders, the amount, if
any, by which the aggregate  amount available for distribution to Noteholders is
less than the sum of (1) an amount  equal to all accrued and unpaid  interest on
the Notes  through  such  Payment  Date and (2) 100% of the  aggregate  Security
Balance of the Notes outstanding immediately prior to such Payment Date.        

     Dissolution Payment Date:  Following an Event of Liquidation,  the Business
Day following the date on which the proceeds of the sale of the Trust Estate are
paid to Securityholders.                                                        

     Draw:  With  respect to any  Revolving  Credit  Loan,  a  borrowing  by the
Mortgagor under the related Loan Agreement.                                     

               Draw Period:  With  respect to each  Revolving  Credit Loan,  the
period  consisting  of either the first five or fifteen  years after the date of
origination of such Revolving Credit Loan, during which the related Mortgagor is
permitted to make Draws.                                                        

     Due Date: With respect to the Revolving  Credit Loans,  the 20th day of the
month.                                                                          

               Eligible  Account:  An account that is any of the following:  (i)
maintained  with a depository  institution  the short-term  debt  obligations of
which have been  rated by each  Rating  Agency in its  highest  rating  category
available,  or (ii) an account or accounts in a depository  institution in which
such accounts are fully insured to the limits established by the FDIC,  provided
that any deposits not so insured shall, to the extent  acceptable to each Rating
Agency,  as evidenced in writing,  be  maintained  such that (as evidenced by an
Opinion of Counsel  delivered to the Indenture  Trustee and each Rating  Agency)
the Indenture  Trustee have a claim with respect to the funds in such account or
a perfected  first  security  interest  against any  collateral  (which shall be
limited to Permitted Investments) securing such funds that is superior to claims
of any other  depositors or creditors of the depository  institution  with which
such  account  is  maintained,  or (iii) in the case of the  Custodial  Account,
either  (A) a trust  account  or  accounts  maintained  at the  corporate  trust
department of the Indenture Trustee or (B) an account or accounts  maintained at
the corporate trust  department of the Indenture  Trustee,  as long as its short
term debt obligations are rated P-1 by Moody's, A-1 by Standard & Poor's (or the
equivalent)  and F1,  if rated by Fitch  (or the  equivalent)  or better by each
Rating  Agency  and its long term debt  obligations  are rated A by  Standard  &
Poor's (or the  equivalent)  and AA-, if rated by Fitch (or the  equivalent)  or
better by each Rating Agency,  or (iv) in the case of the Custodial  Account and
the Payment  Account,  a trust  account or accounts  maintained in the corporate
trust  division  of the  Indenture  Trustee,  or (v) an account or accounts of a
depository institution acceptable to each Rating Agency (as evidenced in writing
by each Rating Agency that use of any such account as the  Custodial  Account or
the Payment Account will not reduce the rating assigned to any of the Securities
by such Rating Agency (if determined  without  regard to the Credit  Enhancement
Instrument) below the lower of the then-current rating or the rating assigned to
such  Securities  (if  determined  without  regard  to  the  Credit  Enhancement
Instrument) as of the Closing Date by such Rating Agency).                      

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               Eligible  Substitute Loan: A Revolving Credit Loan substituted by
the Seller for a Deleted Loan which must, on the date of such  substitution,  as
confirmed in an Officer's  Certificate  delivered to the Indenture Trustee,  (i)
have an outstanding principal balance,  after deduction of the principal portion
of the  monthly  payment due in the month of  substitution  (or in the case of a
substitution  of more than one  Revolving  Credit  Loan for a Deleted  Revolving
Credit Loan, an aggregate outstanding principal balance,  after such deduction),
not in excess of the  outstanding  principal  balance of the  Deleted  Loan (the
amount of any shortfall to be deposited by the Seller in the  Custodial  Account
in the month of substitution); (ii) comply with each representation and warranty
set forth in clauses (ii) through  (xxxiii) of Section  3.1(b) of the  Revolving
Credit  Loan  Purchase  Agreement  other than  clauses  (viii),  (xiii),  (xiv),
(xxiv)(B),  (xxv)(B),  (xxvi) and (xxvii) as of the date of substitution;  (iii)
have a Loan Rate, Net Loan Rate and Gross Margin no lower than and not more than
1% per  annum  higher  than  the Loan  Rate,  Net Loan  Rate and  Gross  Margin,
respectively,  of the Deleted Loan as of the date of  substitution;  (iv) have a
Combined  Loan-to-Value Ratio at the time of substitution no higher than that of
the  Deleted  Loan at the time of  substitution;  (v) have a  remaining  term to
stated  maturity not greater than (and not more than one year less than) that of
the Deleted Loan and (vi) not be 30 days or more delinquent.                    

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

               Event of Default:  With respect to the Indenture,  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):                                    

               (i) a default in the payment of any interest on any Note when the
        same becomes due and  payable,  and such  default  shall  continue for a
period of five days; or                                         

               (ii)  a  default  in  the  payment  of  the  principal  of or any
        installment  of the  principal of any Note when the same becomes due and
      payable, and such default shall continue for a period of five days; or

               (iii) there occurs a default in the  observance or performance of
        any covenant or agreement  of the Issuer made in the  Indenture,  or any
        representation or warranty of the Issuer made in the Indenture or in any
        certificate or other writing delivered  pursuant hereto or in connection
        herewith  proving to have been  incorrect in any material  respect as of
        the time when the same shall have been made which has a material adverse
        effect on  Securityholders,  and such default  shall  continue or not be
        cured,  or the  circumstance  or  condition  in  respect  of which  such
        representation  or warranty was incorrect shall not have been eliminated
        or otherwise  cured, for a period of 30 days after there shall have been

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        given,  by registered or certified  mail, to the Issuer by the Indenture
        Trustee or to the Issuer and the Indenture  Trustee by the Holders of at
        least 25% of the outstanding Security Balance of the Notes or the Credit
        Enhancer,   a  written  notice  specifying  such  default  or  incorrect
        representation  or warranty and  requiring it to be remedied and stating
that such notice is a notice of default hereunder; or           

               (iv) there occurs the filing of a decree or order for relief by a
        court  having  jurisdiction  in the premises in respect of the Issuer or
        any  substantial  part of the Trust Estate in an involuntary  case under
        any applicable federal or state bankruptcy,  insolvency or other similar
        law now or hereafter in effect,  or  appointing a receiver,  liquidator,
        assignee,  custodian,  trustee,  sequestrator or similar official of the
        Issuer or for any substantial part of the Trust Estate,  or ordering the
        winding-up or  liquidation of the Issuer's  affairs,  and such decree or
        order shall remain unstayed and in effect for a period of 60 consecutive
days; or                                                        

               (v) there  occurs the  commencement  by the Issuer of a voluntary
        case under any  applicable  federal or state  bankruptcy,  insolvency or
        other  similar  law now or  hereafter  in effect,  or the consent by the
        Issuer to the entry of an order for relief in an involuntary  case under
        any such law, or the consent by the Issuer to the  appointment or taking
        possession  by a receiver,  liquidator,  assignee,  custodian,  trustee,
        sequestrator  or similar  official of the Issuer or for any  substantial
        part of the assets of the Trust  Estate,  or the making by the Issuer of
        any general  assignment for the benefit of creditors,  or the failure by
        the Issuer  generally  to pay its debts as such debts become due, or the
        taking  of  any  action  by  the  Issuer  in  furtherance  of any of the
foregoing.                                                      

               Event of  Liquidation:  Following  the  occurrence of an Event of
Default under the Indenture,  the  determination  by the Indenture  Trustee,  as
evidenced by a written notice  provided to the Owner Trustee,  the Depositor and
the Credit Enhancer, that all conditions precedent to the sale or liquidation of
the Trust Estate pursuant to Section 5.04 of the Indenture have been satisfied. 

     Event of Servicer Termination:  With respect to the Servicing Agreement,  a
Servicing Default as defined in Section 7.01 of the Servicing Agreement.        

               Excess Loss Amount:  On any Payment  Date  "Excess Loss  Amounts"
will be equal to the sum of (i) the excess, if any, of the aggregate Liquidation
Loss  Amounts  (other  than as  described  in clauses  (ii)-(v)  hereof) for the
related Collection Period and all preceding Collection Periods over $15,412,099,
(ii) any Special Hazard Losses in excess of the Special Hazard Amount, (iii) any
Fraud Losses in excess of the Fraud Loss Amount,  (iv) any Bankruptcy  Losses in
excess of the Bankruptcy Loss Amount, and (v) any losses incurred on a Revolving
Credit Loan caused by or resulting from an Extraordinary Event.                 

     Exchange  Act: The  Securities  Exchange Act of 1934,  as amended,  and the
rules and regulations promulgated thereunder.                                   

               Excluded Amount:  For any Payment Date on or after the occurrence
of an  Amortization  Event,  the  portion of the  balance  with  respect to each
Revolving  Credit Loan  attributable  to all Draws not transferred to the Trust,
and the  portion  of the  Principal  Collections  (other  than  Net  Liquidation
Proceeds to the extent that the Excluded  Amount of Liquidation  Proceeds is not
included in Net Liquidation  Proceeds) and Interest Collections thereon for each

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Collection  Period  allocated  to  such  Excluded  Amount  based  on a pro  rata
allocation  between  the  related  Excluded  Amount  and  the  Loan  Balance  in
proportion to the respective  amounts  outstanding as of the end of the calendar
month preceding such Collection Period.                                         

               Expenses:  The  meaning  specified  in Section  7.02 of the Trust
Agreement.                                                  

               Extraordinary Event: Any of the following conditions with respect
to a Mortgaged  Property or Revolving Credit Loan causing or resulting in a loss
which causes the liquidation of such Revolving Credit Loan:                     

               (a)  losses  that  are of a type  that  would be  covered  by the
        fidelity bond and the errors and omissions  insurance policy required to
        be maintained  pursuant to Section 3.13 of the  Servicing  Agreement but
are in excess of the coverage maintained thereunder;            

               (b)  nuclear   reaction  or  nuclear   radiation  or  radioactive
        contamination,  all whether controlled or uncontrolled, and whether such
        loss be direct  or  indirect,  proximate  or remote or be in whole or in
        part caused by,  contributed  to or aggravated by a peril covered by the
definition of the term "Special Hazard Loss";                   

               (c) hostile or warlike action in time of peace or war,  including
        action  in  hindering,   combatting  or  defending  against  an  actual,
impending or expected attack:                                   

               1. by any government or sovereign  power, de jure or de facto, or
          by any authority  maintaining or using military,  naval or air forces;
or                                                          

2. by military, naval or air forces; or           

               3. by an  agent  of any  such  government,  power,  authority  or
forces;                                                     

               (d) any weapon of war  employing  atomic  fission or  radioactive
force whether in time of peace or war; or                   

               (e) insurrection, rebellion, revolution, civil war, usurped power
        or action taken by  governmental  authority in hindering,  combatting or
        defending  against  such an  occurrence,  seizure or  destruction  under
        quarantine  or  customs  regulations,   confiscation  by  order  of  any
        government  or  public  authority;  or risks of  contraband  or  illegal
transportation or trade.                                        

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

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

               Final Scheduled Payment Date: The Payment Date in September 2030.

Fitch:  Fitch, Inc., or its successor in interest.

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

               Fraud  Loss  Amount:  As of any date of  determination  after the
Cut-off  Date,  the  Fraud  Loss  Amount  shall  equal  (X)  prior to the  first
anniversary  of the Cut-off Date an amount  equal to 3% of the  aggregate of the
Credit  Limits of the  Revolving  Credit  Loans as of the Cut-off Date minus the
aggregate of any Liquidation  Loss Amounts on the Revolving  Credit Loans due to
Fraud Losses up to such date of determination;  (Y) from the first to the second
anniversary  of the Cut-off  Date,  an amount equal to (1) the lesser of (a) the
Fraud Loss Amount as of the most recent  anniversary of the Cut-off Date and (b)
2% of the aggregate of the Credit Limits of the Revolving Credit Loans as of the
most recent  anniversary  of the  Cut-off  Date minus (2) the  aggregate  of any
Liquidation Loss Amounts on the Revolving Credit Loans due to Fraud Losses since
the  most  recent   anniversary   of  the  Cut-off  Date  up  to  such  date  of
determination;  and (Z) from the second to the fifth  anniversary of the Cut-off
Date,  an amount  equal to (1) the lesser of (a) the Fraud Loss Amount as of the
most recent  anniversary  of the Cut-off Date and (b) 1% of the aggregate of the
Credit Limits of the Revolving  Credit as of the most recent  anniversary of the
Cut-off  Date minus (2) the  aggregate  of any  Liquidation  Loss Amounts on the
Revolving Credit Loans due to Fraud Losses since the most recent  anniversary of
the  Cut-off  Date up to such  date of  determination.  On and  after  the fifth
anniversary of the Cut-off Date the Fraud Loss Amount shall be zero.            

     Fraud Losses:  Losses on Revolving Credit Loans as to which there was fraud
in the origination of such Revolving Credit Loan.                               

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

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

               Gross  Margin:  With respect to any  Revolving  Credit Loan,  the
percentage  set forth as the  "Margin"  for such  Revolving  Credit  Loan on the
Revolving Credit Loan Schedule.                                                 

    Holder:  Any of the Noteholders or Certificateholders.

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     Indemnified  Party:  The  meaning  specified  in Section  7.02 of the Trust
Agreement.                                                                      

     Indenture: The indenture, dated as of the Closing Date, between the Issuer,
as debtor, and the Indenture Trustee, as indenture trustee.                     

     Indenture Trustee: The Chase Manhattan Bank, and its successors and assigns
or any  successor  indenture  trustee  appointed  pursuant  to the  terms of the
Indenture.                                                                      

               Independent:  When used with respect to any specified Person, the
Person (i) is in fact independent of the Issuer, any other obligor on the Notes,
the Seller,  the Depositor  and any  Affiliate of any of the foregoing  Persons,
(ii)  does not have any  direct  financial  interest  or any  material  indirect
financial  interest  in the Issuer,  any such other  obligor,  the  Seller,  the
Depositor  or any  Affiliate  of any of the  foregoing  Persons and (iii) is not
connected with the Issuer, any such other obligor,  the Seller, the Depositor or
any Affiliate of any of the foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions. 

               Independent Certificate: A certificate or opinion to be delivered
to the  Indenture  Trustee under the  circumstances  described in, and otherwise
complying  with, the applicable  requirements of Section 10.01 of the Indenture,
made by an  Independent  appraiser or other expert  appointed by an Issuer Order
and approved by the Indenture  Trustee in the exercise of reasonable  care,  and
such opinion or certificate  shall state that the signer has read the definition
of "Independent" in this Indenture and that the signer is Independent within the
meaning thereof.                                                                

               Index:  With respect to any Revolving Credit Loan, the prime rate
from time to time for the  adjustment  of the Loan Rate set forth as such on the
related Credit Line Agreement.                                                  

               Initial Certificates:  The Home Equity Loan-Backed  Certificates,
Series  2000-HS1,   issued  on  the  Closing  Date,  each  evidencing  undivided
beneficial interests in the Issuer and executed by the Owner Trustee.           

     Initial Security Balance: With respect to the Initial Certificates,  $0.00,
the Term Notes, $138,370,000.00, and the Variable Funding Notes, $0.00.         

               Insolvency  Event:  With respect to a specified  Person,  (a) the
filing of a decree or order for  relief by a court  having  jurisdiction  in the
premises in respect of such Person or any substantial part of its property in an
involuntary  case under any applicable  bankruptcy,  insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator,  assignee,
custodian,  trustee, sequestrator or similar official for such Person or for any
substantial  part of its property,  or ordering the winding-up or liquidation of
such  Person's  affairs,  and such decree or order shall remain  unstayed and in
effect for a period of 60  consecutive  days;  or (b) the  commencement  by such
Person of a voluntary case under any applicable bankruptcy,  insolvency or other
similar  law now or  hereafter  in effect,  or the consent by such Person to the
entry of an order for relief in an  involuntary  case under any such law, or the
consent by such Person to the appointment of or taking possession by a receiver,
liquidator,  assignee,  custodian, trustee, sequestrator or similar official for
such Person or for any substantial  part of its property,  or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due or the admission
by such Person in writing (as to which the Indenture  Trustee shall have notice)
of its  inability  to pay its debts  generally,  or the adoption by the Board of
Directors  or managing  member of such Person of a resolution  which  authorizes
action by such Person in furtherance of any of the foregoing.                   

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               Insurance Agreement: The Insurance and Indemnity Agreement, dated
as of the Closing Date,  among the Master Servicer,  the Seller,  the Depositor,
the  Issuer,  the  Indenture  Trustee  and the Credit  Enhancer,  including  any
amendments and supplements thereto.                                             

               Insurance Proceeds:  Proceeds paid by any insurer (other than the
Credit  Enhancer)  pursuant to any insurance  policy covering a Revolving Credit
Loan  which are  required  to be  remitted  to the Master  Servicer,  or amounts
required to be paid by the Master Servicer pursuant to the next to last sentence
of Section 3.04 of the Servicing  Agreement,  net of any  component  thereof (i)
covering  any  expenses  incurred  by or on behalf  of the  Master  Servicer  in
connection with obtaining such proceeds, (ii) that is applied to the restoration
or repair of the related Mortgaged Property,  (iii) released to the Mortgagor in
accordance  with the  Master  Servicer's  normal  servicing  procedures  or (iv)
required to be paid to any holder of a mortgage senior to such Revolving  Credit
Loan.                                                                           

               Insured  Undercollateralization Payment Date: The earliest of (i)
the ninth Payment Date, (ii) the Payment Date immediately following the purchase
of the Revolving Credit Loans by the Master Servicer pursuant to Section 8.08 of
the Servicing Agreement or (iii) the Payment Date on which the Principal Balance
of the Term Notes is reduced to zero.                                           

               Interest  Collections:  With respect to any Payment Date, the sum
of all payments by or on behalf of Mortgagors and any other amounts constituting
interest (including without limitation such portion of Insurance  Proceeds,  Net
Liquidation  Proceeds and  Repurchase  Prices as is allocable to interest on the
applicable  Revolving  Credit  Loan)  as is paid  by the  Seller  or the  Master
Servicer or is collected  by the  Servicer  under the  Revolving  Credit  Loans,
reduced by the Servicing Fees for the related  Collection Period and by any fees
(including annual fees) or late charges or similar  administrative  fees paid by
Mortgagors during the related  Collection  Period. The terms of the related Loan
Agreement  shall  determine  the  portion  of each  payment  in  respect of such
Revolving Credit Loan that constitutes principal or interest.                   

               Interest Period:  With respect to any Payment Date other than the
first  Payment  Date,  the period  beginning on the  preceding  Payment Date and
ending on the day  preceding  such  Payment  Date,  and in the case of the first
Payment  Date,  the period  beginning  on the Closing Date and ending on the day
preceding the first Payment Date.                                               

               Interest Rate  Adjustment  Date:  With respect to each  Revolving
Credit Loan,  the date or dates on which the Loan Rate is adjusted in accordance
with the related Credit Line Agreement.                                         

     Issuer or Trust: The Home Equity Loan Trust 2000-HS1,  a Delaware  business
trust, or its successor in interest.                                            

     Issuer Request: A written order or request signed in the name of the Issuer
by any one of its Authorized Officers and delivered to the Indenture Trustee.   

               LIBOR:  For any  Interest  Period  other than the first  Interest
Period,  the rate for United States dollar  deposits for one month which appears
on the Telerate Screen Page 3750 as of 11:00 A.M., London,  England time, on the
second LIBOR Business Day prior to the first day of such Interest  Period.  With
respect to the first Interest Period, the rate for United States dollar deposits
for one month which  appears on the Telerate  Screen Page 3750 as of 11:00 A.M.,
London, England time, two LIBOR Business Days prior to the Closing Date. If such
rate does not appear on such page (or such other page as may  replace  that page
on that service, or if such service is no longer offered, such other service for
displaying  LIBOR or  comparable  rates  as may be  reasonably  selected  by the
Indenture  Trustee after  consultation  with the Master  Servicer and the Credit
Enhancer),  the rate will be the Reference Bank Rate. If no such  quotations can
be  obtained  and no  Reference  Bank  Rate is  available,  LIBOR  will be LIBOR
applicable to the preceding Payment Date.                                       

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

               Lien:   Any  mortgage,   deed  of  trust,   pledge,   conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other),  preference,  priority right or interest or other security
agreement  or  preferential  arrangement  of  any  kind  or  nature  whatsoever,
including,  without  limitation,  any conditional  sale or other title retention
agreement,  any financing lease having substantially the same economic effect as
any of the  foregoing and the filing of any  financing  statement  under the UCC
(other than any such financing statement filed for informational  purposes only)
or  comparable  law of  any  jurisdiction  to  evidence  any  of the  foregoing;
provided, however, that any assignment pursuant to Section 6.02 of the Servicing
Agreement shall not be deemed to constitute a Lien.                             

               Liquidated  Revolving  Credit  Loan:  With respect to any Payment
Date,  any  Revolving  Credit Loan in respect of which the Master  Servicer  has
determined,  in  accordance  with  the  servicing  procedures  specified  in the
Servicing  Agreement,  as of the  end  of the  related  Collection  Period  that
substantially all Liquidation  Proceeds which it reasonably  expects to recover,
if any, with respect to the disposition of the related REO have been recovered. 

               Liquidation  Expenses:   Out-of-pocket   expenses  (exclusive  of
overhead)  which  are  incurred  by or on  behalf  of  the  Master  Servicer  in
connection with the  liquidation of any Revolving  Credit Loan and not recovered
under any insurance policy, such expenses including,  without limitation,  legal
fees  and  expenses,  any  unreimbursed  amount  expended  (including,   without
limitation,  amounts  advanced to correct defaults on any mortgage loan which is
senior to such Revolving Credit Loan and amounts advanced to keep current or pay
off a mortgage loan that is senior to such Revolving Credit Loan) respecting the
related Revolving Credit Loan and any related and unreimbursed  expenditures for
real  estate  property  taxes  or  for  property  restoration,  preservation  or
insurance against casualty loss or damage.                                      

               Liquidation  Loss  Amounts:  With respect to any Payment Date and
any Revolving Credit Loan that became a Liquidated  Revolving Credit Loan during
the related  Collection  Period,  the  unrecovered  portion of the related  Loan
Balance thereof at the end of such Collection Period, after giving effect to the
Net Liquidation Proceeds applied in reduction of the Loan Balance.              

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               Liquidation Loss Distribution Amount: With respect to any Payment
Date, the aggregate of (A) 100% of the Liquidation  Loss Amounts (other than any
Excess Loss Amounts) on such Payment Date,  plus (B) any such  Liquidation  Loss
Amounts (other than any Excess Loss Amounts)  remaining  undistributed  from any
preceding  Payment  Date  (with  interest  thereon  at a rate  specified  in the
Insurance Agreement for amounts owing to the Credit Enhancer), provided that any
Liquidation Loss Amount described in this clause (B) shall not be distributed to
the extent that the  Liquidation  Loss Amount was paid by means of a draw on the
Credit  Enhancement  Instrument  or  was  reflected  in  the  reduction  of  the
Outstanding Reserve Amount.                                                     

               Liquidation Proceeds:  Proceeds (including Insurance Proceeds but
not including  amounts  drawn under the Credit  Enhancement  Instrument)  if any
received in connection  with the  liquidation  of any  Revolving  Credit Loan or
related REO, whether through trustee's sale, foreclosure sale or otherwise.     

     Loan Agreement:  With respect to any Revolving Credit Loan, the credit line
account  agreement  executed  by the  related  Mortgagor  and any  amendment  or
modification thereof.                                                           

               Loan Balance:  With respect to any Revolving  Credit Loan,  other
than a Liquidated  Revolving Credit Loan, and as of any day, the related Cut-off
Date Loan Balance, plus (i) any Additional Balances in respect of such Revolving
Credit  Loan  conveyed  to the Trust,  minus (ii) all  collections  credited  as
principal in respect of any such  Revolving  Credit Loan in accordance  with the
related Loan Agreement  (except for any such  collections  that are allocable to
any Excluded Amount) and applied in reduction of the Loan Balance  thereof.  For
purposes of this definition,  a Liquidated Revolving Credit Loan shall be deemed
to have a Loan Balance equal to the Loan Balance of the related Revolving Credit
Loan  immediately  prior to the final  recovery  of  substantially  all  related
Liquidation Proceeds and a Loan Balance of zero thereafter.                     

     Loan Rate:  With respect to any Revolving  Credit Loan and any day, the per
annum rate of interest applicable under the related Loan Agreement.             

               Lost Note Affidavit: With respect to any Revolving Credit Loan as
to which  the  original  Credit  Line  Agreement  has been  permanently  lost or
destroyed and has not been replaced, an affidavit from the Seller or the related
Program Seller certifying that the original Credit Line Agreement has been lost,
misplaced  or  destroyed  (together  with a  copy  of the  related  Credit  Line
Agreement).                                                                     

     Master Servicer:  Residential Funding Corporation,  a Delaware corporation,
and its successors and assigns.                                                 

               Master  Servicing Fee: With respect to any Revolving  Credit Loan
and any  Collection  Period,  the product of (i) the Master  Servicing  Fee Rate
divided by 12 and (ii) the Pool  Balance as of the first day of such  Collection
Period.                                                                         

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     Master Servicing Fee Rate: With respect to any Revolving Credit Loan, 0.58%
per annum.                                                                      

     MATI:  Mortgage  Assets  Trading,  Inc.,  a  Delaware  corporation,  or its
successors.                                                                     

               Maximum  Rate:  With respect to each  Revolving  Credit Loan with
respect to which the related Credit Line Agreement  provides for a lifetime rate
cap, the maximum Loan Rate permitted over the life of such Revolving Credit Loan
under the terms of such Credit  Line  Agreement,  as set forth on the  Revolving
Credit Loan  Schedule and  initially as set forth on Exhibit A to the  Servicing
Agreement.                                                                      

               Maximum Variable Funding Balance: The maximum Security Balance of
the  Variable  Funding  Notes  may not  exceed  an  aggregate  amount  equal  to
$45,763,660 or such greater amount as may be permitted under the Indenture.     

     Minimum Monthly Payment:  With respect to any Revolving Credit Loan and any
month,  the minimum amount required to be paid by the related  Mortgagor in that
month.                                                                          

Moody's: Moody's Investors Service, Inc. or its successor in interest.

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

               Mortgage  File:  The  file   containing  the  Related   Documents
pertaining to a particular  Revolving  Credit Loan and any additional  documents
required to be added to the Mortgage File pursuant to the Revolving  Credit Loan
Purchase Agreement or the Servicing Agreement.                                  

               Mortgage  Note:  With  respect to a Revolving  Credit  Loan,  the
mortgage  note  pursuant  to  which  the  related  Mortgagor  agrees  to pay the
indebtedness  evidenced thereby and secured by a Mortgage on a related Mortgaged
Property, as modified or amended.                                               

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

         Mortgagor:  The obligor or obligors under a Loan Agreement.

               Net  Liquidation   Proceeds:   With  respect  to  any  Liquidated
Revolving Credit Loan, Liquidation Proceeds net of Liquidation Expenses (but not
including  the portion,  if any, of such amount that exceeds the Loan Balance of
the  Revolving  Credit  Loan at the  end of the  Collection  Period  immediately
preceding the Collection Period in which such Revolving Loan became a Liquidated
Revolving  Credit Loan,  plus  accrued and unpaid  interest on such Loan Balance
from the date last paid to the date of receipt of final Liquidation Proceeds).  

     Net Loan Rate:  With respect to any Revolving  Credit Loan and any day, the
related Loan Rate less 0.70% per annum.                                         

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               Net Loan Rate Cap: With respect to any Payment Date, the Weighted
Average  Net Loan  Rate,  adjusted  to an  effective  rate  reflecting  interest
calculated  on the basis of the actual  number of days in the  related  Interest
Period and a year assumed to consist of 360 days.                               

               Net Principal Collections:  With respect to any Payment Date, the
excess,  if any, of Security  Principal  Collections for the related  Collection
Period  over the  amount of  Additional  Balances  created  during  the  related
Collection Period.                                                              

Note Owner:  The Beneficial Owner of a Note.      

               Note Rate: With respect to any Interest  Period, a per annum rate
determined  by the  Master  Servicer  equal to the  lesser of (i) LIBOR for such
Interest Period plus 0.24% per annum for the Term Notes and LIBOR plus 0.24% per
annum for the Variable Funding Notes and (ii) 17.25% per annum.                 

     Note Register:  The register  maintained by the Note Registrar in which the
Note Registrar shall provide for the  registration of Notes and of transfers and
exchanges of Notes.                                                             

   Note Registrar: The Indenture Trustee, in its capacity as Note Registrar.

               Noteholder:  The Person in whose name a Note is registered in the
Note Register,  except that,  any Note  registered in the name of the Depositor,
the Issuer or the  Indenture  Trustee or any  Affiliate  of any of them shall be
deemed not to be outstanding and the registered  holder will not be considered a
Noteholder or holder for purposes of giving any request, demand,  authorization,
direction,  notice, consent or waiver under the Indenture or the Trust Agreement
provided that, in determining  whether the Indenture  Trustee shall be protected
in relying upon any such  request,  demand,  authorization,  direction,  notice,
consent or waiver,  only Notes that the  Indenture  Trustee or the Owner Trustee
knows to be so owned  shall be so  disregarded.  Owners of Notes  that have been
pledged in good faith may be regarded as Holders if the pledgee  establishes  to
the  satisfaction  of the  Indenture  Trustee or the Owner Trustee the pledgee's
right so to act with  respect  to such  Notes  and that the  pledgee  is not the
Issuer,  any  other  obligor  upon  the  Notes  or any  Affiliate  of any of the
foregoing Persons.                                                              

     Notes:  Collectively,  the Term Notes and the Variable Funding Notes issued
and outstanding at any time pursuant to the Indenture.                          

               Officer's  Certificate:  With respect to the Master  Servicer,  a
certificate  signed by the  President,  Managing  Director,  a Director,  a Vice
President or an Assistant Vice  President,  of the Master Servicer and delivered
to the Indenture  Trustee.  With respect to the Issuer, a certificate  signed by
any Authorized Officer of the Issuer, under the circumstances  described in, and
otherwise  complying  with, the applicable  requirements of Section 10.01 of the
Indenture,  and delivered to the Indenture Trustee.  Unless otherwise specified,
any  reference  in the  Indenture  to an  Officer's  Certificate  shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.                  

               Opinion of Counsel: A written opinion of counsel.  Any Opinion of
Counsel for the Master  Servicer  may be  provided  by in-house  counsel for the
Master Servicer if reasonably  acceptable to the Indenture  Trustee,  the Credit
Enhancer and the Rating  Agencies or counsel for the Depositor,  as the case may
be.                                                                             

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     Original Trust Agreement:  The Trust  Agreement,  dated as of September 19,
2000, between the Owner Trustee and the Depositor.                              

     Outstanding:  With respect to the Notes,  as of the date of  determination,
all Notes theretofore executed, authenticated and delivered under this Indenture
except:                                                                         

               (i)  Notes  theretofore   cancelled  by  the  Note  Registrar  or
delivered to the Indenture Trustee for cancellation; and    

                      (ii) Notes in exchange for or in lieu of which other Notes
        have  been  executed,   authenticated  and  delivered  pursuant  to  the
        Indenture  unless  proof   satisfactory  to  the  Indenture  Trustee  is
 presented that any such Notes are held by a holder in due course;

provided, however, that for purposes of effectuating the Credit Enhancer's right
of  subrogation  as set forth in Section 4.12 of the Indenture  only,  all Notes
that have been paid with funds provided under the Credit Enhancement  Instrument
shall be deemed to be Outstanding  until the Credit Enhancer has been reimbursed
with respect thereto.                                                           

               Outstanding Reserve Amount: With respect to any Payment Date, the
amount by which the Pool Balance after applying payments received in the related
Collection  Period exceeds the aggregate  Security  Balance of the Notes on such
Payment Date (in each case,  after  application of Net Principal  Collections or
Security  Principal  Collections,  as  the  case  may  be,  for  such  date  and
acquisition by the Trust of Additional  Balances on such Payment Date).  On each
Payment Date, the Outstanding Reserve Amount available to cover Liquidation Loss
Amounts on such Payment Date, if any, shall be deemed to be reduced by an amount
equal to any  Liquidation  Loss Amounts (other than any Excess Loss Amounts) for
such Payment Date,  except to the extent that such Liquidation Loss Amounts were
covered on such Payment Date by a Liquidation Loss Distribution Amount.         

     Owner Trust Estate: The corpus of the Issuer created by the Trust Agreement
which consists of the Revolving Credit Loans.                                   

               Owner  Trustee:  Wilmington  Trust Company not in its  individual
capacity  but  solely as Owner  Trustee  of the Trust,  and its  successors  and
assigns or any successor  owner trustee  appointed  pursuant to the terms of the
Trust Agreement.                                                                

     Paying Agent:  Any paying agent or co-paying  agent  appointed  pursuant to
Section 3.03 of the Indenture, which initially shall be the Indenture Trustee.  

               Payment Account: The account established by the Indenture Trustee
pursuant to Section  8.02 of the  Indenture  and Section  5.01 of the  Servicing
Agreement.  Amounts  deposited in the Payment Account will be distributed by the
Indenture Trustee in accordance with Section 3.05 of the Indenture.             

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     Payment Date: The 20th day of each month,  or if such day is not a Business
Day, then the next Business Day.                                                

               Percentage  Interest:  With  respect to any Note and any  Payment
Date, the percentage  obtained by dividing the Security  Balance of such Note by
the aggregate of the Security  Balances of all Notes  (including  the Term Notes
and the Variable  Funding Notes) prior to such Payment Date. With respect to any
Certificate,  the  percentage  obtained by dividing the Security  Balance on any
such  Certificate by the aggregate of the Security  Balances of all Certificates
prior to such Payment Date.                                                     

   Permitted Investments:  One or more of the following:

               (i)  obligations of or guaranteed as to principal and interest by
        the United  States or any agency or  instrumentality  thereof  when such
        obligations  are  backed  by the full  faith and  credit  of the  United
States;                                                         

               (ii) repurchase agreements on obligations specified in clause (i)
        maturing not more than one month from the date of  acquisition  thereof,
        provided  that  the  unsecured  obligations  of the  party  agreeing  to
        repurchase such  obligations are at the time rated by each Rating Agency
in its highest short-term rating category available;            

               (iii) federal funds,  certificates of deposit,  demand  deposits,
        time  deposits  and  bankers'  acceptances  (which  shall  each  have an
        original  maturity of not more than 90 days and, in the case of bankers'
        acceptances,  shall in no event have an  original  maturity of more than
        365 days or a remaining  maturity of more than 30 days)  denominated  in
        United  States  dollars  of any  U.S.  depository  institution  or trust
        company  incorporated  under the laws of the United  States or any state
        thereof or of any domestic branch of a foreign depository institution or
        trust company;  provided that the debt  obligations  of such  depository
        institution  or trust company (or, if the only Rating Agency is Standard
        &  Poor's,  in the case of the  principal  depository  institution  in a
        depository   institution  holding  company,   debt  obligations  of  the
        depository  institution  holding  company)  at the  date of  acquisition
        thereof have been rated by each Rating Agency in its highest  short-term
        rating category available; and provided further that, if the only Rating
        Agency is Standard & Poor's and if the  depository or trust company is a
        principal  subsidiary of a bank holding company and the debt obligations
        of such subsidiary are not separately rated, the applicable rating shall
        be that of the bank holding company;  and, provided further that, if the
        original maturity of such short-term obligations of a domestic branch of
        a foreign depository  institution or trust company shall exceed 30 days,
        the short-term  rating of such institution  shall be A-1+ in the case of
Standard & Poor's if Standard & Poor's is the Rating Agency;    

               (iv)  commercial  paper (having  original  maturities of not more
        than 365  days) of any  corporation  incorporated  under the laws of the
        United States or any state thereof which on the date of acquisition  has
        been  rated by each  Rating  Agency  in its  highest  short-term  rating
        category  available;  provided that such  commercial  paper shall have a
remaining maturity of not more than 30 days;                    

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               (v) a money market fund or a qualified  investment  fund rated by
        each Rating Agency in its highest  long-term rating category  available;
and                                                             

               (vi) other  obligations or securities that are acceptable to each
        Rating Agency as an Permitted  Investment  hereunder and will not reduce
        the rating  assigned to any  Securities  by such Rating Agency below the
        lower  of  the  then-current  rating  or the  rating  assigned  to  such
        Securities as of the Closing Date by such Rating  Agency,  and which are
        acceptable  to the Credit  Enhancer,  as evidenced in writing,  provided
        that if the Master Servicer or any other Person controlled by the Master
        Servicer  is the issuer or the  obligor of any  obligation  or  security
        described in this clause (vi) such  obligation  or security must have an
        interest  rate or  yield  that  is  fixed  or is  variable  based  on an
        objective  index that is not affected by the rate or amount of losses on
the Revolving Credit Loans;                                     

provided,  however,  that no  instrument  shall be a Permitted  Investment if it
represents,  either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest  payments derived from  obligations  underlying such instrument and the
principal and interest payments with respect to such instrument  provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations  References  herein to the highest  rating  available  on  unsecured
long-term debt shall mean AAA in the case of Standard & Poor's,  Aaa in the case
of  Moody's  and AAA in the case of  Fitch,  if rated by Fitch,  and  references
herein  to the  highest  rating  available  on  unsecured  commercial  paper and
short-term debt obligations shall mean A-1 in the case of Standard & Poor's, P-1
in the case of Moody's and F1 in the case of Fitch, if rated by Fitch.          

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

     Pool Balance:  With respect to any date, the aggregate of the Loan Balances
of all Revolving Credit Loans as of such date.                                  

               Predecessor  Note:  With respect to any  particular  Note,  every
previous Note  evidencing all or a portion of the same debt as that evidenced by
such  particular  Note;  and,  for the  purpose  of this  definition,  any  Note
authenticated  and  delivered  under  Section 4.03 of the Indenture in lieu of a
mutilated,  lost,  destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.                          

               Principal  Collection  Distribution Amount: For any Payment Date,
(i) at any time during the Revolving  Period,  so long as an Amortization  Event
has not occurred,  Net Principal  Collections and (ii) following an Amortization
Event or at any time after the end of the Revolving Period,  Security  Principal
Collections;  provided,  however,  on any Payment Date with respect to which the
Outstanding  Reserve  Amount that would result if determined  without  regard to
this  proviso  exceeds the  Reserve  Amount  Target,  the  Principal  Collection
Distribution  Amount  will be  reduced by the  amount of such  excess  until the
Outstanding Reserve Amount equals the Reserve Amount Target.                    

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     Principal  Collections:  With respect to any Payment Date and any Revolving
Credit Loan, the aggregate of the following amounts:                            

               (i) the  total  amount  of  payments  made by or on behalf of the
        Mortgagor,  received  and  applied  as  payments  of  principal  on  the
        Revolving Credit Loan during the related  Collection Period, as reported
by the related Subservicer;                                     

               (ii) any Net  Liquidation  Proceeds,  allocable  as a recovery of
        principal,  received in connection with the Revolving Credit Loan during
the related Collection Period;                                  

               (iii) if the  Revolving  Credit Loan was  purchased by the Master
        Servicer  pursuant to Section 3.15 of the  Servicing  Agreement,  or was
        repurchased by the Seller pursuant to the Revolving Credit Loan Purchase
        Agreement,  during  the  related  Collection  Period,  100% of the  Loan
        Balance of the Revolving  Credit Loan as of the date of such purchase or
repurchase; and                                                 

               (iv) any other amounts received as payments on or proceeds of the
        Revolving Credit Loan during the Collection Period to the extent applied
in reduction of the principal amount thereof;                   

provided that Principal  Collections shall not include any Foreclosure  Profits,
and  shall be  reduced  by any  amounts  withdrawn  from the  Custodial  Account
pursuant to clauses (c), (g) and (h) of Section 3.03 of the Servicing  Agreement
other than any portion of such  amounts  that are  attributable  to the Excluded
Amount in respect of any  Revolving  Credit Loan that are allocable to principal
of such  Revolving  Credit  Loan and not  otherwise  excluded  from the  amounts
specified in (i) - (iv) above.                                                  

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

     Program Guide:  Together, the Seller's Seller Guide and Servicing Guide, as
in effect from time to time.                                                    

     Program Seller:  With respect to any Revolving Credit Loan, the Person that
sold such Revolving Credit Loan to the Seller.                                  

     Purchase  Price:  The meaning  specified in Section 2.2(a) of the Revolving
Credit Loan Purchase Agreement.                                                 

     Purchaser:  Residential  Funding  Mortgage  Securities II, Inc., a Delaware
corporation, and its successors and assigns.                                    

               Rating  Agency:  Any  nationally  recognized  statistical  rating
organization,  or its successor, that rated the Securities at the request of the
Depositor  at the time of the  initial  issuance of the  Securities.  Initially,
Fitch and Standard & Poor's. If such organization or a successor is no longer in
existence,  "Rating  Agency"  shall be such  nationally  recognized  statistical
rating  organization,  or other comparable Person,  designated by the Depositor,
notice of which designation shall be given to the Indenture Trustee.  References

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herein to the highest short term  unsecured  rating  category of a Rating Agency
shall  mean A-1 or better in the case of  Standard  & Poor's and F1 or better in
the case of Fitch and in the case of any other  Rating  Agency  shall  mean such
equivalent  ratings.  References herein to the highest long-term rating category
of a Rating  Agency  shall mean "AAA" in the case of Standard & Poor's and "AAA"
in the case of Fitch and in the case of any other Rating Agency, such equivalent
rating.                                                                         

               Record Date: With respect to the Term Notes and any Payment Date,
the  Business  Day next  preceding  such  Payment  Date and with  respect to the
Certificates  or the  Variable  Funding  Notes and any  Payment  Date,  the last
Business Day of the month preceding the month of such Payment Date.             

               Reference  Bank Rate:  With  respect to any Interest  Period,  as
follows: the arithmetic mean (rounded upwards, if necessary,  to the nearest one
sixteenth of a percent) of the offered rates for United  States dollar  deposits
for one month which are offered by the Reference Banks as of 11:00 A.M., London,
England  time,  on the second LIBOR  Business Day prior to the first day of such
Interest  Period to prime banks in the London  interbank  market for a period of
one month in amounts  approximately equal to the sum of the outstanding Security
Balance of the Notes;  provided that at least two such  Reference  Banks provide
such rate. If fewer than two offered rates appear,  the Reference Bank Rate will
be the  arithmetic  mean of the rates  quoted by one or more major  banks in New
York City,  selected by the Indenture Trustee after consultation with the Master
Servicer and the Credit Enhancer,  as of 11:00 a.m., New York time, on such date
for loans in U.S. Dollars to leading European Banks for a period of one month in
amounts  approximately  equal to the aggregate Security Balance of the Notes. If
no such  quotations  can be  obtained,  the  Reference  Bank  Rate  shall be the
Reference Bank Rate applicable to the preceding Interest Period.                

     Reference Banks:  Barclays Bank PLC, National  Westminster Bank and Bankers
Trust Company.                                                                  

     Registered  Holder:  The Person in whose name a Note is  registered  in the
Note Register on the applicable Record Date.                                    

               Related  Documents:  With respect to each Revolving  Credit Loan,
the documents  specified in Section 2.1(c) of the Revolving Credit Loan Purchase
Agreement and any documents  required to be added to such documents  pursuant to
the  Revolving  Credit  Loan  Purchase  Agreement,  the Trust  Agreement  or the
Servicing Agreement.                                                            

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

               Repurchase  Event:  With  respect to any  Revolving  Credit Loan,
either (i) a discovery  that, as of the Closing Date,  the related  Mortgage was
not a valid lien on the related Mortgaged  Property subject only to (A) the lien
of any prior mortgage  indicated on the Revolving Credit Loan Schedule,  (B) the
lien of real  property  taxes  and  assessments  not  yet due and  payable,  (C)
covenants,  conditions,  and  restrictions,  rights of way,  easements and other
matters of public  record as of the date of recording of such  Mortgage and such
other  permissible  title  exceptions as are listed in the Program Guide and (D)
other  matters  to which  like  properties  are  commonly  subject  which do not

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materially  adversely affect the value,  use,  enjoyment or marketability of the
related Mortgaged  Property or (ii) with respect to any Revolving Credit Loan as
to which the Seller delivers a Lost Note Affidavit, a subsequent default on such
Revolving  Credit Loan if the enforcement  thereof or of the related Mortgage is
materially  and adversely  affected by the absence of such original  Credit Line
Agreement.                                                                      

               Repurchase  Price:  With  respect to any  Revolving  Credit  Loan
required to be  repurchased  on any date pursuant to the  Revolving  Credit Loan
Purchase Agreement or purchased by the Master Servicer pursuant to the Servicing
Agreement,  an amount equal to the sum of (i) 100% of the Loan  Balance  thereof
(without reduction for any amounts charged off) and (ii) unpaid accrued interest
at the Loan Rate (or with  respect  to the last day of the month in the month of
repurchase,  the Loan Rate  will be the Loan Rate in effect as to the  second to
last day in such month) on the  outstanding  principal  balance thereof from the
Due Date to which  interest  was last paid by the  Mortgagor to the first day of
the month  following the month of purchase.  No portion of any Repurchase  Price
shall be included in any Excluded Amount for any Payment Date.                  

     Request  for  Release:  The form  attached  as  Exhibit 4 to the  Custodial
Agreement or an electronic request in a form acceptable to the Custodian.       

               Reserve  Amount  Target:  As to any  Payment  Date  prior  to the
Stepdown  Date,  the Reserve  Amount  Target  will be 1.75% of the Cut-off  Date
Balance.  As to any  Payment  Date on or after the  Stepdown  Date,  the Reserve
Amount Target will be equal to the lesser of (a) the Reserve Amount Target as of
the Cut-off Date and (b) 3.50% of the Pool Balance after application of Interest
Collections and Principal  Collections  received  during the related  Collection
Period plus 50% of the  outstanding  Principal  Balance of all Revolving  Credit
Loans 90 or more days Delinquent as of such Payment Date but not lower than 0.5%
of the Cut-off Date Balance;  provided  however that any scheduled  reduction to
the Reserve  Amount Target  described  above shall not be made as of any Payment
Date unless (i) the outstanding  Principal Balance of the Revolving Credit Loans
Delinquent  90 days or more averaged over the last six months as a percentage of
the  aggregate  outstanding  Principal  Balance of all  Revolving  Credit  Loans
averaged  over the last six months  does not exceed  3.00%,  (ii) the  aggregate
cumulative  Liquidation  Loss Amounts on the Revolving Credit Loans prior to any
such  Payment Date  occurring  during the first year and the second year (or any
year  thereafter)  after  the  Stepdown  Date are less  than  3.00%  and  4.00%,
respectively,  of the aggregate Pool Balance and (iii) there has been no draw on
the Policy on such  Payment  Date that remains  unreimbursed.  In addition,  the
Reserve  Amount  Target may be  reduced  with the prior  written  consent of the
Credit Enhancer with notice to the Rating Agencies.                             

               Responsible  Officer:  With respect to the Indenture Trustee, any
officer  of  the   Indenture   Trustee  with  direct   responsibility   for  the
administration  of the Indenture and also, with respect to a particular  matter,
any other  officer to whom such  matter is  referred  because of such  officer's
knowledge of and familiarity with the particular subject.                       

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               Revolving  Credit Loan Purchase  Agreement:  The Revolving Credit
Loan Purchase  Agreement,  dated as of the Closing Date,  between the Seller, as
seller,  and the Depositor,  as purchaser,  with respect to the Revolving Credit
Loans.                                                                          

               Revolving Credit Loan Schedule: The initial schedule of Revolving
Credit  Loans as of the  Cut-off  Date set forth in  Exhibit A of the  Servicing
Agreement,  which schedule sets forth as to each  Revolving  Credit Loan (i) the
Cut-off Date Loan Balance  ("Principal  Bal"), (ii) the Credit Limit,  (iii) the
Gross Margin ("Margin"), (iv) the Maximum Rate ("Ceiling"), if any, (v) the lien
position of the  related  Mortgaged  Property,  (vi) the  Depositor's  Revolving
Credit Loan identifying  number,  (vii) the Subservicer's  Revolving Credit Loan
identifying number (viii) the street address of the Mortgaged Property including
the city,  state and zip code,  (ix) a code  indicating  whether  the  Mortgaged
Property is owner-occupied,  (x) the type of residential  dwelling  constituting
the Mortgaged  Property,  (xi) the original number of months to maturity,  (xii)
the remaining  number of months to maturity from the Cut-off Date,  (xiii) as to
any first lien Revolving Credit Loan, the Loan-to-Value Ratio at origination and
as to any second lien Revolving Credit Loan, the Combined Loan-to-Value Ratio at
origination  of such second lien Revolving  Credit Loan,  (xiv) the Loan Rate in
effect as of the Cut-off Date,  (xv) the stated  maturity date,  (xvi) the prior
encumbrance  principal balance (denoted as "Senior Lien" on the Revolving Credit
Loan  Schedule),  if any,  (xvii)  the Credit  Score,  (xviii)  the  Mortgagor's
debt-to-income  ratio,  (xix) a code  indicating  the product type,  (xx) a code
indicating  the purpose of the  Revolving  Credit Loan,  (xxi) the Mortgage Note
date, (xxii) the teaser expiration date, and (xxiii) the Appraised Value.       

               Revolving  Credit Loans: At any time, all Revolving Credit Loans,
including  Additional  Balances,  if any,  that have been sold to the  Depositor
under the Revolving  Credit Loan Purchase  Agreement,  together with the Related
Documents, and that remain subject to the terms thereof.                        

     Revolving  Period:  The period commencing on the Closing Date and ending on
September 30, 2005.                                                             

     Securities  Act: The Securities Act of 1933, as amended,  and the rules and
regulations promulgated thereunder.                                             

Security:  Any of the Certificates or Notes.      

               Security  Balance:  With respect to any Payment Date and the Term
Notes,  the Initial  Security Balance thereof prior to such Payment Date reduced
by all payments of principal thereon prior to such Payment Date. With respect to
any Payment Date and the Variable  Funding Notes,  the Initial  Security Balance
thereof  prior to such Payment Date (i)  increased by the  Aggregate  Additional
Balance  Differential for such Variable  Funding Note immediately  prior to such
Payment Date and (ii) reduced by all payments of principal thereon prior to such
Payment  Date.  With  respect  to any  Payment  Date and the  Certificates,  the
Certificate Principal Balance thereof.                                          

               Securityholder or Holder:  Any Noteholder or a Certificateholder.

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               Security Interest Collections:  With respect to any Payment Date,
Interest  Collections during the related Collection Period excluding the portion
thereof allocable to any Excluded Amount.                                       

               Security Principal Collections: With respect to any Payment Date,
Principal Collections during the related Collection Period excluding the portion
thereof allocable to any Excluded Amount.                                       

     Seller:  Residential Funding Corporation,  a Delaware corporation,  and its
successors and assigns.                                                         

     Seller's Agreement: The agreement between the Seller, as purchaser, and the
related Program Seller, as seller.                                              

     Servicing Agreement: The Servicing Agreement, dated as of the Closing Date,
between the Indenture  Trustee,  the Issuer and the Master  Servicer,  as master
servicer.                                                                       

     Servicing  Certificate:  A certificate  prepared by a Servicing  Officer on
behalf of the Master  Servicer in accordance  with Section 4.01 of the Servicing
Agreement.                                                                      

     Servicing  Default:  The meaning specified in Section 7.01 of the Servicing
Agreement.                                                                      

     Servicing  Fee: With respect to any Revolving  Credit Loan,  the sum of the
related Master Servicing Fee and the related Subservicing Fee.                  

     Servicing Fee Rate:  With respect to any Revolving  Credit Loan, the sum of
the related Master Servicing Fee Rate and the related Subservicing Fee Rate.    

               Servicing  Officer:  Any officer of the Master Servicer  involved
in, or responsible for, the administration and servicing of the Revolving Credit
Loans whose name and specimen  signature appear on a list of servicing  officers
furnished to the Indenture  Trustee (with a copy to the Credit  Enhancer) by the
Master Servicer, as such list may be amended from time to time.                 

     Single  Certificate:  A Certificate  in the  denomination  of a Certificate
Percentage Interest of 10.0000%.                                                

Single Note:  A Note in the amount of $25,000.    

               Special Hazard Amount: As of any date of determination  following
the Cut-off Date, the Special Hazard Amount shall equal  $1,369,964 less the sum
of (A) the aggregate of any  Liquidation  Loss Amounts on the  Revolving  Credit
Loans due to Special  Hazard  Losses and (B) the  Adjustment  Amount (as defined
below) as most recently  calculated.  For each  anniversary of the Cut-off Date,
the Adjustment  Amount shall be equal to the amount, if any, by which the amount
calculated in accordance with the preceding  sentence  (without giving effect to
the  deduction  of the  Adjustment  Amount  for such  anniversary)  exceeds  the
greatest of (i) twice the outstanding  principal balance of the Revolving Credit
Loan which has the largest  outstanding  principal  balance on the Payment  Date

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immediately preceding such anniversary,  (ii) the product of 1.00% multiplied by
the  outstanding  aggregate  Credit Limits of all Revolving  Credit Loans on the
Payment Date  immediately  preceding  such  anniversary  and (iii) the aggregate
outstanding  principal balance (as of the immediately preceding Payment Date) of
the Revolving  Credit Loans in any single  five-digit  California  zip code area
with the largest amount of Revolving Credit Loans by aggregate principal balance
as of such anniversary.                                                         

               Special Hazard Loss: Any Liquidation Loss Amount not in excess of
the cost of the lesser of repair or replacement of a Mortgaged Property suffered
by such Mortgaged Property on account of direct physical loss,  exclusive of (i)
any  loss of a type  covered  by a hazard  policy  or a flood  insurance  policy
required to be  maintained  in respect of such  Mortgaged  Property  pursuant to
Section 3.04 of the Servicing Agreement,  except to the extent of the portion of
such loss not  covered  as a result of any  coinsurance  provision  and (ii) any
losses resulting from an Extraordinary Event.                                   

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

     Stated Value:  With respect to any Revolving  Credit Loan, the value of the
Mortgaged Property as stated by the related Mortgagor in his or her application.

               Stepdown  Date:  The later of (a) the Payment  Date in  September
2002 and (b) the Payment Date on which the  aggregate  principal  balance of the
Revolving  Credit  Loans  after  applying   payments  received  in  the  related
Collection Period is less than 50% of the Cut-off Date Loan Balance.            

     Subservicer:  Any Person with whom the Master  Servicer  has entered into a
Subservicing Agreement as a Subservicer by the Master Servicer.                 

     Subservicing  Account:  An Eligible Account  established or maintained by a
Subservicer as provided for in Section 3.02(c) of the Servicing Agreement.      

               Subservicing  Agreement:  The written contract between the Master
Servicer and any Subservicer relating to servicing and administration of certain
Revolving Credit Loans as provided in Section 3.01 of the Servicing Agreement.  

               Subservicing Fee: With respect to any Collection  Period, the fee
retained  monthly  by the  Subservicer  (or,  in the  case  of a  nonsubserviced
Revolving  Credit Loan, by the Master  Servicer) equal to the product of (i) the
Subservicing  Fee Rate  divided by 12 and (ii) the Pool  Balance as of the first
day of such Collection Period.                                                  

     Subservicing  Fee Rate: With respect to each Revolving  Credit Loan,  0.50%
per annum.                                                                      

               Substitution  Adjustment  Amounts:  With  respect to any Eligible
Substitute  Loan and any Deleted Loan, the amount,  if any, as determined by the
Master Servicer,  by which the aggregate  principal balance of all such Eligible
Substitute  Loans  as of the date of  substitution  is less  than the  aggregate
principal balance of all such Deleted Loans (after  application of the principal
portion of the monthly payments due in the month of substitution  that are to be
distributed to the Payment Account in the month of substitution).               

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               Teaser Loan: Any Revolving  Credit Loan which,  as of the Cut-off
Date,  has a Loan  Rate  that is less  than the sum of the  Index at the time of
origination plus the applicable Gross Margin.                                   

               Telerate Screen Page 3750: The display designated as page 3750 on
the Bridge Telerate  Service (or (i) such other page as may replace page 3750 on
that service for the purpose of  displaying  London  interbank  offered rates of
major banks) or (ii) if such service is no longer  offered,  such other  service
for  displaying  LIBOR or  comparable  rates as may be selected by the Indenture
Trustee after consultation with the Master Servicer and the Credit Enhancer.    

Term Notes: The Notes designated as the "Term Notes" in the Indenture.

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

     Trust:  The Home Equity Loan Trust  2000-HS1 to be created  pursuant to the
Trust Agreement.                                                                

     Trust Agreement: The Amended and Restated Trust Agreement,  dated as of the
Closing Date, between the Owner Trustee and the Depositor.                      

     Trust  Estate:  The  meaning  specified  in  the  Granting  Clause  of  the
Indenture.                                                                      

               Trust  Indenture Act or TIA: The Trust  Indenture Act of 1939, as
amended from time to time, as in effect on any relevant date.                   

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

      Underwriter: Residential Funding Securities Corporation.

               Undercollateralization  Amount:  Initially equal to approximately
$1,373,567.  With respect to any Payment Date, the amount by which the aggregate
Security  Balance of the Notes on such  Payment Date exceeds the Pool Balance as
of the last day of the  related  Collection  Period  (after  application  of Net
Principal Collections or Security Principal Collections, as the case may be, for
such date).                                                                     

               Uniform  Single  Attestation  Program for Mortgage  Bankers:  The
Uniform Single  Attestation  Program for Mortgage  Bankers,  as published by the
Mortgage  Bankers  Association  of America and effective  with respect to fiscal
periods ending on or after December 15, 1995.                                   

     Variable  Funding  Notes:  The Notes  designated as the  "Variable  Funding
Notes" in the Indenture including any Capped Funding Notes.                     

               Weighted  Average Net Loan Rate:  With  respect to the  Revolving
Credit Loans in the aggregate, and any Payment Date, the average of the Net Loan
Rates for each  Revolving  Credit Loan as of the last day of the  Billing  Cycle
immediately prior to such Payment Date weighted on the basis of the related Loan
Balances  outstanding,  as determined,  for each  Revolving  Credit Loan, by the
Master  Servicer  in  accordance  with the Master  Servicer's  normal  servicing
procedures.                                                                     

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
		9/30/05		114
		12/31/00		54
		10/20/00		64					8-K
Filed on:		10/11/00
For Period End:		9/26/00		1		95
		9/19/00		108					8-K
		9/1/00		96
		1/1/00		47
		12/15/95		117
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